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Draft Letter of Offer July 14, 2008 For Equity Shareholders of the Company only

UTTAM

QUALITY

UTTAM SUGAR MILLS LIMITED

(The Company was incorporated as Associated Sugar Mills Limited on October 04, 1993 under the Companies Act, 1956 and received the Certificate of Commencement of Business on April 08, 1994 from the Registrar of Companies NCT Delhi & Haryana. The name of our Company was changed to Uttam Sugar Mills Limited w.e.f. November 24, 1998. The Corporate Identification Number of the Company is L99999UR1993PLC032518. For details of changes in our Registered Office, please refer to page [*] of this Draft Letter of Offer) Registered Office: Village Libberheri, Roorkee, District Haridwar - 247 667 (Uttarakhand) Tel No: +91 1332 229193 Fax No: +91 1332 229194 Corporate Office: A - 2E, III Floor, CMA Tower, Sector - 24, Noida - 201 301 Tel.: +91 120 2412716-18, 2412722-6, Fax: +91 120 2412715 Contact Person: Mr. G Ramarathnam, Chief - Legal and Corporate Affairs & Company Secretary & Compliance Officer e-mail: [email protected] website: www.uttamsugar.com

For private circulation to the Equity Shareholders of the Company only DRAFT LETTER OF OFFER ISSUE OF 64,42,250 EQUITY SHARES OF FACE VALUE OF Rs. 10/- EACH FOR CASH AT A PREMIUM OF Rs. [*] PER EQUITY SHARE (i.e. AT AN ISSUE PRICE OF Rs. [*] PER EQUITY SHARE) AGGREGATING Rs. [*] TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF ONE EQUITY SHARE FOR EVERY FOUR EQUITY SHARES HELD BY THE SHAREHOLDERS ON THE RECORD DATE, i.e., [*], ALONG WITH ONE DETACHABLE WARRANT PER EQUITY SHARE OFFERED ("ISSUE"). THE ISSUE PRICE OF EQUITY SHARES IS [*] TIMES OF THE FACE VALUE OF Rs. 10/- PER EQUITY SHARE. EACH DETACHABLE WARRANT SHALL BE ENTITLED TO ISSUE AND ALLOTMENT OF ONE EQUITY SHARE OF FACE VALUE OF Rs. 10/- EACH AT A PREMIUM OF Rs. 40/- PER EQUITY SHARE ON THE TERMS DETAILED ON PAGE [*] OF THIS OFFER DOCUMENT. THE PRICE AT WHICH WARRANT IS EXERCISABLE IS FIVE TIMES OF THE FACE VALUE OF Rs. 10/- PER EQUITY SHARE. 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 Issuer and the Issue including the risks involved. The securities 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 [*] of this Draft Letter of Offer before making an investment in this Issue. ISSUER'S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Letter of Offer contains all information with regard to the Issuer 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 respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this 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 National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE). The Company has received "in-principle" approvals from NSE & BSE for listing of securities being offered through this Draft Letter of Offer vide letters dated [*] and [*] respectively. For the purpose of this Issue, the Designated Stock Exchange is NSE.

LEAD MANAGER TO THE ISSUE

SPA

SPA MERCHANT BANKERS LIMITED

SEBI Reg, No.: INM 000010825 25, C - Block Community Center, Janak Puri, New Delhi - 110 058 Tel: +91 11 4567 5500 Fax: +91 11 2557 2763 E-mail: [email protected] Website: www.spacapital.com Contact Person: Mr. Nitin Somani / Mr. Saurabh Gupta Issue Programme

INTIME SPECTRUM SHARE REGISTRY

SEBI Reg. No.: INR 000003761 C - 13, Pannalal Silk Mills Compound LBS Marg, Bhandup (West) Mumbai - 400 078 Tel: +91 22 2596 0320 Fax: +91 22 2596 0328 - 29 E-mail: [email protected] Website: www.intimespectrum.com Contact Person: Ms. Awani Thakkar

Issue Opens on [*]

Last Date for Request for Split Application Forms [*]

Issue Closes on [*]

TABLE OF CONTENTS Topics DEFINITIONS AND ABBREVIATIONS CURRENCY OF FINANCIAL PRESENTATION AND USE OF MARKET DATA FORWARD LOOKING STATEMENTS RISK FACTORS SUMMARY THE ISSUE SUMMARY OF FINANCIAL INFORMATION GENERAL INFORMATION CAPITAL STRUCTURE OBJECTS OF THE ISSUE BASIS FOR ISSUE PRICE STATEMENT OF TAX BENEFITS INDUSTRY OVERVIEW OUR BUSINESS HISTORY AND CERTAIN CORPORATE MATTERS REGULATIONS AND POLICIES OUR MANAGEMENT PROMOTER AND PROMOTER GROUP DIVIDEND POLICY FINANCIAL STATEMENTS FINANCIAL INDEBTNESS MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS STOCK MARKET DATA OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS GOVERNMENT APPROVALS STATUTORY AND OTHER INFORMATION TERMS AND PROCEDURE OF THE ISSUE MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF OUR COMPANY MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION DECLARATION Page No. i v vi vii 1 4 5 8 12 19 30 32 38 44 55 58 63 76 105 106 144 147 156 158 192 199 206 223 235 236

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DEFINITIONS AND ABBREVIATIONS Conventions / General Terms Term Act or Companies Act AGM AS BIFR BSE CARO CDSL Depositories Act Depository / Depositories Description The Companies Act, 1956, as amended from time to time Annual General Meeting Accounting Standards as issued by the Institute of Chartered Accountants of India Board for Industrial and Financial Reconstruction Bombay Stock Exchange Limited Companies (Auditors' Report) Order, 2003 Central Depository Services (India) Limited The Depositories Act, 1996, as amended from time to time A depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended from time to time, in this case being NSDL and CDSL A depository participant as defined under the Depositories Act Electronic Clearing System Extraordinary General Meeting Earnings per Equity Share Equity shares of the Company of face value of Rs.10/- each unless otherwise specified in the context thereof Foreign Currency Non Resident Account Foreign Exchange Management Act, 1999, as amended from time to time, and the regulations framed hereunder Foreign institutional investor (as defined under SEBI (Foreign Institutional Investors) Regulations, 1995) registered with SEBI under applicable laws in India Twelve months ending on September 30 of a particular year Foreign Investment Promotion Board Financial Institutions Hindu Undivided Family The Income Tax Act, 1961, as amended from time to time Generally Accepted Accounting Principles in India Internal rate of return Net Asset Value All Bidders who are not NRIs or FIIs and are not persons resident in India Non Resident External Account A person resident outside India, as defined in FEMA and who is a citizen of India or a Person of Indian Origin, and as defined under FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 Non Resident Ordinary Account National Securities Depository Limited The National Stock Exchange of India Limited Permanent Account Number Reserve Bank of India i

Depository Participant / DP ECS EGM EPS Equity Shares or Shares FCNR Account FEMA FII/ Foreign Investor Institutional

Financial Year / Fiscal Year / FY FIPB FIs HUF I.T. Act Indian GAAP IRR NAV Non Residents NRE Account NRI / Non Resident Indian

NRO Account NSDL NSE PAN RBI

ROC RONW SCRR SEBI SEBI Act SEBI DIP Guidelines

SEBI MAPIN Regulations SEBI Takeover Regulations Issue Related Terms Term Allotment / Allot Allottee Banker(s) to the Issue CAF Designated Stock Exchange Draft Letter of Offer Equity Shares Issue / Rights Issue

Registrar of Companies Return on Net Worth Securities Contracts (Regulations) Rules, 1957 as amended from time to time The Securities and Exchange Board of India constituted under the SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time SEBI (Guidelines for Disclosure and Investor Protection) 2000 issued by SEBI effective from January 27, 2000, as amended, including instructions and clarifications issued by SEBI from time to time The SEBI (Central Database of Market Participants) Regulations, 2003, as amended from time to time. Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997, as amended

Issue Closing Date Issue Opening Date Issue Price Investor Lead Manager / LM Letter of Offer Promoters Record Date Registrar / Registrar to the Issue Renouncees Rights Entitlement SAF Stock Exchange(s)

Description Unless the context otherwise requires, issue of Equity Shares pursuant to this Issue The successful applicant to whom the Equity Shares are being / or have been issued The Bank with which the Account for the Rights issue will be opened and which acts as such, in terms of this Draft Letter of Offer [*] Composite Application Form The Designated Stock Exchange for this Issue shall be NSE The Draft Letter of Offer dated July 14, 2008 filed with SEBI. Equity shares of the Company of face value of Rs.10 each, unless otherwise specified in the context thereof. Offer of 64,42,250 equity shares of the face value Rs. 10/- each for cash at a premium of Rs. [*] per equity share (i.e. at an Issue Price of Rs. [*] per equity share) aggregating to Rs. [*] on rights basis to the existing shareholders of the Company in the ratio of one equity share for every four equity shares held on the record date i.e. [*] along with one detachable warrant per equity share offered. Each detachable warrant shall be entitled to issue and allotment of one equity share of face value of Rs. 10/each at a premium of Rs. 40/- per equity share on the terms detailed on page [*] of this offer document. [*] [*] Rs. [*] per equity share. Shall mean the Equity Shareholders and Renouncees SPA Merchant Bankers Limited Letter of Offer dated [*] as filed with the Stock Exchanges after incorporating SEBI comments on the Draft Letter of Offer Mr. Raj Kumar Adlakha, Mr. Rajan Adlakha, Mr. Ranjan Adlakha, Uttam Industrial Engineering Limited, Lipi Boilers Limited and Uttam Sucrotech Limited [*] Registrar to the Issue, in this case being Intime Spectrum Registry Limited Shall mean the person who have acquired rights entitlements from Equity Shareholders Being one equity shares of Rs. 10/- each for every four equity share held as on the Record Date along with one detachable warrant per equity share offered Split Application Form Stock Exchange(s) shall refer to BSE & NSE, where the shares of the Company are presently listed

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Company / Industry Related Terms Term Uttam Sugar Mills Limited / USML / We / Us / the Company / Our Company / the Issuer AOA / Articles / Articles of Association Auditors Acre Board / Board of Directors Bagasse Cogeneration / Co-generation Compliance Officer DG Director(s) Ethanol Free Sale sugar FSQ Fuel Ethanol Gunta HDPE ISMA Khatauni KLPD KWH Levy Sugar MOA / Memorandum Memorandum of Association Molasses MRM MT MW OGL PDS Plantation with Sugar PPA Raw Sugar Refined Sugar ROC Registered Office Company SAP SDF / Description Unless the context otherwise indicates or implies refers to Uttam Sugar Mills Limited. Articles of Association of Uttam Sugar Mills Limited The statutory auditors of our Company M/s B K Kapur & Company, Chartered Accountants Unit of land area measurement. 1 hectare = 2.47 acres The Board of Directors of Uttam Sugar Mills Limited A fibrous residue obtained after the crushing and extraction of juice from sugarcane Cogeneration of Power implies generation of power from by-product i.e. bagasse while main operations of the Company are different from power generation. Compliance Officer of the Company in this case, Mr. G Ramarathnam, Chief-Legal & Corporate Affairs & Company Secretary Diesel Generator Director(s) of our Company unless otherwise specified Ethyl alcohol produced from fermentation of Molasses That portion of the production of a sugar mill, which can be sold in the open market Free Sale Sugar Quota Dehydrated ethyl alcohol, which contains atleast 99.5% ethyl content. This is used for blending in petrol Unit of land area measurement 1 acre = 40 gunta High Density Polyethylene Indian Sugar Mills Association Revenue records showing the mutation Kilo litre Per Day Kilo Watt Per Hour That portion of the production of the sugar mill that is procured by the Gol appointed nominees at a fixed price that has to be sold as per Government direction through fair price shops. The Memorandum of Association of Uttam Sugar Mills Limited A thick liquid residue of sugar manufacturing process, which still contains sugar, which cannot be crystallized Monthly release Mechanism Metric Tonne Mega Watt Open General License Public Distribution System Sugar manufactured from sugarcane by the double sulphitation process Power Purchase Agreement Sugar with sucrose content less than 99.5%, which is normally processed further before human consumption Sugar produced by refining raw sugar Registrar of Companies, Uttar Pradesh & Uttarakhand, Kanpur Registered office of the Company situated at Village Libberheri, Roorkee, District Haridwar - 247 667, Uttarakhand State Advised Price Sugar Development Fund iii

of

the

Term SMP STM SY (Sugar Year) / SS (Sugar Season) TCD TPD Abbreviations Term AS BPLR BSE CAGR CEO CFO CIN DGTD DIN D/E Ratio DP EPS HUF INR / Rs. IDBI IPO Lbs. MAT MMT MOU NAV NRE Account NRO Account NSE P.A PAN P/E Ratio Qtls. RBI RTGS TAN U.P. US / USA USDA USFDA

Description Statutory Minimum Price Sugar Technology Mission Sugar Year, being a period of twelve months ending September 30 of a particular year Tonnes Crushed Per Day Tonnes Per Day

Description Accounting Standards as issued by the Institute of Chartered Accountants of India Bank's Prime Lending Rate Bombay Stock Exchange Limited Compound Annual Growth Rate Chief Executive Officer Chief Financial Officer Corporate Identification Number Director General of Technical Development Director Identification Number Debt Equity Ratio Depository Participant Earnings Per Share Hindu Undivided Family Indian Rupees Industrial Development Bank of India Limited Initial Public Offer Pounds Minimum Alternate Tax Million Metric Tonnes Memorandum of Understanding Net Asset Value Non Resident External Account Non Resident Ordinary Account National Stock Exchange of India Limited Per Annum Permanent Account Number Price/Earnings Ratio Quintals The Reserve Bank of India Real Time Gross Settlement Tax deduction Account Number Uttar Pradesh United States of America United States Department of Agriculture United States Food and Drug Administration

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CURRENCY OF FINANCIAL PRESENTATION In this Draft Letter of Offer, unless the context otherwise requires, all references to the word "lakh" or "lac" means "one hundred thousand", the word "ten lakh" means "one million", the word "crore" means "ten million", the word "billion" means "one thousand million" and the word "trillion" means one thousand billion". In this Draft Letter of Offer, any discrepancies in any table between the total and the sum of the amounts listed may be due to rounding off. Throughout this Draft Letter of Offer, all the figures have been expressed in Rupees in Lakh, except when stated otherwise. All reference to "Rupees" and "Rs." in this Draft Letter of Offer are to the legal currency of India. Unless stated otherwise, the financial information given in this Draft Letter of Offer is derived from the audited financial statements as for the 12 months period ended September 30, 2003, 2004, 2005, 2006, 2007 & 6 months ending March 31, 2008 prepared in accordance with Indian GAAP and the Companies Act, 1956. The financial statements have been restated in accordance with SEBI Guidelines as stated in the report of Auditors, M/s B K Kapur & Company, Chartered Accountants included in this Draft Letter of Offer. There are significant differences between Indian GAAP and U.S. GAAP; accordingly, the degree to which the Indian GAAP financial statements included in this Draft Letter of Offer will provide meaningful information is entirely dependent on the reader's level of familiarity with Indian accounting practice and Indian GAAP. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Draft Letter of Offer should accordingly be limited. We have not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own advisors regarding such differences and their impact on our financial data. For additional definitions used in this Draft Letter of Offer, see the section Definitions and Abbreviations on page i of this Draft Letter of Offer. In the section entitled "Main Provisions of Articles of Association", defined terms have the meaning given to such terms in the Articles of Association of our Company. USE OF MARKET DATA Unless stated otherwise, market data used throughout this Draft Letter of Offer has been obtained from industry publications and Government sources. Industry publication and other website data generally state that the information contained therein has been obtained from sources believed to be reliable, but that their accuracy and completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Although, we believe market data used in this Draft Letter of Offer is reliable, it has not been independently verified. Similarly, internal Company reports and data, while believed by us to be reliable, have not been verified by any independent source.

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FORWARD LOOKING STATEMENTS We have included statements in this Draft Letter of Offer which contain words or phrases such as "will", "aim", "believe", "expect", "will continue", "anticipate", "estimate", "intend", "plan", "seek to", "future", "objective", "goal", "project", "should" and similar expressions or variations of such expressions, that are "forward looking statements". All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from our expectations include but are not limited to: · · · · · · · · · · General economic and business conditions in the markets in which we operate and in the local, regional and national economies; Increasing competition in or other factors affecting the industry segments in which our Company operates; Changes in laws and regulations relating to the industries in which we operate; Our ability to meet our capital expenditure requirements and/or increase in capital expenditure; Fluctuations in operating costs and impact on the financial results; Our ability to attract and retain qualified personnel; Changes in technology in future; Changes in political and social conditions in India or in countries that we may enter, the monetary policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; The performance of the financial markets in India and globally; and Any adverse outcome in the legal proceedings in which we are involved.

For a further discussion of factors that could cause our actual results to differ, please refer to the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Letter of Offer. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Neither the Company nor the Lead Manager nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI / Stock Exchanges requirements, the Company and Lead Manager will ensure that investors in India are informed of material developments until the time of the grant of listing and trading permission by the Stock Exchanges.

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RISK FACTORS Any investment in Equity Shares involves a high degree of risk and so you should carefully consider all of the information in this Letter of Offer including the risks and uncertainties described below before you make an investment decision. Risks have been quantified, wherever possible. If any of the following risks actually occur, our business, financial condition and results of operations could suffer, the trading price of our Equity Shares could decline and you may lose all or part of your investment. Materiality The Risk factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality: (a) Some events may not be material individually but may be found material collectively. (b) Some events may have material impact qualitatively instead of quantitatively. (c) Some events may not be material at present but may be having material impacts in future. Note: Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or other implications of any of the risks described in this section. Internal Risk Factors 1. In the past, one of our Promoters and two Promoter Group members were imposed a penalty of Rs. 33,500/- by SEBI under Substantial Acquisition of Shares and Takeover Act. In year 2001, the Adjudicating Officer of SEBI, Mumbai initiated proceedings against Mr. Ranjan Adlakha (one of our promoter and director) for late submission of the requisite report as acquirer while proceedings were initiated against Mrs. Amita Adlakha, wife of Mr. Raj Kumar Adlakha (one of our promoter & director) and New Castle Finance & Leasing Private Limited (one of our group companies) for being considered as acquirer and hence due to non submission of the requisite report as acquirer. For further details, please refer to the section titled `Outstanding Litigations and Material Developments' on page [*] of this Draft Letter of Offer. There are certain litigations outstanding involving us, our promoters / promoter group companies and our directors Summary of litigations outstanding involving our Company and our Promoters : Nature of Litigations No. of Cases Criminal 5 Civil 31 Labour 21 Government / Tax Authorities Notices 11 Summary of litigations outstanding involving our Promoter Group Companies: Nature of Litigations No. of Cases Criminal Civil 33 Labour 2 Government / Tax Authorities Notices 11 For further details, please refer to the section titled `Outstanding Litigations and Material Developments' on page [*] of this Draft Letter of Offer. 3. There is an overdue amount of Rs. 218.89 Lakhs towards payment of installment of soft loan to Uttarakhand State Government. Our Company was sanctioned a loan of Rs. 656.68 lakhs from Uttarakhand State Government repayable in 3 annual installments starting from January 2008. In view of lower sugar price realization and high cane prices, we vii

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have not paid the installment of loan and have requested the Uttarakhand State Government to extend the repayment period. 4. There have been some delays in payment to Banks in the financial year ended September 30, 2007 and 6 months period ended March 31, 2008. There were some delays in payment of dues to certain Banks in the financial year ended September 30, 2007 and 6 months period ended March 31, 2008 as per the details of the delayed payments of installments and interest thereon given below: Particulars Amount (in Rs. Lakhs) Period of delay Period ended March 31, 2008 Period ended September 30, 2007 Banks 1,347.41 3,225.36 1-30 days 1,405.74 455.07 31-60 days 818.33 300.99 61-90 days Total 3,571.48 3,981.42 These delays were on account of lower sugar price realization and high inventory resulting in increased working capital requirements. However we have no over dues towards Banks as on June 30, 2008. 5. We have incurred significant losses in the recent past, which has affected our ability to service the debt. As per re-stated financial statement, we incurred a net loss of Rs. 4976.60 lakhs for the fiscal ended September 30, 2007 and Rs. 293.04 for the six months period ended March 31, 2008. The financial performance of the Company dipped due to prevailing depressed sugar market which was on account of high production of sugar and steep fall in the selling prices. If we are unable to generate adequate revenues in the future, we may not be able to meet our debt repayment obligations and our lenders may initiate legal proceedings to recover any outstanding payments including proceedings for winding up. Any such proceedings by such lenders to declare us in default may trigger crossdefaults under other loan agreements, and may have a material adverse effect on our business, prospects, financial condition and results of operations. 6. We have paid arrears of cane dues for the crushing season 2007-08 to farmers at a price of Rs. 110 per quintal of sugarcane as directed by the Hon'ble Supreme Court as per its order dated 15th May 2008 as an interim measure. Any decision leading to upward revision in support price of sugarcane may increase our financial liability and thereby impact our financial position. The State Governments of Uttar Pradesh and Uttarakhand fixed the State Advised Price (SAP) at Rs. 125 per quintal and Rs. 127 per quintal respectively for the sugar season 2007-08. The Sugar Mills in protest of the above SAP had filed a petition with the Hon'ble High Court of Allahabd, which has vide its order dated November 15, 2007 fixed the interim price at Rs. 110 per quintal. The UP State Government preferred an appeal in the Supreme Court against the decision of High Court, Allahabad. However the Hon'ble Supreme Court on May 15, 2008, as an interim measure, directed that for the crushing year 2007-08 the rate fixed by the Lucknow bench of Allahabad High Court shall be applicable. Accordingly we have paid all our cane dues for crushing season 2007-08 at a price of Rs. 110 per Quintal of sugarcane. In case any verdict leading to upward revision of SAP is given by the High court or Supreme Court, our liability will increase towards payment of cane dues which may materially affect our financial performance. There was delay in implementation of projects vis-à-vis as given in the offer document of our Initial Public Offering in March 2006. Our Company came out with initial public offering in the month of March 2006 to part finance the cost of setting up sugar mills and co-generation capacity at Khaikheri and Shermau. There had been delay in actual commencement of commercial production of our sugar plants vis-à-vis as envisaged in the offer document of IPO. Name of Unit Khaikheri Shermau Commecement date as per the offer document of IPO October 2006 October 2006 viii Actual date of commencement of commercial production January 2007 April 2007

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For further details, please refer to section titled "Promise vs. Performance" on page [*] of this Draft Letter of Offer. 8. The implementation of the expansion projects, which are to be part financed through this Issue, has been delayed vis-à-vis as envisaged in the Appraisal Report of IDBI Limited. Any further delay in implementation and commencement of operations is subject to cost and time overruns. There has been delay in implementation of the projects in the current expansion plans vis-à-vis as envisaged in the appraisal report of IDBI Limited dated February 2007. For details, please refer to chapter tiled `Objects of the Issue' on page [*] of this Draft Letter of Offer. We are acquiring some plant and machinery for the expansion project from our Promoters. Out of the total plant and machinery aggregating Rs. 21,873 lakhs envisaged for the expansion project, the plant and machinery worth Rs. 9,652 lakhs is being purhased from the Promoter Companies. To this extent, our promoters / directors are interested in these transactions.

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10. Availibility of sugarcane for our sugar mills is predominently dependent upon the cultivation of sugarcane within our reserved cane area. Any shortfall in cultivation of sugarcane in the cane areas by the farmers may adversely impact the raw material supply to our mills thereby adversely impacting our production and results of operation. We do not own any land for the cultivation of sugarcane and we purchase all of our sugarcane from farmers, directly or through farmers' cooperative societies. Under the State laws, we are bound by law to purchase sugarcane from farmers' cooperative societies in areas reserved and assigned to us by the Cane Commissioner, together referred to as "Cane Area". However, the farmers within our Cane Area have no obligation to cultivate sugarcane and may instead grow other more profitable crops. If the farmers within our Cane Area cultivate other crops, or otherwise limit their cultivation of sugarcane, we may have a shortage of raw material. Sugarcane grown within our Reserved Cane Area may be sold to manufacture of Gur & Khandsari and others instead of us. Any reduction in the supply of sugarcane may adversely affect our operations and financial condition. 11. Our business is dependent on the Sugar cane production during the sugar season Sugar industry is an agro based industry and its main raw material is sugarcane. In any year, if there ia a shortfall in sugarcane production on account of adverse climatic conditions, the amount of sugar produced by the sugar mills is affected adversely. Apart from climatic conditions, the sugar cane crop may also be impacted by the occurance of crop disease. Proper water management through irrigation during the formative stage of the cane is critical to the sucrose content and overall quality of the cane. In case the quality /quantity of cane is affected by any of the aforementioned conditions, we may not be able to optimally utilize our crushing capacity. This will directly affect our profitability. 12. We operate in Sugar industry which is cyclic Domestic sugar industry typically follows a 4 to 6 years cycle. Higher sugarcane and sugar production results in a fall in sugar prices and non-payment of dues to farmers. This compels the farmers to switch to other crops thereby causing a shortage of sugarcane, consequently an increase in sugarcane prices. Taking into account the prevalent higher prices for sugarcane, farmers then switch back to sugarcane. Profitability of sugar manufacturing units like ours depends largely on the stage of the cycle witnessed by the industry. The sugar production which was 127 lakh tones in sugar season 2004-05 has grown up substantially to 193 lakh tonnes in sugar season 2005-06 and further to 283 lakh tonnes in sugar season 2006-07. For the sugar season 2007-08, the sugar production is estimated at 261 lakh tonnes (source ISMA). The sugar industry has historically been subject to commodity cycles and is sensitive to changes in domestic market prices, supply and demand. The market in India has experienced periods of limited supply, causing sugar prices and industry profit margins to increase. Sugar imports are governed by Government of India's policy, which currently applies a 100% customs duty and other import tariffs on imported white crystal sugar. In the event of any changes in these policies, import of white sugar may be an attractive option and which, in turn, would drop domestic prices and thereby impact our financial condition.

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Conversely, years of low production and declining sugar stocks may be followed by years of excess production that result in over-supply of sugar to the domestic markets, causing a decline in sugar prices and industry profit margins. For further details see the section titled "Industry Overview" on page no. [*] of this Draft Letter of Offer. 13. Adverse weather conditions, crop disease, pest attacks may adversely affect sugarcane crop yields and sugar recovery rates for any given harvest. Our sugar production depends on the volume and sucrose content of the sugarcane that is supplied to us. Crop yields and sucrose content depends primarily on the variety of sugarcane grown, the presence of any crop disease and weather conditions such as adequate rainfall and temperature, which vary. Adverse weather conditions have caused crop failures and reduced harvests and resulted in volatility in the sugar and Ethanol industries and consequently in our operating results. Flood, drought or frost can adversely affect the supply and pricing of the agricultural commodities that we sell and use in our business. There can be no assurance that future weather patterns, potential crop disease or the cultivation of certain sugarcane crop varieties will not reduce the amount of sugarcane or sugar that we can recover in any given harvest. Any reduction in the amount of sugar recovered could have a material adverse effect on our results of operations. 14. High cost of raw material and inability to pass it to the consumer may put a pressure on the profit margins. Sugarcane costs constitue a major portion of our direct expenditure. As per the existing norms, we have to purchase sugarcane at State Advised Price (SAP). At the same time, the quantity of sugar that can be sold in the market is regulated. Sugar is subject to price fluctuations resulting from adverse wether conditions, natural disasters, domestic and foreign trade policies, shifts in supply and demand and other factors beyond our control. Sugar is sold in the open market at market determined prices. Thus we have little control over the quantity or the price at which we can sell the sugar produced. As a result, any prolonged decrease in sugar prices could have a material adverse effect on our Company and our results of operations. 15. Sugar industry is a highly regulated industry. Sugar is an essential commodity, and is included within the purview of the Essential Commodities Act, 1955. Consequently, sugar production, supply and distribution are regulated by the State and Central Government. The purchase price of sugarcane is regulated as the Central Government fixes the minimum price of sugarcane, termed the Statutory Minimum Price (SMP). Further, states can declare their own State Advised Price (SAP) higher than the SMP. Presently, the regions in which our Company has and proposes operations are governed by the SAP. The quantity to be sold is based on a Monthly Release Mechanism governed by the Sugar Directorate. We thus operate in an industry, which is highly regulated and any change in governmental or legal policies to the detriment to us could adversely affect the business, operations and profitability of our Company. 16. We may face competition from other established companies and future entrants into the industry. In the past few years, there has been an agressive increase in capacities made by the existing sugar companies and the new entrants in the state of Uttar Pradesh. The supply of sugar in the market will further increase once these additional capacities start production. This additional supply of sugar in the market will affect the sugar price if it is not supported by proportionate increase in demand. Our profit margin may reduce incase of fall in future sugar prices and the same will have a direct impact on our share price. 17. We may not be able to successfully integrate sugar mills with new co-generation power units and ethanol capacity. Integration of sugar mills with new co-generation power units and ethanol capacity may consume a considerable amount of management and financial resources. They may also require significant management attention that would otherwise be available for on-going development of our existing business. Any failure to integrate proposed expansions into our existing business operations or any shortcoming in our expansion strategy could adversely affect our financial performance. 18. Our success depends largely on our senior management and our ability to attract and retain our key personnel. Any significant changes in the key managerial personnel, may affect the performance of our company. Our success depends on the continued services and performance of the members of the senior management team and other key employees. Competition for senior and experienced personnel in the industry is intense at present.

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The loss of the services of our senior management or other key personnel could seriously impair our ability to continue to manage and expand our business, which may adversely affect our financial condition. 19. We are subject to restrictive covenants in certain short-term and long term debt facilities provided to us by our lenders We have taken long term and short term loans from Banks. As per the signed loan agreements with them, there are certain standard restrictions imposed on us regarding change in capital structure, payment of dividend out of reserves and other such matters. We are required to obtain their prior approval before initiating such changes. We have obtained no objection from IDBI Limited, the Lead Bank for the Rights Issue. 20. We currently enjoy certain tax benefits, which may not be available to us in the future which may affect our financial performance and future projections. As per the provisions of Section 80-IC of the Income Tax Act, 1961, we are eligible to claim a deduction with respect to profits derived from our sugar mill at village Libberheri, Tehsil Roorkee, District Haridwar, Uttarakhand on the basis of substantial expansion of Industrial Undertaking. Similarly, certain other tax benefits in this regard, which are currently being enjoyed by us, may not be available to us in the future. Such nonavailability of tax benefits could adversely affect our results of operations and financials. For details of tax benefits available to our Company, please refer to "Statement of Tax Benefits" beginning on page [*] of this Draft Letter of Offer. 21. Our insurance coverage may not adequately protect us against certain operating hazards and this may have a material effect on our business. We maintain insurance policies in respect of our principal places of business, including our sugar mills and vehicles. While we believe that the insurance coverage we maintain would reasonably be adequate to cover all normal risks associated with the operation of our business, there can be no assurance that any claim under the insurance policies maintained by us will be honoured fully or in part or on time. To the extent that we suffer loss or damage that is not covered by insurance or exceeds our insurance coverage, our results of operations and cash flow may be adversely affected. 22. We have a high Total Debt - Equity ratio of 3.13 as on March 31, 2008. We have undertaken major expansions of our sugar mills, increased cpacity of co-generation power plants and are setting up ethanol manufacturing unit within the short span of 5 years. These have been funded through a mix of debt, equity and internal accruals. Consequent to this, our Total Debt to Equity Ratio as on March 31, 2008 is 3.13, which is on the higher side. Our capacity to service the debt depends on our continued profitability as demonstrated in the past. In case we are not able to achieve the required growth, due to internal constraints or external factors like adverse developments in the industry, we may find it difficult to service the debt and this will have an impact on the return to the shareholders. However, our long-term debt to equity ratio is 1.77. 23. We have not registered our brand i. e. `Uttam Sugar' and we do not have a registered trademark. We are marketing the sugar manufactured by us under the brand `Uttam Sugar' which has not been registered. This subjects us to the risk of imitation and loss of revenue owing to sub-standard quality sugar being sold by others under our brand name. 24. The equity shares of one of our Promoter Group Company are suspended from trading at Delhi Stock Exchange Limited. The equity shares of one of our Promoter Group Company, Pariksha Fin-Invest-Lease Limited are listed on Delhi Stock Exchange Limited. However the shares of the Company have been suspended by the Stock Exchange w.e.f. February 03, 2003 due to non-compliance with various requirements of Listing Agreement. The Company has submitted necessary documents with the Stock Exchange and has applied for revocation of suspension in trading on April 30, 2008. 25. Our Promoters and Promoter Group will continue to retain significant control in our company after the current issue, which may influence the outcome of matters submitted to shareholders for approval.

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The post Issue Equity Share Capital holding of our Promoters and Promoter group will be 78.07%. As a result, the Promoters and Promoter group will have the ability to exercise significant influence over all matters requiring shareholders' approval, including the election of directors and approval of significant corporate transactions. The Promoters and Promoter group will also be in a position to influence any shareholder action or approval requiring a majority vote. Such a concentration of ownership may also have the effect of delaying, preventing or deterring a change in control. 26. Any loss or break down of operations at any of our manufacturing facilities may have a material effect on our business, financial conditions and results of operations Our manufacturing facilities are subject to operating risks, such as the breakdown or failure of equipment, power supply or processes, performance below expected levels of output or efficiency, obsolescence, labour disputes, natural disasters, industrial accidents and the need to comply with the directives of relevant government authorities. The occurrence of any of these risks could significantly affect our operating results. We are required to carry out planned shutdowns of our plants for maintenance, statutory inspections and testing. Although precautions are taken to minimize the risk of any significant operational issues at our manufacturing facilities, our business, financial condition and results of operations may be adversely affected by any disruption of operations at our facilities, including due to any of the factors mentioned above. 27. If we fail to comply with environmental laws and regulations or face environmental litigation, our results of operation may be adversely affected Environmental laws and regulations in India have been increasing in stringency and it is possible that they will become significantly more stringent in the future. If, as a result of compliance or non-compliance with any environmental regulations, our unit or the operations of such unit is suspended, we may need to incur costs in complying with regulations, appealing any decision closing our facilities, maintaining production at our existing facilities and continuing to pay labour and other costs which continue even if the facility is closed. As a result, our overall operating expenses may increase and our profits may decrease. 28. We have entered into certain related party transactions. We have entered into certain related party transactions with our Promoters, Directors and Promoter Group entities and key managerial personnel. For details refer to section titled "Related Party Transactions" on page no. [*] of this Draft Letter of Offer. 29. We have not provided for certain contingent liabilities which may affect our financial position. As on September 30, 2007 and March 31, 2008, we have not provided for the following contingent liabilities: (a) (Rs. In lakhs) Particulars March 31, 2008 September 30, 2007 Bank Guarantee 200.00 211.00 Letter of Credit 902.28 2,025.43 Excise duty, Income tax & Sales tax demand & show cause notice 1,451.01 *836.87 * out of the above cases against which demand of Rs 341.20 Lakhs was outstanding has been allowed / remanded back to the appropriate authority in subsequent period. b) Differential Cane price payable, if any, for the season 2006-2007 and 2007-2008, on the re-assessement and refixing of state Advisory Price (SAP) by the UP State Government - Amount not ascertainable 30. Some of our Promoter Group Companies have incurred losses in past Some of our Promoter Group Companies have incurred losses within the last 3 financial years, details of which are set forth below: Sr. No. 1. 2. Name of Company Adharshila Capital Services Limited Deepjyoti Electronics Private Limited xii Financial year in which profit after tax was negative (in Rs. lakhs) 31/03/2007 31/03/2006 31/03/2005 (0.02) (3.55)

Sr. No. 3. 4. 5. 6. 7. 8. 9.

Name of Company Lipi Consultants Private Limited New Castle Finance & Leasing Private Limited Shree Uttam Colonisers Private Limited Shubham Sugars Limited Telma Trading Private Limited Uttam Car Wash Private Limited Uttam Tubes Private Limited

Financial year in which profit after tax was negative (in Rs. lakhs) 31/03/2007 31/03/2006 31/03/2005 (4.50) (11.16) (0.08) (0.21) (1.16) (0.71) (0.71) (0.78) (2.26) (2.23) (0.04) (0.08)

For more details please see the section titled "Our Promoter and Promoter Group Companies" beginning on page [*] of the Draft Letter of Offer. 31. We have applied for certain registrations, for which we have not received approvals. If we do not receive the registrations, we may not be able to carry on our operations from such locations and it could adversely affect our business. We have applied for certain regisration / re-newal under applicable laws. We are yet to receive the registrations / re-newals from the appropriate authorities. For further details please refer to section titled "Government and Other Approvals" on page [*] of this Draft Letter of Offer. 32. Bagasse, which is derived from sugarcane, and other biomass based fuels are the basic raw materials for our co-generation business. Any constraint in the availability or fluctuations in the price of sugarcane may affect the current or future capacity utilisation of the co-generation plant. Bagasse and other biomass based products such as rice husk, cane trash, mustard stalk/husk woodchips, are raw materials for the co-generation business. Availability of the primary fuel, Bagasse is dependent on the supply of sugarcane. Further, these raw materials are also used in some industries such as paper and paperboard. The availability of Bagasse and other biomass based raw materials for co-generation is subject to changes in the consumption patterns and other market forces in such other industries. Additionally, other industries may offer higher prices which may divert the supply of externally sourced raw material, which may in turn adversely affect the availability or pricing of these raw materials could impact our co-generation business and our profitability. Any constraint in the availability of sugarcane may affect the availability of Bagasse and consequently, the business of our co-generation plant. 33. Our proposed ethanol business is molasses based, which is derived from sugarcane. Any constraint in the availability of sugarcane may affect the current or future capacity utilisation of the proposed ethanol business. One of the by-products of sugar production is molasses. Our proposed plant will use molasses as raw material for production of ethanol. Any constraint in the availability of molasses, will affect the results of our proposed ethanol business. External Risk Factors 1. The sugar prices in India are impacted by the world sugar production and consumption. The global demand and production may affect the prices for Sugar. Sugar is produced in 110 countries. The increase in production of Sugar in major sugar producing countries like Brazil, China, Thiland, European Union (EU) has created surplus in the global sugar market and has resulted in lowering of the sugar prices in past few years. If such surplus phase characterized by a significant excess of global production over consumption continues, we cannot assure of higher realization prices of sugar being produced by us. Changes in Government Policies and political situation in India may have an adverse impact on the business and operations of our Company Since 1991, the Government of India has pursued policies of economic liberalization, including relaxing restrictions on the private sector. We cannot provide any assurance that the process of liberalization will be xiii

2.

sustained in future. There could be a slowdown in the pace of economic development. The rate of economic liberalization could change, specific laws and policies, foreign investment, currency exchange rates and other matters affecting investing in our securities could change as well. Any adverse change in Government policies relating to the Sugar Industry in general may have an impact on our profitability. 3. Civil disturbances, extremities of weather, regional conflicts and other political instability may have adverse affects on our operations and financial performance. Certain events that are beyond our control such as earthquake, fire, floods and similar natural calamities may cause interruption in the services provided by us. All our facilities are located in India and most of our officers and directors are residents in India. Our operations and financial results and the market price and liquidity of our equity shares may be affected by changes in Indian Government policy or taxation or social, ethnic, political, economic or other adverse developments in or affecting India. Regional or International hostilities, terrorist attack or other acts of violence of war could have a significant adverse impact on international or Indian financial markets or economic conditions or on Government Policy. Such incidents could also create a greater perception that investment in Indian Companies involves a higher degree of risk and could have an adverse impact on our business and on the market price of our company's equity shares. Our Company is subject to risk arising from changes in interest rates and banking policy. We are dependent on various banks for arranging our working capital requirements, etc. Accordingly, any change in the existing banking policy or increase in interest rates may have an adverse impact on our Company's profitability. Statutory taxes and other levies may affect our margin in the event of our inability to factor such expense in our selling prices. Any increase in taxes and / or levies, or the imposition of new taxes and / or levies in the future, could increase the cost of production / operating expenses. To the extent, our Company is not able to factor such increase in the selling price; it may have a material adverse impact on our business operations and financial conditions. Any disruption in supply of power, water or other basic infrastructure facilities could adversely affect the business and production process of our Company or subject it to excess cost, which in turn will have an adverse impact on our profitability. Global economic, political and social conditions may harm our ability to do business, increase our costs and negatively affect our stock price. External factors such as potential terrorist attacks, acts of war or geopolitical and social turmoil in many parts of the world could constrain our ability to do business, increase our costs and negatively affect our stock price. These geopolitical, social and economic conditions could result in increased volatility in India and worldwide financial markets and economy, and such volatility could constrain our ability to do business, increase our costs and negatively affect our stock price. Natural calamities could have a negative impact on the Indian economy and cause the business to suffer. India has experienced natural calamities such as earthquakes, tsunami, floods and drought in the past few years. The extent and severity of these natural disasters has an impact on the Indian economy. Any negative impact of natural disasters on the Indian economy could adversely affect the business and the market price of the Equity Shares.

4.

5.

6.

7.

8.

9.

10. The market value of the Equity Shares may fluctuate due to the volatility of the securities markets. As such shareholders will bear the risk of fluctuation in the price of Equity Shares The securities markets are volatile and stock exchanges have in the past, experienced substantial fluctuations in the prices of listed securities. The stock exchanges have experienced problems, which, if these were to continue or recur, could affect the market price and liquidity of the securities of Indian Companies, including the Equity Shares. The governing bodies of the various Indian stock exchanges have from time to tome imposed restrictions on trading in certain securities, limitations on price movements and margin requirements. xiv

Notes to Risk Factors: 1. 2. 3. The Net Worth of the Company as on September 30, 2007 and March 31, 2008 as per audited financial statements was Rs. 16,787.95 Lakhs & Rs. 16,490.10 Lakhs respectively. Book value of per equity share of the Company as per Audited Accounts as on September 30, 2007 and March 31, 2008 is Rs. 65.15 and Rs. 63.99 respectively. Issue is of 64,42,250 Equity Shares of Rs. 10/- each at a price of Rs. [*] per Equity Share for cash aggregating to Rs. [*] to the existing shareholders on rights basis in the ratio of one equity share for every four equity shares held by the shareholders on the record date i.e. [*], along with one detachable warrant per equity share offered. Each detachable warrant shall be entitiled to issue and allotment of one equity share of face value of Rs. 10/- each at a premium of Rs. 40/- per equity share on the terms detailed on page [*] of the Draft Letter of Offer. The average cost of acquisition of the Equity Shares by the Promoters is as under: Name of the Promoter Average cost of acquisition Mr. Raj Kumar Adlakha Rs. 15/- per share Mr. Rajan Adlakha Rs. 15/- per share Mr. Ranjan Adlakha Rs. 15/- per share Uttam Industrial Engineering Limited Rs. 15/- per share Lipi Boilers Limited Rs. 15/- per share Uttam Sucrotech Limited Rs. 15/- per share Our Directors, Promoters, Promoter Group entities and Directors of the Promtoers have not consummated any transactions in the Equity shares of our Company during the preceding 6 months from the date of filing of the Draft Letter of Offer with SEBI. The Investors are advised to refer to the paragraph on "Basis for Issue Price" on page no. [*] of this Draft Letter of Offer before making any investment in this Issue. The Investors may contact the Compliance Officer or Registrar to the Issue or Lead Manager to the Issue for any complaint / clarification / information pertaining to the Issue. For details of common pursuits, please refer to chapter titled "Our Promoters" on page [*] of this Draft Letter of Offer. Except as disclosed in the "Related Party Transactions" on page [*] of this Draft Letter of Offer, we have not paid any consideration to our Promoters / Promoter Group Entities / Directors / Key Management Personnel. No part of the Issue proceeds will be paid by us as consideration to our Promoter, Directors, Promoter Group Entities or Key Managerial Employees, except the cost of certain plant and machinery being sourced from Promtoers / Promoter Group Companies and in the normal course of our business. Trading in equity shares of our company is in dematerialized form only. Our Company and the Lead Managers shall make all the information available to the public and the investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever. We and the Lead Manager shall update this Draft Letter of Offer and keep the shareholders / public informed of any material changes / developments.

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5. 6. 7. 8. 9. 10. 11. 12. 13.

xv

SUMMARY This is only a summary and does not contain all the information that you should consider before investing in our Equity Shares. You should read the following summary with the risk factors beginning on page [*] of this Draft Letter of Offer and the more detailed information about Uttam Sugar Mills Limited and the financial statements included in this Draft Letter of Offer. INDUSTRY OVERVIEW World Sugar Scenario Sugar is produced in 110 countries. Brazil and India are the largest sugar producing countries followed by China, USA, Thailand, Australia, Mexico, Pakistan, France and Germany. The International Sugar Organisation (ISO) has estimated a higher global sugar surplus of 11.1 million tonnes for the year 2007-08. The ISO had in May, 2007 pegged the surplus at around 9.1 million tonnes. In its quarterly report released in November 2007, the ISO said global sugar output is estimated at 170.31 million tonnes against a consumption demand of 159.17 million tonnes. World consumption is projected to grow by 2.4%, only a fraction up from the 10-year average of 2.3%. For 2007-08, world export availability is projected to exceed import demand by more than 4.27 million tonnes. (Source : ISMA, www.indiansugar.com) Indian Sugar Industry Sugar is a sector of significant importance to the national economy. The sugar industry is the second largest agrobased industry, next to textiles in the country. There were 501 sugar factories in operation in the year 2006-07 which crushed approximately 278.87 million ton of sugarcane producing 28.33 million ton of sugar. The Government of India licensed new units with an initial capacity of 1250 TCD up to the 1980s and with the revision in minimum economic size to 2500 TCD, the Government issued licenses for setting up of 2500 TCD plants thereafter. The Government de-licensed sugar sector w.e.f. 11.9.1998. The entrepreneurs have been allowed to set up sugar factories or expand the existing sugar factories as per the techno-economic feasibility of the project. However, they are required to maintain a radial distance of 15 kms from the existing sugar factory. (Source: Department of Food and Public Distribution, http://fcamin.nic.in) After de-licensing, a number of new sugar plants of varying capacities have been set up and the existing plants have substantially increased their capacity. Production of Sugar in India (Million tonnes) Year Production 2000-01 18.51 2001-02 18.52 2002-03 20.14 2003-04 13.99 2004-05 12.69 2005-06 19.26 2006-07 28.33 2007-08 (E) 26.10 (Indian Sugar journal May 2008 of ISMA) The sugar industry in the country uses sugarcane as input, and majority of the sugar mills are set up in large sugarcane growing states like Uttar Pradesh, Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Andhra Pradesh.Uttar Pradesh and Maharashtra together contribute more than half of the of total production.

1

Annual Installed Production Capacity of top sugar producing states States Maharashtra Uttar Pradesh Karnataka Tamil Nadu Gujarat Andhra Pradesh 2006-07 7.05 6.69 1.85 1.54 1.07 9.32 (000 tonnes) 2005-06 2004-05 7.01 6.98 5.23 4.54 1.54 1.46 1.52 1.52 1.07 1.07 9.08 9.08 (Source : ISMA Handbook of Sugar Statistics)

Current Scenario There has been a record cane and sugar production for two consecutive years i.e. 2006-07 & 2007-08 and two buffer stocks. As a result of which prices of sugar has came down substantially in 2006-07. The whole sale sugar prices which were prevailing Rs 1900 - 2000 per quintal in mid 2006 have come down substantially and touched a low of Rs. 1250 - 1300 per quintal in March - April 2007. The whole sale sugar prices in June 2008 are hovering around Rs. 1450 - 1500 per quintal. However as the farmer is reported to be moving away from this crop in the current year, India's sugar output is likely to dip in the crushing season 2008-09. Cogeneration in sugar industry It is estimated in the 11th five year plan that sugar industry has a potential to co-generate bagasses based generation of up 5000 MW of power. Many of sugar units have invested in Co-generation and are able to export surplus power after meeting captive requirement. Revenues from sale of surplus electricity can go a long way in improving the viability of sugar mills. It has been estimated that `optimum cogeneration' can result in an additional net value addition of Rs 70­ 100 per tonne of cane crushed at current typical electricity sale prices. Ethanol as a fuel - Overview Ethanol is one of the by-products of the sugar industry. It is made from molasses, which still contain some sugar, but this sugar cannot be extracted using current technologies. These molasses are fermented with yeast to give ethyl alcohol. The mixture is then distilled to separate the alcohol from the mixture. The ethanol molecule contains oxygen, it allows the engine to more completely combust the fuel, resulting in fewer emissions. Therefore, ethanol has many advantages as an automotive fuel. The Government announced Ethanol blended petrol scheme in 2002 to encourage alternative fuel, ethanol in the larger interest of cane farmers and also its beneficial impact on environmental protection. the blending of petrol with 5% ethanol has been permitted, in all states excepting the North-East states. India requires an estimated 550 million litters of Ethanol. The government is considering a proposal to make 5% blending compulsory with immediate effect across the country, which is expected to increase to 10% from October 2008. COMPANY OVERVIEW We are in the business of manufacturing sugar with a total installed crushing capacity of 22,750 TCD. We started operations in January, 2001 by setting up a 2500 TCD sugar plant in Village Libberheri, Tehsil Roorkee, District Haridwar, Uttarakhand. The capacity of the plant has since been increased to 6250 TCD in 2004. We installed and commissioned our second unit for manufacturing of sugar in 2005 with a capacity of 3500 TCD (expanded now to 7000 TCD) at Barkatpur, district Bijnaur, Uttar Pradesh . We have also commissioned two units at Khaikheri in January 2007 and Shermau in April 2007 in Uttar Pradesh with crushing capacity of 4500 TCD and 5000 TCD respectively. Along with the sugar manufacturing unit we also have Co-generation capacity of at all our four sugar units with a total capacity of 81 MW. Our businesses can be categorised into two broad areas, namely Sugar Production and Power Co-generation. However the power co-generation is used for captive consumption. Further we have also decided to venture into production of ethanol from Mollasses to improve the financial viability of our sugar mills. During the Financial year 2006-07 we crushed 216.72 Lac Quintals of Cane and manufactured 21.35 Lac Quintals of sugar at a recovery rate of 9.86% in the crushing season as compared to 112.39 Lac Quintals of cane crushed and 2

11.12 Lac Quintals of Sugar manufactured for financial year 2005-06. Our sale from sugar increased to Rs. 26,111.81 Lakhs in the financial year 2006-07 from Rs. 19,943.61 Lakhs in the financial year 2005-06. The income from sale of molasses in 2006-07 increased to Rs. 2899.40 Lakhs from 1716.40 Lakhs in 2005-06. In view of downtrend in sugar industry we incurred a net loss of Rs. 4,976.60 lakhs on net sales of Rs. 27,886.55 lakhs in the financial year 2006-07 as against net profit Rs. 2,274.57 lakhs on net sales of Rs. 21,454.90 lakhs in the financial year 2005-06. During the 6 months period ended March 31, 2008 we have incurred a net loss of Rs. 293.04 lakhs on net sales of Rs. 14,310.85 lakhs as per the restated financial statements. COMPETITIVE STRENGTHS We face competition from the established large players in the industry. Some of our strengths are as follows: · Our Promoters have industry specific knowledge & experience in the of the Sugar Industry Our promoters Mr. Raj Kumar Adlakha, Mr. Ranjan Adlakha, Mr. Rajan Adlakha and Uttam Industrial Engineering Limited (UIEL) have been associated with the Sugar Industry for over 23 years. UIEL has been assisting a number of sugar mills in project implementation and providing technical support since its incorporation. We are eligible for various incentives under Government Policy Our Libberheri unit (at Uttarakhand) is eligible for Income Tax deduction under section 80-IC and is also eligible for the exemption from excise duty for 10 years commencing from Assessment Year 2005-06. We are among the few players in the country to use Defeco Remelt Phospho floatation (DRP) Process to produce sulphurless sugar Most of the conventional sugar mills in India adopt Double Sulphitation Process to manufacture Plantation White Sugar. At the Libberheri unit, we have moved away from this conventional method of sugar manufacturing and adopted the Phosphoflotation process of manufacturing EC II grade refined sugar. This sugar meets the European standards of refined sugar (Colour of less than 45 IU). We produce sugar with negligible sulphur content. Refined sugar is preferred by industrial buyers and generally commands a premium over plantation white sugar. We have sugar refining capacity Our Libberheri unit is capable to produce sugar not only from sugarcane but also from raw sugar. This unit has a sugar refining capacity of 625 TPD which facilitates refining of raw sugar, thereby enabling us to have an increased utilisation of our refining capacity as compared to majority of other sugar manufacturers. We have captive generation of power Presently we have total Co-Generation facility of 81 MW which is proposed to increase to 136 MW. Cogeneration of power by us not only improves the economic viability of our sugar units but also their technical performance. Further the co-generation plants lead to reduction in transmission losses considerably and help in stablising the grid voltage because of their proximity to the load center.

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THE ISSUE The details of this Issue are set out below: Securities proposed to be issued by the Company 64,42,250 Equity Shares of Rs. 10/- each, along with one detachable warrant per equity share offered. Each detachable warrant shall be entitled to issue and allotment of one equity share of face value Rs. 10/- each at a premium of Rs. 40/- per equity share One Equity shares for every Four Equity Share held on the Record Date [*] Rs. [*] Rs. [*] Rs. 50/2,57,69,000 Equity Shares of Rs. 10/- each 3,22,11,250 Equity Shares of Rs. 10/- each 64,42,250 Equity Shares of Rs. 10/- each 3,86,53,500 Equity Shares of Rs. 10/- each Please see section "Objects of the Issue" on page [*] of this Draft Letter of Offer Premium [*] [*] [*] Total [*] [*] [*]

Rights Entitlement Record Date Issue Price per Equity Share Issue Size Exercise Price per Warrant Equity Shares outstanding prior to the issue Equity Shares outstanding after the Issue before exercise of detachable warrants Equity Shares to be issued on exercise of detachable warrants Equity Shares outstanding after exercise of detachable warrants (assuming all the warrants are exercised) Objects of the Issue Terms of payment for equity shares Due date On application On allotment Total

Face Value 5/5/10/-

Terms of payment for warrants The exercise price per warrant shall be payable in full on exercise of warrants. For more information see "Terms and Procedure of the Issue" on page [*] of this Draft Letter of Offer.

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SUMMARY OF FINANCIAL INFORMATION The following table sets forth our selected financial information derived from our audited financial statements for the financial years ended September 30, 2003, 2004, 2005, 2006, 2007 and 6 months period ended March 31, 2008. These financial statements have been prepared in accordance with Indian GAAP and the Companies Act and the annual financial statements have been restated as described in the auditors' report included therewith, in the section titled "Auditors Report" beginning on page [*] of this Draft Letter of Offer. The summary of financial information presented below should be read in conjunction with our financial statements, the notes thereto and the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" beginning on page [*] of this Draft Letter of Offer. Annexure -I (Rs.in lacs)

SUMMARY STATEMENT OF ASSETS AND LIABILITIES AS RESTATED As at A. Fixed Assets: Gross Block Less: Depreciation Net Block Capital Work-in-progress Total B. Investments C. Current Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank balances Loans and Advances Total D. Liabilities and Provisions: Secured Loans Unsecured Loans Current liabilities and Provisions Total E. Deferred Tax Liability (net) F. Networth (A+B+C-D-E) Net worth Represented by G. Share Capital H. Share Application Money I. Reserves & Surplus Miscellaneous Expenditure not yet J. written off 31.03.2008 30.09.2007

30.09.2006 30.09.2005 30.09.2004 30.09.2003

48,043.73 5,560.88 42,482.85 12,322.63 54,805.48 79.00 25,155.03 374.91 1,631.52 3,070.16 30,231.62 48,697.15 2,857.01 15,617.05 67,171.21 1,454.79 16,490.10

47,663.98 4,398.16 43,265.82 7,470.62 50,736.44 79.00 7,526.44 413.36 626.35 2,495.75 11,061.90 32,566.71 1,256.68 9,970.81 43,794.20 1,295.19 16,787.95

24,145.29 2,510.31 21,634.98 15,506.88 37,141.86 2.00 2,235.03 90.94 9,953.52 3,455.19 15,734.68 24,735.15 1,057.00 3,697.55 29,489.70 1,625.67 21,763.17

12,029.43 1,540.28 10,489.15 8,043.41 18,532.56 2.00 678.64 342.99 3,052.29 1,098.22 5,172.14 13,801.35 907.00 1,848.51 16,556.86 1,045.01 6,104.83

6,729.82 1,009.79 5,720.03 2,917.12 8,637.15 39.23 3,113.71 122.04 667.74 593.12 4,496.61 7,263.08 250.00 2,180.14 9,693.22 342.07 3,137.70

5,752.35 697.60 5,054.75 950.57 6,005.32 0.00 2,989.47 466.69 108.76 268.49 3,833.41 5,593.82 200.00 2,181.34 7,975.16 8.23 1,855.35

2,576.90 0.00 13,918.15 4.95

2,576.90 0.00 14,211.19 0.14

2,576.90 0.00 19,187.78 1.51

1,883.19 138.24 4,086.27 2.87

1,497.00 425.00 1,219.94 4.24

1,367.70 194.00 300.11 6.46

K. Networth (G+H+I-J) 16,490.10 16,787.95 21,763.17 6,104.83 3,137.70 1,855.35 Note: The above statement should be read with the Notes on adjustments and significant accounting policies & notes to the accounts for restated financial statements as appearing in Annexure III and IV to the report.

5

SUMMARY STATEMENT OF PROFIT AND LOSS ACCOUNT, AS RESTATED Financial Year ended Period Income Sales: Of Products manufactured by the Company Less: Excise Duty Net Sales Other Income Increase/(Decrease) in inventories Total Income (A) Expenditure Raw material consumed Other Manufacturing Expenses Salaries, Wages and Benefits Administration and other Expenses Depreciation Interest & Financial Charges Total Expenditure (B) Net (Loss)/Profit before exceptional items & tax (A-B) Exceptional Items Net (Loss)/Profit before Tax and Extraordinary Items Taxation Current Tax Minimum alternative Tax (MAT) Credit Entitlement Deferred Tax Fringe Benefit Tax Net (Loss)/Profit before Extraordinary Items Extraordinary Items (net of tax) Net (Loss)/ Profit after Extraordinary Items Income Tax for Earlier Years Net (Loss)/ Profit before adjustments

Annexure -II (Rs.in lacs)

31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003 (6 Months) (12 Months) (12 Months) (12 Months) (12 Months) (12 Months)

15,227.47 916.62 14,310.85 19.08 16,335.05 30,664.98

29,640.57 1,754.02 27,886.55 137.44 4,956.93 32,980.92

22,064.24 609.34 21,454.90 203.14 1,240.87 22,898.91

19,056.15 262.61 18,793.54 3.36 (2,249.29) 16,547.61

10,550.51 766.28 9,784.23 2.53 74.85 9,861.61

9,030.32 731.04 8,299.28 1.01 66.71 8,367.00

24,165.95 1,879.75 1,126.95 395.06 1,162.73 1,766.21 30,496.65 168.33 2,556.51 (2,388.18) 159.59 12.68 (2,560.45) (2,560.45) (2,560.45)

24,969.70 3,334.31 1,665.74 692.76 1,888.83 3,436.50 35,987.84 (3,006.92)

14,701.94 1,202.03 781.71 458.95 983.10 1,630.51 19,758.24 3,140.67

9,664.07 632.71 525.11 371.47 532.91 1,196.37 12,922.64 3,624.97

6,499.11 464.89 318.67 221.04 315.51 790.69 8,609.91 1,251.70

6,205.03 384.15 245.48 193.44 277.90 845.67 8,151.67 215.33

(3,006.92) (330.48) 30.77 (2,707.21) (2,707.21) (2,707.21)

3,140.67 287.03 (257.07) 815.58 19.79 2,275.34 2,275.34 2,275.34

3,624.97 245.50 702.93 5.45 2,671.09 2,671.09 29.76 2,641.33

1,251.70 97.50 333.85 820.35 606.20 214.15 214.15

215.33 16.00 (22.94) 222.27 222.27 222.27

6

ADJUSTED PROFIT AND LOSS ACCOUNT (As per SEBI Guidelines) Financial Year ended Period Net (Loss)/Profit before adjustments (As per audited accounts as above) Adjustment for: a) Impact of Auditors' Qualification Inventory valuation b) Prior Period Items c) Impact of changes in Accounting Policies Inventory valuation d) Exceptional Items e) Extraordinary Items (net of tax) f) Income tax for earlier years Total Impact of Adjustments Current Tax Impact of Adjustments on (a), (b) ,(c) & (d)above Total of Adjustments after Tax Impact Adjusted Net (Loss)/Profit after extraordinary items Profit & Loss Account at the beginning of the year Balance available for appropriation

(Rs.in lacs)

31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003 (6 Months) (12 Months) (12 Months) (12 Months) (12 Months) (12 Months) (2,560.45) (2,707.21) 2,275.34 2,641.33 214.15 222.27

0.62 2,556.51 2,557.13 289.72 2,267.41 (293.04) 473.81 180.77

0.31 (2,556.51) (2,556.20) (286.81) (2,269.39) (4,976.60) 5,450.41 473.81

(0.84) (0.84) (0.07) (0.77) 2,274.57 3,175.85 5,450.41

2.34 29.76 32.10 0.18 31.92 2,673.25 502.60 3,175.85

61.56 7.88 606.20 (29.27) 646.37 5.34 641.03 855.18 (352.58) 502.60

156.56 (10.17) 50.64 (606.20) (0.49) (409.66) 15.52 (425.17) (202.90) (149.68) (352.58)

Note: The above statement should be read with the Notes on adjustments and significant accounting policies & notes to the accounts for restated financial statements as appearing in Annexure III and IV to the report.

7

GENERAL INFORMATION The equity shares now being issued are subject to the terms and conditions of this Draft Letter of Offer, the enclosed CAF, the Memorandum and Articles of Association, Government and RBI approval, if applicable, the provisions of the Companies Act, 1956, Guidelines issued by SEBI, Listing Agreements with Stock Exchanges where the equity shares are proposed to be listed and such other notifications and regulations as may be issued by statutory authorities in this regard from time to time. This issue is pursuant to the resolution passed in the meeting of the Board of Directors of our Company held on January 31, 2008 and July 02, 2008. Present Issue ISSUE OF 64,42,250 EQUITY SHARES OF FACE VALUE OF Rs. 10/- EACH FOR CASH AT A PREMIUM OF Rs. [*] PER EQUITY SHARE (i.e. AT AN ISSUE PRICE OF Rs. [*] PER EQUITY SHARE) AGGREGATING Rs. [*] TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF ONE EQUITY SHARE FOR EVERY FOUR EQUITY SHARES HELD BY THE SHAREHOLDERS ON THE RECORD DATE, i.e., [*], ALONG WITH ONE DETACHABLE WARRANT PER EQUITY SHARE OFFERED ("ISSUE"). THE ISSUE PRICE OF EQUITY SHARES IS [*] TIMES OF THE FACE VALUE OF Rs. 10/- PER EQUITY SHARE. EACH DETACHABLE WARRANT SHALL BE ENTITLED TO ISSUE AND ALLOTMENT OF ONE EQUITY SHARE OF FACE VALUE OF Rs. 10/- EACH AT A PREMIUM OF Rs. 40/- PER EQUITY SHARE ON THE TERMS DETAILED ON PAGE [*] OF THIS OFFER DOCUMENT. THE PRICE AT WHICH WARRANT IS EXERCISABLE IS FIVE TIMES OF THE FACE VALUE OF Rs. 10/- PER EQUITY SHARE. REGISTERED OFFICE Village Libberheri, Roorkee District Haridwar - 247 667 Uttarakhand Tel.: + 91 1332 229 293 Fax: + 91 1332 229 194 Website: www.uttamsugar.com CORPORATE OFFICE A - 2E, III Floor, CMA Tower Sector 24, Noida - 201 301 Tel.: +91 120 2412716-8, 2412722-6 Fax: +91 120 2412715 E-mail: [email protected] Website: www.uttamsugar.com

Corporate Identification Number: L99999UR1993PLC032518 Address of the Registrar of Companies: Registrar of Companies (Uttar Pradesh and Uttarakhand) 10/499-B, Khalasi Line Allenganj, Kanpur - 208 002 Tel. No.: +91 512 255 0688 Listing The existing Equity Shares of the Company are listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE). The Company has received "in-principle" approvals from NSE & BSE for listing of securities being offered through this Draft Letter of Offer vide letters dated [*] and [*]. For the purpose of this Issue, the Designated Stock Exchange is NSE. Issue Schedule The subscription will open upon the commencement of the banking hours and will close upon the close of banking hours on the dates mentioned below: Issue Opening Date Last date for receiving requests for split application forms Issue Closing Date 8 [*] [*] [*]

Board of Directors Name & DIN Mr. Raj Kumar Adlakha DIN: 00133256 Mr. Rajan Adlakha DIN: 00040713 Mr. Ranjan Adlakha DIN: 00040741 Mr. Narendra Kumar Sawhney DIN: 00109853 Mr. Prabhakaran Singh Lalli DIN: 01341476 Dr. Ramasamy Vasudevan DIN: 00109908 Mr. Vikram Singh Tandon DIN: 00613079 Designation Managing Director Non - Executive Promoter Director Non - Executive Promoter Director Non - Executive Independent Director Non - Executive Independent Director Non - Executive Independent Director Non - Executive Independent Director Experience 29 years 21 years 23 years 38 years 4 years 38 years 24 years Residential Address KD - 51, Kavi Nagar, Ghaziabad 201 002 KD - 51, Kavi Nagar, Ghaziabad 201 002 KD - 51, Kavi Nagar, Ghaziabad 201 002 E - 32, Greater Kailash Enclave - 1, New Delhi - 110 048 C - 1/42, Pandara Park, New Delhi 110 003 B-25, 5th Cross, West Extension, Thillai Nagar, Trichy - 620 018 50 - D, DDA Flats, Masjid Moth, New Delhi - 110 048

For more details regarding the Company's Directors please refer to "Our Management" on page [*] of this Draft Letter of Offer. Company Secretary and Compliance Officer Mr. G Ramarathnam Chief - Legal and Corporate Affairs & Company Secretary & Compliance Officer A-2E, III Floor, CMA Tower Sector-24, Noida - 201 301 Tel.: +91 120 6545766 Fax: +91 120 2412715 E-mail: [email protected] Website: www.uttamsugar.com Note: Investors are advised to contact the Compliance Officer or the Registrar to the Issue in case of any pre / post issue related problems such as non-receipt of Letter of Offer / CAF / letter of allotment / share certificate(s) / refund orders. Note: 1. This Issue is applicable to such Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held in the electronic form and on the Register of Members of the Company at the close of business hours on the Record Date i.e. [*]. 2. Your attention is drawn to the section on risk factors starting from page no. [*] of this Letter of Offer. 3. Please ensure that you have received the CAF with this Letter of Offer. 4. Please read the Letter of Offer and the instructions contained herein and in the CAF carefully before filling in the CAF. The instructions contained in the CAF are an integral part of this Letter of Offer and must be carefully followed. An application is liable to be rejected for any non-compliance of the Letter of Offer or the CAF. 5. All enquiries in connection with this Letter of Offer or CAF should be addressed to the Registrar to the Issue, Skyline Financial Services Private Limited quoting the Registered Folio number / DP and Client ID number and the CAF numbers as mentioned in the CAF. 6. 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 the Letter of Offer with SEBI. 7. All the legal requirements as applicable till the filing of the Letter of Offer with the Designated Stock Exchange has been complied with. 8. The Lead Managers and the Company shall update the Letter of Offer and keep the public informed of any material changes till the listing and trading commences. 9

ISSUE MANAGEMENT TEAM Lead Manager to the Issue SPA Merchant Bankers Limited 25, C - Block, Community Center, Janak Puri, New Delhi - 110 058 Tel.: +91 11 4567 5500 Fax: +91 11 2557 2763 E-mail: [email protected] Website: www.spacapital.com Contact Person: Mr. Nitin Somani / Mr Saurabh Gupta Legal Advisor to the Issue JurisPrudent Consulting Partners 1st Floor, Paramount Tower C-17, Community Centre Janak Puri, New Delhi-110 058 Tel.: +91 11 32000177 Fax: +91 11 41588441 E-mail: [email protected] Contact Person: Mr. Ajay Jain Bankers to the Issue [*] Registrar to the Issue Intime Spectrum Registry Limited C - 13, Pannalal Silk Mills Compound LBS Marg, Bhandup (West) Mumbai - 400 078 Tel.: +91 22 2596 0320 Fax: +91 22 2596 0328 - 29 E-mail: [email protected] Website: www.intimespectrum.com Contact Person: Ms. Awani Thakkar Auditors of the Company B K Kapur & Company Chartered Accountants 17, Navyug Market Ghaziabad - 201 001 Telefax: +91 120 279 0951 E-mail: [email protected] Contact Person: Mr. Madhu Sudan Kapur Bankers of the Company IDBI Bank Limited 1, Red Cross Road Indian Red Cross Building, New Delhi ­ 110 001 Tel.: +91 11 2371 6181 - 81 Fax: +91 11 2371 1664

10

Indian Overseas Bank Rajiv Circle Branch D - 28, 29, Connaught Place, New Delhi - 110 001 Tel.: +91 11 2341 7768 Fax: +91 11 2341 6241 Punjab National Bank Mohan Nagar, Ghaziabad, (U. P.) Tel.: +91 120 294 0103 Fax: +91 120 294 0394

Oriental Bank of Commerce Industrial Finance Branch H-15, Connaught Circus, New Delhi ­ 110 001 Tel.: +91 11 2373 9767 Fax: +91 11 2331 8473 State Bank of India SIB Branch, Navyug Market, Ghaziabad, (U.P.) Tel.: +91 120 279 1066 Telefax: +91 120 279 0665

Credit Rating This being a right issue of equity shares, no credit rating is required. IPO Grading This being a right issue of equity shares, no IPO Grading is required. Trustees This being a Rights Issue of Equity Shares, appointment of Trustees is not required. Impersonation As a matter of abundant caution, 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." Minimum Subscription If the company does not receive the minimum subscription of 90% of the issued amount on the date of closure of the issue, or if the subscription level falls below 90% after the closure of issue on account of cheques having being returned unpaid or withdrawal of applications, the company shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days after the company becomes liable to pay the amount, the company shall pay interest as per Section 73 of the Companies Act, 1956. Underwriting / Standby Support This Right Issue of Equity shares is not been underwritten. Declaration by the Board on creation of separate account The Board of Directors declares that funds received against this issue will be transferred to a separate bank account other than the Bank account referred to in sub-section (3) of the Section 73 of the Companies Act.

11

CAPITAL STRUCTURE Capital Structure of the Company Share Capital A. (in Rs. unless otherwise stated) Aggregate value Aggregate Value at face value at Issue Price 40,00,00,000 25,76,90,000 6,44,22,500 6,44,22,500 [*] 32,21,12,500

Authorised Share Capital 4,00,00,000 Equity Shares of Rs. 10/- each B. Current Issued, Subscribed & Paid up Capital before the Issue 2,57,69,000 Equity Shares of Rs. 10/- each C. Present Issue being Offered to the Equity Shareholders through this Draft Letter of Offer: (i) Equity Shares: 64,42,250 Equity Shares of Rs. 10/- each for cash at a premium of Rs. [*] per equity share (ii) Detachable Warrants: 64,42,250 warrants convertible into 64,42,250 Equity Shares of Rs. 10/- each for cash at a premium of Rs. 40/- equity share D. Issued, Subscribed and Paid-up Capital after the Issue: 3,22,11,250 (1) Equity Shares of Rs. 10/- each outstanding after the issue but before exercise of warrants 3,86,53,500 (2) Equity Shares of Rs. 10/- each outstanding after the issue post Warrant Exercise E. Share Premium Account: Before the Issue After the Issue (1) Assuming receipt of full payment on call notice on 64,42,250 equity shares. (2) Assuming full conversion of detachable warrants into 64,42,250 equity shares. Changes in Authorised Share Capital Date of shareholders approval On Incorporation August 29, 2000 December 31, 2001 April 24, 2004 June 19, 2004 April 30, 2005 August 16, 2005 September 02, 2005 February 29, 2008

32,21,12,500 38,65,35,000 1,37,68,52,548 [*]

Details of modification to the Authorised Share Capital The Authorised Share Capital was Rs. 20,000,000/- divided into 2,000,000 equity shares of Rs. 10/- each The authorized share capital was increased to Rs. 125,000,000/- divided into 12,500,000 equity shares of Rs. 10/- each. The authorized share capital was increased to Rs. 150,000,000/- divided into 15,000,000 equity shares of Rs. 10/- each The authorized share capital was increased to Rs. 170,000,000/- divided into 17,000,000 equity shares of Rs. 10/- each Sub-division of Capital: One equity share of face value Rs. 10/- each was sub-divided into 2 equity shares of face value Rs. 5/- each. Consequent of sub-division, the authorised share capital was Rs. 170,000,000/- divided into 34,000,000 equity shares of Rs. 5/- each The authorized share capital was increased to Rs. 200,000,000/- divided into 40,000,000 equity shares of Rs. 5/- each The authorized share capital was increased to Rs. 300,000,000/- divided into 60,000,000 equity shares of Rs. 5/- each Consolidation of Capital: The equity share capital was consolidated from face value of Rs. 5/each to Rs. 10/- each. Consequent to consolidation, the authorized share capital was Rs. 300,000,000/- divided into 3,00,00,000 equity shares of Rs. 10/- each The authorized share capital was increased to Rs. 400,000,000/- divided into 40,000,000 equity shares of Rs. 10/- each. 12

Notes to capital structure: 1. Build up of Equity Share Capital No. of shares allotted 70 93,70,000 16,00,000 Face Value (Rs.) 10 10 10 Issue Price (Rs.) 10 15 15 Consideration Cash Cash Cash Cumulative paid-up share capital (Rs.) 700 937,00,700 10,97,00,700 Cumulative securities premium account (Rs.) 4,68,50,000 5,48,50,000 Remarks

Date of allotment 14/10/1993 17/11/2000 02/01/2002

Allotment to subscribers Allotment to Promoter Group Allotment to Promoter Group & Others 15/03/2002 27,06,900 10 15 Cash 13,67,69,700 6,83,84,500 Allotment to Promoter Group & Others 09/03/2004 12,93,030 10 15 Cash 14,97,00,000 7,48,49,650 Allotment to Promoter Group & Others 19/06/2004 2,99,40,000 5 - 14,97,00,000 7,48,49,650 Sub-division of 1 equity share of Rs. 10/- each into 2 equity shares of Rs. 5/- each 27/07/2005 44,59,800 5 7.50 Cash 17,19,99,000 8,59,99,150 Allotment to Promoter Group 22/08/2005 32,64,000 5 7.50 Cash 18,83,19,000 9,41,59,150 Allotment to Promoter Group 02/09/2005 1,88,31,900 10 - 18,83,19,000 9,41,59,150 Consolidation of equity shares from face value of Rs. 5/- each to face value of Rs. 10/- each 17/10/2005 12,82,600 10 15 Cash 20,11,45,000 10,05,72,150 Allotment to Promoter Group 10/11/2005 74,000 10 15 Cash 20,18,85,000 10,09,42,150 Allotment to others 15/12/2005 13,31,000 10 15 Cash 21,51,95,000 10,75,97,150 Allotment to Promoter Group & Others 23/12/2005 2,49,500 10 15 Cash 21,76,90,000 10,88,44,650 Allotment to Promoter Group & Others 03/04/2006 40,00,000 10 340 Cash 25,76,90,000 1,37,68,52,548* Allotment pursuant to the Initial Public Offering by the Company * Rs. 5,19,92,102 on account of Share Issue expenses has been written off against securities premium account. 2. Share Capital History of the Promoters Name of the Promoter Uttam Sucrotech Ltd Date of Allotment / Transfer 17.11.2000 19.06.2004 02.09.2005 05.10.2005 15.12.2005 Sub Total (A) 17.11.2000 15.03.2002 19.06.2004 22.08.2005 27.08.2005 02.09.2005 15.12.2005 23.12.2005 Sub Total (B) Consideration Cash Sub-Division Consolidation Cash Cash Cash Cash Sub Division Cash Cash Consolidation Cash Cash No. of Equity Shares 5,61,044 11,22,088 5,61,044 25,83,223 3,30,000 34,74,267 14,66,500 13,50,000 56,33,000 14,00,000 11,52,086 40,92,543 3,30,000 2,29,500 46,52,043 13 Face Value (Rs.) 10 5 10 10 10 10 10 5 5 5 10 10 10 Issue / Transfer Price (Rs.) 15 NA NA 15 15 15 15 NA 7.50 7.50 NA 15 15 Remarks Allotment NA NA Acquisition Allotment Allotment Allotment NA Allotment Acquisition NA Allotment Allotment

Uttam Industrial Engineering Limited

Name of the Promoter Lipi Boilers Limited

Raj Kumar Adlakha

Rajan Adlakha

Ranjan Adlakha

Date of Allotment Consideration / Transfer 17.11.2000 Cash 02.01.2002 Cash 19.06.2004 Sub Division 06.05.2005 Cash 27.07.2005 Cash 22.08.2005 Cash 27.08.2005 Cash 27.08.2005 Cash 27.08.2005 Cash 02.09.2005 Consolidation Sub Total (C) 07.10.1998 Cash 17.11.2000 Cash 02.01.2002 Cash 19.06.2004 Sub-Division 24.10.2004 Cash 24.10.2004 Cash 22.08.2005 Cash 02.09.2005 Consolidation 17.10.2005 Cash 15.12.2005 Cash Sub Total (D) 07.10.1998 Cash 17.11.2000 Cash 02.01.2002 Cash 19.06.2004 Sub Division 02.09.2005 Consolidation Sub Total (E) 07.10.1998 Cash 17.11.2000 Cash 02.01.2002 Cash 09.03.2004 Cash 19.06.2004 Sub Division 24.10.2004 Cash 24.10.2004 Cash 02.09.2005 Consolidation Sub Total (F) Total (A+B+C+D+E+F)

No. of Equity Shares 4,35,107 9,15,000 27,00,214 2,66,000 6,66,600 13,34,000 31,154 7,38,646 6,89,068 32,12,841 32,12,841 10 1,20,000 10,000 2,60,020 2,13,200 80,000 3,30,000 4,41,610 5,33,000 6,50,000 16,24,610 10 3,00,000 67,000 7,34,020 3,67,010 3,67,010 10 1,53,500 65,700 4,93,130 14,24,680 1,33,200 1,60,000 8,58,940 8,58,940 1,41,89,711

Face Value (Rs.) 10 10 5 5 5 5 5 5 5 10 10 10 10 5 5 5 5 10 10 10 10 10 10 5 10 10 10 10 10 5 5 5 10

Issue / Transfer Price (Rs.) 15 15 NA 7.50 7.50 7.50 7.50 7.50 7.50 NA 10 15 15 NA 7.50 7.50 7.50 NA 15 15 10 15 15 NA NA 10 15 15 15 NA 7.50 7.50 NA

Remarks Allotment Allotment NA Acquisition Allotment Allotment Acquisition Acquisition Acquisition NA Acquisition Allotment Allotment NA Acquisition Acquisition Allotment NA Allotment Allotment Acquisition Allotment Allotment NA NA Allotment Allotment Allotment Allotment NA Acquisition Acquisition NA

3.

The Pre and Post Issue Shareholding Pattern of our Company is as follows: Pre Issue Post Issue before Warrant Exercise Total No. of %age of Shares total No. of shares 1,77,37,139 74,09,300 2,51,46,439 55.05 23.02 78.07 Post Issue after warrant exercise Total No. of %age of Shares total No. of shares 2,12,84,567 88,91,160 3,01,75,727 55.05 23.02 78.07

Category of Shareholders (A) Promoter and Promoter Group Promoters Promoter Group Total (A)

Total No. of Shares

%age of total No. of shares 55.05 23.02 78.07 14

1,41,89,711 59,27,440 2,01,17,151

Pre Issue Category of Shareholders (B) Public Shareholding Institutions Financial Institutions / Banks FIIs Non-Institutions Bodies Corporate Individual shareholders holding nominal share capital in excess of Rs. 1 lakh Individual shareholders holding nominal share capital up to Rs. 1 lakh Others Total Public shareholding (B) Total (A)+(B) Total No. of Shares %age of total No. of shares 1.70 0.34 3.80 2.16 13.04 0.89 21.93 100.00

Post Issue before Warrant Exercise Total No. of %age of Shares total No. of shares 5,47,490 1,08,062 12,25,737 6,95,980 42,00,778 2,86,764 70,64,811 3,22,11,250 1.70 0.34 3.80 2.16 13.04 0.89 21.93 100.00

Post Issue after warrant exercise Total No. of %age of Shares total No. of shares 6,56,988 1,29,674 14,70,884 8,35,176 50,40,934 3,44,117 84,77,773 3,86,53,500 1.70 0.34 3.80 2.16 13.04 0.89 21.93 100.00

4,37,992 86,450 9,80,590 5,56,784 33,60,622 2,29,411 56,51,849 2,57,69,000

Note: The post Issue shareholding pattern is based on the assumption that all shareholders subscribe in respective categories to their entitlement in full. 4. Details of the shareholding of the Promoters, Promoter Group and the directors of the promoters in our Company as on date of filing of Draft Letter of Offer with SEBI Name of the shareholder Raj Kumar Adlakha Rajan Adlakha Ranjan Adlakha Uttam Industrial Engineering Limited Uttam Sucrotech Limited Lipi Boilers Limited Sub total (A) Promoter Group 7 Balram Adlakha 8 Ranjana Chopra 9 Rajni Babbar 10 Jai Adlakha 11 Shomna Adlakha 12 Sonia Adlakha 13 Rajkumar Adlakha Karta 14 Uttam Chand Adlakha 15 Saieesha Adlakha 16 Bharat Adlakha 17 Shubham Sugars Limited 18 Kumari Shanta 19 New Castle Finance & Leasing Private Limited 20 G M Colonisers Private Limited Sub total (B) Total (A) + (B) 15 No. of shares 16,24,610 3,67,010 8,58,940 46,52,043 34,74,267 32,12,841 1,41,89,711 1,93,100 3,73,300 1,39,910 1,66,500 8,70,410 10 53,300 6,33,610 1,66,500 1,66,500 28,000 60,000 22,62,650 8,13,650 59,27,440 2,01,17,151 %age of holding 6.30 1.42 3.33 18.05 13.48 12.47 55.05 0.75 1.45 0.54 0.65 3.38 0.21 2.46 0.65 0.65 0.11 0.23 8.78 3.16 23.02 78.07

Sr. No. Promoters 1 2 3 4 5 6

5.

Details of shares locked-in as Promoters Contribution since the IPO made by us in March 2006 Name of Shareholder Uttam Industrial Engineering Limited Uttam Sucrotech Limited Lipi Boilers Limited Total No. of shares 19,26,043 28,83,223 3,44,534 51,53,800 %age of preissue capital 7.47 11.19 1.34 20.00 Lock-in upto April 05, 2009. Out of these 12,50,000 equity shares are pledged with IDBI and PNB April 05, 2009 April 05, 2009. The said equity shares are pledged with IDBI and PNB

6.

The list of top 10 shareholders of our Company and the number of Equity Shares held by them is as under: a) As on date of filing of Draft Letter of Offer with SEBI Name of shareholder Uttam Industrial Engineering Limited Uttam Sucrotech Limited Lipi Boilers Limited New Castle Finance & Leasing Limited Raj Kumar Adlakha Shomna Adlakha Ranjan Adlakha G M Colonisers Private Limited Uttam Chand Adlakha Punjab National Bank No. of shares held 46,52,043 34,74,267 32,12,841 22,62,650 16,24,610 8,70,410 8,58,940 8,13,650 6,33,610 4,37,992 Percentage 18.05 13.48 12.47 8.78 6.30 3.38 3.33 3.16 2.46 1.70

b) As on 10 days prior to the date of filing of Draft Letter of Offer with SEBI Name of shareholder Uttam Industrial Engineering Limited Uttam Sucrotech Limited Lipi Boilers Limited New Castle Finance & Leasing Limited Raj Kumar Adlakha Shomna Adlakha Ranjan Adlakha G M Colonisers Private Limited Uttam Chand Adlakha Punjab National Bank c) No. of shares held 46,52,043 34,74,267 32,12,841 22,62,650 16,24,610 8,70,410 8,58,940 8,13,650 6,33,610 4,37,992 Percentage 18.05 13.48 12.47 8.78 6.30 3.38 3.33 3.16 2.46 1.70

As on 2 years prior to the date of filing of Draft Letter of Offer with SEBI Name of shareholder Uttam Industrial Engineering Limited Lipi Boilers Limited Uttam Sucrotech Limited New Castle Finance & Leasing Limited Raj Kumar Adlakha Shomna Adlakha Ranjan Adlakha G M Colonisers Private Limited Uttam Chand Adlakha Sandstone Capital India Master Fund Limited 16 No. of shares held 4685543 4477734 3513223 22,62,650 16,24,610 8,70,410 8,58,940 8,13,650 6,33,610 5,67,117 Percentage 18.18 17.38 13.63 8.78 6.30 3.38 3.33 3.16 2.46 2.20

7. 8. 9.

The total number of members of in our Company as on date of filing of Draft Letter of Offer is 27,092. The present Issue being a rights Issue, the requirement of promoters' contribution and lock-in are not applicable in terms of clause 4.10.1(c) of SEBI (Disclosure & Investor Protection) Guidelines, 2000. Our Promoters, Directors, Promoter Group entities and Directors of our Promoters have not sold / purchased any equity shares of our Company during the preceding six months from the date of filing of The Draft Letter of Offer with SEBI.

10. There are no outstanding warrants, options or rights to convert debentures, loans or other instruments into Equity Shares as on the date if this Draft Letter of Offer.We have no partly paid up equity shares or call in arrears. 11. Details of pledge: Some of our promoters have pledged a part of their holding in our Company with the Industrial Development Bank of India and Punjab National Bank as collateral security for loans being availed by us as per details given below . Name of the Promoter Uttam Industrial Engineering Limited Uttam Sucrotech Limited Lipi Boilers Limited Name of the Pledgee IDBI, New Delhi, & PNB, Ghaziabad IDBI, New Delhi, & PNB, Ghaziabad IDBI, New Delhi, & PNB, Ghaziabad No. of shares 2,750,000 Terms and Conditions of the Pledge Collateral security of shares by means of pledge for securing the due repayment of the loans availed together with the interest and other moneys payable by the Borrower to IDBI and PNB Collateral security of shares by means of pledge for securing the due repayment of the loans availed together with the interest and other moneys payable by the Borrower to IDBI and PNB Collateral security of shares by means of pledge for securing the due repayment of the loans availed together with the interest and other moneys payable by the Borrower to IDBI and PNB

300,000

2,950,000

The promoters or promoter group entities may pledge their equity shares with banks or financial institutions as collateral security for loan granted from Banks or financial institutions, provided pledged of Equity shares is one of the terms of sanction of loan. 12. The Company has not availed of "bridge loans" to be repaid from the proceeds of the Issue for incurring expenditure on the Objects of the Issue. 13. 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. 14. At any given time, there shall be only one denomination of the Equity Shares and we shall comply with such disclosure and accounting norms specified by SEBI from time to time. 15. The Equity shares offered through this Issue shall be made fully paid up or will be forfeited within 12 months from the date of allotment. 16. The Company has not issued any Equity Shares out of revaluation reserves. Further the Company has not revalued any of its assets in the 5 years preceding the date of this Draft Letter of Offer. 17. The Company has not offered any Employees Stock Option Scheme or Employees Stock Purchase Scheme. 18. 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 17

commencing from the date of filing of the Draft Letter of Offer with the SEBI upto the date on which the Equity Shares issued under this Issue are listed or application moneys are refunded on account of the failure of the Issue. 19. Our Company presently does not have any intention or proposal to alter its capital structure for a period of 6 months from the date of opening of the Issue, by way of split / consolidation of the denomination of Equity Shares or further issue of Equity Shares (including issue of securities convertible into Equity Shares) whether preferential or otherwise. However, during such period, or a later date, we may issue Equity Shares or securities linked to Equity shares to finance an acquisition, merger or joint venture or as consideration for such acquisition, merger or joint venture, or for regulatory compliance or such other scheme of arrangement, if any, in the interest of our Company. 20. Our Promoters have confirmed that they along with the companies / entities controlled by them (together referred to as "Promoter" in this clause) intend to subscribe to the full extent of their entitlement in the Issue. The Promoters reserves their right to subscribe to their entitlement in this Issue, either by themselves or through a combination of entities forming part of Promoter Group. Mr. Raj Kumar Adlakha, one of the promoters have provided an undertaking on behalf of all the promoters that they shall 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 Promoter Group may acquire shares over and above their entitlement in the Issue, which may result in an increase of their shareholding being above the current shareholding This subscription and acquisition of additional Equity Shares by the Promoters 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 provison to Regulation 3(1)(b)(ii) of the Takeover Code. As such, other than meeting the requirements indicated in the section titled "Objects of the Issue" on page [*] of this Draft Letter of Offer, there is no other intention / purpose for this Issue, including any intention to delist the Company, even if, as a result of allotment to the Promoters, in this Issue, the Promoter's shareholding in the Company exceeds their current shareholding. The Promoter Group shall subscribe to such unsubscribed portion as per the relevant provisions of the law. Allotment to the Promoter Group of any unsubscribed portion, over and above their entitlement shall be done in compliance with the Listing Agreement and other applicable laws prevailing at that time relating to continuous listing requirements. Our Promoters have given an undertaking that in case the subscription by them to the unsubscribed portion results in the public shareholding falling below the permissible minimum level as specified in the listing condition agreement (10% in our case, as the Initial Public Offering was made by our Company in terms of Rule 19(2)(b) of Securities Contract Regulation Rules, 1956), then the Promoters shall make an offer for sale of their holding so that the public shareholding raise to the permissible minimum level within a period of six months from the date of allotment in the proposed issue in the manner as per sub clause 17.1 and 17.2 of SEBI (Delisting of Securities) Guidelines, 2003 or as per any amendment thereto.

18

OBJECTS OF THE ISSUE The objects of issue are to raise capital for part financing the fund required for: a) Increase of bagasse based co-generation capacity by 55 MW b) Setting up an ethanol plant with capacity of 75 KLPD. c) Increase in crushing capacity by 2500 TCD d) Right Issue Expenses The main object clause and objects incidental or ancillary to the main objects clause of the Memorandum of Association enables us to under take the existing activities and the activities for which the funds are being raised by us through the present issue. Requirement of funds The cost of the projects for which we intend to use our issue proceeds have been appraised by Industrial Development Bank of India Limited, New Delhi Branch Office, vide their appraisal report of February 2007. Further, IDBI, vide its letter dated June 17, 2008 has given its consent to incorporate the required details in this Draft Letter of Offer from the Appraisal Report prepared for the project. The cost of projects is given below: Increase in cane Increase in coSetting up of crushing capacity generation capacity ethanol project (TCD) (MW) (KLPD) Barkatpur Unit 30 Barkatpur Unit 75 Khaikheri 10 Shermau 2500 15 Total 2500 55 75 *The project cost includes pre-operative expenses including expenses for the Rights Issue. Means of Finance S.No. 1 2 3 4 5 6 Means of finance Rupee Term Loan from IDBI Limited Rupee Term Loan from other Bankers Loan from Sugar Development Fund Unsecured Loans from Promoters Internal accruals Rights Issue Total (Rs. In lakhs) Amount 4,000.00 7,050.00 8,700.00 2,139.50 [*] [*] [*] Particulars of the projects Project Cost (Rs. In lakhs) 9,707.00 5,457.00 2,910.00 8,262.00 26,336.00*

The shortfall in funds, if any, shall be met from internal cash accruals and / or raising of the debt. The excess proceeds, if any, from the present Issue would go towards reducing the loan component from the banks for the proposed projects. Details of Term Loans tied up for the aforesaid projects loan disbursed upto June 30, 2008 are as follows: (Rs. in Lakhs) Name of Bank Sanction letter dated Amount Sanctioned Amount Disbursed IDBI Limited February 28, 2007 4,000.00 2,520.00 State Bank of India May 7, 2007 4,000.00 2,973.28 Oriental Bank of Commerce June 1, 2007 2,000.00 1,485.35 Indian Overseas Bank July 3, 2007 1,050.00 787.50 Total 11,050.00 7,766.13 For details of terms and conditions, please refer to chapter entitled "Financial Indebtness" on page no. [*] of this Draft Letter of Offer. 19

Details of Loan from Government of India, Sugar Development Fund (SDF) Out of the project cost of Rs. 26,336 lakhs, a financial assistance of Rs. 8700 lakhs is envisaged from Government of India, Sugar Development Fund. The details of requirement of financial assistance for various projects is given below: (Rs. In Lakh) Name of Unit Amount of assistance applied for Barkatpur Unit (Co-generation) 3,000.00 Barkatpur Unit (Ethanol) 2,000.00 Khaikheri (Co-generation) 700.00 Shermau (Co-generation) 3,000.00 Total 8,700.00 We have applied to SDF for financial assistance for all the four projects as above. Sugar Development Fund, lvide its letter dated July 01, 2008 has informed, that our application for Co-generation (Rs. 3,000 lakhs) and Ethanol (Rs. 2,000 lakhs) projects at Barkatpur have been recommended by the Sub-committee to the Standing Committee of the Sugar Development Fund on June 20, 2008. Further it is also informed by SDF that our applications for the Cogeneration projects at Khaikheri (Rs. 700 lakhs) and Shermau (Rs. 3,000 lakhs) may be taken up in their next meeting. In the event we are unable to obtain financial assistance from SDF, three of our Promoters, i.e. Uttam Industrial Engineering Limited, Lipi Boilers Limited and Uttam Sucrotech Limited have given guarantees that they shall arrange or provide up to Rs. 6,500 lakhs in financing for the projects. The details of such guarantees are given below: (Rs. In lakhs) Name of Promoter Amount Guaranteed Uttam Industrial Engineering Limited 2,500.00 Lipi Boilers Limited 2,500.00 Uttam Sucrotech Limited 1,500.00 Each of Uttam Industrial Engineering Limited, Lipi Boilers Limited and Uttam Sucrotech Limited have also adopted resolutions in their Board Meeting held on June 14, 2008 in this regard. Unsecured loan of Rs. 2,139.50 lakhs We have been sanctioned unsecured loan of Rs. 2,139.50 lakhs by 3 Promoters and 2 Promoter Group Companies as per details given below. The total amount of Rs. 2,139.50 lakhs has since been disbursed and utilized towards project. (Rs. In lakhs) Particulars Amount sanctioned Lipi Boilers Limited 1,075.00 Uttam Industrial Engineering Limited 480.00 Uttam Sucrotech Limited 35.00 Adharshila Capital Services Limited 377.25 Pariksha Fin-Invest-Lease Limited 172.25 Total 2,139.50 For detailed terms of the loans, please refer to the chapter titled "Financial Indebtness" on page [*] of this Draft Letter of Offer. Accordingly, our Company has made firm arrangements (as envisaged by clause 2.8 of the SEBI DIP Guidelines) for financing at least 75% of the stated means of finance, excluding the amount to be raised through proposed Right Issue. Projects Details We propose to expand capacities of three of the existing co-generation plants, increase the crushing capacity from 5000 TCD to 7500 TCD of our mill at Shermau and setting up of an ethanol project at Barkatpur. The detailed cost for Projects are given below. All the new projects are being set upon existing land at our sugar mills and no land is proposed to be purchased.

20

Particulars Building & Civil Works Plant & Machinery Miscellaneous Expenses Preoperative expenses Provision for contingencies Margin Money for working capital Total

Barkatpur (Cogeneration) 215 8,408 100 348 436 200 9,707

Barkatpur (Ethanol) 661 4,096 100 257 243 100 5,457

Khaikheri (Cogeneration) 190 2,412 25 105 131 47 2,910

Shermau (Cogeneration and Crushing) 127 6,957 294 354 530 8,262

Total (Rs. Lakhs) 1,193 21,873 225 1,004 1,164 877 26,336

All plant and machinery is new and no second hand machinery is proposed to be purchased for the Project. Till June 30, 2008, we have placed orders of plant and machinery aggregating Rs. 19,264 lakhs out of the total projected plant and machinery cost of 21,873 lakhs. Since the major orders for plant and machinery have been placed on firm basis, we estimate that there will not be any cost escalation on this head due to delay in project implementation. However a provision of Rs. 2,168 lakhs for contingencies and pre operative expenses is included in the project cost to take care of cost over run, if any. Out of the total plant and machinery of Rs. 21,873 lakhs, plant and machinery worth Rs. 9,652 lakhs is being sourced from our Promoters / Promoter Group Companies for which orders has been placed. The Unit-wise costs of the project are given below: Barkatpur (Co-generation project): Project cost of Rs. 9,707 lakh a. Civil works The civil works for add-on facility of 30.0 MW co-generation power is estimated at Rs. 215 lakh. A sum of Rs. 5 lakh has been provided for cable trenches etc., Rs. 80 lakh for foundation of boiler, TG set, transformer and other equipment. Rs. 15 lakh for cooling tower and its auxiliaries, Rs. 40 lakh for RCC chimney and foundation including refractory lining etc. Rs.5 lakh for switch yard development and transformer station, Rs. 50 lakh for raw water reservoirs etc and Rs.20 lakh for other miscellaneous civil works. b. Plant & machinery The total cost of plant & machinery is estimated at Rs. 8,408 lakh, details of which are given below: S. No. Description Amount (Rs. Lakh) A Mechanical Work 1 140 TPH bagasse fired steam boiler including ESP, instrumentation along with 2,730.00 DICS system, PLC control & other control and cooling fans, pumps, piping valves, PRD's, auxiliaries and (complete in all respect) etc. 2 2 x 15 MW bleed cum extraction cum condensing turbo-generator unit 2,150.00 including all auxiliaries, piping, control and instrumentation, lube oil system, alternator control relay & metering panels, HT panels, NGR. LAVT's etc. 3 Fuel (Bagasse) handling system including belt/slat conveyors and supports etc. 50.00 4 Ash handling system for boiler consisting of submerged scrappers conveyors, 65.00 screw conveyors, and belt conveyors, etc. 5 Cooling water system 80.00 · One for each cell and one standby with base frame electric motor etc. · Cooling water piping, valves and expansion joints etc. 6 High pressure steam piping, valves and other piping supports etc. 55.00 7 Exhaust steam piping condensate piping support valves etc. 45.00 8 Water piping, condensate piping support valves etc 15.00 9 30 cu./h capacity, RO system based water treatment plant including DM plant 65.00 with accessories etc. 10 Air compressor and piping (2 Nos. complete with drier etc.) 25.00 21

S. No. 11 12 13 B 1 2 3 4 5 6 7 8 9 10 11 12

Description Miscellaneous pumps and valves etc. Fire protection system. Air conditioning & ventilation Total for Mechanical Work Electric Work Generator and its auxiliaries including relay metering and control panels etc. Switchyard 25 MVA Power Transformer ­ 2 nos. 2.5 MVA Distribution Transformer ­2 nos. 11 KV and 132 KV switch gear panel for co-generation LT Switches gear & panels LT bus ducts HT cables for bus ducts and export transformer Earthing & Lightening protection Plant communication system Lighting & Miscellaneous Laying of 26 km transmission line from Sugar Mill to Najibabad sub-station @ 22.00 lakhs/km Total for electric work Total (A+B) Taxes and Duties, freight & erection @ 20% Total Plant & Machinery

Amount (Rs. Lakh) 35.00 10.00 10.00 5,335.00 Already covered (A2) 450.00 90.00 275.00 15.00 15.00 225.00 20.00 5.00 5.00 572.00 1,672.00 7,007.00 1,401.00 8,408.00

The cost estimates of Plant & Machinery are based on the quotations given by group companies and orders placed by the company. A condition has been stipulated that Company shall obtain suitable performance guarantee from major machinery suppliers. c. Miscellaneous Fixes Assets The miscellaneous fixed assets of Rs. 100 lakhs comprise furniture and air conditioners. The details of miscellaneous fixed assets are given below: S. No. Description Amount (Rs. lakhs) 1 Furniture & Fixtures 15.00 2 Water treatment equipment 10.00 3 Vehicles 15.00 4 Stores & Spares 50.00 5 Others 10.00 Total 100.00 d. Preoperative Expenses An amount of Rs. 348 lakh has been allocated to this unit out of the total Pre-operative expenses of Rs. 1004 lakh provided towards up-front fee & consultancy charges, interest during construction period, etc. e. Provision for Contingency A provision for contingency @5% of the entire capital cost excluding pre-operative expenses and margin money for working capital, i.e. Rs. 436 lakhs has been made. f. Margin Money for Working Capital A provision of Rs. 200 lakh has been made towards margin money for working capital for the optimum year of operations. The margin money has been calculated based upon 3 months debtors and 1 month stock of raw material. The average margin money requirement @25% works out to Rs. 200 lakh.

22

Barkatpur (Ethanol): Project cost of Rs. 5,457 lakhs a. Civil Works The civil works for add-on facility of 75 KLPD ethanol is estimated at Rs. 661 lakh. A sum of Rs. 20 lakh has been provided for Security Office, Distillery Office, Laboratory and store etc., Rs 124 lakh for foundation of boiler, molasses tanks, Storage tanks and other equipment etc. Rs.10 lakh for cooling tower and its auxiliaries, Rs. 106 lakh for Fermentation and distillation tower etc. Rs. 200 lakh for bio composting, Rs. 36 lakh for spirit storage, Rs.15 lakh for drainages and Rs. 150 lakh for other miscellaneous civil works. b. Plant & Machinery The total cost of plant & machinery is estimated at Rs. 4,096 lakh, details of which are given below: S. No. Item Description 1 2 3 4 5 6 Molasses storage tank Spirit Storage Receivers & F.O. storage and impure spirit storage Miscellaneous tanks Pipe racks R.S. & A.A. Plants along with accessories and complete in all respects in the battery limits area (including instrumentation) Alcohol loading pumps Molasses Pumps Boiler Turbine Water treatment plant Yard piping (outside battery limits) Bio-methanation plant Effluent Concentration plant Bio-composting Electrification Firefighting Total Taxes & Duties Erection & Freight Total 1 no. 10000 tonnes capacity; 18m x 9m ht carbon steel 6 Nos. 1400 m3 capacity; 15m x 9m ht. Carbon steel 6 Nos. 75 m 3 ;(5m x 6m) carbon steel 75000 LPD of total spirit batch fermentation section starting from laboratory culture, 3500 LPD rectified spirit multi pressure distillation section and 60000 LPD Fuel ethanol plant of Mol. Sieve, PSA and distillation section complete in all respects excepting molasses storage and finished product storage 2 Nos. with explosion proof motors and fittings Positive displacement geared types 4 Nos. with motors 25 T/hr., 45 kg/cm2 g pressure and 400C 2.0 MW capacity; 4.0kg/cm2 g back pressure 5m3 /hr , 120 m3 /cycle ; cation , anion exchangers , degasers Steam, cooling water, molasses transfer, liquor transfer, etc. UASB/CSTR type bio reactor (C.S. with polyester lined) complete with circulation pumps, heater exchanger, gas blower and gas holder etc. Water evaporation failing film evaporator with condensate flash system complete with structures and vacuum system Aerotiller Composter, spray tank, grader etc. As per TAAC rules @20.97% @3%

Cost (Rs lakh) 350.00 180.00 25.00 15.00 25.00 1,014.00

7 8 9 10 11 12 13 14 15 16 17

1.70 2.00 350.00 150.00 20.00 50.00 600.00 200.00 120.00 150.00 100.00 3,352.70 650.00 93.00 4,095.70

A condition has been stipulated that company shall obtain suitable performance guarantee from major suppliers. c. Miscellaneous Fixes Assets The miscellaneous fixed assets comprise furniture and air conditioners. The details of miscellaneous fixed assets are given below: S. No. Particulars Amount (Rs Lakhs) 1 Furniture & Fixtures 5.00 23

S. No. 2 3 4 5

Particulars Water treatment equipment Vehicles Stores & Spares Others Total

Amount (Rs Lakhs) 50.00 15.00 20.00 10.00 100.00

d. Preoperative Expenses An amount of Rs. 257 lakh has been estimated for this unit towards up-front fee & consultancy charges, interest during construction period, etc. e. Provision for Contingency A provision for contingency @5% of the entire capital cost excluding pre-operative expenses and margin money for working capital, i.e. Rs. 243 lakhs has been made. f. Margin Money for Working Capital A provision of Rs. 100 lakh has been made towards margin money for working capital for the first year of operations. The margin money has been calculated on the basis of 1 month raw material stock and 5 days closing stock of finished goods and WIP. Khaikheri (Co-generation project): Project cost of Rs. 2,910 lakhs a. Civil works The civil works for add-on facility of 10.0 MW co-generation power is estimated at Rs. 190 lakh. A sum of Rs. 5 lakh has been provided for cable trenches etc., Rs. 85 lakh for foundation of boiler, TG set, transformer and other equipment. Rs. 10 lakh for cooling tower and its auxiliaries, Rs. 40 lakh for RCC chimney and foundation including refractory lining etc., Rs.15 lakh for switch yard development and transformer station, Rs. 20 lakh for raw water reservoirs etc. and Rs. 15 lakh for other miscellaneous civil works. b. Plant & machinery The total cost of plant & machinery is estimated at Rs. 2,412 lakh, details of which are given below: S. No. Description Amount (Rs. Lakh) A Mechanical Work 1 60 TPH bagasse fired steam boiler1 including ESP, instrumentation along with 830.00 DICS, PLC control & other control and cooling fans, pumps, piping valves, PRD's, auxiliaries and (complete in all respect) etc. 2 10 MW bleed cum extraction cum condensing turbo-generator unit including all 640.00 auxiliaries, piping, control and instrumentation, lube oil system, alternator control relay & metering panels, HT panels, NGR. LAVT's etc. 3 Ash handling system for boiler consisting of submerged scrappers conveyors, 40.00 screw conveyors, and belt conveyors, etc. 4 Cooling water system 40.00 · One for each cell and one standby with base frame electric motor etc. · Cooling water piping, valves and expansion joints etc. 5 High pressure steam piping, valves and other piping supports etc. 20.00 6 Exhaust steam piping condensate piping support valves etc. 15.00 7 Water piping, condensate piping support valves etc 10.00 8 Ro system based water treatment plant including DM plant with accessories etc. 50.00 9 Air compressor and piping ( 2 Nos. complete with drier etc.) 25.00 10 Fire protection system. 5.00 11 Air conditioning & ventilation 10.00 Total for Mechanical Work 1,685.00 B Electric Work 1 Generator and its auxiliaries including relay metering and control panels etc. 24

S. No. 2 3 4 5 6 7 8 9 10 11 12

Description Switchyard Power Transformer ­ 1 no. Distribution Transformer ­ 1 no. 11 KV and 132 KV switch gear panel for co-generation LT Switches gear & panels LT bus ducts HT cables for bus ducts and export transformer Earthing & Lightening protection Plant communication system Lighting & Miscellaneous Laying of 4.5 km transmission line from Sugar Mill to Purkaji sub-station Total for electric work Total (A+B) Taxes and Duties, freight & erection @ 20% Total Plant & Machinery

Amount (Rs. Lakh) (Add on cost) 70.00 30.00 50.00 10.00 5.00 70.00 20.00 5.00 5.00 60.00 325.00 2,010.00 402.00 2,412.00

c. Miscellaneous Fixes Assets The miscellaneous fixed assets comprise furniture and air conditioners. The details of miscellaneous fixed assets are given below: S. No. Particulars Amount (Rs. lakhs) 1 Furniture & Fixtures 5.00 2 Stores & Spares 15.00 3 Others 5.00 Total 25.00 d. Preoperative Expenses An amount of Rs. 105 lakh has been estimated towards up-front fee & consultancy charges, interest during construction period, etc. e. Provision for Contingency A provision for contingency @5% of the entire capital cost excluding pre-operative expenses and margin money for working capital, i.e. Rs. 131 lakhs has been made. f. Margin Money for Working Capital A provision of Rs. 47 lakh has been made towards margin money for working capital for the optimum year of operations. The margin money has been calculated based upon 3 months debtors and 1 month stock of raw material. The average margin money requirement @25% works out to Rs. 47 lakhs. Shermau (Crushing and Co-generation): Project cost of Rs. 8,262 lakhs a. Civil Works and Buildings A sum of Rs 127 lakh has been provided for foundation of Boiler, Turbine and machinery required in process and melt clarification section. . b. Plant & Machinery The incremental cost of plant & machinery from 5000 TCD to 7500 TCD and 15 MW is estimated Rs. 6,957 lakh, details of which are given below: S. No. Items Amount (Rs. Lakhs) A Milling Section 1 1 No. Hydraulic grab type cane unloader 32.00 2 4 No. Mills of size 1020 x 2040 mm with drive , 1st & 4th mill GRPF with drive 292.15 gearing, hydraulic, system, inter carriers, juice pumps & troughs, railings & platform etc. 25

S. No. 3 4 B 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 C 24 25 26 27 28 29 30 31 D 32 33 34 35 36 E 37 38 39 40

Items 1 No. Imbibition water pump 1 No. Rotary screen for juice Sub Total A Process 2 Nos. VLJH of 300m2 each and 6 nos.' juice heaters of 350m2 each for SJH, DJH & CJ, 1 No. clear juice direct contact heater 1 No. Film type Sulphur Furnace & Air compressor 2 Nos. Juice Sulphiter 2 Nos. tray less juice clarifier 2 Nos. rotary vacuum filters, size 14' x 30' 2 Nos. Semi Kestner, 1200m2 HAS, 1 No. 3000m2 HAS 4 Nos. Robert type vapor cell, 1500m2 HSA (1 No. Standby) 1 No. Robert type vessel, 600m2 HSA + 1 Nos. 600 m2 HAS 3 Nos. batch type vacuum pans 60 t each for R boiling, 60 t for A massecuite graining, 1 No. 60 t for B graining & 1 No. 60 t for C graining. 3 Nos. cont. vacuum pans, 30 t/h for A-boiling 2 Nos. cont. vacuum pans, 22.5 t/h for B-boiling 1 No. cont. vacuum pans, 30 t/h for C-boiling 16 Nos. single entry condensers for evaporator and pans 4 Nos. injection water pumps, 2500 m3 /hr and header 1 No. Cooling tower consisting of 4 cells of 2500 m3 capacity each and 3 Nos. lifting/spray pumps, 2500 m3/hr capacity each 12 Nos. air cooled crystalizer of 65t capacity each 5 Nos. water-cooled crystalizer of 2 x 150 & 3 x 200 T cap. Each 6 Nos. fully automatic, flat bottom c/f, 1250 kg/ch with DC drive 15 Nos. continuous machines of 1500 mm size Sub Total B Melt Clarification Section 2 Nos. Sugar melter Melt clarification system Static bed filter and wash system 2 Nos. Rotary Sugar dryer, 25 t/h 2 Nos. Sugar Elevator 2 Nos. Sugar grader, 25t/h capacity 6 Nos. sugar bins, 40t capacity each with SS lining 6 Nos. automatic sugar weighing cum filler with stitching machines Sub Total C Steam & Power Generation 2 Nos. boiler, 120 t/h each, 67 barag, 505+5C complete in all respect including fuel handling, ash handling, feed water etc. Steam piping, live and exhaust, water piping, valves and valves fittings 1 No. back pressure turbo alternator sets of 15 MW + 2 Nos. double extraction cum condensing TG set operating at 67 barag, 500C Transformer & switch yard equipment including cables Transmission line 8.5 km Sub Total D Miscellaneous Steel structure for juice heaters, pan, evaporator and other boiling house equipments, service water tanks etc. Electrical cables, panels, switches etc. Pumps, piping and valves (for boiling house) Insulation, paints etc. 26

Amount (Rs. Lakhs) 1.00 7.00 332.15 14.96 43.00 23.87 43.65 55.00 81.93 40.24 20.12 90.41 159.67 46.63 27.93 25.80 4.00 16.00 26.70 21.00 89.33 89.58 919.82 10.00 100.00 40.00 21.28 4.00 14.80 22.00 21.65 233.73 2,184.00 350.00 1,699.00 90.00 70.00 4,393.00 90.00 70.00 125.00 25.00

S. No. Sub Total E Total (A + B + C + D + E ) Taxes and Duties, freight & erection Grand Total

Items

Amount (Rs. Lakhs) 310.00 6,188.70 767.50 6,956.20

c. Preoperative Expenses An amount of Rs. 294 lakh has been estimated towards up-front fee & consultancy charges, interest during construction period and the expenditure on the proposed IPO for both the units. d. Provision for Contingency A provision for contingency @5% of the entire capital cost excluding cost of land (already acquired), pre-operative expenses and margin money for working capital, i.e. Rs. 354 lakhs has been made. e. Margin Money for Working Capital A provision of Rs. 530 lakh has been made towards margin money for working capital. The margin money has been considered both for increase in capacity for sugar as well as power co-generation. For sugar it has been calculated on the basis of 15% of mean of peak and average money requirement and in power co-generation it has been calculated on the basis of 25% of 3-months debtors and 1 months stock of raw material. Implementation Schedule The schedule of implementation as envisaged in the appraisal report of IDBI, the revised schedule as per our management and current status is given below: 1. As per IDBI appraisal Commencement Completion Land, Building & Civil Works Purchase of Land Already Acquired Site Development In progress January 2007 Factory Buildings January 2007 April 2007 Administrative Buildings January 2007 April 2007 Plant & Machinery Order Placement Placed March 2007 Delivery at site April 2007 June 2007 Installation April 2007 November 2007 Trial Runs End of December 2007 Commercial Production January 2008 2. As per IDBI appraisal Commencement Completion Land, Building & Civil Works Purchase of Land Already Acquired Site Development In progress January 2007 Factory Buildings January 2007 April 2007 Administrative Buildings January 2007 April 2007 Plant & Machinery Order Placement Placed March 2007 Delivery at site April 2007 June 2007 Installation April 2007 November 2007 Trial Runs End of December 2007 Commercial Production January 2008 27 Khaikheri Cogeneration Activity Barkatpur Cogeneration Activity Revised Schedule (as per Management) Current Status Completion Already Acquired Completed In progress July 2009 In progress September 2009 Already Placed November 2007 June 2009 December 2008 September 2009 October 2009 November 2009 Revised Schedule (as per Management) Current Status Completion Already Acquired Completed September 2007 June 2009 February 2009 June 2009 Already Placed November 2007 June 2008 December 2007 September 2009 October 2009 November 2009

3.

As per IDBI appraisal Commencement Completion Land, Building & Civil Works Purchase of Land Already Acquired Site Development Completed Completed Factory Buildings Started January 2007 Administrative Buildings Started January 2007 Plant & Machinery Order Placement Already Placed Delivery at site Started April 2007 Installation February 2007 April 2007 Trial Runs End of May 2007 Commercial Production June 2007 4. Shermau Cogeneration with Expansion Activity As per IDBI appraisal Commencement Completion Land, Building & Civil Works Purchase of Land Already Acquired Site Development In progress January 2007 Factory Buildings January 2007 April 2007 Administrative Buildings January 2007 April 2007 Plant & Machinery Order Placement Placed March 2007 Delivery at site April 2007 June 2007 Installation April 2007 November 2007 Trial Runs End of December 2007 Commercial Production January 2008

Barkatpur Ethanol Activity

Revised Schedule (as per Management) Current Status Completion Already Acquired Completed July 2007 July 2008 Started July 2008 Already Placed July 2007 July 2008 August 2007 September 2008 October 2008 November 2008 Revised Schedule (as per Management) Current Status Completion Already Acquired Completed October 2007 June 2009 February 2009 June 2009 Already Placed November 2007 June 2009 December 2007 September 2009 October 2009 November 2009

The delay in implementation of the Projects is mainly due to delay in financial closure. Public Issue Expenses The expenses for the issue include among others, fees payable to Book Running Lead Manager, Registrar to the Issue, selling commissions printing and distribution expenses, legal fees, stamp duty, statutory advertising expenses and listing fees payable to the stock exchanges, The estimated Issue Expenses are as follows: Particulars Fees: Lead Manager to the Issue, Registrar to the Issue, Legal Counsel to the Issue & Auditors Advertising & Marketing expenses Printing, Stationary, Dispatch Stamp Duty, Listing, SEBI Fee and other expenses Total Amount (Rs. in Lakhs) [*] [*] [*] [*] [*]

Funds deployed We have deployed funds to the extent of Rs. 9,967 lakhs on the project upto June 28, 2008 as certified by our auditors M/s. B. K. Kapur & Co., Chartered Accountants vide their certificate dated July 02, 2008. The same has been financed through term loans disbursed by Banks (Rs. 7,363 lakhs), unsecured loans from promoters (Rs. 2,140 lakhs) and internal sources (Rs. 464 lakhs). Estimated Schedule of deployment of funds The Issue proceeds are proposed to be utilized in the financial years 2007-08, 2008-09 and 2009-10. The break up of cost is as under: 28

Sr. No. 1. 2. 3. 4. 5.

Particulars

Upto June 28, 2008 533.00 8,222.00 22.00 1,190.00 9,967.00

Land & Factory Building Plant & Machinery Miscellaneous Expenses Preoperative expenses / Provision for contingencies Margin Money for working capital Total

Financial year 2007-08 (from June 29 to Sept 30, 2008) 60.00 1,501.00 28.00 37.00 1,626.00

Financial year 2008-09 600.00 11,750.00 160.00 831.00 630.00 13,971.00

Financial year 2009-10 400.00 15.00 110.00 247.00 772.00

(Rs. In Lakhs) Total

1,193.00 21,873.00 225.00 2,168.00 877.00 26,336.00

Interim Use of Funds Pending utilization of the proceeds out of the Issue for the purposes described above, we intend to temporarily invest the funds in high quality interest bearing liquid instruments including money market mutual funds, deposits with banks and other investment grade interest bearing securities as may be approved by the Board. Such investments would be in accordance with the investment policies approved by the Board from time to time. Monitoring Agency There is no requirement for appointment of an independent monitoring agency in terms of clause 8.17 of the DIP Guidelines. Pursuant to Clause 49 of the listing agreement, the Audit Committee of our Board will monitor the utilization of the proceeds of the Issue. We shall, on a quarterly basis disclose to the Audit Committee the uses and application of the proceeds of the Issue. We will disclose the utilization of the proceeds of the Issue under a separate head in our balance sheet till such time the proceeds of the Issue have been utilised, clearly specifying the purpose for which such proceeds have been utilized. We will also, in our balance sheet till such time the proceeds of the Issue have been utilised, provide details, if any, in relation to all such proceeds of the Issue that have not been utilized thereby also indicating investments, if any, of such unutilized proceeds of the Issue. No part of the proceeds from the Issue will be paid by us as consideration to our Promoter, our Directors, Promoter Group Entities or Key Managerial Employees, except the cost of certain plant and machinery being sourced from Promtoers / Promoter Group Companies as mentioned above and in the normal course of our business.

29

BASIS FOR ISSUE PRICE Investors should also refer to the section "Risk Factors" on page [*] and "Financial Statements" [*] of this Draft Letter of Offer to get a more informed view before making the investment decision. The trading price of the equity shares of our Company could decline due to these risks and you may loose all or part of your investments. Qualitative Factors · · · · · Our Promoters have industry specific knowledge & experience in the of the Sugar Industry We are eligible for various incentives under Government Policy We are among the few players in the country to use Defeco Remelt Phospho floatation (DRP) Process to produce sulphurless sugar We have sugar refining capacity We have captive generation of power

For details please refer to section titled "Competitive Strengths" on page [*] of this Draft Letter of Offer Quantitative Factors Information presented in this section is derived from our restated financial statements upto March 31, 2008 prepared in accordance with Indian GAAP. 1. Weighted average earnings per share Period Year ended September 30, 2005 Year ended September 30, 2006 Year ended September 30, 2007 Weighted Average Basic EPS (Rs.) 17.19 10.04 (19.31) (3.44) Diluted EPS (Rs.) 17.19 10.04 (19.31) (3.44) Weight 1 2 3

The Basic and Diluted EPS for the 6 months period ended March 31, 2008 is Rs. (1.14) (not annualized). 2. Price / Earning (P/E) ratio in relation to Issue Price of Rs. [*] Based on the EPS for the year ended September 30, 2007 Based on the weighted average EPS Industry P/E (1) Highest (Triveni Engineering and Industries Ltd) Lowest (Kothari Sugars) Average

(1)

[*] [*] 47.20 9.20 31.70

Source: "Capital Market" vol. XXIII/09 dated June 30 - July 13, 2008, Industry - Sugar. Note: The companies which are in loss have not been considered for lowest industry P/E 3. Return on net worth Period Year ended September 30, 2005 Year ended September 30, 2006 Year ended September 30, 2007 Weighted Average RONW (%) 44.80 10.45 (29.64) (3.87) Weight 1 2 3

Return on Net Worth for the 6 months period ended March 31, 2008 is (1.78%) (not annualized). 30

4.

Minimum Return on Increased Net Worth required to maintain pre-Issue EPS The minimum return on increased net worth after issue of equity shares required to maintain pre-issue EPS of Rs. (19.31) as on September 30, 2007 is [*].

5.

Net Asset Value · · · · NAV per Equity Share at March 31, 2008 is Rs. 63.99 per share. NAV per Equity Share at September 30, 2007 is Rs. 65.15 per share. NAV per Equity Share after the Issue is Rs. [*] Issue Price per Equity Share: Rs. [*]

6.

Comparison with other listed companies Company Uttam Sugar Mills Limited (as on September 30, 2008) DCM Shriram Industries Dwarikesh Sugar Oudh Sugar Shree Renuka Sugar

(1)

Face Value 10.00 10.00 10.00 10.00 1.00

EPS (Rs.) (19.31) 0.90 1.80

P/E [*] 35.80

Return on Net Worth (%) (29.64) 1.20 (4.50) (22.50) 18.40

Book Value per Share (Rs.) 65.15 88.10 90.40 58.30 18.30

Source: "Capital Market" vol. XXIII/09 dated June 30 - July 13, 2008, Industry - Sugar.

The Lead Manager believes that the Issue Price of Rs. [*] is justified in view of the above qualitative and quantitative factors. The investor may also see the chapters titled "Risk Factors" on page [*] of this Draft Letter of Offer and "Financial Statements" on page [*] of this Draft Letter of Offer to have a more informed view.

31

STATEMENT OF TAX BENEFITS We hereby certify that the enclosed Annexure states the possible Tax benefits available to the Uttam Sugar Mills Ltd (the company) and its Shareholders under the current tax laws presently in force in India. Several of these benefits are dependent on the company or its shareholders fulfilling the conditions prescribed under the relevant provisions of 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 based on the business imperatives, the company may or may not choose to fulfill. The contents of this Annexure are based on Information, explanation and representation obtained from the Company and on the basis of our understanding of the business activities and operation of the Company. The benefits discussed in the annexure are not exhaustive. This statement is only intended to provide general information to the investors and hence is neither designed or intended to substitute for professional Tax advice and each investor is advised to consult his/her/its own Tax consultants with respect to the specific tax implications arising out of their participation in the issue. For B. K. KAPUR & CO. Chartered Accountants

(M. S. KAPUR) F.C.A. Partner Membership No 74615 Place: Noida Dated: July 02, 2008

32

A. A.1 1. (a) (b)

TAX BENEFITS AVAILABLE TO THE COMPANY UNDER THE INCOME TAX ACT, 1961 (I.T.ACT) The company is engaged in the manufacture and sale of Sugar since January 2001. The Company is having four manufacturing units (Industrial Undertakings) three of which are located in the state Uttar Pradesh and one is located in the state Uttaranchal. The Company had undertaken substantial expansion in November 2003 in the unit situated in Village Libberheri, Tehsil Roorkee, District Haridwar (Uttarakhand) which was completed in November 2004. On the basis of this substantial expansion of Industrial Undertaking, the company is entitled to get deduction u/s 80-1C of the I.T. Act as specified u/s 80-1C(3)(ii) w.e.f. the financial year ended 31st March, 2005 as follows: Period of deduction Extent of Deduction First 5 assessment years 100% of the profits and gains derived from such undertaking Next 5 assessment years 30% of the profits and gains from such undertaking Under section 32 of I.T.Act, the company is entitled to claim depreciation on Tangible and Intangible assets for the use thereof in the company's business as explained in the said section. Under section 35 of I.T.Act and subject to the provision therein, the company would be entitled to deduction in respect of expenditure laid out or expended on scientific research relating to the business. Under Section 35D of I.T.Act the company is eligible to claim amortization of preliminary expenses, subject to limits specified in sub-section (3) of the said section. Under section 10 (34) of I.T.Act, dividend income referred to in section 115-O is exempt from tax in the hands of the company. Under section 10(38) of I.T.Act, income arising from transfer of long-term capital asset, being the equity shares of a company or units of an equity oriented mutual fund is exempt from tax, if the transaction of such sale has been entered into on or after the date on which Chapter VII of the Finance (No.2) Act, 2004 being Securities Transaction Tax (STT) has come into force i.e. on or after October 1,2004 and such transaction is chargeable to STT under that Chapter. Under section 111A of I.T.Act, the short term capital gain on transfer of equity shares or units of an equity oriented mutual funds shall be chargeable to tax @ 15% (plus applicable surcharge, education cess and secondary and higher education cess), if the transaction of such sales has been entered into on or after the date on which chapter VII of the Finance (No.2) Act, 2004 being Securities Transaction Tax (STT) has come into force i.e. on or after October 1,2004 and such transaction is chargeable to STT under that Chapter. Deduction under Chapter VI-A of I.T.Act is not available on such income. Under section 112 and other relevant provisions of I.T.Act, the long term capital gains arising on transfer of long term capital assets shall be taxed at the rate of 20% (plus applicable surcharge, education cess and secondary and higher education cess), after indexation as provided in the second proviso to section 48 of I.T.Act. However, in case of transfer of listed securities or unit or zero coupon bond, the long-term capital gain (not covered under section 10(36) & 10(38) of I.T. Act) can be taxed at 10% (plus applicable surcharge and education cess) without indexation, at the option of Company. Deduction under Chapter VI-A of I.T.Act is not available on such income. By virtue of section 115JAA of the I.T.Act Tax credit shall be allowed in a future year in which tax become payable on the total income computed in accordance with the provisions other than section 115JB. Credit eligible for carry forward is the difference between tax paid under section 115JB and the tax computed as per the normal provision of the Act. Carried Forward shall not be allowed beyond the seventh assessment year succeeding the assessment year which tax credit becomes allowable. Under section 54EC of the I.T.Act and subject to the conditions and to the extent specified therein, long term capital gains arising on the transfer of capital asset by the Company will be exempt from capital gains tax if the capital gains arising therefrom are invested within a period of 6 months after the date of such transfer in eligible bonds (to be held for a minimum period of 3 years from the date of their acquisition) issued by ­ · National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988; 33

2. 3 4 5 6

7

8

9

10

11

· Rural Electrification Corporation Limited, the company formed and registered under the Companies Act, 1956; However, the investment made on or after April 1, 2007 in the specified bonds during the financial year should not exceed Rs 50 lakhs. The company is setting up three power generation units and in accordance with and subject to the condition specified in section 80IA of IT Act, the company would be entitled to 100% deduction of profits derived from industrial undertaking engaged in generation and/or distribution or transmission of power for any 10 consecutive assessment years out of fifteen years beginning from the year in which the undertaking generate power or commences transmission or distribution of power before 31.03.2010 UNDER THE WEALTH TAX ACT, 1957 The company is liable to pay wealth tax as per the provisions of Wealth tax Act, 1957 at the rate of 1% in respect of certain assets owned by the company subject to the basic exemption of Rs.15 Lacs. UNDER INDIRECT TAXES: Central Excise Tariff The Unit of the company situated at Village Libberheri, Tehsil Roorkee, District Haridwar (State Uttarakhand) is eligible for exemption in respect of payment of Excise duty for sugar and its by-products manufactured at its unit in terms of Notification No.49/2003 C.E. dated 10.06.03 and Notification No 5O/2003 CE dated 10.06.03 subject to fulfilling of the conditions prescribed in the aforesaid notifications. TAX BENEFITS AVAILABLE TO THE MEMBERS UNDER THE INCOME-TAX ACT, 1961 (I.T. ACT)

A.2

A-3

B. B.1

TO RESIDENT MEMBERS: 1. 2. Under section 10(34) of I.T.Act, dividend income referred to in section 115-O is exempt from tax in the hands of the shareholders. Under section 10(38) of I.T.Act, the long term capital gains arising on transfer of the shares of the Company, is exempt from tax, if the transaction of such sale has been entered into on or after the date on which Chapter VII of the Finance (No.2) Act, 2004 being Securities Transaction Tax (STT) has come into force i.e. on or after October 1,2004 and such transaction is chargeable to STT under that Chapter. Under section 111A of I.T.Act, the short term capital gain on transfer of equity shares of the Company shall be chargeable to tax @ 15% (plus applicable surcharge, education cess and secondary and higher education cess), if the transaction of such sale has been entered into on or after the date on which chapter VII of the Finance (No.2) Act, 2004 being Securities Transaction Tax (STT) has come into force i.e. on or after October 1,2004 and such transaction is chargeable to STT under that Chapter. Deduction under Chapter VI-A of I.T.Act is not available on such income. Under section 112 and other relevant provisions of I.T.Act, the long term capital gains arising on transfer of the shares of the Company, shall be taxed at the rate of 20% (plus applicable surcharge, education cess and secondary and higher education cess) after indexation as provided in the second proviso to section 48 of I.T.Act. However, at the option of the shareholder, instead of above, the long-term capital gain arising from the transfer of the equity shares of the Listed Company, if not covered under section 10(36) & 10(38) of I.T.Act, can be taxed at the rate of 10% (plus applicable surcharge, education cess and secondary and higher education cess) without indexation. Deduction under Chapter VI-A of I.T.Act is not available on such income. Under section 54EC of the I.T.Act and subject to the conditions and to the extent specified therein, long term capital gains arising on the transfer of shares in the Company will be exempt from capital gains tax if the capital gains arising therefrom are invested within a period of 6 months after the date of such transfer in eligible bonds (to be held for a minimum period of 3 years from the date of their acquisition ) issued by ­ · National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988; · Rural Electrification Corporation Limited, the company formed and registered under the Companies Act, 1956; 34

3.

4.

5.

6.

However, the investment made on or after April 1, 2007 in the specified bonds during the financial year should not exceed Rs 50 lakhs. In accordance with section 54F of I.T.Act and subject to the conditions provided therein, long term capital gains arising on transfer of shares in the company held by an individual or HUF shall be exempt from tax if the net sale consideration from the transfer of the shares in the Company is utilized within a period of one year before or two years after the date of transfer for purchase of a new residential house or construction of a new residential house within a period of three years from the date of such transfer.

TO NON-RESIDENT MEMBERS: 1. 2. Under section 10(34) of I.T.Act, dividend income referred to in section 115-O of I.T.Act is exempt from tax in the hands of the shareholders. Under section 10(38) of I.T.Act, the long term capital gains arising on transfer of the shares of the Company, is exempt from tax, if the transaction of such sale has been entered into on or after the date on which Chapter VII of the Finance (No.2) Act, 2004 being Securities Transaction Tax (STT) has come into force i.e. on or after October 1, 2004 and such transaction is chargeable to STT under that Chapter. Under section 111A of I.T.Act, the short term capital gain on transfer of equity shares of the Company shall be chargeable to tax @ 15% (plus applicable surcharge, education cess and secondary and higher education cess), if the transaction of such sale has been entered into on or after the date on which chapter VII of the Finance (No.2) Act, 2004 being Securities Transaction Tax (STT) has come into force i.e. on or after October 1, 2004 and such transaction is chargeable to STT under that Chapter. Deduction under Chapter VI-A of I.T.Act is not available on such income. Under section 112 and other relevant provisions of I.T.Act, the long term capital gains arising on transfer of the shares of the Company, shall be taxed at the rate of 20% (plus applicable surcharge, education cess and secondary and higher education cess) after indexation as provided in the second proviso to section 48 of I.T. Act. Indexation is not available if investment made in foreign currency as per first proviso to section 48 of I.T. Act. However, at the option of the shareholder, instead of above, the long-term capital gain arising from the transfer of the equity shares of the Listed Company, if not covered under section 10(36) & 10(38) of I.T. Act, can be taxed at the rate of 10% (plus applicable surcharge, education cess and secondary and higher education cess) without indexation. Deduction under Chapter VI-A of I.T.Act is not available on such income. Under the first proviso to section 48 of I.T.Act, in case of a non-resident, in computing the capital gains arising from transfer of shares of the company acquired in convertible foreign exchange (as per exchange control regulations) protection is provided from fluctuation in the value of rupee in terms of foreign currency in which the original investment was made. Cost indexation benefits will not be available in such a case. However, the capital gain will be taxed as per the provision of section 111A or 112 of I.T. Act as applicable. As per the provisions of section 115A of I.T.Act, in the case of a non resident or a foreign company, the tax payable on dividends other than dividends referred to in section 115-O of I.T. Act shall be 20% (plus applicable surcharge, education cess and secondary and higher education cess) of such income. It shall not be necessary for such assessee to furnish the Return of Income if their only source of income is investment income and tax has been deducted at source from such income under the provisions of chapter XVIIB of I.T.Act. Under section 54EC of the I.T.Act and subject to the conditions and to the extent specified therein, long term capital gains arising on the transfer of shares in the Company will be exempt from capital gains tax if the capital gains arising therefrom are invested within a period of 6 months after the date of such transfer in eligible bonds (to be held for a minimum period of 3 years from the date of their acquisition) issued by ­ · National Highways Authority of India constituted under section 3 of the National Highways Authority of India Act, 1988; · Rural Electrification Corporation Limited, the company formed and registered under the Companies Act, 1956; However, the investment made on or after April 1, 2007 in the specified bonds during the financial year should not exceed Rs 50 lakhs. In accordance with section 54F of I.T.Act and subject to the conditions provided therein, long term capital gains arising on transfer of shares in the company held by an individual or HUF shall be exempt from tax if 35

3.

4.

5.

6.

7.

8.

the net sale consideration from the transfer of the shares in the Company is utilized within a period of one year before or two years after the date of transfer for purchase of a new residential house, or for construction of a new residential house within a period of three years from the date of such transfer. 9. 9.1 9.1.1 SPECIAL PROVISIONS FOR NON-RESIDENT INDIAN MEMBERS: A Non-Resident Indian (i.e. individual being a citizen of India or person of Indian origin, has the option to be governed by the special provisions of chapter XII-A of I.T. Act, according to which--Under section 115E of I.T.Act, where shares in a company are subscribed or acquired for in convertible foreign exchange by a non-resident Indian then income from long term capital gains (not covered under section 10(36) & 10(38) of I.T.Act) on transfer of these shares shall be charged to tax @ 10% (plus applicable surcharge, education cess and secondary and higher education cess) without indexation as per first proviso to section 48 of I.T.Act. Under section 115F of I.T.Act, the long term capital gains arising from the transfer of shares of the Company, where these were acquired or subscribed in convertible foreign exchange, shall be exempt from tax provided that the net consideration from the transfer of the shares in the Company is invested in any specified asset (including share in the company) within six months from the date of transfer of the asset. The amount so exempt from tax shall, however, be chargeable to tax subsequently as long-term capital gains, if the new asset is transferred or converted into money within three years from the date of their acquisition. Under section 115G of I.T.Act, a non-resident Indian is not required to file a Return of Income under section 139(1) of I.T.Act, if his total income consists only of income from investments as defined under Special provisions of Chapter XII-A of IT Act or long term capital gains earned on transfer of such investments or both and tax has been deducted at source from such income under the provisions of chapter XVIIB of I.T.Act. Under section 115I of I.T.Act, a non-resident Indian has the option of not being governed by the special provisions of chapter XII-A for any assessment year by furnishing his return of income under section 139 of I.T.Act declaring therein that the provision of this chapter shall not apply to him for that assessment year. Foreign Institutional Investors (FIIs) In terms of section 10(34) of the I.T.Act, dividend income referred to in section 115-O of the IT Act, is exempt from tax in the hands of the shareholder. In accordance with section 10(38) of the I.T.Act, income arising from transfer of long term capital asset, being the equity shares in a company or a unit of an equity oriented fund which are subject to Securities Transaction Tax, are exempt in the hands of the shareholder. The income by way of short term capital gains or long term capital gains realized by FIIs (notified by the Central Government) on sale of shares in the company would be taxed at the following rates as per section 115AD of the I.T.Act. · Short term capital gains ­ 30% (plus applicable surcharge, education cess and Secondary and higher education cess). However as per the provisions of section 111A of the I.T.Act and subject to the conditions and restrictions mentioned thereunder, short term capital gains arising from transfer of a short term capital asset, being the equity shares in a Indian Company, shall be taxed at 15% (plus applicable surcharge, education cess and secondary and higher education cess). · Long term capital gains ­ 10% (plus applicable surcharge, education cess and secondary and higher education cess) but without indexation / foreign exchange-rupee fluctuation benefits (Shares held in a company would be considered as a long-term capital asset provided they are held for a period exceeding 12 months.) To Venture Capital Companies/ Funds/ Mutual Funds 1. 2. In terms of section 10(23FB) of the I.T.Act, all Venture capital companies/ funds registered with Securities and Exchange Board of India, subject to the conditions specified in the said section, are eligible for exemption from income tax on all their income, including income from sale of shares of the company. In terms of section 10(23D) of the I.T.Act, all Mutual Funds set up by Public Sector Banks or Public Financial Institutions or Mutual Funds registered under the Securities and Exchange Board of India or 36

9.1.2

9.1.3

9.1.4

10. 10.1. 10.2 10.3

authorized by the Reserve Bank of India, subject to the conditions specified therein, are eligible for exemption from income tax on all their income, including income from investment in the shares of the company. B-2 Benefits to Members of the Company under the Wealth Tax Act, 1957 Shares of the company held by the shareholder will not be treated as an asset within the meaning of section 2(ea) of Wealth Tax Act, 1957; hence Wealth Tax Act will not be applicable. Gift Tax At present, there is no gift tax in India. Accordingly, the gift of shares of the company would not be liable to Gift tax.

B3

Scope Limitation · Our comments are based on the law as of date. Tax rates mentioned above are that which are currently applicable. Tax laws are subject to changes from time to time and as such any changes may affect the advice contained in our opinion. We have no responsibility to update our advice for events and circumstances occurring after the date of this opinion, unless specifically requested by you. · In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be subject to any further benefits available under the Double Taxation Avoidance Agreements, if any, between India and the country in which the non-resident has fiscal domicile. · Tax advice is a matter of interpretation of law and is based on our experience with the tax authorities. Accordingly, it cannot be said with certainty that the tax authorities would accept the opinion expressed above. · 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 scheme. · Several of these tax benefits are dependent upon 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 tax benefits is dependent upon fulfilling of such conditions, which is based on business imperatives, in the case of the company and on the specific circumstances, in the case of the shareholders.

37

INDUSTRY OVERVIEW The information presented in this section has been obtained from publicly available documents from various sources, including officially prepared materials from the Government bodies and industry websites/publications. Industry websites/publications generally state that the information contained in therein has been obtained from sources believed to be reliable but their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe industry, market and government data used in this Draft Letter of Offer is reliable, it has not been independently verified. Similarly, internal Company estimates, while believed by us to be reliable, have not been verified by any independent agencies. SUGAR INDUSTRY World Sugar Scenario Sugar is produced in 110 countries. Brazil and India are the largest sugar producing countries followed by China, USA, Thailand, Australia, Mexico, Pakistan, France and Germany. The International Sugar Organisation (ISO) has estimated a higher global sugar surplus of 11.1 million tonnes for the year 2007-08. The ISO had in May, 2007 pegged the surplus at around 9.1 million tonnes. In its quarterly report released in November 2007, the ISO said global sugar output is estimated at 170.31 million tonnes against a consumption demand of 159.17 million tonnes. World consumption is projected to grow by 2.4%, only a fraction up from the 10-year average of 2.3%. For 2007-08, world export availability is projected to exceed import demand by more than 4.27 million tonnes. (Source : ISMA, www.indiansugar.com) WORLD SUGAR BALANCE (mn tonne, raw value) Production Consumption Surplus / Deficit Import demand Export availability End Stocks Stocks/Consumption ratio in% 2007/08 170.308 159.169 11.139 45.496 49.768 74.716 46.94 2006/07 166.030 154.985 11.045 46.070 46.077 67.849 43.78 Source: ISMA, www.indiansugar.com Indian Sugar Industry Sugar is a sector of significant importance to the national economy. The sugar industry is the second largest agrobased industry, next to textiles in the country. There were 501 sugar factories in operation in the year 2006-07 which crushed approximately 278.87 million ton of sugarcane producing 28.33 million ton of sugar. The Government of India licensed new units with an initial capacity of 1250 TCD up to the 1980s and with the revision in minimum economic size to 2500 TCD, the Government issued licenses for setting up of 2500 TCD plants thereafter. The Government de-licensed sugar sector w.e.f. 11.9.1998. The entrepreneurs have been allowed to set up sugar factories or expand the existing sugar factories as per the techno-economic feasibility of the project. However, they are required to maintain a radial distance of 15 kms from the existing sugar factory. (Source: Department of Food and Public Distribution, http://fcamin.nic.in) After de-licensing, a number of new sugar plants of varying capacities have been set up and the existing plants have substantially increased their capacity. 38 -0.574 3.691 6.867 -1.25 8.01 10.12 Change in Million Tonne 4.278 4.184 in % 2.58 2.70

Production of Sugar in India (Million tonnes) Year Production 2000-01 18.51 2001-02 18.52 2002-03 20.14 2003-04 13.99 2004-05 12.69 2005-06 19.26 2006-07 28.33 2007-08 (E) 26.10 (Indian Sugar journal May 2008 of ISMA) The sugar industry in the country uses sugarcane as input, and majority of the sugar mills are set up in large sugarcane growing states like Uttar Pradesh, Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Andhra Pradesh.Uttar Pradesh and Maharashtra together contribute more than half of the of total production. Annual Installed Production Capacity of top sugar producing states States Maharashtra Uttar Pradesh Karnataka Tamil Nadu Gujarat Andhra Pradesh Statewise Sugar Production in India States Maharashtra Uttar Pradesh Karnataka Tamil Nadu Andhra Pradesh Gujarat 2006-07 (P) 9.09 8.47 2.66 2.57 1.68 1.42 (000 tonnes) 2005-06 2004-05 5.19 2.21 5.78 5.03 1.94 1.04 2.17 1.13 1.24 0.98 1.168 0.79 (Source : ISMA Handbook of Sugar Statistics) 2006-07 7.05 6.69 1.85 1.54 1.07 9.32 (000 tonnes) 2005-06 2004-05 7.01 6.98 5.23 4.54 1.54 1.46 1.52 1.52 1.07 1.07 9.08 9.08 (Source : ISMA Handbook of Sugar Statistics)

It is expected that the drivers for consumption i.e. the GDP growth and population growth would continue to grow at current rates. Based on the past ten years' growth in consumption and estimates from various independent sources, it is expected that in 2017, the domestic sugar consumption would be approximately 28.5 million MT. Given the high cost of imports and the strategic importance of food security, India would need to target its production in excess of domestic consumption. Given the past trend in production cyclicality, sugar equivalent to 1.5 months of consumption i.e. an additional 3.5 million MT of sugar would need to be produced by 2017. (Source : ISMA, www.indiansugar.com ) Release Mechanism of Sugar Under the partial control of sugar industry followed by the Central Government, 90% of the sugar produced by sugar mills may be disposed off by them, without any restriction on price and movement. The balance 10% is to be supplied by them at prices fixed by the Central Government. However, both free sale sugar and levy sugar are subject to monthly quotas decided by the Central Government. The sugar produced in 4 to 5 months in a sugar seasons is 39

controlled and regulated to be sold throughout the year. This release mechanism has been in place since 1942, when the Sugar and Sugar Products Control Order was first promulgated and has since been followed except for a break during 1978-79, when monthly release was given up. The reason for monthly release of sugar has been to ensure that sugar is available throughout the year at reasonable prices to consumers. 10% of the sugar produced by the factory is procured by the Government as levy sugar at a pre-determined price for supply to consumers through the Public Distribution System. This proportion of levy sugar was 60% in 1967-68 and has been gradually brought down to 10% from 2001-02. Sugarcane Pricing Sugarcane price is governed by notifications of the Government of India, which fixes the minimum price payable to farmers, known as the Statutory Minimum Price "SMP"). The SMP is fixed having regard to the following: · · · · · Cost of production of sugarcane Return to the growers from alternative crops and the general trend of prices of agricultural commodities Availability of sugar to consumers at a fair price Price at which sugar produced from sugarcane is sold by sugar producers Recovery of sugar from sugarcane

The SMP for the crushing season 2006-2007 was Rs.80.25 per quintal and for 2007-08 Rs.81.18 per quintal for 9.0% recovery. In addition, several States advice a higher cane price called the State Advised Price ("SAP") to be paid by the sugar mills. The States of Uttar Pradesh, notified sugar mills to pay a price of Rs. 125 per quintal for general variety of sugarcane for crushing seasons 2006-2007 and as well 2007-08. The government of Uttarakhand fixed the SAP of Rs. 127 per Quintal for crushing season 2006-07 as well as 2007-08. The decision of Uttar Pradesh Government of fixing SAP of Rs 125 per quintal for Sugar season 07-08 was challenged by the Sugar Mills before the Hon'ble Allahabad High Court, Lucknow Bench. The Hon'ble High Court vide its order dated November 15, 2007 fixed an interim price of Rs. 110 per quintal and the same was confirmed as interim measure by the Hon'ble Supreme Court vide its order dated 15 May 2008. Current Scenario There has been a record cane and sugar production for two consecutive years i.e. 2006-07 & 2007-08 and two buffer stocks. As a result of which prices of sugar has came down substantially in 2006-07. The whole sale sugar prices which were prevailing Rs 1900 - 2000 per quintal in mid 2006 have come down substantially and touched a low of Rs. 1250 - 1300 per quintal in March - April 2007. The whole sale sugar prices in June 2008 are hovering around Rs. 1450 - 1500 per quintal. However as the farmer is reported to be moving away from this crop in the current year, India's sugar output is likely to dip in the crushing season 2008-09. Factors affecting Sugar Production A. Sugarcane availability: Sugarcane is the primary raw material for sugar production and adequate sugarcane availability is a prerequisite for mill viability. Sugarcane is primarily grown in nine states of India: Andhra Pradesh, Bihar, Gujarat, Haryana, Karnataka, Maharashtra, Punjab, Uttar Pradesh and Tamil Nadu. More than 50 million farmers and their families are dependent on sugarcane for their livelihood. The availability of sugarcane depends on: · Area under sugarcane cultivation: The area under cultivation of sugarcane in the proximity of the mill determines the amount of sugarcane that can be made available. Crop switching from sugarcane to other crops effectively lowers the area under cultivation of sugarcane. · Climate and irrigation facilities: Sugarcane is a tropical crop which requires adequate water and sunshine. In addition, monsoons can effect the crop yield and quality of the crop. The state of UP is supplied water from the Ganga, which along with its tributaries and associated canal system accounts for 34% of the total river water available in the country (Source: Ministry of Water). This available perennial water reduces the state's reliance on seasonal monsoons. · Crop diseases and pests: Crop diseases affect both the quantity and quality of sugarcane. Harvests have been impacted severely by insects and pests (Eg. Wholly Aphid). Several sugar factories are currently investing in research and development in the field of Entomology to control such pest outbreaks. 40

·

·

Sugarcane yield: This is the total sugarcane output per hectare of land. It depends upon several factors like climate, soil, variety of sugarcane, and development measures undertaken by sugarcane farmers, agencies, cooperatives, government, and sugar manufacturers. Agricultural engineering and extension services, usually undertaken by individual sugar mills, have played an important role in increasing sugarcane yields. Diversion of sugarcane to other products: The sugarcane producers may not supply the sugarcane to a sugar manufacturer and divert the production to other products like gur, and khandsari which are forms of crude sugar.

B. Sugar Recovery Sugar recovery is the amount of sugar recovered from a fixed amount of sugarcane during the crushing process. The recovery depends upon several factors like: · Sugarcane quality: The quality of sugarcane directly determines the sugar recovery. For example, farmers are encouraged to bring less trash and binding material to improve overall recovery. · Operational efficiencies of the manufacturer: Operating efficiencies and technology used impact the recovery to a large extent. · Sugarcane Variety: Higher recovery is possible from high-sugared sugarcane varieties. · Delay in crushing after harvesting of sugarcane: Sugarcane quality declines rapidly once the sugarcane has been harvested. To maintain high recovery it is essential to minimise the delay in crushing after the sugarcane is harvested. C. Cyclicality Management The domestic sugar industry typically follows a 4 to 6 year cycle. Higher sugarcane and sugar production results in a fall in sugar prices. The resulting low prices for sugar impact the ability of mills to pay the farmers. This compels the farmers to switch to other crops thereby causing a shortage of sugarcane, consequently an increase in sugarcane prices. Taking in to account the prevalent higher prices for cane, farmers then switch back to sugarcane. Cyclicality management is the opportunity to minimize arrears, thereby reducing the need for any financial support from the government. The removal of arrears would also remove induced cyclicality; thereby reducing the incidence of surplus and deficit production phases. Economically, this would translate into reducing the incidence of excess inventory build up in surplus phases and the need for potentially costly imports and government support during deficit phases.

Natural Cyclicality Climate variations Water Availability Pest Attacks Higher sugar production

Induced Cyclicality

Decline in sugar prices Lower Profitability

Higher sugarcane production

2-3

4-5 yea rs

ye ar s

High sugarcane arrears

Improved profitability Low sugarcane arrears

Decline in area under cultivation Lower sugarcane Production

Lower sugar availability Increase in sugar prices

Lower sugar production

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D. By Product Opportunity The sugar industry in the country has diversified into multiple by-products, to enhance the value addition for every MT of cane that is crushed. Bagasse and Molasses is the two most important by-product of sugar industry. Whereas bagasse is primarily used to meet the captive requirement of fuel and used for co-generation of power, molasses is used extensively for the manufacture of ethyl alchohal or rectified spirit. Rectified sprit is used as feed stock for alchohal based chemicals and to manufacture portable alcohol. Dehydrated alcohol (ethanol) is being used as a blend with motor spirit

CO-GENERATION - OVERVIEW Cogeneration in sugar industry It is estimated in the 11th five year plan that sugar industry has a potential to co-generate bagasses based generation of up 5000 MW of power. Many of sugar units have invested in Co-generation and are able to export surplus power after meeting captive requirement . Revenues from sale of surplus electricity can go a long way in improving the viability of sugar mills. It has been estimated that `optimum cogeneration' can result in an additional net value addition of Rs 70­ 100 per tonne of cane crushed at current typical electricity sale prices. Benefits of Co-generation Systems: a. Provides economic competitive advantages through a maximized return on investment by utilizing the same fuel to provide heat and electricity; b. Environment friendly because of reduced air emissions of Green House Gases, sulphur dioxide, nitrogen oxides, and particulate matters; c. A reliable source of power and process steam or heat; d. Onsite electricity generation can reduce transmission and distribution losses; and e. Low gestation period. Almost all major sugar-producing states have announced policies in support of cogeneration in sugar mills. Support to these projects by state governments includes purchase of additional electricity at attractive rates through long-term power purchase agreements (PPAs), facilities for wheeling and banking in many states, prompt payments for purchased electricity, etc. ETHANOL AS A FUEL - OVERVIEW Ethanol is one of the by-products of the sugar industry. It is made from molasses, which still contain some sugar, but this sugar cannot be extracted using current technologies. These molasses are fermented with yeast to give ethyl alcohol. The mixture is then distilled to separate the alcohol from the mixture. The ethanol molecule contains oxygen, 42

it allows the engine to more completely combust the fuel, resulting in fewer emissions. Therefore, ethanol has many advantages as an automotive fuel. The Government announced Ethanol blended petrol scheme in 2002 to encourage alternative fuel, ethanol in the larger interest of cane farmers and also its beneficial impact on environmental protection. the blending of petrol with 5% ethanol has been permitted, in all states excepting the North-East states. India requires an estimated 550 million litters of Ethanol. The government is considering a proposal to make 5% blending compulsory with immediate effect across the country, which is expected to increase to 10% from October 2008. Ethanol Production Capacity In India State Maharashtra Uttar Pradesh Karnataka T.N. & Pondicherry Andhra Pradesh Gujarat, Daman Diu & Dadar and Nagar Haveli Bihar Total (mn litres) No. of Units Annual Installed Capacity 55 665 28 510 9 109 5 68 10 100 8 75 4 60 119 1587 (Source : ISMA Handbook of Sugar Statistics, October 2007)

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OUR BUSINESS We are in the business of manufacturing sugar with a total installed crushing capacity of 22,750 TCD. We started operations in January, 2001 by setting up a 2500 TCD sugar plant in Village Libberheri, Tehsil Roorkee, District Haridwar, Uttarakhand. The capacity of the plant has since been increased to 6250 TCD in 2004. We installed and commissioned our second unit for manufacturing of sugar in 2005 with a capacity of 3500 TCD (expanded now to 7000 TCD) at Barkatpur, district Bijnaur, Uttar Pradesh. We have also commissioned two units at Khaikheri in January 2007 and Shermau in April 2007 in Uttar Pradesh with crushing capacity of 4500 TCD and 5000 TCD respectively. Along with the sugar manufacturing unit we also have Co-generation capacity of at all our four sugar units with a total capacity of 81 MW. Our businesses can be categorised into two broad areas, namely Sugar Production and Power Co-generation. However the power co-generation is used for captive consumption. Further we have also decided to venture into production of ethanol from Mollasses to improve the financial viability of our sugar mills. We plan to increase the capacity of our sugar production from 22750 TCD to 25250 TCD by increasing the sugar crushing capacity by 2500 TCD at Shermau. Further to improve the financial viability of our sugar manufacturing units, we intend to increase the Co-generation capacity by 55 MW at our sugar units. The power produced by our cogeneration plants will be utilized for running our sugar mills and the surplus power will be supplied to the power distribution companies. The co-generation of surplus power by our sugar mills will not only improve our economic viability but also the technical performance of mills. In addition an Ethanol unit of capacity 75 KLPD is also being set up at Barkatpur sugar plant. Given below is a detail of our facilities including proposed expansion: Name of Unit / Location Existing: Libberheri Barkatpur Khaikheri Shermau Total Proposed (additional capacities): Barkatpur Khaikheri Shermau Total Cane crushing capacity per day (TCD) 6,250 7,000 4,500 5,000 22,750 2,500 2,500 Co-generation capacity (MW) 16 20 15 30 81 30 10 15 55 Ethanol capacity (KLPD) 75 75

During the Financial year 2006-07 we crushed 216.72 Lac Quintals of Cane and manufactured 21.35 Lac Quintals of sugar at a recovery rate of 9.86% in the crushing season as compared to 112.39 Lac Quintals of cane crushed and 11.12 Lac Quintals of Sugar manufactured for financial year 2005-06. Our sale from sugar increased to Rs. 26,111.81 Lakhs in the financial year 2006-07 from Rs. 19,943.61 Lakhs in the financial year 2005-06. The income from sale of molasses in 2006-07 increased to Rs. 2899.40 Lakhs from 1716.40 Lakhs in 2005-06. In view of downtrend in sugar industry we incurred a net loss of Rs. 4,976.60 lakhs on net sales of Rs. 27,886.55 lakhs in the financial year 2006-07 as against net profit Rs. 2,274.57 lakhs on net sales of Rs. 21,454.90 lakhs in the financial year 2005-06. During the 6 months period ended March 31, 2008 we have incurred a net loss of Rs. 293.04 lakhs on net sales of Rs. 14,310.85 lakhs as per the restated financial statements. Our existing manufacturing facilities Unit at Libberheri Our sugar mill at Libberheri, district Hardwar in Uttarakhand has sugarcane crushing capacity of 6250 TCD and cogeneration capacity of 16 MW. This mill is one of the few units in India producing sugar through the Defeco Remelt 44

Phospho Floatation Process (DRP). The sugar unit is well connected by rail as well as road to the nearest major market being Muzzafarnagar. The region is situated in the Gangetic Plain which has ample water supply due to the high water table. Incentive available to our Libberheri unit in Uttaranchal Benefit under Income Tax Act, 1961 On the basis of the substantial expansion of Industrial Undertaking between November 2003 to November 2004, our Company is entitled to get deduction u/s. 80-IC of the Income Tax Act, 1961 as specified u/s. 80-IC(3)(ii) beginning from assessment year 2005-2006 as follows: Period of Deduction Extent of Deduction First 5 assesment years 100% of the profits and gains derived from such undertaking Next 5 assessment years 30% of the profits and gains from such undertaking Benefit under Central Exicse Our Libberheri unit is eligible for exemption in respect of payment of excise duty for sugar and its by-products for a period of 10 years starting from December 2004 in terms of Notification No.49/2003 C.E. dated June 10, 2003 and Notification No 5O/2003 CE dated June 10, 2003 subject to fulfilling of the conditions prescribed in the aforesaid notifications. Other benefits to Libberheri Unit Ministery of Consumer Affairs, Fertilzers & Public Distribution has issued letter dated January 22, 2001 under Sugar Promotional Scheme to Libberheri unit for exemption from levy sugar up to 440,000 qtls. of sugar production till 2007-08 sugar year. Unit at Barkatpur Our sugar mill at Barkatpur is located in the Tehsil - Nazibabad, District - Bijnore (Uttar Pradesh). It was commissioned in January 2006 at a capacity of 3500 TCD and since then has been expanded to the present crushing capacity of 7000 TCD and co- generation facilities of 20 MW of power. The factory is ideally located with respect to the availability of raw material, water, skilled and unskilled manpower and infrastructural facilities. The site is around 27 Kms. From Bijnor city and the nearest railway station and town is Chandak which is about 5 kms. from the site. The site is also at a distance of 12 Kms. from NH 74. Unit at Khaikheri We have set up a sugar mill with an installed capacity of 4500 TCD along with co-generation capacity of 15 MW at village Khaikheri, Dist. Muzaffarnagar, Uttar Pradesh which commenced production in January 2007. The site is around 25 Kms. from the main city and the nearest railway station is Muzaffarnagar. The site is also at a distance of about 4 Kms. from the NH 58. The distance from the Company's unit at Libberheri (Tehsil Roorkee) is around 16 Kms. and from Bijnore is around 80 Kms. Unit at Shermau We have set up a sugar mill with installed capacity of 5000 TCD alongwith co-generation capacity of 30 MW at village Shermau, Dist. Saharanpur, Uttar Pradesh which commenced production in April 2007. The site is around 40 Kms. from the main city and the nearest railway station is Saharanpur. Manufacturing process - Sugar There are various technologies used for the manufacture of the sugar. The main technologies used in the manufacturing of sugar are Defeco Remelt Phospho floatation (DRP) Process, Double Sulphitation (DS) Process and Single Sulphitation and Remelt Clarification (SSRC) Process. The sugar cane procured is weighed and unloaded on cane carrier through mechanical un-loaders. This cane carrier conveys the cane to chopper and then to cutter and fibrizer so as to convert the cane into fine fibers. The process is called as preparation of cane.

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The prepared cane is crushed in multiple rollers milling tandem. Hot water is added before last mill so as to extract maximum quantity of juice from cane. Residue left is called bagasse, which is utilized as fuel to produce steam at 45 Kg/ cm2 in high-pressure boilers. The steam is used for producing power for sugar factory's own consumption as well as export purpose. The juice received from mills is screened through juice screens and then weighed in load cell based juice weighing scale. Defeco Remelt Phospho floatation (DRP) Process In this technology, the juice received from mills is screened through juice screens and then weighed in load cell based juice weighing scale. After weighment, it is passed through juice heaters where it is heated up to 70 degree centigrade after which it is neutralized by adding milk of lime and phosphoric acid. The treated juice is further heated to 103-105 degree centigrade and fed to juice clarifier where it is allowed to stay for 1.5 - 2 hours to allow impurities to settle down. Clear juice is decanted from top and dirty juice from bottom continuously. Dirty juice, which is also called muddy juice is filtered in continuous vacuum filter after adding bagacilo, where remaining juice is extracted from mud, under vacuum. Mud is retained on vacuum filter screen from where it is dropped on a belt conveyor and conveyed to mud yard. Mud being a good manure, is sold to farmers. The extracted juice is again sent to weighed juice tank for reprocess. Clear juice from clarifier is concentrated in multiple effect evaporators working under differential vacuum conditions. The concentrated juice which is now called syrup is sent to pans for further concentration till such time the crystals start appearing. These crystals are further developed under controlled conditions in crystallizers. Our sugar mill at Libberheri, Roorkee, Haridwar has adopted four massecuite boiling system i.e. A-1, A, B & C. The raw sugar is purged in `A' continuous centrifugal machines where sugar crystals are separated from molasses. The sugar thus produced is melted with hot water, which is called raw melt. This melt is re-screened and sent for melt clarification treatment with the help of lime sucroete and phosphoric acid by froth flotation process. The scum is removed from the top and clear melt is taken for further filtration with the help of deep bed pre-filter and filter. The clear filtrate received after deep bed filter is sent for de-colorization through Ion Exchange resins where color is removed and this solution is further sent for crystallization to pans. The concentration in pans is carried out to the extent that sugar crystals start appearing after which it is dropped in crystallizer for cooling of massecuite and developing the sugar crystals further. After cooling of `A-1'massecuite, it is passed through batch centrifugal machines for separating molasses from sugar crystals. The crystals are retained on screen and mother liquor is collected in tanks, which is again sent for reprocess. The mother liquor coming out of `A' centrifugal machines is again boiled in another vacuum pan for further crystallization after formation of crystals mass is dropped in crystallizer for cooling. Cooled massecuite is sent to `B' continuous centrifugal machines for separation of crystals and mother liquor. Crystals are melted in melter and melt is sent to pans for crystallization. The mother liquor from `B' massecuite is again boiled in vacuum pans for further crystallization. Crystallized mass is called as `C' massecuite. It is then sent to continuous crystallizer for cooling. Cooled `C' massecuite is also cured in continuous centrifugal machines. The mother liquor separated from this massecuite is known as final molasses, which is stored in big steel tank. The final molasses is very useful by-product and used for production of alcohol. Crystals from `C' massecuite are melted and sent to pans for crystallization. After separation of sugar crystals through batch type refined sugar centrifugal machines from `A-1' massecuite, the sugar is conveyed through hopper and fluidized bed drier to sugar elevator. Through elevator, the sugar is transferred to storage bins after separating various sizes of crystals of sugar in sugar sizer. From the sugar bins, the sugar is bagged in poly or gunny bags as per the requirement after passing through automatic weighing and bagging machines. These bags are stitched by stitching machine and transferred to the sugar godown through various fixed & portable conveyers and stackers

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Double Sulphitation (DS) Process This is the process adopted by the company at Barkatpur sugar mills. Juice received from mills is weighed, heated to 70° C and treated with lime & sulphur-dioxide in juice sulphitation vessel. Treated juice is again heated to 103°-105° C and sent to clarifier where juice is allowed to stay for 1.5-2 Hrs. to allow impurities to settle down. Clear juice is decanted from top and dirty juice from bottom continuously. Dirty juice (called muddy juice) is filtered in continuous vacuums filters where remaining juice is separated from mud under vacuum & mud is retained on filter screen. Mud being a good manure, is sold to farmers. Retained juice is again sent for treatment. Clear juice from clarifier is concentrated in multiple effect evaporators working under vacuum. Concentrated juice is known as syrup. Syrup is treated with sulphur-dioxide in syrup sulphitors. Sulphited syrup is further concentrated under vacuum in vacuum pans. The concentration is carried out to the extent when crystals start appearing. These Crystals are developed in controlled conditions under vacuum. The mass so formed is called A-Massecuite. After assuring desired grain size massecuite is dropped in air-cooled crystallizers. After 2 hours of cooling, massecuite is sent to A-batch type centrifugal machines for separation of crystal & mother liquor. Crystals are retained on screen and mother liquor is collected in tanks. This mother liquor is again boiled in another vacuum pan for further crystallization. After formation of crystals mass, is again dropped in B-continuous crystallizers for cooling. Cooled massecuite is sent to B-continuous centrifugals for separation of crystals & mother liquor. Crystals are melted in melter & melt is sent to pans for crystallizations. This mother liquor from B-massecuite is again boiled in vacuum pans for further crystallization. Crystallized mass is called as C-massecuite. It is also sent to continuous crystallizers for cooling. Cooled C-massecuite is cured in continuous centrifugals. Mother liquor separated from this massecuite is known as final molasses. It is stored in big steel tank. It is very useful by product and is used to produce alcohol. Crystals from C-massecuite are melted in melter & sent to pans for crystallizations. Crystals from 1st massecuite (A-massecuite) are washed in centrifugals, dried on hoppers and graded for different grain sizes in graders. Graded sugar is filled in gunny/poly bags and weighed and stitched and sent to godown for storage. Defeco Remelt Phosphofloatation Process without Ion Exchange System. This is the process our company is adopting for our sugar units at Khaikheri & Shermau. Juice received from mill is weighed in load cell based scale, then heated to 70 Degree Centigrade in juice heaters and treated with lime in reaction tanks. Treated juice is again heated to 1030 - 1050 Degree Centigrade and then sent to dorr clarifier where juice is allowed to stay for 1.5 - 2.0 hours to allow impurities to settle down. Clear juice decanted from top and dirty juice from bottom, continuously. Dirty juice called muddy juice is filtered in continuous vacuum filters where juice is separated from mud under vacuum and mud is retained on filter screen. It is scrapped through mud scrappers. Mud being a good manure, is sold to farmers. Retained juice is again sent for treatment. Clear juice from clarifier is concentrated in multiple effect evaporators working under differential vacuum conditions. The concentrated juice which is now called syrup is sent to pans for further concentration till such time the crystals start appearing. It is known as massecuite. This massecuite is cooled in crystallizers. The factory is adopting six massecuite boiling system i.e. A, B, C, R1, R2 & R3. We say "A" massecuite sugar as raw sugar which is recived from the centrifugal machines after curing of "A" massecuite. This raw sugar is the melted and screened. Then this is known as raw melt. This raw melt is transferred to melt clarification system after passing it through the melt heater to heat it to 820 - 850 C and then to reaction tank, where we add lime succharate, phosphoric acid & flocculent. By adding these chemicals, floatation of impurities and dirt occurs known as scum which is scrapped form the top of the melt clarifier and the clear melt has been taken form the bottom coils of the melt clarifier.

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The clear melt thus received is sent for crystallization to pans for final boilings. The concentration in pans is carried out to the extent that sugar crystals start appearing after which it is dropped in crystallizer for cooling of massecuite and developing the sugar crystals further. After cooling of massecuite, it is passed through batch centrifugal machines for separating molasses from sugar crystals. The crystals are retained on screen and mother liquor is collected in run ­ off tanks, which is again sent for reprocess. The mother liquor coming out of "A" centrifugal machines is again boiled in another vacuum pan for further crystallization. After formation of mass, known as "B" massecuite is again dropped into the crystallizers for cooling. This cooled massecuite is sent to "B" continuous centrifugal machines for separation of sugar crystals and mother liquor. Crystals are melted in melter and melt is sent to pans for crystallization. The mother liquor coming out of "B" centrifugal machines is again boiled in another vacuum pan for further crystallization. After formation of mass, known as "C" massecuite is again dropped into the crystallizers for cooling. This cooled massecuite is sent to "C" continuous centrifugal machines for separation of sugar crystals and mother liquor known as final molasses and stored in big steel tank. This final molasses is very useful by ­ product and used for production of alcohol. Crystals are melted in melter and melt is sent to pans for crystallization. After separation of sugar crystals through batch type sugar centrifugal machines from "R1" and "R2" massecuite, the sugar is conveyed through hopper and then to multi tray hopper to sugar elevator. Through elevator, the sugar is transferred to sugar sizers. These sugar sizers separates out various size of sugar. After sugar sizers, this sugar is stored in sugar bins. The mother liquor of "R1" massecuite is used in the formation of "R2" Massecuite. The mother liquor received from "R2" massecuite is being used for the formation of "R3" massecuite. This "R3" massecuite is being cured in continuous centrifugal machines. The sugar crystals received from "R3" Massecuite after curing is again remelted and transferred to pan floor for reformation of "R1" and "R2" massecuites. The mother liquor received from "R3" Massecuite is transferred for the formation of "A" Massecuite. From the sugar bins, the sugar is bagged in poly or gunny bags as per the requirement after passing through automatic weighing and bagging machines. These bags are stitched by stitching machines and transferred to the sugar godown through fixed & portable conveyors. In sugar godown these sugar bags are stacked by sugar stackers. Manufacturing Process: Co-Generation Cogeneration of surplus power by a sugar mill not only improves its economic viability but also its technical performance. These plants have low gestation period as compared to conventional power plants. These plants normally operate between mid November to April end. The average season days are considered as 165 days for sizing the surplus power generation project. The operation of cogeneration plant in brief is as under In a sugar factory, after the cane is crushed and juice taken out in the mills, the residue of cane, which is known as bagasse is used as fuel for steam generation in boilers. The cane juice extracted from cane in the mills is sent for sugar manufacturing process which requires steam. The sugar factory also requires electric power to run the power driven equipment like pumps and prime movers of various equipment. The high-pressure steam is used in Turbo Alternators to generate electric power. The steam required for process is drawn from power turbine as exhaust steam or bled from intermediate stage of Turbine. Entire electric power requirement of factory is met by the power generated in these Turbo Alternators. Excess power shall also be generated because of availability of bagasse and matching high-pressure boiler capacity. Manufacturing Process: Ethanol Fermentation: Molasses containing between 40% - 45% fermented sugars is taken into the Fermentation Tanks for processing. Water is thereby added to reduce the viscosity in Molasses. Yeast is then added and fermentation thereby commences. Yeast contains Bacteria which convert the sugars in the Molasses into Alcohol. Distillation: Post Fermentation, we obtain Fermented Wash, and the same is further treated in various tanks. This liquid is then taken into the Distillation Columns for Separation and Purification. The first Column is the Primary Column where the Wash is treated to separate various volatile liquids and gasses. The second Column is Rectifier - I 48

Column. As the name speaks, Alcohol and water separation commences. The third column is Dealdehyde column where the impure spirit (Dealdehyde and chemicals) is removed. The fourth column is Rectifier - II, which again rectifies the spirit further. The fifth Column is Hydro Extractive column where water is added to the distilled liquid for obtaining better quality alcohol. The sixth column is Defusel Column to separate the fusel oil from the liquid. The seventh column is Refining Column. The eighth column is Recovery column and the ninth column is Anhydrous Column to produce Ethanol. In the anhydrous column the final remains of water are absorbed by resins to produce complete dry ethanol which is compatible for mixing with petroleum to make fuel. Receiving & Storage: The alcohol so derived is then received in tanks and stored in other storage tanks for distribution and sale. Bio Digester Section: The liquid so derived after Distillation is called spent wash which is further processed for utilization. The Spent Wash is transferred into a Buffer Tank where the solids are allowed to settle and the thin liquid is fed into the Bio Digester Tank. With the help of agitators the liquid generates Methane Gas which is very useful as fuel for the Boiler. The balance liquid is then transferred to the Lagoon for storage. This is then fed into an Evaporator whereby the spent wash is dried upto 40% so that the resultant semi - solids can be mixed with Press mud and other ingredients, from the Sugar mill for Bio Composting. The manure so prepared is ideal for crops. In case the spent wash is dried upto 55% then it can be mixed with bagasse or husk and fed into the boiler for incineration. COMPETITIVE STRENGTHS We face competition from the established large players in the industry. Some of our strengths are as follows: · Our Promoters have industry specific knowledge & experience in the of the Sugar Industry Our promoters Mr. Raj Kumar Adlakha, Mr. Ranjan Adlakha, Mr. Rajan Adlakha and Uttam Industrial Engineering Limited (UIEL) have been associated with the Sugar Industry for over 23 years. UIEL has been assisting a number of sugar mills in project implementation and providing technical support since its incorporation. We are eligible for various incentives under Government Policy Our Libberheri unit (at Uttarakhand) is eligible for Income Tax deduction under section 80-IC and is also eligible for the exemption from excise duty for 10 years commencing from Assessment Year 2005-06. We are among the few players in the country to use Defeco Remelt Phospho floatation (DRP) Process to produce sulphurless sugar Most of the conventional sugar mills in India adopt Double Sulphitation Process to manufacture Plantation White Sugar. At the Libberheri unit, we have moved away from this conventional method of sugar manufacturing and adopted the Phosphoflotation process of manufacturing EC II grade refined sugar. This sugar meets the European standards of refined sugar (Colour of less than 45 IU). We produce sugar with negligible sulphur content. Refined sugar is preferred by industrial buyers and generally commands a premium over plantation white sugar. We have sugar refining capacity Our Libberheri unit is capable to produce sugar not only from sugarcane but also from raw sugar. This unit has a sugar refining capacity of 625 TPD which facilitates refining of raw sugar, thereby enabling us to have an increased utilisation of our refining capacity as compared to majority of other sugar manufacturers. We have captive generation of power Presently we have total Co-Generation facility of 81 MW which is proposed to increase to 136 MW. Cogeneration of power by us not only improves the economic viability of our sugar units but also their technical performance. Further the co-generation plants lead to reduction in transmission losses considerably and help in stablising the grid voltage because of their proximity to the load center.

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BUSINESS STRATEGY Our business strategy primary based on following: · Achieve full integration by setting up Ethanol Capacity The manufacturing of Ethanol is one of the key areas planned for capacity build up by the company. Due to persistent hike in international oil prices the government has announced the blending of petrol with ethanol at 5 % from November 1, 2006 on all India basis accepting north-east states and to raise to 10 % as soon as the system for compulsory blending is put in place. Ethanol is produced from sugarcane by-product, Molasses which is one 49

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of the simplest, cheapest & the main source of raw material for ethanol manufacture in India.We propose to set up a Fuel Ethanol Plant by using captive mollases from our sugar unit at Barkatpur. The Molasses shall be converted into best quality Ethanol using state of the art technology. We have received permission from the Excise Commissioner, Government of Uttar Pradesh to produce and sell 22500 kl per annum (75 KLT per day) industrial alcohol at Barkatpur, District Bijnor. Increased revenues from co- generation We plan to become a key player in co - generation since Uttar Pradesh being a Power deficited state which offers ample opportunities for power co-generation. Further the company has also taken the initiatives for getting itself registered to avail carbon credits. Achieve greater raw material security We are focused on identifying locations which have the potential to grow high yielding varieties of sugarcane and which are not covered in the cane area of any other sugar mill. Strengthen relationship with sugarcane farmers. We are dependent on sugarcane farmers for supply of sugarcane to our plants. There is no obligation on the farmers to cultivate sugarcane and they are at liberty to cultivate any other crops. In this scenario, it is important that our relationship with the farmer is strong and mutually beneficial. We conduct training programs for farmers and demonstrate them best practices for cultivation, providing good quality seeds of high yeild variety which will improve the yield and recovery of sugar from the sugarcane and assist them in keeping the sugarcane crop healthy and disease free. Such a relationship with farmers will enable us to secure the source of our primary raw material. Continuously improve the technology in our sugar mills. We intend to focus on improving the technology used in our sugar mills for modernizing our plants and machinery and reducing our plant and machinery breakdown time. We are focused on technological advances for the existing plants and the new plants to achieve efficient and continuous production as it assists in (a) improving the crushing capacity and up time which helps avoiding diversion of sugarcane to alternative users, (b) minimizing sucrose loss after harvesting of sugarcane resulting in production of more sugar from the raw material, (c) reduce `losses' in the process (d) improving our energy efficiency, thereby reducing our cost of production and (e) improve the quality of our sugar. These will enable us to maintain our position of leadership in the sugar market. Expand our installed capacity for co-generation and increase our off-season operations for cogeneration. We use bagasse, a by-product of the sugar production process as fuel for co-generation. With increase in our sugarcane crushing capacity the amount of bagasse available to us will also increase. We plan to utilise this bagasse for operating our co-generation plants for maximum days per annum. We also seek to increase the plant load factor of our co-generation plants, which will enable us to maximise the utilisation of our plants. Emphasis on Marketing and Branding Our company is producing premium sugar (Branded) and has initiated an aggressive branding and retail marketing program under "Uttam Quality". To take this effort further we intends to put in place an innovative marketing program under experienced marketing Professionals in major states. Retail distribution foray We have entered into retail sugar market where we propose to enter into metro market with our semi refined sugar. The semi refined sugar (sulphurless sugar) will be marketed in the Metro and urban markets for better realization.

Marketing and selling arrangements We have experienced professionals handling our sales and marketing functions with a team of over 40 dedicated Managers and field executives. The sales are divided into two functional areas: (a) Bulk Sales Division: Retail channels for branded and bulk sugar sold in 1kg, 2kg, 5kg and 50kg packing, and (b) Consumer Pack Division: Wholesale channels for bulk sugar sold in 50kg HDPE bags We have expanded our network to many parts of India covering the states of Delhi, Uttar Pradesh, Punjab, Jammu and Kashmir, Uttarakhand, Rajasthan, Madhya Pradesh, Gujarat and parts of Maharashtra. Today we are supplying our brands to major Retail outlets like Aditya Birla Retail Limited, Subhiksha Trading Services Limited, etc. We have also entered into agreement for selling our Brand theough the retail chain of Bhart-Walmart Joint Venture. The bulk packages are sold through wholesalers, i.e. agents spread across states. The bulk sugar rates are determined depending upon the market demand and supply forces. 50

Power Purchse Agreement The surplus power generated as a result of installation of additional co-generation capacities at our various plants, will be transmitted to UP Power Corporation Limited or will be sold through PTC India Limited. We have entered into Power Purchanse Agreements for sale of power produced at our plants to UP Power Corporation Limited for sale of power as per the details given below: Unit Date of Agreement Sale of Power Barkatpur August 22, 2007 26 MW Shermau August 22, 2007 10 MW Khaikheri August 22, 2007 6.50 MW The tariff table for the sale of power is as under: Year of Commissioning FY 2008 FY 2009 FY 2010 FY 2008 3.11 FY 2009 3.15 3.25 (Rs. per Unit) FY 2010 3.20 3.29 3.38

During off-season an incentive of 3 paise per unit is also admissible subject to terms given in Power Purchase Agreement. Competition We face competition from other sugar mills in private sector, public sector and in co-operative sector located in Uttar Pradesh and Uttarakhand and other sugar mills. Some of the players present in Uttar Pradesh and Uttarakhand are follows: · Bajaj Hindustan Limited · Simbholi Sugar Limited · Dhampur Sugar Mills Limited · Triveni Engineering and Industries Limited · Ganga Kishan Sahakari Chini Mills Limited Competition will further be enhanced with entry of new players in the industry and expansion by the existing players. Utilities Raw Material: Sugar Sugarcane forms the major raw material in the manufacture of sugar. Sugarcane availability and prices are the key determinants of profitability. We have been in operation for more than 7 years and have developed good relationship with the cane growers / co-operative societies in the mill area. We are also involved in Cane Development activities in our area, which include seed treatment, variety replacement, plantation of high yield variety of sugarcane, technical assistance to farmers, development of early maturing variety, soil testing, control of post harvest sugar losses etc. We do not foresee any problems in the availability of sugar cane in our area of operation. Raw Material Consumed (2006-07) Particulars Sugar Cane Unit Qtls. Quantity 216,02,600 Value (Rs. in lakhs) 262,69.46

Co-generation The raw material (Bagasse) is available in the sugar mills itself. Bagasse is the by-product of sugar cane, which is approx 28%-30% of sugarcane crushed. After meeting the captive consumption of power, approx. 4.5% to 7.5% bagasse is available for extra power generation depending upon the sugar manufacturing process. The company is generating power only on the basis of bagasse available in the unit and no problem is envisaged in availability of raw material for enhanced capacity of co-generation.

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Ethanol The ethanol unit needs 93,750 tonnes molasses (@ 240 liters of ethanol per ton of molasses) as raw material for manufacture of 22500 KL/year (75 KLPD x 300 days) of ethanol per annum. The total production of molasses in FY 2007-08 of all the units is projected at 175200 tonnes. The molasses requirement of 56800 ton per year will be met from Barkatpur unit and the balance requirement of molasses will be taken from other units of the company. After meeting the above requirement we will still have excess production of molasses which will be sold in the market. Therefore, no problem is envisaged in procurement of molasses required for production of ethanol at this stage. Besides, the company would also need certain chemicals which are available locally. Power The bagasse produced duing the sugar manufacturing process can be optimally utilized for power generation. The requirement of power during the crushing season is met through bagasse based captive co-generation facilities. For the off-season we have DG sets as standby electric power source. Water We have an ample supply of water since all the units are situated in the Gangetic plain, which has a high water table. Human Resources Since sugar industry is a seasonal industry, our requirement of normal work force varies during the year. The brief details of our existing permanent employees as on March 31, 2008 are as given below: Department Libberheri Barkatpur Khaikheri Shermau Corporate Office Total Administration & 55 39 33 31 57 215 Commercial Cane Department 44 36 30 21 131 Engineering & 76 77 102 84 339 maintenance Manufacturing 22 15 16 23 76 Total 197 167 181 159 57 761 Further, in addition to above, there are around 655 persons on contract basis. Effluent Treatment & Management Plan of Our Sugar Mills Primary Treatment Plant: The sugar mill effluent consists of various oils, grease and other materials generated during operations. The effluent is first passed through Primary Treatment Plant containing two sections. In the first section the screening of waste material is conducted and coarse and suspended materials are removed. In the second compartment Oils and Grease are trapped through a screen bar and gravity method. The said oil and grease so collected (negligible quantity) are burned away in the boiler. Equalization Tank: The effluent is then passed into an Equalization Tank. Equalization of waste streams is essential for regulation and prevention of shock loads that are created by batch dumping of strong waste. This increases the temperature, ph, alkalinity, BOD and COD levels. The parameters of all are scaled down (reduced) and controlled with the use of lime and alum and then passed onto the Primary Mechanical Clarifier. Primary Mechanicl Clarifier: Due to the above chemical treatment, Sludge collects, which is separated from the liquid and then dried on sludge beds which can be used as land fills or brick manufacturing. Next the remaining effluent is transferred to the Aeration Tank. Aeration Tank: Biological treatment of the effluent is necessary. Air is pumped into the waste water and with the help of micro organisms it is treated biologically. It is then transferred to the Secondary Mechanical Clarifier for filteration. Secondary Mechanical Clarifier: Here the remaining sludge in the effluent is further collected and removed for drying on Sludge beds to be later used for land fills. 52

The balance liquid is then passed through Pressurized Sand Filters (Mix Beds) for removing suspended solids. The solid sludge which is trapped in the sand filters is removed periodically and dried and used. The remaining water so derived is free from waste and is then recirculated into the aeration tank for reprocessing and the cycle thereby continues. The above system is followed by all our sugar mills situated at Libberherri, Barkatpur, Khaikherri and Shermau and is as per the prescribed norms of the Pollution Control Board. Capacity Utilization 2005-06 A 1 Sugar Libberheri Unit Installed Capacity in TCD No. of days in Season Cane Crushed (Lakh Qtls) Capacity Utilisation (%) Barkatpur Unit Installed Capacity in TCD No. of days in Season Cane Crushed (Lakh Qtls) Capacity Utilisation (%) Khaikheri Unit Installed Capacity in TCD No. of days in Season Cane Crushed (Lakh Qtls) Capacity Utilisation (%) Shermau Unit Installed Capacity in TCD No. of days in Season Cane Crushed (Lakh Qtls) Capacity Utilisation (%) Co-Generation Libberheri Unit Installed Capacity in MW No. of days in Season Capacity Utilisation (%) Barkatpur Unit Installed Capacity in MW No. of days in Season Capacity Utilisation (%) Khaikheri Unit Installed Capacity in MW No. of days in Season Capacity Utilisation (%) Shermau Unit Installed Capacity in MW No. of days in Season Capacity Utilisation (%) Ethanol Barkatpur Installed Capacity in KLPD No. of days in Season Capacity Utilisation (%) 6250 168 77.01 73.34% 7000 117 35.38 68.77% 16 20 53 2006-07 6250 167 75.47 72.30% 7000 168 94.54 80.39% 4500 148 32.85 49.33% 5000 58 13.17 45.41% 16 20 15 30 2007-08 6250 134 54.87 65.52% 7000 131 69.37 75.65% 4500 132 33.22 55.93% 5000 133 47.92 72.05% 16 134 65.52% 20 131 75.65% 15 132 55.93% 30 133 72.05% 2008-09 6250 165 85 82% 7000 165 126.23 90% 4500 165 66.83 90% 5000 165 111.38 90% 16 165 82% 20 165 90% 15 165 90% 30 165 90% 75 275 75% 2009-10 6250 165 85 82% 8500 165 126.23 90% 4500 165 66.83 90% 7500 165 111.38 90% 16 165 82% 50 165 90% 25 165 90% 45 165 90% 75 300 85% 2010-11 6250 165 85 82% 8500 165 126.23 90% 4500 165 66.83 90% 7500 165 111.38 90% 16 165 82% 50 165 90% 25 165 90% 45 165 90% 75 300 90%

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Other Business Induction Furnace Unit In order to utilize the excess power generated during the crushing season, our Company had set up an induction furnace with a capacity to manufacture 80 TPD of steel ingots from steel scrap & sponge iron at a cost of Rs. 160 lakhs. The project was implemented in March 2003 and trial runs were conducted. The said unit was leased out to Gayatri Iron Private Limited which terminated on January 31, 2008. Since then, the said agreement was not renewed. As on present date, we are not operating this unit. Property We have our registered office located at Village Libberheri, Tehsil Roorkee, District Haridwar, Uttarakhand - 247 667. Besides this, we have a corporate office located at Noida, India. The following properties are owned by us, where we are operating our plants. Further our Registered Office is situated at Libberheri, one of the locations where our plant is located. Location Area (in Nature of property Capacity of the hectare) Sugar Mill Libberheri Unit 25.82 Freehold 6250 TCD Village Libberheri, Tehsil Roorkee, Distt. Haridwar, Uttarakhand Barkatpur Unit 47.39 Freehold 7000 TCD Village: Barkatpur, Tehsil: Nazibabad, Distt.: Bijnore, Uttar Pradesh Khaikheri Unit, 40.49 Freehold 4500 TCD Village : Khaikheri, Tehsil : Muzzaffarnagar, Distt: Muzzaffarnagar, Uttar Pradesh Shermau Unit, 27.67 Freehold 5000 TCD Village: Tehsil Nakud, Distt: Saharanpur, Uttar Pradesh The following table sets out details of properties taken on lease by us: Location Area A-2E, III Floor, CMA Tower, Sector - 24, Noida - 210 301, Uttar Pradesh 5,400 Sq. Ft. Nature of property Lease terminating on September 1, 2009 Activities undertaken Corporate Office

Insurance We maintain insurance policies with leading Indian insurers. All our principal places of business, including our sugar mills and godowns are covered by insurance. Our plant and machinery such as mills, , boiler, pressure vessels, godown and office equipment are covered by Building, Plant and Machinery Insurance, fire and special perils insurance policies, boiler and pressure plant policies & machinery Insurance. We also maintain business interruption insurance and terrorism is specifically excluded from all our policies. The total coverage under all our policies as of March 31, 2008 was Rs. 65,614 Lakhs. Intellectual Property We do not own any intellectual property.

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HISTORY AND CERTAIN CORPORATE MATTERS History & major events Our Company was incorporated as Associated Sugar Mills Limited on October 04, 1993. The erstwhile promoters of the Company were Mr. M K Swarup and his family / associates. The Company received the Certificate for Commencement of business on April 8, 1994. The Company also received a license to set up a sugar mill with a capacity of 2500 TCD under the then prevailing licensing system. In the year 1998, Adlakha family, along with their associates, acquired the 100% shareholding in the Company from the erstwhile promoters and gained overall control of our Company. Subsequent to this, the name of our Company was changed to Uttam Sugar Mills Limited and a fresh Certificate of the Incorporation was obtained on November 24, 1998 from the Additional Registrar of Companies N.C.T. of Delhi and Haryana. The Registered Office of our Company was shifted from Delhi to the State of Uttarakhand on November 02, 2007 and received the Certificate for shifting of Registered Office to Uttarakhand on November 27, 2007. Our present Promoters are Mr. Raj Kumar Adlakha, Mr. Rajan Adlakha, Mr. Ranjan Adlakha, Uttam Industrial Engineering Limited, Lipi Boilers Limited and Uttam Sucrotech Limited. We set up our first sugar unit at village Libberheri, Tehsil Roorkee, Distt. Haridwar, Uttaranchal in 2001 for manufacturing sugar using double sulphitation process with a capacity of 2500 TCD along-with co-generation facilities of 6 MW of power. Our Company commenced commercial production from January 2001. Our Company expanded its capacity to 4000 TCD during November 2001 by installing additional cane loaders / un-loaders, increasing the length of cane conveyor, adding certain evaporator bodies, centrifugal machines etc. Our Company further expanded its capacity to 5000 TCD along-with additional co-generation facility of 3 MW during November 2002. Our Company further increased its installed capacity to 6250 TCD and upgraded its production process to the present Defeco Remelt Phospho Floatation process alongwith the expansion of co-generation facility to 16 MW of power in the year 2004. In 2005, we expanded our capacity by setting up another sugar mill in Barkatpur with a capacity of 3500 TCD and cogeneration power plant of 10 MW. In March 2006, we came out with an initial public offering of 40,00,000 equity shares of face value Rs. 10/- each at a premium of Rs. 330/- per share to part finance the new sugar mills at Khaikheri with a capacity of 4500 TCD along with co-generation of power with a capacity of 15 MW and at Shermau with a capacity of 5000 TCD alongwith cogeneration of power with a capacity of 30 MW. We further expanded our capacity at Barkatpur to 7000 TCD during the fiscal year 2005-06. Major events in the history of our Company since inception Year 1993 1994 1998 2001 2002 2004 2005 2006 Key events, milestones and achievements Incorporated as Associated Sugar Mills Limited Received license to set up sugar mill with a capacity of 2500 TCD Acquisition of 100% shareholding in our Company by the Uttam Group, subsequent to which the name of our Company was changed to Uttam Sugar Mills Limited Set up first unit in Libberheri with a capacity of 2500 TCD using double sulphitation process along with co-generation facility of 6 MW of power Capacity enhanced to 4000 TCD in November in the same year Capacity further expanded to 5000 TCD along with additional co-generation facility of 3 MW of power Increased our installed capacity to 6250 TCD and upgraded our production process to the present Defeco Remelt Phospho Floatation process alongwith the expansion of co-generation facility to 16 MW of power Expanded our capacity by setting up another sugar mill with 3500 TCD and 10 MW cogeneration power plant in village Barkatpur, Bijnore Expanded our capacity from 3500 TCD to 7000 TCD at village Barkatpur, Bijnore 55

2007

Initial Public Offering by us in March 2006 for: - Setting up a unit at Khaikheri with a capacity of 4500 TCD and cogeneration of power with a capacity of 15 MW - Setting up a unit at Shermau with a capacity of 5000 TCD and cogeneration of power with a capacity of 30 MW Trading in our shares commenced w.e.f. April 10, 2006 on NSE and BSE Commercial production commenced in Khaikheri in the month of January Commercial production commenced in Shermau in the month of April

Changes in our Registered Office Date of change Since incorporation * November 1998 November 2007 07, 02, Existing Address New Address 4343/4-C, Ansari Road, Daryaganj, New Delhi - 110 002 4343/4-C, Ansari Road, C-631, New Friends Colony, Daryaganj, New Delhi - 110 002 New Delhi - 110 065 C-631, New Friends Colony, 7C, 1st Floor, "J" Block New Delhi - 110 065 Shopping Centre, Saket, New Delhi - 110 017 7C, 1st Floor, "J" Block Village Libberheri, Roorkee, Shopping Centre, Saket, New District Haridwar - 247 667 Delhi - 110 017 (Uttarakhand) Reasons for change Moved to a bigger office Moved to a bigger office Moved for convenience in carrying out operations, as one of our unit is situated at Libberheri

* The details with respect to this change in the address of registered office is not available. Main Objects The Main objects as per the Memorandum of Association of our Company are as under: 1. To purchase, manufacture, produce, boil, refine, prepare, import, export, self and generally to deal in sugar, sugarcandy, sugar-beet, sugar-cane, molasses, syrups, alcohol, sprits, liquors and all sugur products such as confectionery, glucose, canned fruit, golden syrup and aerated waters and/or by-products such as bagasse, boards, paper pulp, paper alcohol, acetone, carbon dioxide, hydrogen, potash, can wax and fertilizers and food products generally. 2. To cultivate, plant produce and raise or purchase sugar-cane, sorghum, sugar-beet, sago, palmyra juice and other crops. Our Company sought the approval of our shareholders (i) in the Extra-ordinary General Meeting held on January 10, 2003 for carrying on the business of steel furnaces and continuous casting and rolling mill plant for producing steel and alloy steel billets and all kinds and sizes of the re-rolled sections; and (ii) in the Extra-ordinary General Meeting held on March 22, 2003 for carrying on the business of co-generation of electricity from `Baggase', a by-product of sugar process as a part of its ancilliary objects. The Object clause of the Memorandum and Articles of Association of our Company enable us to undertake our existing activities and the activities for which the funds are being raised by us, through the present issue. Changes in our Memorandum of Association Date of shareholders approval On Incorporation November 24, 1998 August 29, 2000 December 31, 2001 Details of modification to the Authorised Share Capital The Authorised Share Capital was Rs. 20,000,000/- divided into 2,000,000 equity shares of Rs. 10/- each The name of the Company was changed from "Associated Sugar Mills Limited" to "Uttam Sugar Mills Limited" The authorized share capital was increased to Rs. 125,000,000/- divided into 12,500,000 equity shares of Rs. 10/- each. The authorized share capital was increased to Rs. 150,000,000/- divided into 15,000,000 equity shares of Rs. 10/- each 56

Date of shareholders approval April 24, 2004 June 19, 2004 April 30, 2005 August 16, 2005 September 02, 2005 November 27, 2007 February 29, 2008

Details of modification to the Authorised Share Capital The authorized share capital was increased to Rs. 170,000,000/- divided into 17,000,000 equity shares of Rs. 10/- each Sub-division of Capital: One equity share of face value Rs. 10/- each was sub-divided into 2 equity shares of face value Rs. 5/- each. Consequent of sub-division, the uthorized share capital was Rs. 170,000,000/- divided into 34,000,000 equity shares of Rs. 5/- each The authorized share capital was increased to Rs. 200,000,000/- divided into 40,000,000 equity shares of Rs. 5/- each The authorized share capital was increased to Rs. 300,000,000/- divided into 60,000,000 equity shares of Rs. 5/- each Consolidation of Capital: The equity share capital was consolidated from face value of Rs. 5/- each to Rs. 10/- each. Consequent to consolidation, the authorized share capital was Rs. 300,000,000/- divided into 3,00,00,000 equity shares of Rs. 10/- each The Registered Office of our Company was shifted from New Delhi to the State of Uttarakhand The authorized share capital was increased to Rs. 400,000,000/- divided into 40,000,000 equity shares of Rs. 10/- each.

Subsidiaries Our Company does not have any subsidiary as on the date of filing of this Draft Letter of Offer. Strategic & Financial Partners We do not have any strategic and / or financial partners Shareholders Agreement We have not entered into any shareholders agreement Other Agreements Except Material contracts mentioned on page [*] of this Draft Letter of Offer, there are no other material agreements or contracts, which have been entered into by us within a period of 2 years prior to the date of this Draft Letter of Offer, and which are subsisting as on date.

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REGULATIONS AND POLICIES The sugar industry is one of the industries enumerated in entry 33 of the List in the Seventh Schedule to the Constitution of India and sugarcane is an article relatable to the sugar industry. The sugar industry falls in the seventh schedule to the Constitution of India and therefore the production and sale of sugar and procurement of sugarcane is governed by various laws, rules and regulations enacted by both the Central and State Government. Accordingly, such legislations as enacted by both Central as well as State Governments would be applicable to our business. 1. The Essential Commodities Act, 1955 The Essential Commodities Act, 1955 was enacted to ensure easy availability of essential commodities to the consumers and to protect them from exploitation by unscrupulous traders. The Act provides for regulation and control of production, distribution and pricing of commodities, which are declared as essential for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices. Most of the powers under the Act have been delegated to the State Governments. In the context of liberalisation of Indian economy, the Central Government issued the Removal of Licensing requirements, Stock limits and Movement Restrictions on Specified Foodstuffs Order, 2002 on 15 February 2002 under the Essential Commodities Act, 1955 allowing dealers to freely buy, stock, sell, transport, distribute, dispose, etc., any quantity in respect of sugar and many other items without requiring any license or permit therefore under any order issued under the Act. Through the notification/order dated 16 June 2003 the said Central Order of 15 February 2002 has been amended to amplify the definition of ''dealer'' to include producer, manufacturer, importer and exporter. Similarly, producer, manufacturer, importer and exporter of sugar have been excluded from the purview of the aforesaid Order as to facilitate issue of direction regarding stocks, storage, etc., of sugar particularly in the context of the prevalence of release mechanism/levy sugar quota and also to provide minimum support price to sugar cane growers. Section 3(3C) of the Essential Commodities Act makes specific provision with regard to the payment to be made for sugar sold by the producer in compliance of an order made under Section 3(2) (f) of the Act by the Central Government for supply of levy sugar. This Section lays down the guidelines for determination of price payable to the producer for levy sugar supplied by him. Section 3 of the Act confers wide powers on the Central Government to make orders to provide for achieving the primary objective of exercising effective control to check inflationary trend in prices and to ensure equitable distribution of the essential commodity. The Levy Sugar Supply (Control) Order, 1979 as amended by the Levy Sugar Supply (Control) Amendment Order, 2000 The objective of this law is to empower the Central Government to issue directions to any producer or importer or recognized dealer to supply levy sugar in such quantities and at such prices as may be specified by the Government in this regard. Such supply of levy sugar to be made from such place of manufacture or storage to such persons or organizations, in such areas or markets or to the State Government/Union Territory/Administration as specified by the Government through an order made with reference to Section 3(2) (f) of the Essential Commodities Act, 1955. Levy Sugar mechanism is regulated by this Order. Presently, 10% of the sugar production is reserved for supply as Levy Sugar for the public distribution system set up by the Government. Month-to-month release orders for delivery of levy sugar are issued in exercise of the powers conferred by this order. 3. Sugar (Control) Order, 1966 The Sugar (Control) Order 1966 confers power on the Government to regulate production of sugar, restrict sale etc. of sugar by producers, movement of sugar and quality of sugar, call for information from producer or recognised dealer, inspection, entry, search, sampling and seizure of sugar and delegation of powers conferred by the Sugar (Control) Order, 1966 to any officer or authority of the Central or State Government. 4. Sugar (Packing and Marking) Order, 1970 The objective of this Order is to regulate the packing of sugar manufactured by a producer and marking on bags. The Order prescribes that each producer shall, at the time of such packing, mark the quality of sugar in terms of the Indian 58 2.

Sugar Standards. Unless otherwise permitted by Central Government, sugar is required to be packed in A-twill jute bags conforming to Indian Standard Specifications. Sugar meant for the purpose of export and small consumed packs of 5 kg and below, have been exempted from the compulsory use of jute bags. 5. Sugarcane (Control) Order, 1966 Under the aforesaid Order, the Central Government is empowered to fix the minimum price of sugarcane (SMP) to be paid by producers of the sugar for sugarcane purchased by them having regard to certain factors as mentioned in Clause 3 of the said Order. Further, a different price may be fixed for different areas or different qualities or varieties of sugarcane. Further, the Central Government or the State Government with the approval of the Central Government, may, subject to such conditions as specified in the Order, allow a suitable rebate in the price so fixed. The said Order also contains various provisions for regulating the supply and distribution of sugarcane. The Central Government is empowered to direct the producers of the sugarcane to pay additional price for sugarcane in addition to the minimum sugar prices fixed in accordance with the provisions of the second schedule to the said Order. The Central Government is empowered to delegate certain powers conferred upon it by this Order subject to such restrictions, exceptions and conditions, if any, as the Central Government may think fit. 6. The Molasses Control Order, 1961 The Molasses Control Order, 1961 includes various provisions for regulation of the storage, grading, sale and removal of Molasses. It empowers the Government to fix maximum prices of Molasses. 7. Sugar Development Fund Act, 1982 and Sugar Development Fund Rules, 1983 The object of the Sugar Development Fund Act, 1982 (the SDF Act) is the formation of the Sugar Development Fund to be applied for the purpose of rendering financial assistance through loans at concessional rates for rehabilitation and modernisation of sugar factories as well as for sugarcane development and for encouraging research aimed at development of sugar industry by making grant. The Fund shall also be applied for defraying expenditure for the purpose of building up and maintenance of buffer stock of sugar with a view to stabilising price of sugar. The Sugar Development Fund Rules, 1983 provide for (a) the manner in which any loss or grants out of the Fund and the terms and conditions thereof, (b) the manner and form in which applications are to be made; (c) the composition of the committee and the procedure to be followed by it in the discharge of its functions and (d) the form in which and the period within which statistical and other information may be furnished by sugar factories. From November 01, 1982 the amount of cess payable by sugar factories is Rs. 14/- per quintal of sugar. 8. Levy Sugar Price Equalisation Fund Act (Amended upto 1984) The Levy Sugar Price Equalisation Fund Act 1976 (the LSPEF Act) was enacted to provide for the establishment, in the public interest, of a Fund to ensure that the price of levy sugar may be uniform throughout India and for matters connected therewith or incidental thereto. 9. Sugar Cess Act, 1982 The Sugar Cess Act 1982 was enacted to provide for the imposition of a cess on sugar for the development of sugar industry and for matters connected therewith. The Act empowers the Central Government to levy the cess, by way of a duty of exercise, on sugar which will help to generate funds for supplementing financial assistance for rehabilitation and modernisation or sugar factories and for development of sugarcane and research activities connected therewith. The Sugar Cess Rules, 1982 (which were made under the Act) provide for the manner of accounting reports and returns to be furnished by sugar factories, maintenance of accounts etc. An amount equivalent to the proceeds of the duty of excise levied and collected under the Act, reduced by the Cost of collection as determined by the Central Government, shall be credited to the Sugar Development Fund formed under Section 3 of the Sugar Development Act, 1982.

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10. Sugar Export Promotion Act, 1958 The Sugar Export Promotion Act, 1958 (the "Sugar Export Act") provides "for the export of sugar in public interest and for the levy and collection in certain circumstances of an additional duty of excise on sugar produced in India." The Act has been repealed by an Ordinance which, however, has not been subsequently converted into an Act within the stipulated time. With the de-canalisation of exports, it is no longer mandatory for all manufacturers of sugar to export. Export can be made voluntarily. But, resorting to export of sugar, would not exempt any sugar mill either from its obligation to supply levy sugar which is requisitioned by the Government in terms of Section 3(2) (f) of the Essential Commodities Act, 1955, or to effect sale of sugar in open market in compliance of the month to month release orders issued by the Government. 11. Electricity Act, 2003 Electricity Act, 2003 ("Electricity Act") was enacted with effect from June 10, 2003, repealing and replacing all the three Acts i.e. Indian Electricity Act, 1910, Electricity (Supply) Act, 1948 and Electricity Regulatory Commissions Act, 1998. The Electricity Act seeks to provide for demarcation of the roles of generation, transmission and distribution to provide for individual accountability of each. Some of the major provisions of the Electricity Act include inter alia the following: (i) de-licenses generation, makes captive-generation freely permissible; (ii) establishes Transmission Utility at the Central as well as State level, which would be a Government Company and have responsibility of ensuring that the transmission network is being developed in a planned and coordinated manner to meet the requirements of the sector; (iii) provides open access for transmission, distribution and trading; (iv) specifies technical standards, grid standards and safety requirements; and (v) introduces power trading as a distinct activity from power generation, transmission and distribution. 12. The Industries (Development and Regulation) Act, 1951: Licensing and De-licensing of Sugar Industries The Act was enacted to provide for the development and regulation of certain industries. Section 11 of the Industries (Development and Regulation) Act, 1951 (the "IDRA") provides that "(1) No person or authority other than the Central Government, shall, after the commencement of this Act, establish any new industrial undertaking, except under and in accordance with a licence issued in that behalf by the Central Government. Provided that a Government other than the Central Government may, with the previous permission of the Central Government, establish a new industrial undertaking. (2) A licence or permission under sub-section may contain such conditions including, in particular, conditions as to the location of the undertaking and the minimum standards in respect of size to be provided therein as the Central Government may deem fit to impose in accordance with the rules, if any, made under section 30." The Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government of India ("DIPP") has, by issue of Press Note Number 12/1998 dated August 31, 1998, delicensed the sugar industry. Sugar industries, therefore, no longer come within the purview of compulsory licensing under the provisions of the IDRA. Entrepreneurs desirous of setting up sugar factories are only required to file an Industrial Entrepreneurs Memorandum ("IEM") in the prescribed form with the Secretariat of Industrial Assistance, Ministry of Commerce and Industry, Government of India ("SIA") as provided in Press Note dated August 2, 1991 issued by the SIA. To avoid unhealthy competition among sugar factories to procure sugarcane, the DIPP has provided that a minimum distance of 15 kilometres must be maintained between an existing sugar mill and a new mill. 13. The Uttar Pradesh Sugarcane (Regulation of Supply & Purchase) Act, 1953 This Act is applicable to the State of Uttar Pradesh and it seeks to regulate the supply and purchase of sugarcane for use in sugar factories located in the State.This Act prescribes that the Cane Commissioner shall, on application by the Occupier of the Factory, reserve or assign any area for the purposes of supply of sugarcane to the factory in accordance with the provisions of Section 16 of the said Act. Section 16 of the said Act contains provisions to regulate the purchases and supply of cane in the reserved and assigned areas.

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The Hon'ble Supreme Court, vide a land mark judgment passed on May 05, 2004 in its 3:2 Bench upheld the rights of Uttar Pradesh State Government to fix the State Advice Price (SAP) of Sugarcane, under Section 16 of the Act at levels higher than Statutory Minimum Price (SMP) prescribed by the Central Government under the Sugarcane (Control) Order 1966. 14. The Uttar Pradesh Sugarcane (Regulation of Supply &Purchase) Rules, 1954 These Rules have been framed in exercise of the powers conferred by Section 23 of Uttar Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1953 which prescribes the rules with particular regard to the reservation and assignment of sugarcane area, payment of the sugarcane price by sugar factory to the cane growers, commission on the purchase of cane payable by the factory to the Cane Growers Co-operative Society and Council to regulate the supply and purchase of sugarcane. 15. The Sugarcane Supply Act and the Sugarcane (Regulation of Supply & Purchase) Rules, 1954 These rules regulate the payment of cane price to suppliers of sugarcane. Further, they also provide for the payment of a cess to the government based on the quantity of sugarcane utilized by a factory. 16. Uttar Pradesh Sugarcane (Purchase Tax) Act, 1961 The Act was enacted to "impose a tax on the purchase of sugarcane by factories and certain Gur, Rab or Khandsari Sugar Manufacturing Units and to regulate the manufacture of Gur or Rab by such Units." 17. Sugar (Regulation of Production) Act, 1961 The Sugar (Regulation of Production) Act, 1961 (the "Sugar Act") empowers the Central Government to fix the quantity of sugar, which may be produced, in a factory during any year. The Act was meant to provide for the regulation of production of sugar in the interests of general public and for the levy and collection of a special excise duty on sugar produced by a factory in excess of the quota fixed for the purpose. 18. Foreign Trade (Development and Regulation) Act, 1992 Under the Foreign Trade (Development and Regulation) Act, 1992, the Central Government is empowered to periodically formulate the Export Import Policy (EXIM Policy) and amend it thereafter whenever it deems fit. All exports and imports have to be in compliance to such EXIM Policy. 19. Income Tax Act, 1961 and Income Tax Rules, 1962 Income Tax Act, 1961 is applicable to every Domestic /Foreign Company whose income is taxable under the provisions of this Act or Rules made under it depending upon its "Residential Status" and "Type of Income" involved. U/s 139(1) every Company is required to file its Income tax Return for every Previous Year by 31st October of the Assessment Year. Other compliances like those relating to Tax Deduction at Source, Fringe Benefit Tax, Advance Tax, Minimum Alternative Tax and the like are also required to be complied with by every Company. 20. The Central Excise Act, 1944 The Central Excise Act, 1944 seeks to impose an excise duty on specified excisable goods, which are produced or manufactured in India. However, the Government has the power to exempt certain specified goods from excise duty, by notification. The rate at which the said duty is sought to be imposed is contained in the Central Excise Tariff Act. Accordingly, currently white sugar attracts an excise duty at the rate of Rs. 850 per tonne. Labour and Industrial Regulations Sugar factories must obtain a factories licence under the Factories Act, 1948.Further, a number of labour laws have also to be complied with. Apart from the generally applicable labour laws, including the Industrial Disputes Act, 1947, the Contract Labour (Regulation and Abolition) Act, 1970, the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, the Payment of Gratuity Act, 1972 and the Payment of Wages Act, 1936, there are also Standing Orders specifically applicable to the sugar industry. Land Regulations For setting up a sugar factory, permission for acquisition of land is required from local authorities in the light of the provisions of local land ceiling laws. Further, it is necessary to apply for change of land use from agricultural to industrial, in the event the area identified for setting up of the factory is designated as an agricultural area. 61

Environmental Regulations We are subject to Indian laws and regulations concerning environmental protection, in particular, the discharge of effluent water and solid particulate matter during our manufacturing processes. The principal environmental regulations applicable to industries in India are the Water (Prevention and Control of Pollution) Act, 1974, the Water Access Act, 1977, the Air (Prevention and Control of Pollution) Act, 1981 and the Environment Protection Act, 1986. Further, Environmental regulations require a company to file an Environment Impact Assessment ("EIA") with the State Pollution Control Board ("PCB") and the Ministry of Environment and Forests ("MEF") before undertaking a project entailing the construction, development or modification of any plant, system or structure. If the PCB approves the project, the matter is referred to the MEF for its final determination. The estimated impact, which a project would have on the environment, is carefully evaluated before granting clearances. When granting clearance, conditions can be imposed and the approving authorities can direct variations to the proposed project. The PCB located across the States monitors compliance with applicable environmental regulations. No industrial or productive facility may operate without a valid authorisation from the local PCB office. PCBs routinely inspect industrial and productive facilities, to monitor compliance with applicable environmental standards and regulations, including the provisions of the Water Act and the Water Access Act. The PCBs are also empowered to grant authorisation for collection, treatment, storage and disposal of hazardous waste, either to the occupier or the operator of the facility. Violations of relevant environmental regulations are punishable by monetary fines and imprisonment for Company officers and controlling persons. Foreign Investment Regulations The new industrial policy was formulated in 1991 to implement the Government's liberalisation programme and consequently, the industrial policy reforms relaxed industrial licensing requirements and restrictions on foreign investment. In subsequent years, the Government has further liberalized the foreign investment regime.At present, investments in companies manufacturing sugar fall under the RBI automatic approval route for FDI / NRI investment up to 100%. A list of other legislations relating to sugar, sugar cane and alcohol are set out below: · · · · · · · · · · · The Packaging Commodities Act The Petroleum Act 1934 The Arms Rules 1962 India Explosives Act & Rules 1884 Standard Weight & Measure (Packaged Commodities) Rules 1977 Trade Marks Act, 1999 The Customs Act 1962 Factories Act 1948 Uttar Pradesh Prevention of Food & Adulteration Act 1976 The Uttar Pradesh Sheera Niyantran Adhiniyam 1964 Uttar Pradesh Sugar Industry Incentive Policy 2004

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OUR MANAGEMENT Board of Directors We presently have 7 directors on our Board. The constitution of our Board is as under: Sr. No 1. Name, Address, Experience, Occupation, Term, & DIN Mr. Raj Kumar Adlakha, S/o Sh. Uttam Chand Adlakha KD - 51, Kavi Nagar, Ghaziabad 201 002 Experience: 29 years Occupation: Business Term: 01/09/2006 to 31/08/2009 DIN: 00133256 Age (in years) 52 Designation Managing Director Date of Appointment Appointed on 28/07/1998 Re-appointed as Managing Director for 3 years on 01/09/2006 Directorships held in Indian Companies and Partnershipfirms Indian Companies 1. Uttam Industrial Engineering Limited 2. Lipi Boilers Limited 3. Uttam Distilleries Limited 4. Shubham Sugars Limited 5. Mansinghgroup Hotels & Resorts Limited 6. Lipi Consultants Private Limited 7. Uttam Car Wash Private Limited 8. Uttam Tubes Private Limited 9. Uttam Properties Private Limited 10. Shree Uttam Colonisers Private Limited 11. Telma Trading Private Limited 12. Divine Grace Enterprises Private Limited 13. Uttam Lifestyle Hotels Private Limited 14. Uttam Elite Hotels Private Limited Indian Companies 1. Uttam Industrial Engineering Limited 2. Uttam Sucrotech Limited 3. Uttam Distilleries Limited 4. Mansinghgroup Hotels & Resorts Limited 5. The Standard Type Foundry Private Limited 6. Uttam Tubes Private Limited 7. Uttam Sucrotech International Private Limited 8. Autocare Mart Private Limited 9. Uttam Lifestyle Hotels Private Limited 10. Uttam Foma Techno Cast Private Limited Partnership Firms 1. Uttam Corporation, Partner Indian Companies 1. Uttam Sucrotech Limited 2. Uttam Industrial Engineering Limited 3. Uttam Distilleries Limited 4. Shubham Sugars Limited 5. Mansinghgroup Hotels & Resorts

2.

Mr. Rajan Adlakha, S/o Sh. Uttam Chand Adlakha KD - 51, Kavi Nagar, Ghaziabad 201 002 Experience: 21 years Occupation: Business Term: Liable to retire by rotation DIN: 00040713

48

Director

Appointed on 28/07/1998

3.

Mr. Ranjan Adlakha, S/o Sh. Uttam Chand Adlakha KD - 51, Kavi Nagar, Ghaziabad 201 002 Experience: 23 years Occupation: Business Term: Liable to retire by rotation

45

Director

Appointed on 28/07/1998

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Sr. No

Name, Address, Experience, Occupation, Term, & DIN DIN: 00040741

Age (in years)

Designation

Date of Appointment

4.

5.

6.

7.

Mr. Narendra Kumar Sawhney, S/o Late Sh. Mehar Chand Sawhney E-32, Greater Kailash Enclave - I, New Delhi - 110 048 Experience: 38 years Occupation: Consultant Term: Liable to retire by rotation DIN: 00109853 Mr. Prabhkaran Singh Lalli, S/o Sh. Baljit Singh Lalli C-1/42, Pandara Park, New Delhi ­ 110 003 Experience: 4 years Occupation: Advocate Term: Liable to retire by rotation DIN: 01341476 Dr. Ramasamy Vasudevan, S/o Sh. Viswanathan Ramasamy B-25, 5th Cross, West Extension, Thillai Nagar, Trichy - 620 018 Experience: 38 years Occupation: Consultant Term: Liable to retire by rotation DIN: 00109908 Mr. Vikram Singh Tandon, S/o of Late Sh. Suraj Narayan Tandon 50 - D, DDA Flats, Masjid Moth, Phase - I, New Delhi - 110 048 Experience: 24 years Occupation: Professional Term: Liable to retire by rotation DIN: 00613079

66

Director Independent

Appointed on 04/01/2006

Directorships held in Indian Companies and Partnershipfirms Limited 6. The Standard Type Foundry Private Limited 7. Uttam Car Wash Private Limited 8. Uttam Properties Private Limited 9. Shree Uttam Colonisers Private Limited 10. Idea Engineering Private Limited 11. Uttam Lifestyle Hotels Private Limited 12. Deepjyoti Electronics Private Limited 13. Kailash Automobiles Private Limited 14. Autocare Mart Private Limited 15. JPC Apparels Private Limited 16. JPC Mercantile Private Limited 17. Strok Engineering Private Limited Partnership Firms 1. Uttam Corporation, Partner Nil

28

Director Independent

Appointed on 28/03/2007

Nil

70

Director Independent

Appointed on 04/01/2006

Nil

54

Director Independent

Appointed on 04/01/2006

Indian Companies 1. Mukul Computer Services Private Limited

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Brief Biography of our Directors: Mr. Raj Kumar Adlakha, aged 52 years, Managing Director of our Company, is a Mechanical Engineer from Bangalore University. He has started his career in 1979 by joining his family business of manufacturing parts for sugar mill machinery and expanded the business by using his technical expertise to carry out turnkey sugar mill projects. He was instrumental in setting up of our four sugar manufacturing units. He has an experience of more than 29 years in Sugar Industry. Presently he is looking after the overall affairs of our Company. He was awarded with the Udyog Ratna award for "Involvement in Economic Development of Uttaranchal" on July 08, 2005 on the Centenary Celebrations of PHD Chamber of Commerce and Industry. Mr. Rajan Adlakha, aged 48 years, is an BBA from Akron University, Ohio, United States of America. He joined the family business in 1986 and has about 21 yaers of business experience. He is the managing Director of Uttam Sucrotech International Private Ltd. & The Standard Type Foundry Private Limited and is also a director on the board of other group companies. Mr. Ranjan Adlakha, aged 45 years, joined the family business in 1990 and has an overall experience of about 23 years. Currently, he is the Managing Director in Uttam Industrial Engineering Ltd. (UIEL) and is also director on the board of other group companies. Mr. Narendra Kumar Sawhney aged 66 years, is an Engineer and a Qualified B. Tech (IIT), ANSI (Tech.) and MBA. He has an overall experience of over 40 years with various industries in senior positions. Presently he is serving as an Advisor to the IFFCO Foundation, New Delhi. He retired as the Executive Director of National Co-operative Development Corporation (NCDC) after serving for 18 years. He served as a manager in IFCI Limited during 197379. He has also worked with companies like Triveni Engineering, Daurala Sugars of DCM and Ganga Sugar Corporation Limited. Mr. Prabhkaran Singh Lalli aged 28 Years, is one of the founder partner of Sarin, Lalli, Kakkar & Associates, a legal firm based in New Delhi. He pursued Masters in Law at Oxford University with specialization in areas like Competition Law, Banking and Finance, International dispute settlement, WTO Dispute settlement etc. He is practicing in various Courts including High Court and appears in the Supreme Court of India and other Quasi - Judicial Bodies / tribunals like D.R.T., B.I.F.R., A.A.I.F.R., C.A.T. etc. Dr. Ramasamy Vasudevan aged 70 Years, is a Doctorate and Ph. D., B.E (Hons). He has an overall experience of 38 years. He has served Bharat Heavy Electricals Limited for a total period of 31 years and retired as General Manager (Engineering). He is one of the founder Directors of the School of Engineering Technology, Bharathidasan University, Tiruchirappalli. He has won various awards in the field on engineering such as Business leadership award in the field of bio-energy for the year 2003 by International Congress on Renewable Energy, World Environmental Congress Award for the manufacture of compost from the municipal waste for the Tiruchirappalli City Corporation etc. He had chaired various committees such as the R&D Committee, Ministry of Non ­ Conventional Energy Sources, Sugar, Cogeneration Projects and has also being a member of the Energy panel, Tamil Nadu Commission. Mr. Vikram Singh Tandon, aged 54 years, is a Chartered Accountant. He has an overall experience of over 24 years in the field of Finance, Accounts and Taxation. His core strengths are financial analysis and management and statutory and internal audit. He has worked on several financial feasibility reports for Sugar Development Fund and Sugar Technology Mission. He was a member of Expert Committee constituted by the Government of India for rehabilitation of sick sugar units of Bihar State co-operative mills in 1997 and a member of the Expert Committee constituted by STM for rehabilitation of Khalilabad Sugar Mill in Uttar Pradesh in 2002. He has visited Fiji in January 2004 as a member of the expert team sent by GOI for revival of sugar industry in that country. Borrowing Powers The Articles, subject to the provisions of the Act authorise the Board, to raise or borrow or secure the payment of any sum or sums of money for the purposes of the Company. The members in their Annual General Meeting held on February 29, 2008 has empowered the Board u/s 293(1)(a) to mortgage and / or charging by the Board of Directors of the Company of all the immovable & movable properties of the company wheresoever situated, present & future and the whole or substantially the whole of the undertaking(s) of the company together to or in favor of the Company's 65

Banker(s) or any Financial institutions, Central Government (for Sugar Developoment Fund Loan) to secure any term loans, working capital facilities, debentures or any type of financial assistance, not exceeding Rs. 1250 crores lent and advanced / agreed to be lent and advanced by them , together with the interest, compound interest, additional interest, liquidated damages,premia on pre payment or on redemption, costs, charges, expenses or monies payable by the Company to them under loan agreements / letters of sanction / debenture trust deed etc. In the same meeting, the members also authorized the Board u/s 293(1)(d) to borrow any sum or sums of money from time to time, notwithstanding that the money(s) to be borrowed together the moneys already borrowed by the company (apart from the temporary loans obtained from the company's bankers in the ordinary course of business) may exceed the aggregate of the paid up capital of the company and its free reserves, that is to say, reserves not set apart for any specific purposes provided however, the total amount so borrowed shall not exceed Rs. 1000 crores. Compensation to our Directors 1. Mr. Raj Kumar Adlakha, Managing Director In the Annual General meeting of our company held on March 28, 2007, our shareholders have approved the reappointment of Mr. Raj Kumar Adlakha as the Managing Director of the company. The current terms & conditions of his appointment are as under: (i) Period: The appointment is effective from September 01, 2006 for a period of 3 years i.e up to August 31, 2009. (ii) Overall Remuneration: Subject to the provisions of section 198, 269 & 309 and other applicable provisions, if any, of the Companies Act, 1956, the remuneration payable to the Managing Director in any financial year shall not exceed 5% (five percent of the net profit of the company), or such other limits as may be specified under the relevant legislation prevailing from time to time. Within the aforesaid ceiling, the remuneration payable to him shall be as follows: a. Salary: 3,75,000/- (Rupees Three Lakhs Seventy Five thousand only) per month. b. Perquisites: · In addition to above remuneration the Managing Director shall also be entitled to perquisites like furnished accommodation, gas, electricity, water and furnishings, medical reimbursement and leave travel assistance for self and family, club fees, medical insurance etc. in accordance with the rules of the company. · Valuation of perquisites shall be done as per the Income Tax rules, wherever applicable. In the absence of any such rule, the perquisites shall be evaluated at actual cost. · Company's contribution to Provident Fund and superannuation Fund or Annuity Fund shall not be included in the computation of the ceiling on perquisites to the extent these either singly or put together are not taxable under the provisions of the Income Tax Act. · Gratuity: One half months salary for each completed year of service in accordance with the rules of the company. · Provision of Car for use on Company's business and telephone at residence will not be considered as perquisities. Personal long distance calls and use o car for private pirpose shall however be billed by the Company to the Managing Director. · Commission: Such remuneration by way of commission, in addition to the above salary and perquisites, calculated with reference to the net profits of the company in a particular financial year, as may be determined by the Board of Directors of the company at the end of each financial year, Subject to the overall ceilings stipulated in section 198 and 309 of the Companies Act 1956. The commission payable to the Managing Director will be limited to 4% of the net profits of the company as calculated in terms of the provision of section 349 of the companies Act, 1956 to be determined at the end of each financial year. (iii) Maximum Remuneration Payable being the Managing Director of two companies Raj Kumar Adlakha is also functioning as Managing Director of M/s Lipi Boilers Limited w.e.f. 01.04.2006. Hence, he will draw maximum remuneration subject to the provisions of Section III of Part II of Schedule XIII of the Companies Act, 1956, according to which:

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A managerial person shall draw remuneration from one or both companies, provided that the total remuneration drawn from the Companies does not exceed the higher maximum limit admissible from any one of the companies of which he is a managerial person. (iv) Minimum Remuneration Notwithstanding anything to the contrary herein contained , where in any financial year during the currency of the tenure of the Managing Director, the Company has no profits or its profits are inadequate, the company will pay remuneration by way of salary and perquisites as specified in section II of part II of Schedule XIII to the Companies Act, 1956 as may be amended from time to time. (v) Functions Subject to the superintendence, control and direction of the Board of Directors of the company the Managing Director shall have substantial powers of management including day to day affairs of the Company and shall exercise other duties and functions as may be delegated/assigned to him by the Board of Directors/Committee of Directors from time to time. (vi) Sitting Fee He shall not be paid any sitting fee for attending the Meeting of Board or committee thereof. He shall not, so long as he functions as a Managing Director, become interested or otherwise concerned directly or through his wife and or/minor children in any selling agency of the company. 2. The following tables set forth details of sitting fee paid to the Independent Directors for the year ended September 30, 2007: Sr. No. 1. 2. 3. 4. Name Vikram Singh Tandon Narendra Kumar Sawhney Ramasamy Vasudevan Prabhakaran Singh Lalli Sitting Fee (in Rs.) 1,30,000/1,30,000/70,000/40,000/-

Other than as mentioned above, no other compensation is being paid to any other Director of our Company Shareholding of Our Directors in our Company The following table details the shareholding of our Directors in their personal capacity and either as sole or first holder as on the date of filing of Draft Letter of Offer with SEBI. Name of Directors Raj Kumar Adlakha Rajan Adlakha Ranjan Adlakha Narendra Kumar Sawhney Prabhakaran Singh Lalli Ramasamy Vasudevan Vikram Singh Tandon Pre Issue 16,24,610 3,67,010 8,58,940 Post Issue before exercise of Warrants* 20,30,762 4,58,762 10,73,675 Post Issue after Warrant Exercise* 24,36,914 5,50,514 12,88,410 -

*The number of shares for the column entitled Number of Equity Shares (Post-Issue) has been calculated assuming full subscription to rights entitlement in this Issue None of our Directors have undertaken transactions in the Equity Shares of our Company during the preceding six months from the date of filing of Draft Letter of Offer with SEBI.

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Changes in Our Board of Directors during the last three years Name Mr. Vecha Venkata Rama Murty Mr. Jeevan Jyoti Bhagat Dr. Ramasamy Vasudevan Joginder Singh Dhikkar Mr. Vijay Kumar Ghuliani Mr. Vikram Singh Tandon Mr. Narendra Kumar Sawhney Mr. Prabhkaran Singh Lalli Mr. U R K Rao Date of appointment July 01, 2005 January 04, 2006 January 4, 2006 January 04, 2006 January 04, 2006 March 28, 2007 Date of cessation January 04, 2006 July 28, 2006 January 04, 2006 January 04, 2006 September 01, 2007 Reason Resigned due to personal reason Resigned due to personal reason Appointed as additional director Resigned due to personal reason Resigned due to personal reason Appointed as Casual Director in place of Mr. Vijay Kumar Ghuliani Appointed as Casual Director in place of Mr. Vecha Venkata Rama Murty Appointed as Additional Director Resigned due to personal reason

Corporate Governance: Corporate governance is administered through our Board and the Committees of the Board. In compliance with Clause 49 of the Listing Agreement with the Stock Exchanges, we have formed the Audit Committee, Shareholder Grievance Committee and Remuneration Committee. However, the primary responsibility for upholding corporate governance and providing necessary disclosures within the framework of legal provisions and institutional conventions with commitment to enhance shareholders' value vests with our Board. As a listed company we are in compliance with the applicable provisions of the Listing Agreements pertaining to corporate governance, including appointment of Independent Directors and constitution of Committees. We have complied with the requirements of Corporate Governance contained in the Listing Agreement, particularly those relating to composition of Board of Directors, constitution of committees such as Audit Committee, Shareholder Grievance Committee and Remuneration Committee. A brief description of the key committees, their scope, composition and meetings for the current year is as follows: Audit Committee The Audit Committee of the Board was constituted on May 31, 2001. Our company has re-constituted the Audit Committee on January 4, 2006 & thereafter on March 28, 2007. The Committee currently comprises of 3 members namely Mr. Vikram Singh Tandon, Chairman, Mr. Narendra Kumar Sawhney & Dr. Ramasamy Vasudevan as its members. All the three members of the committee are Independent Non-executive Directors. The Company Secretary of the Company acts as Secretary to the Committee. Powers of Audit Committee The Audit Committee has been given the following powers: 1. To investigate into any matter in relation to the items specified in Section 292A of the Companies Act, 1956 and any activity within its terms of reference. 2. To investigate into any activity within its terms of reference. 3. To seek information from any employee. 4. To obtain legal or other professional advice. 5. To secure attendance of outsiders with relevant expertise. Role of Audit Committee The role of the audit committee shall include but shall not restricted to the following: 1. Oversee the company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible. 2. 2. Making recommendations to the Board on the appointment the External auditor, the audit fee and any question of resignation or dismissal 68

3. 4. 5. 6. 7. 8. 9.

Review of half yearly and annual financial statements before submission to the Board Discussion with the External Auditors about the internal control system, nature and scope of audit, any problem or reservations arising from the audit and any other matter which the external auditor wishes to discuss. Review of External Auditor's management letter Review of company statement on internal control system prior to endorsement by the board and ensure compliance of internal control system. Review of any significant findings of internal investigation Review of reports of the Internal auditors To monitor the utilization proceeds of the Public / Rights Issue

Remuneration Committee The Remuneration Committee of the Board was constituted on January 04, 2006 and has been reconstituted on March 28, 2007.The remuneration committee comprises of 3 members Mr. Narendra Kumar Sawhney as its Chairman, Dr. Ramasamy Vasudevan & Mr. Prabhakaran Singh Lalli as its member. All the three members of the Committee are Independent Non-executive Directors. The Remuneration Committee has been constituted for the purpose of deciding, approving and fixing of remuneration payable to Managing Directors / Whole Time Directors or any other Directors of the Company, as the case may be, from time to time, pursuant to the provisions of Schedule XIII of the Companies Act, 1956." Powers of Remuneration Committee 1. To approve remuneration payable to managerial personnel, taking in to account the financial position of the Company, trend in the industry, appointee's qualification, experience, past performance and past remuneration. 2. To bring about objectivity in determining the remuneration package while striking a balance between the interest of the Company and the shareholders. Shareholder/Investor's Grievances Committee The Shareholders/ Investors Grievance Committee was constituted by the Board in its meeting held on January 04, 2006 and has been reconstituted on March 28, 2007. The Shareholder Grievance Committee consists of Dr. Ramasamy Vasudevan as its Chairman, Mr. Ranjan Adlakha & Mr. Prabhakaran Singh Lalli as its memnber. All the members of the Committee are Non-executive Directors of which two are independent. Powers of Shareholder/Investor's Grievances Committee 1. To approve and register transfer and/or transmission of all classes of Shares. 2. To sub-divide, consolidate and issue share certificates on behalf of the Company. 3. To affix/ to authorize affixation of the common seal of the Company on the share certificates of the Company. 4. To redress matters relating to shareholders and investor complaints like transfer of Shares, non-receipt of balance sheet, non-receipt of declared dividend etc. 5. To do all such acts, deeds or things as may be necessary or incidental to the exercise of the above powers.

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Organizational Structure Chart The organization structure of our Company is given below:

Mr. Raj Kumar Adkalha CMD

Mr. Sandeep Punshi Head-Sales

Mr. G.Chaudhary AGM (Purchase)

Mr. Parminder Singh GM-Cane Admn

Mr.Vikas Kansal GM-Civil

Mr. G.Ramarathnam Chief-Legal,Corp.&CS Mr. Rajesh Garg Sr.Mgr-Legal & Sec.

Mr. Sanjay Bhandari CFO Mr. Ashish Bansal Manager-Accounts Mr. Sharad Kumar AM-Accounts Mr.Harish Dhingra AM-Finance Mr. Nalin Garg AO-Libberheri Mr. Rakesh Sharma Acct Mgr-Barkatpur Mr. Rajesh Gupta

D. Mgr. Acc-Khaikheri

Mr. P.K. Sharma Chief Engr-SRM

Mr. S.M.H. Rizvi GM-Khaikheri

Mr. Piyush Kotia DGM-Prod.

Mr. Sanjay Singh Chief Engr.-BKT

Mr. K.B. Mishra DGM-Prod.

Mr. A.P. Kaushik Chief Engineer

Mr. S. Vijayant DGM-Engg.

Dr. S.K. Taneja GM-Cane

Mr. Sushil Kumar Adl Chief Chemist

Mr. Asif Iqbal Adl Chief Chemist

Dr. Omvir Singh DGM-Cane

Mr. Sanjay Dubey Chief Chemist

Mr. R.N. Singh Chief Engineer

Mr. T.P. Singh Manager-Cane

Col. Pasha Biswas Chief Adm Officer

Mr. Chaturvedi DyM-Acct-Shermau

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Key Managerial Personnel Brief Profile of our Key Managerial Personnel is as follows: Mr. Sundeep Punshi, aged 47 years, joined our Company on November 01, 2007 and is presently working as Head Sales and looking after the sales and marketing division. He is a Post Graduate Diploma holder in Marketing & Sales and B.Sc. (Hons) in Chemistry. He is having an experience of 27 years in Sales & Marketing in Consumer oriented FMCG & Pharmaceutical Companies. Prior to joining our Company, he has worked with Johnson & Johnson, Bharat Serums & Vaccines Limited, S.C. Johnson Products Limited, Relaxo Footwears Limited, Hindustan Lever Limited, Searle India Limited and Martin & Herris. Currently he is drawing a remuneration of Rs. 20,09,364/- per annum. Mr. Gyanendra Singh Choudhary, aged 42 years, joined our Company on November 25, 2003 and is presently working as AGM - Purchase and is looking after mechanical, electrical work for in-house and site work for all the four sugar mills and setting up of proposed distillery. He is B.E. Mechanical from M.S. Ramaiah Institute, Bangalore University and B.Sc. from Merrut University. He is having an experience of 18 years in co-ordination, installation and material purchasing for sugar mills. Prior to joining our Company, he was associated with Uttam Industrial Engineering Limited. Currently he is drawing a remuneration of Rs. 6,09,060/- per annum. Mr. Parminder Singh, aged 47 years, joined our Company on August 29, 2007 and is presently working as GM Cane Administration and is looking after cane administration, systems, MIS and cane audit. He is also `Occupier' for all the four units of our Company under Sugarcane (Regulation of supply and purchase) Act. He is M.Sc (Applied Physics) from Punjabi University Pataila and holding Post Graduate Diploma in servicing of electronic instruments from Punjabi University, Patiala. He is having 23 years of experience in the sugar industry in cane administration function. Prior to joining our Company, he was working with Brijnathpur Sugar Mills and The Simbhaoli Sugar Mills Limited. Currently he is drawing a remuneration of Rs. 8,31,348/- per annum. Mr. Vikas Kansal, aged 45 years, joined our Company on December 03, 2004 and is presently working as GM-Civil and is looking after civil construction activities.. He is Diploma holder in Civil Engineering, and an Associate Member of Institute of Engineers (AMIE). He is having an experience of 23 years in Civil Engineering Prior to joining our Company he was associated with our with Supertech Construction Limited and Uttam Sucrotech Limited. Currently he is drawing a remuneration of Rs. 4,89,360/- per annum. Mr. G. Ramarathnam, aged 66 years, joined our Company on May 01, 2002 and is presently working as Chief Legal and Corporate Affairs & Company Secretary and is heading the Legal and Secretarial Department. He is a Fellow member of the Institute of Company Secretaries of India with the additional qualifications of L.L.B, FCA, AICWA and B. Com. He is having an experience of 34 years in Finance, Accounts, Legal and Secretarial functions. Prior to joining our Company, he was in full time practice as Chartered Accountant. Currently he is drawing a remuneration of Rs. 6,24,000/- per annum. Mr. Sanjay Bhandari, aged 43 years, joined our Company on January 29, 2007 and is presently working as Chief Financial Officer and is in-charge of Finance and Accounts Department. He is a FCA, B.Com from University of Rajasthan with over 20 years of experience in finance and accounts field. Prior to joining our Company, he was associated with Kiran Udyog Private Limited, Ispat India Limited, BSES Limited & Willard India Limited. Currently he is drawing a remuneration of Rs. 15,36,000/- per annum. Mr. Rajesh Garg, aged 34 years, joined our Company on June 01, 2003 and is presently working as Sr. ManagerLegal and Secretarial. He is ACS, LLB and B.Com (Hon.) with 11 years of experience in Finance, Accounts, Legal and Secretarial functions. Prior to joining our Company, he was associated with Lipi Boilers Limited as Company Secretary. Currently he is drawing a remuneration of Rs. 4,61,760/- per annum.

Mr. Ashish Bansal, aged 36 years, joined our Company on January 06, 2005 and is presently working as Manager Accounts. He is FCA and B. Com with 10 years of experience in finance and accounts related matters. Currently he is drawing a remuneration of Rs. 4,44,360/- per annum. Mr. Sharad Kumar, aged 34 years, joined our Company on September 09, 2005 and is presently working as Ass. Manager-Accounts and looking after the accounts related matter. He is FCA and B. Com with 5 years of experience in accounts and audit related matters. Prior to joining our Company, he was working with Lodha and Company. Currently he is drawing a remuneration of Rs. 4,08,960/- per annum. Mr. Harish Dhingra, aged 38 years, joined our Company on August 02, 2005 and is presently working as Ass. Manager - Finance. He is ICWA and B. Com(H) from Delhi University. He is having a total experience of 17 years in Finance and Accounts related functions. Prior to joining our Company, he was associated with Willard India Limited, Jalpac India Limited and Montari Industries Limited. Currently he is drawing a remuneration of Rs. 4,23,360/- per annum. Libberheri Unit Mr. Peeyush Kotia, aged 48 years, joined our Company on October 22, 2001 and is presently working as DGM (Production) and is looking after the entire production process at the Libberheri Unit. He is B.Sc. (Hons), Associate of National Sugar Institute (Sugar Technology), PGDBA and is having 26 years of experience in the Sugar Industry. Prior to joining our Company, he has worked with Shri Narmada Khand Udyog Sahakari Mandli Limited, Daurala Sugar, Mawana Sugar and J.K. Sugar. Currently he is drawing a remuneration of Rs. 4,43,796/- per annum. Mr. Vijayant Sarvesh, aged 49 years, joined our Company on November 01, 2007 and is presently working as DGM (Engineering) and is looking after all technical and engineering aspects. He is B.E. Mechanical (First Hons) from Thapar Institute of Engineering & Technology, Patiala, and has obtained Boiler Operation Engineer (Proficiency Certificate) and Diploma in Information Systems Management. He is having an experience of 22 years in handling engineering functions related to sugar mills. He has also worked as scientific officer at Bhabha Atomic Research Centre, Trombay for 4 years. Prior to joining our Company, he was associated with The Haryana Co-op Sugar Mills Limited, Jai Mahesh Sugar Mills, Ch. Devl Lal Co-op Sugar Mills Limited, The Meham Co-op Sugar Mills Limited, The Kaithal Co-op Sugar Mills Limited, The Palwal Co-op Sugar Mills Limited and The Jind Co-op Sugar Mills Limited. Currently he is drawing a remuneration of Rs. 9,00,000/- per annum. Dr. Omveer Singh, aged 60 years, joined our Company on September 24, 2007 and is presently working as DGM (Cane) and is responsible for managing qualitative raw material to meet out the crushing capacity of the factory. He is Ph. D. (Ag. Plant Pathology) and has an experience of 30 years. Prior to joining our Company, he was working with Govind Sugar Mills Limited. Currently he is drawing a remuneration of Rs. 6,99,996/- per annum. Barkatpur Unit Mr. Sanjay Singh, aged 42 years, joined our Company on May 10, 2005 and is presently working as Chief Engineer at our Barkatpur plant. He is responsible for running and operations of the entire sugar plant at this unit including operation of steam and power generation. He has passed Sugar Engineering course from National Sugar Institute, Kanpur and is holding Diploma in Industrial Safety from Anna Malai University, Diploma in Mechenical Engineering from Kanhayalal Polytechnic, Roorkee and Diploma in Material Management from Amity University. He is having an experience of 18 years. Prior to joining our Company, he has worked with Daurala Sugar Works and Jain Tube Company Limited. Currently he is drawing a remuneration of Rs. 7,91,952/- per annum. Dr. S K Taneja, aged 55 years, joined our Company on October 29, 2007 and is presently working as General Manager (Cane) and is looking after cane procurement functions at our Barkatpur Unit. He is Doctorate in Agriculture, M.Sc. (Ag) from Agra University and holding Diploma in Marketing Management. He is having an experience of 32 years in Business Operations, New Product Development, Research and Documentation, Quality Assurance etc. Prior to joining our Company, he has worked with Bajaj Hindustan Limited, Triveni Engineering and Industries Limited,

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Agauta Sugars, Mawana Sugar Works and Simbhaoli Sugar Mills Limited. Currently he is drawing a remuneration of Rs. 7,23,036/- per annum. Mr. Sanjai Dube, aged 43 years, joined our Company on May 06, 2006 and is presently working as Chief Chemist. He is M.Sc. (Physics), and Associate of National Sugar Institute (Sugar Technology) from N.S.I. Kanpur and is having 20 years of experience in the sugar industry. Prior to joining our Company, he was associated with Kamlapur Sugar and Allied Industries Limtied, J H V Sugar Limited, K M Sugar Mills Limited and Oswal Agro Mills Limited. Currently he is drawing a remuneration of Rs. 5,36,868/- per annum. Lt. Col. Pasha Biswas, aged 49 years, joined our Company on January 14, 2008 and is presently working as Chief Administration Officer and is looking after all administrative functions in our Company. He is B.A. from Jawaharlal Nehru University and having 27 years of experience in management of personnel and equipments. For 23 years, he was holding various positions in the Indian Armed forces. Currently he is drawing a remuneration of Rs. 7,59,360/per annum. Khaikheri Unit Mr. Syed Mokhtar Husain Rizvi, aged 63 years, joined our Company on November 13, 2007 and is presently working as General Manager for the Khaikheri unit. He is M.Sc. Ag. (Agronomy) from Allahabad Agricultural Institute and qualified combined Civil Services Examination conducted by UP Public Service Commission, Allahabad. He is having an experience of 31 years of experience in the sugar industry, including 25 years of administrative experience in the Cane Development Department of Government of Uttar Pradesh. He has also worked as General Manager for the Government owned Co-operative Sugar Mills and Distillery plant of Ghosi Sugar Mills Limited. Currently he is drawing a remuneration of Rs. 9,99,996/- per annum. Mr. Adesh Prakash Kaushik, aged 50 years, joined our Company on May 01, 2006 and is presently working as Chief Engineer and is looking after complete repair and maintenance and running activities of the plant. He is holder of Diploma in Mechanical Engineering from the D.N. Polytechnic, Meerut and is having is having 29 years of experience in fabrication, erection, commissioning and maintenance of sugar mills. Prior to joining of our Company, he was associated with Uttam Industrial Engineering Limited, Tiveni Engineering Works Ltd and Prem Heavy Engineering Private Limited. Currently he is drawing a remuneration of Rs. 6,49,116/- per annum. Mr. Asif Iqbal, aged 33 yras, joined our Company on May 21, 2007 and is presently working as Adl. Chief Chemist. In the past also, he was associated with our organization from December 2000 to October 2006. He is B. Sc. (Hons) Physics from Jamia Millia, New Delhi and Associate of National Sugar Institute (ANSI) in Sugar Technology from N.S.I., Kanpur. He has a total experience of 11 years in the Sugar Industry. Prior to joining our Company, he was working with Nanglamal Sugar Complex ( A unit of Mawana Sugars Limited), K. S. Projects & Process Engineers and Bagpat Coop. Sugar Mills Limited. Currently he is drawing a remuneration of Rs. 9,99,996/- per annum. Mr. Tej Pal Singh, aged 49 years, joined our Company on September 24, 2007 and is presently working as ManagerCane. He is B Sc. (Ag) & AH from (AG & AH) Pantnagar and is having 24 years of experience in the sugar industry, including 7 years as Cane Development Inspector. Prior to joining our Company, he was associated with Bajaj Hindustan Limited, J K Sugar Mills Limited, Oswal Sugar Limited and Tiveni Engineering & Industries Limited. Currently he is drawing a remuneration of Rs. 5,79,996/- per annum. Shermau Unit Mr. P K Sharma, aged 52 years, joined our Company on May 24, 2005 and is presently working as Chief Engineer and looking after the technical matter of the plant and also sharing responsibilities of Unit Head. He is Diploma holder in Mechanical Engineering from DEI Techniical College, Agra. He is having 30 years of experience in sugar industry in erection, commissioning and maintenance of sugar mills. Prior to joining our Company, he was associated with Agauta Sugar and Chemicals, The Simbhaoli Sugar Mills, Riga Sugar Company and M.P. Udyog Sugar Mills. Currently he is drawing a remuneration of Rs. 9,32,508/- per annum.

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Mr. Kulbhooshan Misra, aged 38 year, joined our Company on September 25, 2007 and is presently working as DGM-Production looking after all activities related to production of the company. He is holder of Post Graduate Diploma in Sugar Technology from NSI Kanpur and B.Sc. (PCM) from University of Kanpur. He is having 15 years of experience in varied functions in the Sugar Industry. He has jointly authored a project report with M/s Tate & Lyle on `Process technology for installation of Raw Sugar based refinery' and prepared project reports jointly with Sugar Technology Mission for `Upgradation of Sugar Manufacturing Process'. Prior to joining our Company, he was working with Mawana Sugars Limited. Currently he is drawing a remuneration of Rs. 10,87,752/- per annum. Mr. Sushil Kumar, aged 35 years, joined our Company on August 17, 2006 and is presently working as Adl. Chief Chemist He is holder of Post Graduate Diploma in Computer Applications from Kurukshetra University and Associate of National Sugar Institute (ANSI) in Sugar Technology from NSI, Kanpur. He is having 12 years of experience in the sugar industry in production related activities. Prior to joining our Company, he was associated with Bajaj Hindustan Limited, Indian Sucrose Limited, Nahar Sugar & Allied Industries Limited, Meham Co-Operative Sugar Mills Limited, Karnal Co-Operative Sugar Mills Limited and Modi Sugar Mills Limited. Currently he is drawing a remuneration of Rs. 4,77,996/- per annum. Mr. Ram Narayan Singh, aged 46 years, joined our Company on November 01, 2007 and is presently working as Chief Engineer at the Shermau Plant. He is Diploma holder in Mechanical Engineering from IERT, Allahabad, (UP) and having 26 of experience as erection engineer and site manager. Prior to joining our Company, he was associated with Bajaj Hindustan Limited, Uttam Industrial Engineering Limited, North Land Sugar Complex Limited and Triveni Engineering Works Limited. Currently he is drawing a remuneration of Rs. 6,04,960/- per annum. All the above mentioned key managerial personnel are permanent employees of our Company. Changes in our key managerial employees during the last three years Name Mr. Harish Dhingra Mr. Sharad Kumar Mr. Adesh Prakash Kaushik Mr. Sanjai Dube Mr. G. Pawan Kumar Mr. S.C. Johri Mr. S.K Agarwal Mr. Sushil Kumar Mr. Dinesh Gupta Mr. Sanjay Bhandari Mr. R.K Kathuria Mr. Asif Iqbal Mr. M.K Biswas Mr. Parminder Singh Mr. URK Rao Mr. Mahendra Kumar Dhain Mr. Tej Pal Singh Dr. Omveer Singh Mr. Kulbhooshan Misra Mr. T.N. Singh Mr. T. Kannan Dr. S.K Taneja Mr. Vijayant Sarvesh Mr. Sandeep Punshi Designation Ass. Manager - Finance Ass. Manager - Accounts Chief Engineer-Khaikheri Chief Chemist DGM, Account GM, Barkatpur DGM, Barkatpur Chemist-Shermau Sr. Manager, Corporate affair CFO GM, Barkatpur Chief chemist-Khaikheri GM, Shermau GM-Cane Admisteration Executive Director GM-Libberheri Manager-Cane DGM-Cane DGM(P)-shermau Add. Chief engineer-Shermau GM, Libberheri GM-Cane DGM-Libberheri Head- Sales Date of Joining 02-08-2005 09-09-2005 01-05-2006 06-05-2006 17-08-2006 29-01-2007 21-05-2007 29-08-2007 24-09-2007 24-09-2007 24-09-2007 25-09-2007 29-10-2007 01-11-2007 01-11-2007 Date of Leaving 10-06-2006 17-06-2006 15-07-2006 30-09-2006 16-03-2007 14-08-2007 31-08-2007 13-06-2008 26-09-2007 03-10-2007 -

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Name Mr. Ram Narayan Singh Mr. Syed Mokhtar Hussain Rizvi Mr. Rakesh Arora Lt. Co. Pasha Biswas Mr. Ashok Agarwal Mr. Hitendra Singh Mr. R.K. Verma Mr. A.K.M Tripathi

Designation Chief Engineer GM-Khaikheri Manager-Marketing Chief Administration Officer CFO Additional DGM, Shermau GM-Cane, Shermau Manager-P&A

Date of Joining 01-11-2007 13-11-2007 14-01-2008 -

Date of Leaving 16-11-2007 31-03-2008 15-04-2008 25-04-2008 03-05-2008

Shareholding of key managerial personnel in our Company None of the key managerial personnel of our Company is holding equity shares in our Company as on the date of filing of Draft Letter of Offer with SEBI except as mentioned below: Name of Key Managerial Personnel Mr. P K Sharma Pre Issue 33 Post Issue before exercise of Warrants* 41 Post Issue after Warrant Exercise* 49

* The number of shares for the column entitled Number of Equity Shares (Post-Issue) has been calculated assuming full subscription to rights entitlement in this Issue Interest of Promoters, Directors and Key Managerial Personnel Except as stated in "Related Party Transactions" on page [*] of this Draft Letter of Offer, to the extent of shareholding in our Company and the cost of cetain plant and machinery proposed to be acquired through our Promoters / Promoter Group, our Promoters and Promoter group entities do not have any other interest in our business. All Directors of the Company may be deemed to be interested to the extent of remuneration / sitting fees, if any, payable to them for attending meetings of the Board or a Committee. The managing director will be interested to the extent of remuneration paid to him for services rendered by him as officer of the Company. All our directors may also be deemed to be interested to the extent of Equity Shares, if any, already held in our Company by them or their relatives or companies, firms and trust, in which they are interested as directors, members, partners and/or trustees, or that may be subscribed for and allotted to them, under the present Issue and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares. The key managerial personnel of our Company do not have any interest in our Company other than to the extent of the remuneration or benefits to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred by them during the ordinary course of business and to the extent of the Equity Shares held by them in our Company, if any or that may be subscribed for and allotted to them under the present Issue. Employees Stock Option Scheme / Employees Stock Purchase Scheme Presently, we do not Employees Stock Option Scheme / Employees Stock Purchase Scheme. Payment or Benefit to Officers of the Company Except the payment of salaries and perquisites, the Company does not make any payments to its officers.

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PROMOTER AND PROMOTER GROUP Mr. Raj Kumar Adlakha, Mr. Rajan Adlakha, Mr. Ranjan Adlakha, Uttam Industrial Engineering Limited, Lipi Boilers Limited and Uttam Sucrotech Limited are the promoters of our Company. Promoters who are Individuals 1. Mr. Raj Kumar Adlakha Passport No. Voter ID Driving License No. PAN Bank a/c No. Z045162 R-12699/NT/GZB/2000 issued at Ghaziabad AJZPK7896C Saving Bank a/c 10640715007 (State Bank of India, SIB Branch, Navyug Market, Ghaziabad)

Mr. Raj Kumar Adlakha, aged 52 years, Managing Director of our Company, is a Mechanical Engineer from Bangalore University. He joined his family business of manufacturing parts for sugar mill machinery in 1979. He expanded the business using his technical expertise to carry out turnkey sugar mill projects. He was instrumental in setting up of our four sugar manufacturing units. He has an experience of more than 29 years in Sugar Industry. He was awarded with the Udyog Ratna award for "Involvement in Economic Development of Uttaranchal" on July 08, 2005 on the Centenary Celebrations of PHD Chamber of Commerce and Industry. Presently he is looking after the overall affairs of our Company. 2. Mr. Rajan Adlakha Passport No. Voter ID Driving License No. PAN Bank a/c No. G0875137 UP/79/388/0948159 ADEPA1936C Saving Bank a/c 10640715552 (State Bank of India, SIB Branch, Navyug Market, Ghaziabad)

Mr. Rajan Adlakha, aged 48 years, is an BBA from Akron University, Ohio, United States of America. He joined the family business in 1986. He has an experience of 21 years in Sugar Industry. He is also Director on the Board of Diretors of other group companies. 3. Mr. Ranjan Adlakha Passport No. Voter ID Driving License No. PAN Bank a/c No. Z1398314 NT-1415/DC/GZB-9/9/97 issued at Ghaziabad AAEPA8800E Saving Bank a/c 10640715449 (State Bank of India, SIB Branch, Navyug Market, Ghaziabad)

Mr. Ranjan Adlakha, aged 45 years, joined the family business in 1990 and has an overall experience of about 23 years. Currently, he is the Managing Director in Uttam Industrial Engineering Limited, one of our Promtoers and is also director on the Board of Directors of other group companies.

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Promoters who are Companies 1. Uttam Industrial Engineering Limited (UIEL) May 28, 1983 U74899DL1983PLC015815 Registrar of Companies NCT, Delhi & Haryana 4th Floor, IFCI Tower, 61 Nehru Place, New Delhi - 110 019 B - 231 - D, Second Floor, Greater Kailash, Part I, New Delhi - 110 048 AAACU1074B CC a/c no. 10640719873 (State Bank of India, SIB, Navyug Market, Ghaziabad)

Date of Incorporation CIN Registrar of Companies Registered Office PAN Bank Account No.

UIEL was incorporated in the year 1983 as a private limited company. UIEL became deemed public limited company on July 01, 1995 and was later converted into public limited company on January 01, 2002. UIEL was promoted by Mr. Uttam Chand Adlakha (Father of Mr. Raj Kumar Adlakha) with the main object to undertake manufacture, design, repair and assemble plant and machinery & assecories for sugar, chemical, paper, pulp cement cane mechanization, agricultural equipments and other allied industries and to undertake turnkey projects relating to sugar, power generation, molasses based industries and other allied industries. The existing manufacturing facility of UIEL's is located at Meerut Road Industrial Area, Ghaziabad. The said plant has the facilities for manufacturing, designing, fabrication and machining of complete range of machinery required for sugar plant viz. cane handling and preparatory equipment, milling tandem, boiling house equipment etc. UIEL also undertakes contracts on a turnkey basis for both green field sugar projects as well as expansion of existing projects. UIEL has executed several sugar projects and major grass root sugar projects since inception. It has executed 2500 TCD cane Sugar Plant on turnkey basis for Naraingarh Sugar Mills Limited, 2500 TCD Sugar Plant on turnkey basis for Varalakshmi Sugars Limited, supplied plant & machinery for 2500 TCD Sugar Plant on turnkey basis for NCS Gayatri Sugars Limited, assisted in the expansion of sugar mills from 1500 TCD to 5000 TCD for Harinagar Sugar Mills and supplied entire plant & machinery for co-generation sugar plant of 2500 TCD on turnkey basis for The Naranja Sahakari Sakkare Karkhane Limited. Apart from manufacturing of machinery required for sugar plant and execution of such turnkey projects, UIEL also undertakes supply and installation of different equipments used in sugar mill viz. milling tandem, boiling house equipment and boilers, etc. Composition of Board of UIEL as on March 31, 2008 Mr. Ranjan Adlakha, Managing Director Mr. Uttam Chand Adlakha, Whole Time Director Mr. Sohan Lal Arora, Whole Time Director Mr. Raj Kumar Adlakha, Director Mr. Rajan Adlakha, Whole-Time Director Ms. Shomna Adlakha, Whole -Time Director Shareholding pattern of UIEL as on March 31, 2008 Name of shareholder Mr. Raj Kumar Adlakha Mr. Ranjan Adlakha Mr. Uttam Chand Adlakha Mr. Sohan Lal Arora Shree Uttam Colonisers Private Limited Kumari Shanta Ms. Shomna Adlakha Total No. of shares held 10,600 1,57,330 6,750 18,200 20 500 500 1,93,900 %age of shareholding 5.47 81.14 3.48 9.39 0.01 0.26 0.26 100.00

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Financial performance The audited financial results of UIEL for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Sales & other Income 22488.88 13,232.62 6,197.90 Profit after Tax 1319.13 182.84 116.13 Equity share capital 193.90 193.90 38.78 Share application money 65.00 255.00 Reserves and Surplus (excluding mis. expenditure) 2228.91 909.78 904.17 Net Worth 2487.81 1,103.68 1,197.95 Book Value per share of face value Rs. 100/- each (in Rs.) 1249.51 569.20 2,431.54 Earning per share of face value Rs. 100/- each (in Rs.) 680.31 94.30 299.45 The equity shares of UIEL are not listed on any Stock Exchange. There has been no amalgamation / change in management of the Company during the last 3 years. The Company has not been declared as a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995. 2. Lipi Boilers Limited (LBL) September 11, 1974 U28131MH1974PLC017766 Registrar of Companies Pune, PMT Building, 3rd Floor, Deccan Gymkhana, Pune - 411 004 (Maharashtra) Mahindra Chambers, May Fair, A-4, Dhole Patil Road, Pune - 411 001 AAACL1650L CC a/c no. 1273 (Indian Overseas Bank, Pune Cantonment Branch, Pune)

Date of Incorporation CIN Registrar of Companies Registered Office PAN Bank Account No.

LBL, incorporated in the year 1974 as private limited company, was taken over by the Uttam Group in 1992. LBL was converted into public limited company on October 11, 1995. It is engaged in the manufacture of boilers and auxiliaries and commissioning of boilers and to design manufature, erect and commission heat engineering and thermal equipments. LBL is having manufacturing capacity located at Aurangabad, Maharashtra, with an installed capacity to manufacture 20 boilers p.a. LBL has facilities to manufacture various types of boilers (of capacities ranging from 2.5 tph to 100 tph) including pulsating grade boilers, CAD spreader stoker boilers and cellulosic fuel fired boilers. Composition of Board of LBL as on March 31, 2008 Mr. Raj Kumar Adlakha, Managing Director Mr. Vijay Kumar Ghuliani, Whole Time Director Ms. Amita Adlakha, Director Shareholding pattern of LBL as on March 31, 2008 Name of shareholder Mr. Vijay Kumar Goel Lipi Consultants Private Limited Mr. Raj Kumar Adlakha Mr. Rajan Adlakha Ms. Amita Adlakha Mr. Ranjan Adlakha Ms. Sonia Adlakha No. of shares held 3,125 1,04,164 16,88,125 2,084 3,334 2,084 2,084 %age of shareholding 0.07 2.39 38.81 0.05 0.08 0.05 0.05

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Name of shareholder Mr. Uttam Chand Adlakha Ms. Shomna Adlakha Pariksha Fin-Invest-Lease Limited New Castle Finance and Lease Private Limited Adharshila Capital Services Limited G M Colonisers Private Limited Total

No. of shares held 1,250 1,250 15,70,000 2,77,500 5,15,000 1,80,000 43,50,000

%age of shareholding 0.03 0.03 36.09 6.38 11.84 4.14 100.00

Financial performance The audited financial results of LBL for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Sales & Other Income 2801.73 1,212.61 442.10 Profit after Tax 156.37 52.98 4.99 Equity share capital 435.00 435.00 435.00 Share application money 6.50 Reserves and Surplus (excluding revaluation reserve) 422.22 266.44 218.46 Net Worth 857.22 701.44 659.96 Book Value per share of face value Rs. 10/- each (in Rs.) 19.71 16.13 15.02 Earning per share of face value Rs. 10/- each (in Rs.) 3.59 1.22 0.11 The equity shares of LBL are not listed on any Stock Exchange. There has been no amalgamation / change in management of the Company during the last 3 years. The Company has not been declared as a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995. 3. Uttam Sucrotech Limited (USL) December 01, 1981 U29221UP1981PLC005493 Registrar of Companies, Uttar Pradesh & Uttarakhand. 10/499-B, Khalasi Line, Allenganj, Kanpur - 208 002 C-42, Meerut Road Industrial Area, Ghaziabad - 201 003 AAACU4042K CC A/c no. 10640712630 (State Bank of India, SIB Branch, Navyug Market, Ghaziabad)

Date of Incorporation CIN Registrar of Companies Registered Office PAN Bank Account No.

USL was incorporated in 1981 as a private limited company. The name of the Company was changed from Uttam Sucrotech Private Limited to Uttam Maxitherm Boilers Limited on July 31, 1992 and further changed to Uttam Sucrotech Limited on May 29, 1995. The main object of the Company is to design, manufacture or assemble plant and machinery and accessories for the use of sugar and chemical Industry. USL is presently engaged in the manufacture of energy saving devices, pressure vessels etc. used in sugar mills with know-how developed in-house. USL is also manufacturing boiling house structures and equipment, overhead cranes, clarifiers, filters etc for sugar and other industries. Besides, the company is also engaged in designing, manufacturing and supplying equipment for iron making, steel making, continuous casting, hot/ cold rolling mills and processing line plants, and equipment for the non-ferrous industry. The company has its facilities at Ghaziabad, U.P. Composition of Board of USL as on March 31, 2008 Mr. Rajan Adlakha, Director Mr. Ranjan Adlakha, Director

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Ms. Sonia Adlakha, Director Shareholding pattern of USL as on March 31, 2008 Name of shareholder Mr. Uttam Chand Adlakha Mr. Sohan Lal Arora Mr. Raj Kumar Adlakha Mr. Sanjay Kumar Arora Mr. Ajay Kumar Arora Ms. Raj Rani Uttam Chand Adlakha & Sons HUF Mr. Rajan Adlakha Ms. Sudesh Kumari Ms. Kumari Shanta R K & Sons (HUF) Ms. Amita Adlakha Ms. Shomna Adlakha Mr. Ranjan Adlakha Total No. of shares held 5,250 4,400 4,900 2,600 2,000 3,000 10,000 4,00,500 2,000 2,000 53,000 53,000 49,500 56,000 6,48,150 %age of shareholding 0.81 0.68 0.76 0.40 0.31 0.46 1.54 61.79 0.31 0.31 8.18 8.18 7.64 8.64 100.00

Financial performance The audited financial results of USL for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Sales & Other Income 4446.12 2218.70 1415.40 Profit after Tax 147.14 51.84 26.35 Equity share capital 64.82 64.82 64.82 Share application money 8.20 Reserves and Surplus (excluding mis. expenditure) 446.19 283.53 232.49 Net Worth 511.01 348.34 305.51 Book Value per share of face value Rs. 10/- each (in Rs.) 78.84 53.74 45.87 Earning per share of face value Rs. 10/- each (in Rs.) 22.70 8.00 4.07 The equity shares of USL are not listed on any Stock Exchange. There has been no amalgamation / change in management of the Company during the last 3 years. The Company has not been declared as a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995. Other Confirmation We confirm that Permanent Account Number, Passport Number and Bank Account Number have been submitted to the NSE and BSE. Further our promoters and promoter group entitites, including relatives of the promoters have confirmed that they have not been declared as willful defaulters by the RBI or any other Government authority and there are no violations of securities laws committed by them in the past or are pending against them except as mentioned under the chapter "Outstanding Litigations and Material Developments" on page [*] of this Draft Letter of Offer. Common Pursuit Our corporate promoters and companies promoted by our promoters cater to a diverse range of industries. Several of the companies belonging to the group (Lipi Boilers Limited, Uttam Industrial Engineering Limited, Uttam Sucrotech Limited and others) cater to the needs of sugar mills and thus they compliment our operations by providing the necessary plant and machinery or technical inputs.

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Shubham Sugars Limited and Uttam Distilleries Limited, promoter group companies have their main objects similar to that of our Company. However Shubham Sugars Limited is not operating any sugar mill as on date and is only carrying out research activities on sugarcane crop cultivation. Uttam Distilleries Limited, another Promtoer Group Company is implementing a grain based distillery, which is different from the molasses based distillery being implemented by us. Except as mentioned aforesaid, our promoters do not have interest in any venture that is engaged in any activities that are similar to that of our Company resulting in conflict of interest. Payment or benefit to our Promoters during the last two years Except as stated in the Annexure XVIII(a) and XVIII(b) to the "Financial Statements" on page [*] and [*] of this Draft Letter of Offer, there has been no payment of benefits to our Promoters during the last two years preceding the date of filing of this Draft Letter of Offer. Related party transactions For details of related party transactions please refer the "Financial Statement" on page [*] of this Draft Letter of Offer. Subsidiaries Our Company has no subsidiaries. Litigation Details Pertaining to Promoters For details on litigations and disputes pending against the Promoter and defaults made by the Promoter please refer to the section titled "Outstanding Litigations and Material Developments" on page [*] of this Draft Letter of Offer.

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Promoter Group Companies 1. Adharshila Capital Services Limited December 08, 1993 L74899DL1993PLC056347 E - 24, 3rd Floor, Jawahar Park, Laxmi Nagar, Delhi - 110 092 To carry on the business of investment, finance & leasing and financial services.

Date of Incorporation CIN Registered Office Main objects

The Company was originally incorporated as Adharshila Capital Services Private Limited. The Company was converted into public limited company on February 13, 1995 and consequently the name was changed to Adharshila Capital Services Limited. The Company is registered with the Reserve Bank of India vide Registration No. 14.00391 dated July 31, 2000 to carry on the business of non banking financial institution without accepting public deposits. Board of Directors as on March 31, 2008 Mr. Rajendra Kumar Khanna Mr. Joginder Singh Dhikker Mr. Rajender Kumar Mr. Sunil Kumar Jain Shareholding Pattern as on March 31, 2008 Name Promoter Shareholding Mr. Raj Kumar Adlakha Ms. Amita Adlakha R K & Sons (HUF) Ms. Shomna Adlakha Mr. Ranjan Adlakha New Castle Finance & Leasing Private Limited Uttam Industrial Engineering Limited Uttam Sucrotech Limited Public Shareholding Total No. of shares held 12,10,000 50,000 50,000 1,00,000 8,20,000 1,40,000 50,000 1,50,000 29,30,000 55,00,000 %age of Shareholding 22.00 0.91 0.91 1.82 14.91 2.55 0.91 2.73 53.27 100.00

Financial performance The audited financial results of Adharshila Capital Services Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income 42.79 46.27 5.00 Profit after Tax 18.49 4.54 (0.02) Equity share capital 550.00 550.00 550.00 Reserves and Surplus (net of miscellaneous expenditure) 10.06 (8.43) (13.44) Net Worth 560.06 541.57 536.56 Book Value per share of face value Rs. 10/- each (in Rs.) 10.18 9.85 9.76 Earning per share of face value Rs. 10/- each (in Rs.) 0.34 0.08 Dividend The equity shares of Adharshila Capital Services Limited are listed on Delhi Stock Exchange Limited. There has been no transaction in the shares of the Company on Delhi Stock Exchange Limited in the last 3 years. The Company has not raised any funds from the public during the last 3 years.

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Investor grievance redresal system The Company has constituted a committee of the Board, named as Shareholders / Investors Grievance Committee to look into redressal of Shareholders / Investor Complaints regarding transfer and transmission of shares, non-receipt of Balance Sheet and dematerialisation of shares and matters related to issue of share certificates, etc. The Committee comprises of 3 Independent non-executive Directors. The Company has also appointed Skyline Financial Services Private Limited as their Registrar and Transfer Agents. There were no pending complaints against the Company as on March 31, 2008. 2. Pariksha Fin-Invest-Lease Limited February 11, 1994 L74899DL1994PLC057377 E-24, 3rd Floor, Jawahar Park, Laxmi Nagar, Delhi - 110 092 To carry on the business of investment, finance, hire purchase and leasing.

Date of Incorporation CIN Registered Office Main objects

The Company was originally incorporated as Pariksha Fin-Invest-Lease Private Limited. The Company was converted into public limited company on March 02, 1995 and consequently the name was changed to Pariksha Fin-Invest-Lease Limited. The Company is registered with the Reserve Bank of India vide Registration No. 14.00596 dated March 30, 1998 to carry on the business of non banking financial institution without accepting public deposits. Board of Directors as on March 31, 2008 Mr. Gopalaiyer Ramarathnam Mr. Anil Dutta Mr. Sanjay Kumar Srivastava Mr. Harnand Tyagi Shareholding Pattern as on March 31, 2008 Name Promoter Shareholding Mr. K K Kohli Ms. Amita Adlakha Mr. Ranjan Adlakha Mr. Raj Kumar Adlakha New Castle Finance & Leasing Private Limited Public Shareholding Total No. of shares held 13000 1,50,000 8,07,000 5,55,000 4,60,000 17,65,500 37,50,500 %age of Shareholding 0.35 4.00 21.52 14.80 12.27 47.07 100.00

Financial performance The audited financial results of Pariksha Fin-Invest-Lease Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income (excluding changes in stock) 21.45 13.59 2.59 Profit after Tax 6.51 3.68 0.22 Equity share capital 375.05 375.05 375.05 Reserves & Surplus (net of miscellaneous expenditure) 22.55 15.25 10.81 Net Worth 397.60 390.30 385.86 Book Value per share of face value Rs. 10/- each (in Rs.) 10.60 10.41 10.29 Earning per share of face value Rs. 10/- each (in Rs.) 0.17 0.10 0.01 Dividend -

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The equity shares of Pariksha Fin-Invest-Lease Limited are listed on Delhi Stock Exchange Limited. The Company is suspended from trading since February 03, 2003 due to non-compliance of certain listing conditions. However the Company has on April 30, 2008 submitted the necessary documents and paid the fee to the Delhi Stock Exchange Limited and has applied for revocation of suspension of the trading in the shares of the Company. There has been no transaction in the shares of the Company on Delhi Stock Exchange Limited in the last 3 years. The Company has not raised any funds from the public during the last 3 years. Investor grievance redresal system The Company has constituted a committee of the Board, named as Shareholders / Investors Grievance Committee to look into redressal of Shareholders / Investor Complaints regarding transfer and transmission of shares, non-receipt of Balance Sheet and dematerialisation of shares and matters related to issue of share certificates, etc. The Committee comprises of 3 Independent non-executive Directors. The Company has also appointed Skyline Financial Services Private Limited as their Registrar and Transfer Agents. There were no pending complaints against the Company as on March 31, 2008. 3. Autocare Mart Private Limited January 31, 2007 U34300UP2007PTC032784 A - 11, Meerut Road Industrial Area, Ghaziabad - 201 003 To manufacture and deal in automotive parts, spares and accessories and to sale, purchase, deal or act as agents / distributors of automobiles, and their spares, accessories, and allied products.

Date of Incorporation CIN Registered Office Main objects

Board of Directors as on March 31, 2008 Mr. Rajan Adlakha Mr. Ranjan Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Rajan Adlakha The Standard Type Foundary Private Limited Total No. of shares held 5,000 5,000 10,000 %age of Shareholding 50.00 50.00 100.00

Financial performance The audited financial results of Autocare Mart Private Limited for the years ended March 31, 2007 are set forth below. The Company has not commenced any operations in the financial year ending March 31, 2007. (Rs. in lakhs) Particulars 31/03/2007 Total Income Profit after Tax Equity share capital 1.00 Share application money 85.85 Reserves & Surplus (net of miscellaneous expenditure) (0.72) Net Worth 86.13 Book Value per share of face value Rs. 10/- each (in Rs.) 2.84 Earning per share of face value Rs. 10/- each (in Rs.) The equity shares of the Company are not listed on any Stock Exchange.

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4.

Deepjyoti Electronics Private Limited November 25, 1988 U74899DL1988PTC034010 7C, 1st Floor, J Block Shopping Centre, Saket, New Delhi - 110 017 To manufacture & deal in electronic equipments and computers and to operate computer training centres.

Date of Incorporation CIN Registered Office Main objects

Board of Directors as on March 31, 2008 Mr. Ranjan Adlakha Ms. Shomna Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Ranjan Adlakha Ms. Shomna Adlakha Total No. of shares held 2,177 1,653 3,830 %age of Shareholding 56.84 43.16 100.00

Financial performance The audited financial results of Deepjyoti Electronics Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income 0.16 0.12 Profit after Tax 0.02 0.05 (3.55) Equity share capital 3.83 3.83 3.83 Share application money 58.40 41.25 Reserves & Surplus (3.60) (3.62) (3.67) Net Worth 58.63 41.46 0.16 Book Value per share of face value Rs. 100/- each (in Rs.) 6.06 5.45 4.12 Earning per share of face value Rs. 100/- each (in Rs.) 0.62 1.33 (92.75) The equity shares of Deepjyoti Electronics Private Limited are not listed on any Stock Exchange. 5. Divine Grace Enterprises Private Limited September 14, 2004 U51909DL2004PTC129025 32 Western Avenue, Sainik Farms, Delhi - 110 062 To deal in all kind of merchandises.

Date of Incorporation CIN Registered Office Main object

Board of Directors as on March 31, 2008 Mr. Raj Kumar Adlakha Ms. Amita Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Raj Kumar Adlakha Ms. Amita Adlakha Total No. of shares held 5,000 5,000 10,000 %age of Shareholding 50.00 50.00 100.00

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Financial performance The audited financial results of Divine Grace Enterprises Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income Profit after Tax Equity share capital 1.00 1.00 1.00 Reserves & Surplus (net of miscellaneous expenditure) (0.35) (0.35) (0.35) Net Worth 0.65 0.65 0.65 Book Value per share of face value Rs. 10/- each (in Rs.) 6.46 6.46 6.46 Earning per share of face value Rs. 10/- each (in Rs.) For the year 2004-05, 2005-06 and 2006-07, the Company has not carried out any business activity. The equity shares of Divine Grace Enterprises Private Limited are not listed on any Stock Exchange. 6. G. M. Colonisers Private Limited March 12, 1993 U74899DL1993PTC052533 E-24, III Floor, Jawahar Park, Laxmi Nagar, Delhi - 110 092 To carry on the business as real estate development, finance and investment.

Date of Incorporation CIN Registered Office Main objects

The Company is registered with the Reserve Bank of India vide Registration No. B-14.01864 dated September 23, 2000 to carry on the business of non banking financial institution without accepting public deposits. Board of Directors as on March 31, 2008 Mr. Sunil Kumar Jain Mr. Gopalaiyer Ramarathnam Shareholding Pattern as on March 31, 2008 Name Pariksha Fin-Invest-Lease Limited New Castle Finance & Leasing Private Limited Adharshila Capital Services Limited Mr. Raj Kumar Adlakha R K & Sons (HUF) Mr. Ranjan Adlakha Shradha Constructions Private Limited Yogesh Kumar Singhal Sunita Agarwal Dinesh Pahwa Agarwal Traders Total No. of shares held 1,00,000 1,57,500 1,80,000 11,53,000 3,27,000 3,00,000 30,000 20,000 35,000 25,000 40,000 23,67,500 %age of Shareholding 4.22 6.65 7.60 48.70 13.81 12.67 1.27 0.84 1.48 1.06 1.69 100.00

Financial performance The audited financial results of G. M. Colonisers Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below:

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Particulars Total Income (excluding changes in stock) Profit after Tax Equity share capital Share application money Reserves & Surplus (net of miscellaneous expenditure) Net Worth Book Value per share of face value Rs. 10/- each (in Rs.) Earning per share of face value Rs. 10/- each (in Rs.)

31/03/2007 0.32 0.01 221.00 15.75 (0.84) 235.91 9.96 -

31/03/2006 0.39 0.07 221.00 15.75 (0.92) 235.83 9.96 -

(Rs. in lakhs) 31/03/2005 0.63 0.15 119.00 102.00 (0.39) 220.61 9.97 0.01

The equity shares of G. M. Colonisers Private Limited are not listed on any Stock Exchange. The Company had issued 1,50,000 equity shares at a consideration of Rs. 10/- per share on October 25, 2007 and 7,500 equity shares at a consideration of Rs. 10/- per equity share on March 25, 2008. 7. Idea Engineering Private Limited June 09, 2005 U29254DL2005PTC137418 No. 95, FIE Patparganj Industrial Area, Delhi - 110 092 To manufacture and deal in plant & machinery for sugar and allied industry and to undertake turnkey project relating to sugar industry.

Date of Incorporation CIN Registered Office Main objects

Board of Directors as on March 31, 2008 Mr. Ranjan Adlakha Mr. Gopalaiyer Ramarathnam Shareholding Pattern as on March 31, 2008 Name Mr. Ranjan Adlakha Mr. G Ramarathnam Uttam Industrial Engineering Limited Sekhri Finance & Investments Private Limited Total No. of shares held 9,000 1,000 5,000 5,000 20,000 %age of Shareholding 45.00 5.00 25.00 25.00 100.00

Financial performance The audited financial results of Idea Engineering Private Limited for the years ended March 31, 2007 and 2006 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 Total Income Profit after Tax Equity share capital 2.00 1.00 Reserves & Surplus (net of miscellaneous expenditure) (0.23) (0.23) Net Worth 1.77 0.77 Book Value per share of face value Rs. 10/- each (in Rs.) 8.84 7.68 Earning per share of face value Rs. 10/- each (in Rs.) The Company has not commenced any business activity in the financial year 2006-07. The equity shares of the Company are not listed on any Stock Exchange.

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8.

JPC Apparels Private Limited December 02, 2002 U18101DL2002PTC117850 7C, 1st Floor, J - Block Shopping Centre, Saket, New Delhi - 110 017 To manufacture, process and deal in all kind of food and food products or to act as commission agents for food products and food grains.

Date of Incorporation CIN Registered Office Main objects

Board of Directors as on March 31, 2008 Mr. Ranjan Adlakha Ms. Shomna Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Ranjan Adlakha Ms. Shomna Adlakha Total No. of shares held 5,000 5,000 10,000 %age of Shareholding 50.00 50.00 100.00

Financial performance The audited financial results of JPC Apparels Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income Profit after Tax Equity share capital 1.00 1.00 1.00 Share application money 156.00 0.00 0.00 Reserves & Surplus (net of miscellaneous expenditure) (0.34) (0.34) (0.34) Net Worth 156.66 0.66 0.66 Book Value per share of face value Rs. 10/- each (in Rs.) 6.63 6.63 6.63 Earning per share of face value Rs. 10/- each (in Rs.) The Company has not commenced any business activity and its equity shares are not listed on any Stock Exchange. 9. JPC Mercantile Private Limited December 02, 2002 U51222DL2002PTC117848 7C, 1st Floor, J - Block Shopping Centre, Saket, New Delhi - 110 017 To carry on the business of as commission agent / brokers and to manufacture, process and deal in all kinds of food and food products.

Date of Incorporation CIN Registered Office Main objects

Board of Directors as on March 31, 2008 Mr. Ranjan Adlakha Ms. Shomna Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Ranjan Adlakha Ms. Shomna Adlakha Total No. of shares held 5,000 5,000 10,000 %age of Shareholding 50.00 50.00 100.00

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Financial performance The audited financial results of JPC Mercantile Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income Profit after Tax Equity share capital 1.00 1.00 1.00 Share application money 150.95 Reserves & Surplus (net of miscellaneous expenditure) (0.34) (0.34) (0.34) Net Worth 151.61 0.66 0.66 Book Value per share of face value Rs. 10/- each (in Rs.) 6.63 6.63 6.63 Earning per share of face value Rs. 10/- each (in Rs.) The Company has not commenced any business activity and its equity shares are not listed on any Stock Exchange. 10. Kailash Automobiles Private Limited Date of Incorporation CIN Registered Office Main objects June 23, 2003 U34300DL2003PTC121026 B - 231/D, 2nd Floor, Greater Kailash I, New Delhi - 110 048 To own and run vehicle service stations and to deal in all kind of vehicles.

Board of Directors as on March 31, 2008 Ms. Sunita Rani Sharma Mr. Rishi Kumar Sharma Mr. Ranjan Adlakha Ms. Shomna Adlakha

Shareholding Pattern as on March 31, 2008 Name Mr. Ranjan Adlakha Ms. Shomna Adlakha Total

No. of shares held 5,000 5,000 10,000

%age of Shareholding 50.00 50.00 100.00

Financial performance The audited financial results of Kailash Automobiles Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income Profit after Tax Equity share capital 1.00 1.00 1.00 Share application money 33.20 1.00 1.00 Reserves & Surplus (net of miscellaneous expenditure) (0.15) (0.15) (0.15) Net Worth 34.06 1.85 1.85 Book Value per share of face value Rs. 10/- each (in Rs.) 8.54 8.54 8.54 Earning per share of face value Rs. 10/- each (in Rs.) -

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The Company has not commenced any business activity. The equity shares of Kailash Automobiles Private Limited are not listed on any Stock Exchange. 11. Lipi Consultants Private Limited Date of Incorporation CIN Registered Office Main object August 07, 1981 U74140PN1981PTC024955 Mahendra Chambers, May Fair, A-4, Dhole Patil Road, Pune - 411 001 To carry on the business of industrial consultancy and errection contracts.

Board of Directors as on March 31, 2008 Mr. Raj Kumar Adlakha Ms. Amita Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Raj Kumar Adlakha Ms. Amita Adlakha Total No. of shares held 800 200 1,000 %age of Shareholding 80.00 20.00 100.00

Financial performance The audited financial results of Lipi Consultants Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income 65.51 7.08 63.18 Profit after Tax 2.24 (4.50) 1.93 Equity share capital 1.00 1.00 1.00 Reserves & Surplus 20.46 18.23 22.73 Net Worth 21.46 19.23 23.73 Book Value per share of face value Rs. 100/- each (in Rs.) 2145.91 1922.85 2372.69 Earning per share of face value Rs. 100/- each (in Rs.) 223.94 (449.85) 193.37 The equity shares of Lipi Consultants Private Limited are not listed on any Stock Exchange. 12. Mansinghgroup Hotels and Resorts Limited Date of Incorporation Commencement of Business CIN Registered Office Main object January 19, 1990 January 29, 1990 U55101DL1990PLC038971 8C, Pocket B, J - Block Shopping Centre, Saket, New Delhi - 110 017 To run hotels, resorts and commercial complexes and to carry on the business of caterers, money-changers, travel agents and tour operators.

The Company has not commenced any business activity since incorporation. Board of Directors as on March 31, 2008 Mr. Raj Kumar Adlakha Mr. Ranjan Adlakha Mr. Rajan Adlakha

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Shareholding Pattern as on March 31, 2008 Name Mr. Raj Kumar Adlakha R K & Sons (HUF) Ms. Amita Adlakha Ms. Shomna Adlakha Lipi Consultants Private Limited Mr. Ranjan Adlakha Mr. Rajan Adlakha Ms. Sonia Adlakha Lipi Boilers Limited Uttam Industrial Engineering Ltd. Total

No. of shares held 4,67,540 45,500 18,000 28,900 45,000 10 10 10 7,50,000 3,20,000 16,74,970

%age of Shareholding 27.91 2.72 1.07 1.73 2.69 0.00 0.00 0.00 44.78 19.10 100.00

Financial performance The audited financial results of Mansinghgroup Hotels and Resorts Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income Profit after Tax Equity share capital 60.50 60.50 60.50 Reserves & Surplus (net of miscellaneous expenditure) (0.86) (0.86) (0.86) Net Worth 59.64 59.64 59.64 Book Value per share of face value Rs. 10/- each (in Rs.) 9.86 9.86 9.86 Earning per share of face value Rs. 10/- each (in Rs.) The equity shares of Mansinghgroup Hotels and Resorts Limited are not listed on any Stock Exchange. The Company had issued 10,70,000 equity shares at a consideration of Rs. 10/- per equity share on August 25, 2007. 13. New Castle Finance and Leasing Private Limited Date of Incorporation CIN Registered Office Main objects July 16, 1990 U74899DL1990PTC040824 E-24, 3rd Floor, Jawahar Park, Laxmi Nagar, Delhi - 110 092 To carry on the business of investment, finance and leasing and to provide leasing advisory / consultancy services.

The Company is registered with the Reserve Bank of India vide Registration No. B-14.01784 dated September 29, 2000 to carry on the business of non banking financial institution without accepting public deposits. Board of Directors as on March 31, 2008 Mr. Sunil Kumar Jain Mr. Harnand Tyagi Shareholding Pattern as on March 31, 2008 Name Mr. Raj Kumar Adlakha Ms. Amita Adlakha Adharshila Capital Services Limited No. of shares held 11,42,300 1,35,000 5,05,000 %age of Shareholding 24.26 2.87 10.73

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Name Pariksha Fin-Invest-Lease Limited Uttam Industrial Engineering Limited Uttam Sucrotech Limited Mr. Naresh Kumar Goel Ms. Sangeeta Gupta Mr. Ashish Kumar Mangal Mr. Lokesh Kumar Garg Total

No. of shares held 1,00,000 4,55,750 22,80,000 40,000 12,500 25,000 12,500 47,08,050

%age of Shareholding 2.12 9.68 48.43 0.85 0.27 0.53 0.27 100.00

Financial performance The audited financial results of New Castle Finance and Leasing Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income 6.51 6.15 0.91 Profit after Tax (11.16) 0.07 0.16 Equity share capital 461.81 461.81 223.81 Share application money 9.00 9.00 238.00 Reserves & Surplus (net of miscellaneous expenditure) (6.92) 4.08 5.38 Net Worth 463.89 474.89 467.19 Book Value per share of face value Rs. 10/- each (in Rs.) 9.85 10.09 10.24 Earning per share of face value Rs. 10/- each (in Rs.) (0.24) 0.01 The equity shares of New Castle Finance and Leasing Private Limited are not listed on any Stock Exchange. The Company had issued 90,000 equity shares at a consideration of Rs. 10/- per share on October 26, 2007. 14. Shree Uttam Colonisers Private Limited Date of Incorporation CIN Registered Office Main object November 29, 1985 U74899DL1985PTC022623 7C, 1st Floor, J Block Shopping Centre, Saket, New Delhi - 110 017 To deal in all kind of immovable properties and to act as real estate developers.

The Company was originally incorporated as Shri Uttam Investments Private Limited at New Delhi. The name of the Company was changed to Shree Uttam Colonisers Private Limited on October 06, 2005 pursuant to the change of the main objects of the Comapany. Board of Directors as on March 31, 2008 Mr. Raj Kumar Adlakha Mr. Ranjan Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Raj Kumar Adlakha Mr. Uttam Chand Adlakha Ms. Amita Adlakha R K & Sons (HUF) Total No. of shares held 3,050 50 690 10 3,800 %age of Shareholding 80.26 1.32 18.16 0.26 100.00

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Financial performance The audited financial results of Shree Uttam Colonisers Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income 0.17 0.16 Profit after Tax 0.09 0.07 (0.08) Equity share capital 3.80 3.80 3.80 Share application money 86.35 86.35 Reserves and Surplus (9.64) (9.73) (9.80) Net Worth 80.51 80.42 (6.00) Book Value per share of face value Rs. 100/- each (in Rs.) (153.63) (156.01) (157.96) Earning per share of face value Rs. 100/- each (in Rs.) 2.38 1.95 (2.00) The equity shares of Shree Uttam Colonisers Private Limited are not listed on any Stock Exchange. 15. Shubham Sugars Limited Date of Incorporation Commencement of Business CIN Registered Office Main objects July 20, 1994 July 26, 1994 U15426UP1994PLC016697 A - 11, Meerut Road Industrial Area, Ghaziabad - 201 003 To manufacture and deal in sugar, wines, alcohol, spirits, paper, board and pulp and all other allied products.

Board of Directors as on March 31, 2008 Mr. Raj Kumar Adlakha Mr. Ranjan Adlakha Ms. Shomna Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Raj Kumar Adlakha Uttam Industrial Engineering Limited Ms. Shomna Adlakha Mr. G Ramarathnam Mr. H N Tyagi Mr. Rajesh Garg Mr. Surendra Kumar Sharma Total No. of shares held 1,86,210 1,86,010 40 10 10 10 10 3,72,300 %age of Shareholding 50.02 49.96 0.01 0.00 0.00 0.00 0.00 100.00

Financial performance The audited financial results of Shubham Sugars Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income 4.22 Profit after Tax (PAT) 1.28 (0.21) (1.16) Equity share capital 37.23 37.23 37.23 Reserves & Surplus (net of miscellaneous expenditure) 36.59 35.27 35.43 Net Worth 73.82 72.50 72.66

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Particulars Book Value per share of face value Rs. 10/- each (in Rs.) Earning per share of face value Rs. 10/- each (in Rs.)

31/03/2007 19.83 0.34

31/03/2006 19.47 (0.06)

31/03/2005 19.52 (0.31)

The equity shares of Shubham Sugars Limited are not listed on any Stock Exchange. Shubham Sugars Limited was a subsidiary of our Company and ceased to be as such w.e.f. September 15, 2005. 16. Strok Engineering Private Limited Date of Incorporation CIN Registered Office Main objects May 18, 2007 U17291DL2007PTC163642 B - 231/D, IInd Floor, Greater Kailash Part I, New Delhi - 110 048 To manufacture and deal in automative engineering machinery & components and allied works and act as their distributor.

Board of Directors as on March 31, 2008 Mr. Ranjan Adlakha Mr. Gagan Deep Gandhi Shareholding Pattern as on March 31, 2008 Name Mr. Ranjan Adlakha Mr. Gagan Deep Gandhi Total No. of shares held 82,500 2,500 85,000 %age of Shareholding 97.06 2.94 100.00

Financial performance Since the Company was newly incorporated, no past financial data is available. The equity shares of Strok Engineering Private Limited are not listed on any Stock Exchange. The Company has issued and allotted 75,000 equity shares for a consideration of Rs. 10/- per share on March 06, 2008. 17. Telma Trading Private Limited Date of Incorporation CIN Registered Office Main object March 24, 2000 U51909PN2000PTC017659 Mahendra Chambers, May Fair, A/4, Dhole Patil Road, Pune - 411 001 To carry on the business as traders, agents & stockist of goods.

Board of Directors as on March 31, 2008 Mr. Raj Kumar Adlakha Ms. Amita Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Raj Kumar Adlakha Ms. Amita Adlakha Lipi Boilers Limited Total No. of shares held 100 100 29,99,800 30,00,000 %age of Shareholding 0.00 0.00 99.99 100.00

Financial performance The audited financial results of Telma Trading Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below:

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Particulars Total Income Profit after Tax Equity share capital Share application money Reserves & Surplus (net of miscellaneous expenditure) Net Worth Book Value per share of face value Rs. 10/- each (in Rs.) Earning per share of face value Rs. 10/- each (in Rs.)

31/03/2007 (0.71) 299.00 3.35 (4.29) 298.06 9.86 (0.02)

31/03/2006 (0.71) 299.00 3.35 (4.22) 298.13 9.86 (0.02)

(Rs. in lakhs) 31/03/2005 (0.78) 299.00 2.86 (4.15) 297.71 9.87 (0.03)

The equity shares of Telma Trading Private Limited are not listed on any Stock Exchange. 18. The Standard Type Foundry Private Limited Date of Incorporation CIN Registered Office Main object March 18, 1957 U29294WB1957PTC023384 Room No. 316, 3rd Floor, Centre Point 21, Hemanta Basu Sarani, Kolkata-700 001 The Company is engaged in the business of manufacture and sale of centrifugal machines and machinery parts through foundries and having the dealership of Toyota vehicles.

Board of Directors as on March 31, 2008 Mr. Rajan Adlakha Mr. Ranjan Adlakha Ms. Amita Adlakha Mr. Ajay Kumar Arora Shareholding Pattern as on March 31, 2008 Name Mr. Raj Kumar Adlakha Mr. Rajan Adlakha Mr. Ranjan Adlakha Adharshila Capital Services Limited Pariksha Fin-Invest-Lease Ltd. Uttam Sucrotech Limited Total No. of shares held 840 43,333 7,827 44,240 20,000 8,760 1,25,000 %age of Shareholding 0.67 34.67 6.26 35.39 16.00 7.01 100.00

In addition to above the Company's capital comprises of 23,000 6% non-cumulative redeemable preference shares of Rs. 100/- each in the name of Mr. Ranjan Adlakha. Financial performance The audited financial results of The Standard Type Foundry Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income 25,178.73 20,649.28 12,082.27 Profit after Tax 83.03 99.97 7.17 Equity share capital 125.00 125.00 125.00 Preference Share Capital 23.00 23.00 23.00 Share application money 7.25

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Particulars Reserves & Surplus (net of miscellaneous expenditure) Net Worth (including Preference Shares) Book Value per share of face value Rs. 100/- each (in Rs.) Earning per share of face value Rs. 100/- each (in Rs.)

31/03/2007 202.31 350.31 261.85 66.42

31/03/2006 113.47 261.47 190.78 79.98

31/03/2005 7.70 162.95 106.16 5.74

The equity and preference shares of The Standard Type Foundry Private Limited are not listed on any Stock Exchange. 19. Uttam Car Wash Private Limited Date of Incorporation CIN Registered Office Main object September 08, 1988 U74899DL1988PTC033076 7C, 1st Floor, J Block Shopping Centre, Saket, New Delhi - 110 017 Manufacture and deal in car washing machineries and equipments, to provide automatic car washing services and to operate vehicle service station.

Board of Directors as on March 31, 2008 Mr. Raj Kumar Adlakha Mr. Ranjan Adlakha Ms. Shomna Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Raj Kumar Adlakha Mr. Ranjan Adlakha Total No. of shares held 1,050 25,250 26,300 %age of Shareholding 3.99 96.01 100.00

Financial performance The audited financial results of Uttam Car Wash Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income 0.08 0.25 6.81 Profit after Tax (2.26) (2.23) 0.58 Equity share capital 26.30 26.30 26.30 Reserves & Surplus (net of miscellaneous expenditure) 4.52 7.17 9.29 Net Worth 30.82 33.47 35.59 Book Value per share of face value Rs. 100/- each (in Rs.) 117.19 127.26 135.33 Earning per share of face value Rs. 100/- each (in Rs.) (8.59) (8.46) 2.20 The equity shares of Uttam Car Wash Private Limited are not listed on any Stock Exchange. 20. Uttam Distilleries Limited Date of Incorporation Commencement of Business CIN Registered Office Main Objects August 16, 2004 September 10, 2004 U15520DL2004PLC128347 7C, 1st Floor, J Block Shopping Centre, Saket, New Delhi - 110 017 To carry on the business of distillers, brewers, manufacturers of wines, alcohol and spirit and allied products and bye-products.

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Uttam Distilleries Limited is still in the process of implementing the project and no business activities were carried out in the financial years ended March 31, 2007, 2006 and 2005. The expenditure incurred for the said period has been carried to the Balance Sheet as "Pre-operative expenses - Pending Capitalisation". Board of Directors as on March 31, 2008 Mr. Raj Kumar Adlakha Mr. Rajan Adlakha Mr. Ranjan Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Raj Kumar Adlakha Mr. Ranjan Adlakha Uttam Sugar Mills Limited Uttam Industrial Engineering Limited Uttam Sucrotech Limited Ms. Shomna Adlakha Mr. Rajan Adlakha Shubham Sugars Limited G.M. Colonisers Private Limited New Castle Finance & Leasing Private Limited Lipi Boilers Limited Akik Education Center (P) Limited Bhagwan Krishan Investment & Trading Company Limited Hajima Resorts Limited Parsandi Leasing & Finance (P) Limited Total No. of shares held 5,000 5,000 7,90,000 5,000 5,000 5,000 5,000 3,75,000 1,50,000 1,00,000 4,50,000 50,000 50,000 50,000 50,000 20,95,000 %age of Shareholding 0.24 0.24 37.71 0.24 0.24 0.24 0.24 17.90 7.16 4.77 21.48 2.39 2.39 2.39 2.39 100.00

Financial performance The audited financial results of Uttam Distilleries Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income Profit after Tax Equity share capital 5.00 5.00 5.00 Share application money 228.70 179.50 91.10 Reserves & Surplus (net of miscellaneous expenditure) (7.72) (7.72) (7.72) Net Worth 225.98 176.78 88.38 Book Value per share of face value Rs. 10/- each (in Rs.) (5.43) (5.43) (5.43) Earning per share of face value Rs. 10/- each (in Rs.) The equity shares of Uttam Distilleries Limited are not listed on any Stock Exchange. The Company has issued and allotted 18,45,000 equity shares on August 25, 2007 and 2,00,000 equity shares on January 15, 2008 for a consideration of Rs. 10/- per share. 21. Uttam Elite Hotels Private Limited Date of Incorporation CIN Registered Office April 24, 2008 U55101DL2008PTC177202 7-C, 1st Floor, J Block Shopping Centre, Saket, New Delhi - 110 017

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Main object

To construct, manage and run hotels, resorts, motel and commercial complexes and to carry on the business of caterers, money-changers, travel agents and tour operators.

Board of Directors as on June 30, 2008 Mr. Raj Kumar Adlakha Ms. Amita Adlakha Shareholding Pattern as on June 30, 2008 Name Mr. Raj Kumar Adlakha Ms. Amita Adlakha Total No. of shares held 5,000 5,000 10,000 %age of Shareholding 50.00 50.00 100.00

Financial performance Since the Company is newly incorporated, no past financial data is available. The equity shares of Uttam Elite Hotels Private Limited are not listed on any Stock Exchange. 22. Uttam Foma Techno Cast Private Limited Date of Incorporation CIN Registered Office Main object July 25, 2007 U27310PN2007PTC130489 Mahindra Chambers, Mayfair A4, Dhole Patil Road, Pune, Maharashtra - 411 001 To manufacture, marketing and sale & purchase of the Aluiminium Die-casting Products, within India and outside India.

Board of Directors as on March 31, 2008 Mr. Rajan Adlakha Mr. Alessandro Montini Mr. Vipen Kumar Khetarpal Mr. Kashi Lal Gulati (Alternate Director for Mr. Vipen Kumar Khetarpal) Mr. Anish Ghoshal (Alternate Director for Mr. Alessandro Montini) Shareholding Pattern as on March 31, 2008 Name Mr. Rajan Adlakha Ms. Sonia Adlakha FOMA S.P.A., Italy Total No. of shares held 9,000 2,91,000 3,00,000 6,00,000 %age of Shareholding 1.50 48.50 50.00 100.00

Financial performance Since the Company was newly incorporated, no past financial data is available. The equity shares of Uttam Foma Techno Cast Private Limited are not listed on any Stock Exchange. The Company has allotted 590,000 equity shares at a price of Rs. 10/- per share on December 27, 2007. The Company has not been declared as a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995. 23. Uttam Lifestyle Hotels Private Limited Date of Incorporation CIN June 09, 2005 U80302DL2005PTC137428

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Registered Office Main objects

No. 95, FIE Patparganj Industrial Area, Delhi - 110 092 To run hotels, resorts, motels and restaurants.

The Company was originally incorporated as Uttam Tranning Centre Private Limited. The name of the Company was changed to Uttam Lifestyle Hotels Private Limited on October 16, 2006. Uttam Lifestyle Hotels Private Limited has carried out no business activities in the financial years ended March 31, 2007 and 2006. Board of Directors as on March 31, 2008 Mr. Ranjan Adlakha Mr. Raj Kumar Adlakha Mr. Rajan Adlakha Ms. Shomna Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Ranjan Adlakha Mr. Uttam Chand Adlakha Mr. Raj Kumar Adlakha Mr. Rajan Adlakha Ms. Sonia Adlakha Ms. Shomna Adlakha Mr. Sohan Lal Arora Uttam Industrial Engineering Limited Total No. of shares held 9,000 1,000 1,000 500 500 500 500 1,000 14,000 %age of Shareholding 64.29 7.14 7.14 3.57 3.57 3.57 3.57 7.14 100.00

Financial performance The audited financial results of Uttam Lifestyle Hotels Private Limited for the years ended March 31, 2007 and March 31, 2006 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 Total Income Profit after Tax Equity share capital 1.00 1.00 Reserves & Surplus (net of miscellaneous expenditure) (0.23) (0.23) Net Worth 0.77 0.77 Book Value per share of face value Rs. 10/- each (in Rs.) 7.68 7.68 Earning per share (in Rs.) The equity shares of Uttam Lifestyle Hotels Private Limited are not listed on any Stock Exchange. The Company has allotted 4000 equity shares at a price of Rs. 10/- per share on July 25, 2007. 24. Uttam Properties Private Limited Date of Incorporation Commencement of Business CIN Registered Office Main object November 06, 1985 January 10, 1986 U74899DL1985PTC022459 B-231/D, IInd Floor, Greater Kailash I, New Delhi - 110 048 Real Estate Developers and manufacturer of allied items with respect to construction industry.

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The Company was incorporated as a public limited company as "Uttam Properties Limited". It was later converted into private limited company on June 5, 1992 and the name was changed to Uttam Properties Private Limited. Board of Directors as on March 31, 2008 Mr. Raj Kumar Adlakha Mr. Ranjan Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Raj Kumar Adlakha Mr. Ranjan Adlakha Ms. Ranjana Chopra Ms. Amita Adlakha Mr. Sohan Lal Arora Mr. Uttam Chand Adlakha Ms. Raj Rani Kumari Shanta G. M. Colonisers Private Limited Uttam Industrial Engineering Limited Total No. of shares held 16,710 8,020 10 10,010 10 10 6,000 7,000 1,75,000 2,50,000 4,72,770 %age of Shareholding 3.53 1.70 0.00 2.12 0.00 0.00 1.27 1.48 37.02 52.88 100.00

Financial performance The audited financial results of Uttam Properties Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income 0.78 2.04 2.28 Profit after Tax 0.42 0.15 0.21 Equity share capital 47.28 47.28 47.28 Reserves and Surplus (net of miscellaneous expenditure) (9.02) (9.44) (9.58) Net Worth 38.25 37.84 37.69 Book Value per share of face value Rs. 10/- each (in Rs.) 8.09 8.00 7.97 Earning per share of face value Rs. 10/- each (in Rs.) 0.09 0.03 0.05 The equity shares of Uttam Properties Private Limited are not listed on any Stock Exchange. 25. Uttam Sucrotech International Private Limited Date of Incorporation CIN Registered Office Main object April 21, 2005 U51909DL2005PTC135241 B - 231 - D, IInd Floor, Greater Kailash I, New Delhi - 110 048 To carry on the business of import, export and to deal in all kinds of plant, machineries, equipments, spares and parts.

Board of Directors as on March 31, 2008 Mr. Rajan Adlakha Ms. Sonia Adlakha Mr. Sanjiv Gulati

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Shareholding Pattern as on March 31, 2008 Name Mr. Rajan Adlakha Ms. Sonia Adlakha Mr. Anil Datta Mr. Kashi Lal Gulati Ms. Ashima Gulati Mr. Sanjiv Gulati Mr. Nand Kishore Datta Ms. Radha Datta Pariksha Fin-Invest-Lease Limited Adharshila Capital Services Limited Rajan & Sons (HUF) Total

No. of shares held 5,10,000 15,000 6,000 15,000 22,000 5,000 6,800 4,500 5,00,000 5,00,000 9,65,700 25,50,000

%age of Shareholding 20.00 0.59 0.24 0.59 0.86 0.20 0.27 0.18 19.61 19.61 37.87 100.00

Financial performance The audited financial results of Uttam Sucrotech International Private Limited for the years ended March 31, 2007 and March 31, 2006 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 Total Income 1537.99 Profit after Tax 79.69 Equity share capital 255.00 1.00 Share application money 8.60 Reserves & Surplus (net of miscellaneous expenditure) 227.78 Net Worth 482.78 1.00 Book Value per share of face value Rs. 10/- each (in Rs.) 18.93 10.00 Earning per share of face value Rs. 10/- each (in Rs.) 3.11 The equity shares of Uttam Sucrotech International Private Limited are not listed on any Stock Exchange. 26. Uttam Tubes Private Limited Date of Incorporation CIN Registered Office Main object March 11, 1988 U74899DL1988PTC030926 7C, 1st Floor, J Block Shopping Centre, Saket, New Delhi - 110 017 Manufacture and deal in all kinds of pipes and tubes and to deal in all kinds of metals, rubbers, plastics and resins.

Board of Directors as on March 31, 2008 Mr. Raj Kumar Adlakha Mr. Rajan Adlakha Shareholding Pattern as on March 31, 2008 Name Mr. Raj Kumar Adlakha Mr. Rajan Adlakha Mr. Ranjan Adlakha Uttam Chand & Sons (HUF) Total No. of shares held 1,790 150 490 135 2,565 %age of Shareholding 69.79 5.85 19.10 5.26 100.00

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Financial performance The audited financial results of Uttam Tubes Private Limited for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income 0.16 Profit after Tax (0.04) 0.05 (0.08) Equity share capital 2.57 2.57 2.57 Reserves & Surplus 15.91 16.72 16.66 Net Worth 18.47 19.28 19.23 Book Value per share of face value Rs. 100/- each (in Rs.) 720.27 751.73 749.67 Earning per share of face value Rs. 100/- each (in Rs.) (1.66) 2.06 (3.14) The equity shares of Uttam Tubes Private Limited are not listed on any Stock Exchange. 27. Uttam Corporation Date of Formation Correspondence Address Main business Partners as on March 31, 2008 Mr. Rajan Adlakha Mr. Ranjan Adlakha Ms. Sonia Adlakha Ms. Shomna Adlakha Profit Sharing ratio of the firm is as under Name of the Partner Mr. Rajan Adlakha Mr. Ranjan Adlakha Ms. Sonia Adlakha Ms. Shomna Adlakha Total Profit Sharing Ratio 25% 25% 25% 25% 100% April 01, 1992 KD - 36, Kavi Nagar, Ghaziabad Contract work of industrial machineries

Financial performance The audited financial results of Uttam Corporation for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income 330.82 0.15 0.26 Net Profit 28.95 0.02 0.12 Partners' Capital 29.80 8.24 10.22 28. Uttam Chand & Sons, HUF Date of Formation Correspondence Address Main business November 7, 1969 B-231/D, 2nd Floor, Greater Kailash - I, New Delhi This HUF is not carrying any business activity except investment in securities..

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Members of HUF Mr. Uttam Chand Adlakha, Karta Mr. Raj Kumar Adlakha Ms. Amita Adlakha Mr. Rajan Adlakha Ms. Sonia Adlakha Mr. Ranjan Adlakha Ms. Shomna Adlakha Mr. Balram Adlakha Mr. Jai Adlakha Mr. Bharat Adlakha Ms. Saieesha Adlakha Ms. Sunaina Adlakha Ms. Ranjana Chopra Ms. Rajni Babbar Financial performance The financial details of Uttam Chand & Sons, HUF for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2008 31/03/2007 31/03/2006 Total Income 2.33 1.63 2.04 Capital 27.42 25.64 24.47 29. R. K. & Sons, HUF Date of Formation Correspondence Address Main business Members of HUF Mr. Raj Kumar Adlakha, Karta Ms. Amita Adlakha Mr. Balram Adlakha Mr. Jai Adlakha Financial performance The financial details of R.K. & Sons, HUF for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2008 31/03/2007 31/03/2006 Total Income 0.65 0.60 0.50 Capital 24.93 24.05 23.73 30. Rajan & Sons, HUF Date of Formation Correspondence Address Main business NA B-231/D, 2nd Floor, Greater Kailash - I, New Delhi This HUF is not carrying any business activity except investment in securities.. January 22, 1988 32, Western Avenue, Sainik Farm, Khanpur, New Delhi This HUF is not carrying on any business except the business of investment in securities.

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Members of HUF Mr. Rajan Adlakha, Karta Ms. Sonia Adlakha Mr. Bharat Adlakha Ms. Saieesha Adlakha Financial performance The financial details of Rajan & Sons, HUF for the years ended March 31, 2007, 2006 and 2005 are set forth below: (Rs. in lakhs) Particulars 31/03/2007 31/03/2006 31/03/2005 Total Income 14.62 99.73 2.21 Capital 295.05 117.54 61.19 None of the promoter group company has been declared as a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995. For details on litigations and disputes pending against the Promoter Group Entities please refer to the section titled "Outstanding Litigations and Material Developments" on page [*] of this Draft Letter of Offer. Related Party Transactions For details of related party transactions please refer to the "Financial Statement" on page [*] of this Draft Letter of Offer. Disassociation In the last 3 years, our Promoters have disassociated themselves from the following companies: 1. Sekhri Finance and Investments Private Limited Sekhri Finance & Investments Pvt. Ltd. originally incorporated as Isha Leasing & Investments Limited on May 27, 1986. Subsequently the name of the Company was changed to Sekhri Finance & Investments Limited on February 27, 1995. The Company also changed its name from `Sekhri Finance & Investments Limited' to `Sekhri Finance & Investments Private Limited' on October 12, 1998. The Company was incorporated with main object of leasing, finance, hire purchase, investment etc. The Company was acquired by Sh. Ranjan Adlakha by acquiring 4,21,810 equity shares (58.36%) on March 15, 2005. Sh. Ranjan Adlakha and Mrs. Shomna Adlakha also acquired balance shares i.e. 3,01,000 equity shares (41.64%) in the Company on December 30, 2005. Mr. Ranjan Adlakha & Smt. Shomna Adlakha has dissociated from Sekhri Finance & Investments Private Limited on January 5, 2006 by way of gift of their shareholding of 712810 Equity Shares of Rs.10/- each to Mrs. Ranjana Chopra, B-231-D, Greater Kailash I, New Delhi, to concentrate on the core business of sugar / sugar plant manufacturing. 2. Janak Handicap Agency Private Limited Janak Handicap Agency Pvt. Ltd. was incorporated on February 22, 2005 with main object to carry on business of dealers in all kinds & classes of handicapped products including tricycle, clutches, wheel chair, all other types of walking aid for handicapped person, artificial limbs and their parts & accessories. The Company was acquired by Sh. Ranjan Adlakha & Smt. Shomna Adlakha by acquiring 10,000 Eq. Shares on April 15, 2006. Mr. Ranjan Adlakha & Smt. Shomna Adlakha has dissociated from Janak Handicap Agency Pvt. Ltd. Pvt. Ltd. on March 29, 2008 by way of sale of their shareholding of 10,000 Equity Shares to M/s Pindi Builders and Developers Private Limited, to concentrate on the core business of sugar / sugar machinery manufacturing.

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DIVIDEND POLICY We have not paid any dividends during the last five years. Our dividend history may not necessarily be an indicative of our dividend policy or dividend amounts, if any, in the future.

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FINANCIAL STATEMENTS Auditors' Report as required by Part II of Schedule II of the Companies Act,1956 The Board of Directors Uttam Sugar Mills Limited A-2E, IIIrd Floor, CMA Tower, Sector 24 NOIDA-201301, Uttar Pradesh Sub.: Your Proposed Right Issue Dear Sirs, We have examined the Restated Financial Information of the Uttam Sugar Mills Limited (the Company) for the six months period ended 31st March, 2008 and for each of the five financial years ended 30th Sept. 2007, 30th Sept. 2006, 30th Sept. 2005, 30th Sept. 2004 and 30th Sept. 2003 and annexed to this report. The Said financial information has been prepared in connection with the Proposed Right Issue of Equity Shares, in accordance with the requirements of: i) Paragraph B(1) of Part II of Schedule II of the Companies Act, 1956 (the Act),

ii) The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000 (the Guidelines) issued by the Securities and Exchange Board of India (SEBI) as amended to date from time to time in pursuance of section 11 of the Securities and Exchange Board of India Act, 1992; and iii) In accordance with requirements of paragraph B of Part II of Schedule II of the Securities and Exchange Board of India Act, 1992; and iv) The instruction received from the company requesting to examine the financial information referred to above and proposed to be included in the letter of Offer of the company in connection with its Proposed Right Issue. Financial Information of the Company 1. We have examined the attached statement of restated Assets & Liabilities of the company as at 31st March, 2008, 30th Sept. 2007, 30th Sept. 2006, 30th Sept. 2005, 30th Sept. 2004 and 30th Sept. 2003 (Annexure - I) and accompanying statement of restated Profit & Loss of the company for the six months ended 31st March, 2008 and for the financial year(s) ended 30th Sept. 2007, 30th Sept. 2006, 30th Sept. 2005, 30th Sept. 2004 and 30th Sept. 2003 (Annexure ­ II) and Annexed restated Cash flow statement for the six months ended 31st March, 2008 and for the financial year(s) ended 30th Sept. 2007, 30th Sept. 2006, 30th Sept. 2005, 30th Sept. 2004 and 30th Sept. 2003 (Annexure ­IIA ) as prepared by the company and approved by the Board of Directors. These statements reflects the assets and liabilities and Profit and Losses for each of the relevant years as extracted by the management from the balance sheet and profit and loss account for those years. These statements have been made after making such adjustment and regroupings as in our opinion are appropriate and more fully described in the Notes appearing in Annexure III to this report. Based on our examination of these summary statements we confirm that: · The impact arising on account of changes in accounting policies adopted by the company has been adjusted with the retrospective effect in the attached summary statements. · The previous year adjustments have been made in the summary statements in the years to which they relate. · The impact of qualifications in auditors report wherever applicable have been adjusted in the attached summary statements. · The impact of extra-ordinary items have been separately disclosed in the attached summary statement.

2.

106

3.

The Company has not declared/paid any dividend in respect of six months ended 31st March, 2008 and for the financial year(s) ended 30th Sept. 2007, 30th Sept. 2006, 30th Sept. 2005, 30th Sept. 2004 and 30th Sept. 2003 as mentioned in Annexure V to this report. We have examined the following financial information relating to the company prepared by the management and approved by the Board of Directors for the purpose of inclusion in the Offer document: Accounting Ratios as appearing in Annexure VI to this report. Capitalization Statement as appearing in Annexure VII to this report. Statement of Tax Shelters as appearing in Annexure VIII to this report. Details of Secured Loans as appearing in Annexure IX to this report. Details of Unsecured Loans as appearing in Annexure X to this report. Details of Investments as appearing in Annexure XI to this report. Details of Debtors as appearing in Annexure XII to this report. Details of Loans & Advances as appearing in Annexure XIII to this report. Details of Capital advances due from promoter Group companies as appearing in Annexure XIV to this report. Details of Contingent Liabilities as appearing in Annexure XV to this report. Details of Capital Commitments as appearing in Annexure XVI to this report. Details of Miscellaneous Income as appearing in Annexure XVII to this report. Details of Related Party, Relationship & Transactions and Significant Transaction with related parties as appearing in Annexure XVIII, XVIII (a) and XVIII (b) respectively to this report. The Principal terms of Secured Loans and assets charged as securities and Principal terms of Unsecured loans as appearing in Annexure XIX to this report.

4.

i. ii. iii. iv. v. vi. vii. viii. ix. x. xi. xii. xiii. xiv.

In our opinion the above financial information of the company read with Significant Accounting Policies and notes on accounts attached in Annexure IV to this report, after making adjustments and regrouping as considered appropriate has been prepared in accordance with Part II of the Schedule II of the Act and the SEBI Guidelines. This report should not be in any way construed as a reissuance or redating of any of the previous audit reports issued by us nor should this report be construed as a new opinion on any of the financial statements referred therein. This report is intended solely for use of the management of the Company and for inclusion in the Offer document in connection with the Proposed Right Issue of Equity shares of the Company and is not be used, referred to or distributed for any other purpose without our written consent. Our work has been carried out in accordance with the auditing standards generally accepted in India and as per the Guidance Note on Reports in Company Prospectuses issued by the Institute of Chartered Accountants of India. Thanking you, B. K. KAPUR & COMPANY Chartered Accountants

Place: Noida Dated: June 17, 2008

M. S. KAPUR (FCA) Partner Membership No.74615

107

SUMMARY STATEMENT OF ASSETS AND LIABILITIES AS RESTATED As at A. Fixed Assets: Gross Block Less: Depreciation Net Block Capital Work-in-progress Total B. Investments C. Current Assets, Loans and Advances Inventories Sundry Debtors Cash and Bank balances Loans and Advances Total D. Liabilities and Provisions: Secured Loans Unsecured Loans Current liabilities and Provisions Total E. Deferred Tax Liability (net) F. Networth (A+B+C-D-E) Net worth Represented by G. Share Capital H. Share Application Money I. Reserves & Surplus Miscellaneous Expenditure not yet J. written off 31.03.2008 30.09.2007

Annexure -I (Rs.in lacs)

30.09.2006 30.09.2005 30.09.2004 30.09.2003

48,043.73 5,560.88 42,482.85 12,322.63 54,805.48 79.00 25,155.03 374.91 1,631.52 3,070.16 30,231.62 48,697.15 2,857.01 15,617.05 67,171.21 1,454.79 16,490.10

47,663.98 4,398.16 43,265.82 7,470.62 50,736.44 79.00 7,526.44 413.36 626.35 2,495.75 11,061.90 32,566.71 1,256.68 9,970.81 43,794.20 1,295.19 16,787.95

24,145.29 2,510.31 21,634.98 15,506.88 37,141.86 2.00 2,235.03 90.94 9,953.52 3,455.19 15,734.68 24,735.15 1,057.00 3,697.55 29,489.70 1,625.67 21,763.17

12,029.43 1,540.28 10,489.15 8,043.41 18,532.56 2.00 678.64 342.99 3,052.29 1,098.22 5,172.14 13,801.35 907.00 1,848.51 16,556.86 1,045.01 6,104.83

6,729.82 1,009.79 5,720.03 2,917.12 8,637.15 39.23 3,113.71 122.04 667.74 593.12 4,496.61 7,263.08 250.00 2,180.14 9,693.22 342.07 3,137.70

5,752.35 697.60 5,054.75 950.57 6,005.32 0.00 2,989.47 466.69 108.76 268.49 3,833.41 5,593.82 200.00 2,181.34 7,975.16 8.23 1,855.35

2,576.90 0.00 13,918.15 4.95

2,576.90 0.00 14,211.19 0.14

2,576.90 0.00 19,187.78 1.51

1,883.19 138.24 4,086.27 2.87

1,497.00 425.00 1,219.94 4.24

1,367.70 194.00 300.11 6.46

K. Networth (G+H+I-J) 16,490.10 16,787.95 21,763.17 6,104.83 3,137.70 1,855.35 Note: The above statement should be read with the Notes on adjustments and significant accounting policies & notes to the accounts for restated financial statements as appearing in Annexure III and IV to the report.

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SUMMARY STATEMENT OF PROFIT AND LOSS ACCOUNT, AS RESTATED Financial Year ended Period Income Sales: Of Products manufactured by the Company Less: Excise Duty Net Sales Other Income Increase/(Decrease) in inventories Total Income (A) Expenditure Raw material consumed Other Manufacturing Expenses Salaries, Wages and Benefits Administration and other Expenses Depreciation Interest & Financial Charges Total Expenditure (B) Net (Loss)/Profit before exceptional items & tax (A-B) Exceptional Items Net (Loss)/Profit before Tax and Extraordinary Items Taxation Current Tax Minimum alternative Tax (MAT) Credit Entitlement Deferred Tax Fringe Benefit Tax Net (Loss)/Profit before Extraordinary Items Extraordinary Items (net of tax) Net (Loss)/ Profit after Extraordinary Items Income Tax for Earlier Years Net (Loss)/ Profit before adjustments

Annexure -II (Rs.in lacs)

31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003 (6 Months) (12 Months) (12 Months) (12 Months) (12 Months) (12 Months)

15,227.47 916.62 14,310.85 19.08 16,335.05 30,664.98

29,640.57 1,754.02 27,886.55 137.44 4,956.93 32,980.92

22,064.24 609.34 21,454.90 203.14 1,240.87 22,898.91

19,056.15 262.61 18,793.54 3.36 (2,249.29) 16,547.61

10,550.51 766.28 9,784.23 2.53 74.85 9,861.61

9,030.32 731.04 8,299.28 1.01 66.71 8,367.00

24,165.95 1,879.75 1,126.95 395.06 1,162.73 1,766.21 30,496.65 168.33 2,556.51 (2,388.18) 159.59 12.68 (2,560.45) (2,560.45) (2,560.45)

24,969.70 3,334.31 1,665.74 692.76 1,888.83 3,436.50 35,987.84 (3,006.92)

14,701.94 1,202.03 781.71 458.95 983.10 1,630.51 19,758.24 3,140.67

9,664.07 632.71 525.11 371.47 532.91 1,196.37 12,922.64 3,624.97

6,499.11 464.89 318.67 221.04 315.51 790.69 8,609.91 1,251.70

6,205.03 384.15 245.48 193.44 277.90 845.67 8,151.67 215.33

(3,006.92) (330.48) 30.77 (2,707.21) (2,707.21) (2,707.21)

3,140.67 287.03 (257.07) 815.58 19.79 2,275.34 2,275.34 2,275.34

3,624.97 245.50 702.93 5.45 2,671.09 2,671.09 29.76 2,641.33

1,251.70 97.50 333.85 820.35 606.20 214.15 214.15

215.33 16.00 (22.94) 222.27 222.27 222.27

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ADJUSTED PROFIT AND LOSS ACCOUNT (As per SEBI Guidelines) Financial Year ended Period Net (Loss)/Profit before adjustments (As per audited accounts as above) Adjustment for: a) Impact of Auditors' Qualification Inventory valuation b) Prior Period Items c) Impact of changes in Accounting Policies Inventory valuation d) Exceptional Items e) Extraordinary Items (net of tax) f) Income tax for earlier years Total Impact of Adjustments Current Tax Impact of Adjustments on (a), (b) ,(c) & (d)above Total of Adjustments after Tax Impact Adjusted Net (Loss)/Profit after extraordinary items Profit & Loss Account at the beginning of the year Balance available for appropriation

(Rs.in lacs)

31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003 (6 Months) (12 Months) (12 Months) (12 Months) (12 Months) (12 Months) (2,560.45) (2,707.21) 2,275.34 2,641.33 214.15 222.27

0.62 2,556.51 2,557.13 289.72 2,267.41 (293.04) 473.81 180.77

0.31 (2,556.51) (2,556.20) (286.81) (2,269.39) (4,976.60) 5,450.41 473.81

(0.84) (0.84) (0.07) (0.77) 2,274.57 3,175.85 5,450.41

2.34 29.76 32.10 0.18 31.92 2,673.25 502.60 3,175.85

61.56 7.88 606.20 (29.27) 646.37 5.34 641.03 855.18 (352.58) 502.60

156.56 (10.17) 50.64 (606.20) (0.49) (409.66) 15.52 (425.17) (202.90) (149.68) (352.58)

Note: The above statement should be read with the Notes on adjustments and significant accounting policies & notes to the accounts for restated financial statements as appearing in Annexure III and IV to the report.

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CASH FLOW STATEMENT AS RESTATED

Annexure - IIA (Rs. In lacs) Six Months Year ended Year ended Year ended Year ended Year ended 31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003 1,321.15 315.51 790.69 2.01 3.52 2,432.88 101.73 (124.24) (144.53) 2,265.84 (2.66) 0.00 (1.30) 2,261.88 (3,037.78) 12.75 (39.23) (3,064.26) 129.30 64.65 231.00 (780.95) 2,380.60 (657.21) 1,367.39 565.01 102.73 667.74 412.36 277.90 845.67 0.49 5.66 1,542.08 (219.58) (326.88) 1,428.75 2,424.37 2.18 (606.20) 1,820.35 (985.47) 4.50 (980.97) 192.00 (897.54) 420.00 (544.21) (829.75) 9.63 93.10 102.73

A. Cash flow from Operating Activities Net Profit before Tax & Extra Ordinary items 168.96 (5,563.11) 3,139.83 3,627.31 Adjustments for: Depreciation 1,162.73 1,888.83 983.09 532.91 Interest and financial charges 1,766.21 3,436.50 1,630.51 1,196.37 Loss on sale/damage of assets (net) 2.78 24.16 Miscellaneous Expenditure written off 1.10 1.37 1.37 1.37 Wealth Tax 0.18 4.58 1.94 Interest earned (4.24) (24.67) (19.52) (2.25) Operating Profit before Working Capital changes 3,094.94 (253.72) 5,737.22 5,379.87 Adjustments for: Trade & Other Receivables (532.68) 639.00 (2,104.09) (724.67) Inventories (17,628.59) (5,291.40) (1,556.39) 2,435.07 Trade Payables 5,645.61 6,099.07 683.36 (610.41) Cash generated from operations (9,420.72) 1,192.94 2,760.09 6,479.86 Direct taxes (paid)/refund (17.07) (377.56) 52.69 (94.09) Cane Price Difference for Season 2002-03 Misc. Expenses Net Cash flow from Operating Activities (9,437.79) 815.38 2,812.78 6,385.77 B. Cash Flow Investing Activities Purchase of Fixed Assets (5,692.56) (14,902.32) (18,582.81) (10,477.20) Sale of Fixed Assets 8.40 24.72 Investments sold 37.23 Investments Made (77.00) Interest Received 2.98 22.68 18.68 0.87 Net Cash used in Investing Activities (5,689.58) (14,948.24) (18,564.13) (10,414.38) C. Cash Flow Financing Activities Proceeds from issue of Shares 693.71 386.19 Share Issue expenses (754.83) Share Premium realised - 13,346.85 193.10 Share Application money (138.24) (286.76) Preliminary Expenses Paid (5.00) Interest paid (1,545.88) (3,098.28) (1,469.96) (1,083.39) Proceeds from Borrowings 20,571.16 10,600.87 15,357.03 8,967.34 Repayments of Borrowings (2,887.75) (2,696.91) (4,381.99) (1,763.31) Net Cash flow from Financing Activities 16,132.53 4,805.69 22,652.58 6,413.17 Net Increase/(decrease) in Cash and Cash 1,005.16 (9,327.17) 6,901.23 2,384.56 Equivalents (A+B+C) Cash and Cash Equivalents at beginning of the year 626.35 9,953.52 3,052.29 667.74 Cash and Cash Equivalents at the end of the year 1,631.51 626.35 9,953.52 3,052.29 Notes: 1. Cash and Cash Equivalents represent Cash and Bank Balances 2. Previous year figures have been regrouped / rearranged wherever consider necessary.

111

ANNEXURE - III NOTES TO ADJUSTMENTS CARRIED OUT IN RESTATED FINANCIAL STATEMENTS 1. Restated financial statements have been prepared in respect of five years commencing from the financial years ended 30.09.2003 to 30.9.2007 and for the six months period ended on 31.3.2008.As a result of restatement of income and expenses amounts, the necessary adjustments have been made against the reserves and corresponding effect have been given to the respective heads in related year restated summary statement of Assets and Liabilities. Following adjustments have been given effect in restated financial statements: Upto the financial year ended 30.09.2002, the company included the interest paid on cash credit limit availed from the bank as part of conversion cost of finished goods as per the practice followed by other sugar mills, which was not in accordance with Accounting Standard (AS) ­ 2 on `Valuation of Inventories' issued by the Institute of Chartered Accountants of India(ICAI) and the same was also subject matter of Auditor's qualification. In order to comply with aforesaid AS-2, the company had changed its method of valuation of finished goods by excluding the interest on cash credit availed from bank as part of conversion cost from the financial year ended 30.09.2003. Since the restated financial statement has been prepared from the financial year ended 30.9.2003, The impact of such Auditor's qualifications on restated summary statement of Profit & Loss account for the year ended 30.09.03 and restated summary statement of Assets and Liabilities as on 30.09.2003 has been adjusted and disclosed accordingly and the impact of Auditor's qualification on audited financial statements of earlier years has been adjusted from the opening reserve and surplus as an 1.10.2002 & corresponding effect have been given to the opening balances of the respective head of restated summary statement of Assets and Liabilities. b) From 1.10.2002 the company changed method valuation of finished goods from FIFO to Weighted Average method . Accordingly, valuation of opening stock of finished goods has been recomputed for the year ended 30.09.2003. The restated summary statement of Profit & Loss account for the year ended 30.09.2003 and restated summary statement of Assets & Liabilities as on 30.09.2003 has been adjusted and disclosed accordingly. Impact of change in Method of valuation of inventory on audited financial statements of earlier year has been adjusted from opening reserve and surplus as on 1.10.2002. c) As stated in para 2(a) above in order to comply with AS-2 the company has changed its method of valuation of finished goods by ignoring interest on cash credit availed from bank. However, the interest portion that was included in opening stock of finished goods was not excluded while valuing the closing stock of finished goods under weighted average method for the year ended 30.09.2003. The same was subject matter of Auditor's qualification. The impact of such Auditor's qualifications on restated summary statement of Profit & Loss account for the year ended 30.09.03, 30.09.04 and restated summary statement of Assets and Liabilities as on 30.09.2003 & 30.09.2004 has been adjusted and disclosed accordingly. d) Previous Year adjustments have been adjusted in the year to which it pertains. e) Extra ordinary items ­ Differential Cane Price payable for earlier year as held by the Hon'ble Supreme Court, being the difference between the State Advisory Price (SAP) as fixed by the State Government and Statutory Minimum Price (SMP) has been adjusted in the restated summary statement of Profit & Loss account and restated summary statement of Assets and Liabilities. f) The company adopted Accounting Standard (AS) ­ 22 on `Accounting for Taxes on Income' issued by the ICAI for the first time in preparing financial statements for the year ended 30th September 2003.Impact of adoption of AS -22 on earlier years of Rs 31.17 has been reduced from opening reserve and surplus and corresponding effect have been given to the opening balances as on 1.10.2002 of the respective head of restated summary statement of Assets and Liabilities. g) The Hon'ble High Court ,Allahabad while disposing the various writ petitions filed by sugar producing factories, by its order dated 19th December,2007 has inter-alia, quashed the state advisory price (SAP) fixed by State Government of UP for the cane price for the season 2006-2007 being arbitrary and unreasonable and a)

2.

112

further directed state Government of UP to reassess and re fix SAP it in due consultation with various parties involved and as per legal opinion sought for the same the company has accounted for the sugar cane Liability for season 2006-2007 on payment basis. However ,the Hon'ble Supreme Court on the special leave petition of State of UP has stayed the above order vide its order dated January 18,2008. Accordingly the company has accounted for balance sugarcane liability during the period ended 31.3.2008 and this is shown as an Exceptional Item in the financial statements for the period ended 31.3.2008.As this pertain to the year ended 30.9.2007 same has been accordingly adjusted in the restated summary statement of Profit & Loss account and restated summary statement of Assets and Liabilities. 3. Current Tax impact of adjustments Current tax impact of adjustments relates to tax effect on adjustments made for restatement of the financial statements. The company has filed income tax returns ( to be filed for the financial year ended 31.3.2008), wherein the tax liability was computed as per the provisions of Minimum Alternate Tax (`MAT') where ever applicable. Hence, the tax effects have been recomputed, at the MAT rate applicable to these respective years for adjustments, which have altered the book profits for those years. 4. Material Regroupings

Following regroupings has been made to keep in line Previous year figures with latest audited financial statements: a) Upto financial year ended 30.09.2004, the company was showing gross turnover (inclusive of excise duty) only in the profit and loss account. However, from the financial year ended 30.09.2005 the company changed its presentation as per the requirements of ASI-14 on `Disclosure of revenue from sales transaction' issued by ICAI and accordingly has shown both gross turnover and net turnover for meaningful understanding of financial statements. The summary statement of Profit & Loss account as restated for the financial year ended 30.09.2003 & 30.09.2004 has been regrouped and disclosed accordingly. b) Upto financial year ended 30.09.2004 prior period item (net) and Miscellaneous Expenditure written off were disclosed as a separate line item in Profit and Loss account. However from the financial year ended 30.09.2005 the company has changed its classification and accordingly prior period items (net) and Miscellaneous Expenditure written off have now been shown under the head `Administration & Other expenses'. The summary statement of Profit & Loss account as restated for the financial year ended 30.09.2003 & 30.09.2004 have been regrouped and disclosed accordingly. c) Up to financial year ended 30.09.2004 dues from employees were shown as a separate line item under the head `Loans & advances'. From the year ended 30.09.2005, the company has changed its classification and accordingly dues from employees has now been included in `Advances recoverable in cash or in kind' under the head `Loans & advances'. Details of Loans & advances for the financial year ended, 30.09.2003 & 30.09.2004 have been regrouped and disclosed accordingly. d) Upto the financial year ended 30.09.2003, the capital advances were grouped under `Advances recoverable in cash or in kind' under the head `Loans & advances'. From the financial year ended 30.09.2004 these have been regrouped under `Capital work in progress'. The classification in the summary statement of Assets and Liabilities as restated for the financial year ended 30.09.2003 has been regrouped and disclosed accordingly. . e) Upto the financial year ended 30.09.2004 `Vehicle Loan' was classified under `Current Liabilities & Provisions'. From the financial year ended 30.09.2005 the same has been reclassified under the head `Secured Loans'. The classification in restated summary statement of assets and liabilities for the financial year ended 30.09.2003 and 30.09.2004 has been regrouped and disclosed accordingly.

113

ANNEXURE ­ IV SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNTS FOR THE PERIOD ENDED 31st MARCH, 2008. A. i. SIGNIFICANT ACCOUNTING POLICIES : Basis of Accounting: The Company follows the Mercantile System of Accounting and recognizes Income and Expenditure on Accrual Basis. The financial statements are prepared under the historical cost convention and are in accordance with the requirements of Companies Act, 1956 and accepted accounting principles. Fixed Assets and Depreciation: Fixed Assets are stated at cost less accumulated Depreciation. Cost of acquisition or construction is inclusive of freight, duties, taxes and incidental expenses incurred during construction period. Depreciation on fixed assets put to use has been provided on Straight Line Method at the rates in the manner specified in Schedule XIV to the Companies Act, 1956.Low value items costing individually Rs.5,000/- or less are fully depreciated in the year of purchase. Depreciation is charged on pro-rata basis in respect of assets acquired/sold during the year. Post impairment, depreciation is provided on the revised carrying value of the asset over its remaining useful life. iii. Lease : Assets acquired under finance lease are recognized at the lower of the fair value of leased assets at inception and the present value of minimum lease payments, lease payments are apportioned between the finance charges and the reduction of the outstanding liability. The finance charges are allocated to the period during the lease term at a constant periodic rate of interest on the remaining balance of the liability. In respect of fixed assets taken on finance lease, when there is reasonable certainty that the Company will obtain ownership by the end of the lease term, depreciation is provided in accordance with the policy followed by the Company for owned assets. iv. Investments : Long Term Investments are valued at cost. Where applicable, provision is made if there is a permanent diminution in value. Inventories: Inventories (other than By-products) are valued at lower of cost or net realizable value. Cost of inventories is determined on weighted average/or FIFO. Cost of finished goods has been worked out on absorption cost basis. By products and residuals are valued at net realizable value. vi. Taxes on Income : a) Current tax is determined on the amount of tax payable in respect of taxable income for the year. Fringe Benefit Tax is determined at current applicable rates on expenses falling within the ambit of fringe benefits as defined under the Income Tax Act,1961.

ii.

v.

114

b)

c) d)

Deferred tax assets/liabilities are provided on significant timing differences arising from the different treatments in accounting and taxation of relevant item. Deferred tax assets/liabilities shall be reviewed as at each Balance Sheet date, based on development during the year, to reassess realization/liabilities. Deferred Tax Assets in respect of accumulated Loss and Unabsorbed Depreciation are recognized and carried forward only if there is virtual certainty of its realization. Deferred tax resulting from timing difference which originate during the tax holiday period but are expected to reverse after tax holiday period is recognized in the year in which the timing differences originate using the tax rate and laws in acted or substantively enacted by the balance sheet date.

vii viii

Sales : Sales includes Excise Duty, Administrative Charges and entry Tax etc. Borrowing Costs : Borrowing cost that is attributable to the acquisition or construction of qualifying assets are capitalized as a part of the cost of such assets. A Qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing cost are charged to revenue. Impairment of Assets: An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value and impairment loss is charged to profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount. Foreign Currency Transactions: Transactions in foreign currency are recorded at the exchange rate prevailing on the date of transaction. Monetary items denominated in foreign currencies at the year end translated at the year end rates which is likely to be realized from, or required to disburse at the balance sheet date. Exchange differences arising on settlement of monetary items at rates different from those at which they were initially recorded are recognized as income or expense in the year in which they arise except exchange differences on liabilities incurred for acquisition of fixed assets from outside India which are capitalized/de-capitalized. Premium in respect of forward contract is accounted for over the period of the contract. Treatment of Expenditure During Construction Period: Expenditure during construction period is included under Pre-operative expenses and the same are allocated to the respective fixed assets on the completion of erection/installation. Provisions, Contingent Liabilities and Contingent Assets: Provision involving substantial degree of estimation in measurement are 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 not recognized but are disclosed in notes to accounts. Contingent assets are neither recognized nor disclosed in the financial statements. Retirement Benefits : Contribution to the Employees' Provident Fund is made under the relevant statutes/rules and is charged to the Profit & Loss Account on accrual basis. Provision for leave encashment and gratuity is made on the basis of actuarial valuation carried out by an independent actuarial at the year end. Share issue expenses : Share issue expenses have been adjusted from share premium account as permissible under section 78 of the Companies Act 1956.

ix.

x.

xi

xii

xiii

xiv

115

B. 1.

NOTES ON ACCOUNTS: Freehold land includes land aggregating to Rs. 92.24 lacs (Previous Year Rs. 92.24 lacs) which is yet to be registered in the name of the Company. Further, Motor cars having gross book value of Rs. 99.42 lacs (Previous Year Rs. 99.42 lacs), are yet to be transferred in the name of the company and Motor cars having gross book value Rs.77.63 lacs (Previous Year Rs.91.22 lacs) have been purchased on hire purchase basis. Amount of borrowing cost capitalized to fixed assets during the period is Rs. 401.61 lacs (Previous Year Rs. 156.05 lacs). All the Current Assets, Loans and Advances, in the opinion of the Board of Directors, have a value on realization which in the ordinary course of business shall at least be equal to the amount, at which it is stated in the Balance Sheet. Advances recoverable in cash or in kind include Rs. 18.53 lacs (Previous Year Rs. 11.74 lacs) as other advance and also capital advance includes a sum of Rs. 1984.85 lacs (Previous Year Rs. 1568.72 lacs ) given against purchase of capital goods in ordinary course of business to companies in which some directors of the company are interested as its directors/shareholders. Balances of certain Sundry Debtors, Creditors and Advances are subject to confirmation. The Company has applied for exemption from Trade tax under section 4A of U.P.Trade Tax Act, 1948 (adopted by Uttarakhand Government) for its Unit at Village Libberhedi. Tehsil Roorkee Distt. Haridwar on sale of sugar, molasses and bagasse, presently applicable to sale of molasses only as the sale of sugar & bagasse being exempted from tax. The application for the same is pending for approval with competent authorities. Management is hopeful for obtaining the necessary exemption (eligibility certificate) with in the year. Sundry Creditors include Rs. 58.89 lacs (Previous Year Rs.71.71 lacs) due to Small Scale Industrial undertakings (SSIs). The name of Small Scale undertakings to whom amount was outstanding for more than 30 days, to the extent such parties have been identified from the available information, are as follows : Accord Communication Limited, Alpha Control Instrument Pvt. Ltd., Arya Machine Tools, Automation Services Pvt. Ltd., Jagat Machinery & Manufacturers Pvt. Ltd., Kay Kay Industries,, Material Conveying Engineers, Material Handling Engineers, Miltech Engineering Works, National Electricals, National Engineering Works, Meerut, Niles Engineering Works Pvt. Ltd., Omfa Rubber Pvt. Ltd., Puri Industries, Quest Computers, Spray Engineering Devices, Superior Engineering & Manufacturing Co., Sweta Suppliers & Engineering Works, The Devite Company, Vikas Pump & Project, Waltech India. Information with regard to amount due to SSI unit has been determined on the basis of information available with the company and relied up on by auditors. The company is in the process of identifying its suppliers as micro, small and medium enterprises as defined under the Micro, Small and Medium Enterprises Development Act 2006. However, the company has not received information . communication from there supplier regarding applicability of this act to them, there no such disclosure under the said Act has been furnished. 8. Since during the period the company has operated in a single primary business segment i.e. Manufacturing of sugar and its sale being in the domestic market only, the disclosure requirement of accounting standard "17" `Segment Reporting' issued by the Institute of Chartered Accountants of India in not applicable. 9. The company has made an investment of the requisite amount for setting up of new project in the state of Uttar Pradesh in accordance with the UP Sugar Industry Promotion Policy,2004 and has accordingly filed application for eligibility under the above policy on 13th April 2007. Which is still pending. However, the new State Government has terminated the Policy with effect from June 4, 2007 and has expressed its intention to introduce another policy. The Company has been legally advised that it is eligible for the benefits under the said policy. 10. Sugar Cane purchases at units in State of Uttar Pradesh for season 2007-2008 has been accounted for at the rate Rs. 110/- per quintal based on an interim order dated November 15,2007 of Lucknow Bench of Hon'ble High Court of Allahabad. Necessary adjustments, if any will be considered as and when the matter is finally decided. In respect of its unit situated in the state of Uttrakhand, the sugarcane liability has been provided at State Advisory Price (SAP) fixed by the Uttrakhand Government. 11. Disclosure in respect of Operating Lease:

2. 3. 4.

5. 6.

7.

116

The company has entered into Operating Lease for premises. These lease agreements are non-cancelable up to 36 months generally and are usually renewable by mutual consent on mutually agreeable terms. The lease rental of Rs 0.35 lacs (Previous Year Rs. 3.46 lacs) has been charged and included in rent as rent under schedule "17" and Rs. Nil (Previous Year Rs. 3.87 lacs) to fixed assets of units At Khaikheri and Rs. 9.08 Lacs (Previous Year Rs. 6.96 lacs) are debited to Pre-Operative Expenses pending capitalization relating to Co-Generation Units at Barkatpur, Khaikeri , Shermau. & Distillery Unit at Barkatpur. ii) Future obligations by way of lease rentals in respect of these lease arrangements amount to:(Rupees in lacs) Current Period Previous year Ended Ended 31.3.2008 30.9.2007 7.85 2.17 2.88 20.95 NIL NIL

i)

( a ) Not later than one Year ( b ) Later than one year & not later than Five Years ( c ) Later than Five years

12. Consequent upon AS-28 impairment of assets being made mandatory by the Institute of Chartered Accountants of India. The company has carried out an exercise to ascertain the impairment, if any, in the carrying value of its fixed assets. However no such case was found. 13. During the year, company has availed a term loan of Rs. 3365 lacs for payment of cane dues for season 2006-2007 and 2007-2008 as per scheme for Extending financial assistance to Sugar Undertakings 2007 issued by Government of India. As per scheme the Banks will debit interest on the loan to the company and on receipt of the interest subsidy from Central Government and Sugar Development fund, the same shall be credited to the Company's account as such the interest of Rs. 70.95 lacs debited by the bank has been shown as recoverable. 14. All expenses incurred upto 31.032008 at distillery & cogeneration units which are under process of being set up have been debited to pre operative expenses pending capitalization. The details of pre-operative expenses pending allocation for new units/expansion, which are in process of being setup, are as under: (Amount Rs. in Lacs) 31.03.2008 30.09.2007 214.26 7.64 21.85 0.35 1.63 0.45 58.60 1299.76 0 .85 66.67 34.84 1.29 1.03 719.28 35.26 30.17 0.04 8.29 19.61 4.07 95.00

Particulars Material Consumed Other Manufacturing Expenses Consumption of Stores, Spares & Packing Material Power & Fuel Repair to : Plant & Machinery Others Salary & Wages Staff & Workers Welfare Rent Rates & Taxes Printing & Stationary Postage, Telegram & Telephone Advertisement & Publishing Traveling & Conveyance

117

Fees & Subscription Legal & Professional Charges Auditor's Remuneration Vehicle Running & Maintenance Insurance Cane Development Expenses Business Promotion Fringe Benefit Tax Interest & Financial Charges Foreign Exchange Fluctuations Office & other administration expenses Less:Sale of Sugar (during trial run period) Sale of Scrap (during trial run period) Interest earned Misc. Income -Others Allocation to Fixed Assets Closing Stock of Finished & Semi Finished Goods at the end of trial run period Total 15. Auditor's Remuneration:

10.60 33.49 0.51 20.18 6.26 2.37 547.40 119.64 14.38 ----------1059.61 21.98 ----------1037.63 ---------1037.63 ======

Less:-

6.76 36.75 0.52 23.94 27.33 5.32 0.14 3.56 843.60 43.58 11.04 ------------3318.70 387.39 5.32 ----------2925.99 1497.07 1051.23 ---------377.69 ======

(Rs. In lacs) Current Period Previous Year Ended 31.3.2008* Ended 30.9.2007 (a) As Statutory Auditors 2.70 4.51 (b) For Tax Audit 0.34 .17 (c) For Taxation Matters 0.10 .10 (c) For other Matters 1.97 2.36 Total 5.11 7.14 *Including Rs. 0.41 lacs (Previous Year Rs. 0.52 lacs) Statutory Audit Fees debited to Pre-operative expenses. 16. Remuneration to Directors: a) Managerial Remuneration : (Rs. in lacs) Managing Director Directors Particulars Current Period Previous Year Current Period Previous Year ended 31.03.08 ended 30.09.08 ended 31.03.08 ended 30.09.08 ( a) Remuneration 22.50 45.00 Nil 16.50 ( b ) Perquisites 4.06 2.95 Nil 2.68 ( c ) Commission Nil Nil Nil Nil ( d ) Sitting Fees Nil Nil 2.10* 3.70* Total 26.56 47.95 2.10 22.88 * Represents payment made to Non-Executive Independent Directors.

118

17. Earning per share (EPS) Current Period 31.03.2008 a) b) (Loss)attributable to the Equity Shareholders (Rs in Lacs) Weighted average number of equity shares outstanding i) Basic: Weighted average number of equity shares at the end ii) Diluted Weighted average number of shares as in b(i) Paid up value of share Basic Earning per share Diluted Earning per share (2560.45) Previous Year ended 30.09.2007 (2707.20)

25769000 25769000 Rs. 10/(9.94) (9.94)

25769000 25769000 Rs.10/(10.51) (10.51)

c) d) e) 18.

(a/bi) (a/bii)

The Previous Year figures have been re-arranged, regrouped, reclassified, wherever necessary to make them comparable.

119

ANNEXURE ­ V Rates of Dividend paid The company has not paid any dividend during the 5 years ended 30th September 2003, 30th September 2004, 30th September 2005, 30th September2006, 30th September 2007 and period ended 31st March, 2008

120

Annexure -VI Accounting Ratios (on restated numbers) Financial year ended Earning per share (EPS) (Rs.) Basic Before Extra-ordinary Items Basic After Extra-ordinary items Diluted Before Extra-ordinary Items Diluted After Extra-ordinary items Net Asset Value (NAV) (Rs. in lacs) Return on Net Worth (%) No. of equity shares (Weighted) No. of equity shares (Year end) 31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003

*(1.14) *(1.14) *(1.14) *(1.14)

(19.31) (19.31) (19.31) (19.31)

10.04 10.04 10.04 10.04

17.19 17.19 17.18 17.18

5.98 5.98 5.98 5.98

2.95 (1.48) 2.95 (1.48)

63.99 65.15 84.45 31.68 9.06 12.15 *(1.78) (29.64) 10.45 44.80 31.53 (12.21) 2,57,69,000 2,57,69,000 2,26,55,474 1,55,52,064 1,42,96,916 1,36,76,970 2,57,69,000 2,57,69,000 2,57,69,000 1,88,31,900 2,99,40,000 1,36,76,970

a. EPS = Adjusted Net profit for the year / Weighted Average No. of equity shares (As per AS-20) b. Net asset value per equity share (Rs.) = Net worth / No. of equity shares outstanding at year end c. Return on Net Worth (%) = Adjusted Profit after tax / Net Worth * Not Annualised.

121

Capitalisation Statement Debt Short Term (A) Long Term (B) Total Debt (C = A + B) Shareholders Fund Share Capital Reserves as restated Total Less: Miscellaneous Expenditure not yet written off Total Shareholders Fund (D) Long Term Debt / Total Shareholders Fund (B/D) Total Debt / Total Shareholders Fund (C/D)

Annexures - VII (Rs.in lacs) Pre Issue As at 31.03.2008 22,326.90 29,227.26 51,554.16

2,576.90 13,918.15 16,495.05 4.95 16,490.10 1.77 3.13

* The post offer capitalisation can be ascertained only after completion of the offer. Notes: 1. Short Term debt represents debts which are due within 12 months from 31.03.2008 and include current portion of vehicle loan, current portion of long term debt - secured and current portion of long term debt (Soft Loan From Uttaranchal State Government)- unsecured, 2. Long term debt represent other than short term debts as defined above.

122

Statement of Tax Shelters Year ended 31.03.2008

Annexure - VIII (Rs.in lacs) 31.03.2007 31.03.2006 31.03.2005 31.03.2004 31.03.2003 588.86 33.99 200.15 4,166.80 33.66 1,402.54 647.24 36.59 236.84 1,067.33 35.88 382.90 21.30 36.75 7.83

Net (Loss)/Profit before Tax as per books (A) (4,278.06) Tax Rate (%) 33.99 Tax on Actual Profit (1,454.11)

Adjustments Permanent Differences Charity & Donation 3.70 3.04 1.83 2.00 1.73 0.71 Prior Period adjustments 2.12 0.75 2.51 2.43 3.10 0.13 Payment to club 0.25 0.12 0.50 Lease payments (29.44) (9.04) (1.29) Provision for wealth tax 1.90 3.78 1.94 Other Adjustments 39.22 383.37 8.28 24.13 1.93 1.33 46.94 390.94 14.56 (0.63) (2.16) 1.38 Total Permanent Differences (B) Timing Differences Difference between tax depreciation & (4,993.06) (2,530.39) (2,073.89) (1,148.72) (464.34) (591.47) book depreciation Expenditure Allowable under section 43B 1,368.39 121.13 27.42 (205.41) 197.30 (49.78) of Income Tax Act Disallowance u/s 40(a)(i) (165.51) 30.87 24.15 (14.14) 124.63 Amount Allowable/Disallowable u/s 35D 128.50 63.26 (3,918.68) (2,441.65) (2,022.32) (1,368.27) (142.41) (641.25) Total Timing Differences (C) (3,871.74) (2,050.71) (2,007.76) (1,368.90) (144.57) (639.87) Net Adjustments (B+C) Tax Saving thereon (1,316.00) (697.04) (675.81) (500.91) (51.86) (235.15) Tax liability/(saving) after considering the (2,770.12) (496.88) 726.73 (264.07) 331.04 (227.32) effect of adjustments Tax impact of setting off Brought forward (472.74) (331.04) losses Tax liability/(saving) after set off of brought (2,770.12) (496.88) 254.00 (264.07) (227.32) forward loss Tax impact of Deduction u/s 80IC (254.00) (2,770.12) (496.88) (264.07) (227.32) Tax liability/(saving) after Deduction u/s 80IC Tax saving on Extraordinary items 50.48 Tax liability/(saving) before Extraordinary (2,770.12) (496.88) (264.07) 50.48 (227.32) items Tax liability under MAT on book profits 281.64 23.33 82.05 1.82 Interest liability on above 29.96 2.78 9.93 0.27 Total tax paid under MAT 311.60 26.11 91.98 2.09 Notes to the tax shelter statement 1. The above statement of tax shelters has been prepared as per the audited accounts of the Company and not on the basis of restated profits. 2. The permanent / timing differences have been computed considering the acknowledged copies of the income tax returns filed by the company each of the respective years stated above except for the financial year ended 31.3.2008 for which return is to be filed.

123

Details of Secured Loans As at A) Term Loans Industrial Development Bank Of India (IDBI ) Indian Overseas Bank Punjab National Bank OBC State Bank of India Govt. of India, Sugar Development Fund (SDF) Interest Accrued and Due on above Total A B) Vehicle Loans ICICI Bank Ltd. Kotak Mahindra Premius Ltd. Total B C) Working Capital Facilities: Industrial Development Bank Of India (IDBI ) OBC Punjab National Bank Indian Overseas Bank State Bank of India Total C Total A+B+C

Annexure - IX (Rs.in lacs) 31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003

9,265.90 2,862.51 7,820.68 2,435.35 8,429.44 1,664.56 251.20 32,729.64 19.99 19.99 406.39 213.12 11,127.63 1,710.30 2,490.09 15,947.52 48,697.15

6,653.66 2,727.08 6,065.26 1,763.41 7,534.53 1,664.56 244.65 26,653.15 30.60 30.60 424.47 303.71 3,779.73 328.55 1,046.51 5,882.96 32,566.71

5,248.97 2,663.75 6,120.13 1,200.00 6,715.63 1,664.56 117.37 23,730.41 61.30 0.13 61.43 1,680.72 (717.74) (19.67) 943.32 24,735.15

2,354.30 1,615.42 2,370.00 3,970.00 1,664.56 8.60 11,982.88 16.56 0.87 17.43 844.51 701.68 254.85 1,801.04 13,801.35

427.64 857.69 720.00 1,490.00 832.28 17.35 4,344.96 1.55 1.55 1,928.67 498.45 489.45 2,916.57 7,263.08

561.36 1,130.78 982.50 11.28 2,685.92 11.76 11.76 1,400.86 894.83 600.45 2,896.14 5,593.82

124

Details of Unsecured Loans As at From Body Corporates ( promoter group companies) Soft Loan from Uttaranchal State Government Interest Accrued & due on above loans Total

Annexure - X (Rs.in lacs) 31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003 2,159.50 656.68 40.83 2,857.01 600.00 656.68 1,256.68 400.00 657.00 1,057.00 250.00 657.00 907.00 250.00 250.00 200.00 200.00

125

Details of Investments As at Other than trade-Unquoted (At Cost) 790000 Equity Shares (Previous years 20000 Equity share of Rs. 10/- each in Uttam Distilliaries Ltd. (Associate Company) - fully paid up Equity Shares of Shubham Sugar Ltd. (372300 Equity Shares Of 10/- each fully paid up) A wholly owned subsidiary company -(upto 15.09.2005) Total 31.03.2008 30.09.2007

Annexure - XI (Rs.in lacs) 30.09.2006 30.09.2005 30.09.2004 30.09.2003

79.00

79.00

2.00

2.00

2.00

-

-

-

-

-

37.23

-

79.00

79.00

2.00

2.00

39.23

-

126

Annexure - XII Details of Debtors As at (Unsecured considered good) Debts over six months Others Total

(Rs.in lacs) 31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003

118.98 255.93 374.91

123.36 290.00 413.36

15.09 75.85 90.94

5.30 337.69 342.99

5.82 116.22 122.04

2.54 464.15 466.69

127

Details of Loans and Advances As at Advance Recoverable in cash or in kind or for value to be received Share Application Money Balance with Excise Department Cenvat Receivable Security Deposits Interest Accrued thereon Prepaid Expenses Advance Income Tax (Net of Provision for Taxation) MAT Credit Entitlement Total

Annexure - XIII (Rs.in lacs) 31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003

800.67 4.20 1,833.05 72.60 108.12 6.72 92.58 60.15 92.07 3,070.16

314.06 4.20 1,824.43 25.06 81.51 5.46 90.83 58.13 92.07 2,495.75

1089.09 77.00 1,035.54 830.64 128.74 3.47 33.64 0.00 257.07 3,455.19

318.31 68.80 332.33 294.46 60.02 2.63 21.67 0.00 0.00 1,098.22

441.56 0.00 26.15 45.50 65.16 1.26 13.49 0.00 0.00 593.12

186.63 0.00 26.22 6.31 25.72 0.23 23.38 0.00 0.00 268.49

128

Details of Capital Advances due from Group Companies included under Capital work in progress As at Capital advances Total

Annexure - XIV (Rs.in lacs)

31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003 1,984.85 1,984.85 1,568.73 1,568.73 759.94 759.94 725.92 725.92 315.79 315.79 75.69 75.69

129

a)

Details of Contingent Liabilities As at Bank guarantee Letter of Credit Excise Duty, Income Tax and Sales Tax demands and Show cause notice Total

Annexure - XV (Rs.in lacs) 31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003 200.00 902.28 1,451.01 2,553.29 211.00 2,025.43 *836.87 3,073.30 71.00 500.63 571.63 5.98 144.36 150.34 9.84 9.84 2.84 2.84

* out of the above cases against which demand of Rs 341.20 Lacs was outstanding has been allowed / remanded back to the appropriate authority in subsequent period. b) Differential Cane price payable, if any, for the season 2006-2007 and 2007-2008, on the re-assessement and refixing of state Advisory Price (SAP) by the UP state government.-Amount not ascertainable

130

Details of Capital Commitments As at Estimated amount of contracts remaining to be executed on capital account and not provided for in the financial statement (Net of Advances) Total

Annexure - XVI (Rs.in lacs) 31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003 9,284.50 7,105.82 8,636.67 2,224.65 1,801.00 316.75

9,284.50

7,105.82

8,636.67

2,224.65

1,801.00

316.75

131

Annexure - XVII Details of Miscellaneous Income As at Interest Earned Miscellaneous Income -Liquidated Damages -Others Total

(Rs.in lacs)

31.03.2008 30.09.2007 30.09.2006 30.09.2005 30.09.2004 30.09.2003 Nature of income 4.24 14.84 19.08 24.67 93.74 19.03 137.44 19.52 183.38 0.24 203.14 2.25 1.11 3.36 0.88 1.65 2.53 0.97 0.04 1.01 Non- Recurring Non- Recurring Non- Recurring

132

Details of the List of Related Parties and Nature of Relationships Particulars Nature of Relationship Subsidiaries Company Associates Key Management Personnel (KMP) 31.03.2008 Name of the party 30.09.2007 Name of the party 30.09.2006 Name of the party Financial Year ended 30.09.2005 30.09.2004 Name of the party Name of the party Shubham Sugars Ltd. Shubham Sugars Ltd. (Upto 15.09.2005) Uttam Distilleries Ltd. Uttam Distilleries Ltd.

Annexure ­ XVIII

30.09.2003 Name of the party

Uttam Distilleries Ltd.

Uttam Distilleries Ltd.

Uttam Distilleries Ltd.

Shri Raj Kumar Adlakha Shri Raj Kumar Adlakha Shri Raj Kumar Adlakha (MD) (MD) (MD) Shri. U.R.K.Rao (WTD Shri. U.R.K.Rao (WTD) Up to 31.08.2007) Shri V.V.R.Murty (WTD up to 04.01.2006 )

Shri Raj Kumar Adlakha Shri Raj Kumar Adlakha Shri Raj Kumar Adlakha (MD) (MD) (MD) Shri. U.R.K.Rao (WTD) Shri. U.R.K.Rao (WTD) Shri. U.R.K.Rao (WTD) Shri V.V.R.Murty (WTD) Smt. Sunna Adlakha (Mother of MD) Sh. Ranjan Adlakha (Brother of MD) Smt. U.Subba Lakshmi (wife of WTD) Sh. Uttam Chand Adlakha (Father of MD) Smt. Amita Adhlakha (Wife of MD) Sh. Rajan Adlakha (Brother of MD) Smt. Sonia Adlakha (wife of brother of MD) Smt. Shomna Adlakha (wife of brother of MD) Master Balram Adlakha (son of MD) Smt. Sunna Adlakha (Mother of MD) Sh. Ranjan Adlakha (Brother of MD) Smt. U.Subba Lakshmi (wife of WTD) Sh. Uttam Chand Adlakha (Father of MD) Smt. Amita Adhlakha (Wife of MD) Sh. Rajan Adlakha (Brother of MD) Smt. Sonia Adlakha (wife of brother of MD) Smt. Shomna Adlakha (wife of brother of MD) Master Balram Adlakha (son of MD)

Relative of Key Sh. Uttam Chand Sh. Uttam Chand Sh. Uttam Chand Smt. Sunna Adlakha Management Personnel Adlakha (Father of MD) Adlakha (Father of MD) Adlakha (Father of MD) (Mother of MD) (RKMP) Sh. Ranjan Adlakha Smt. Sunna Adlakha Smt. Sunna Adlakha Sh. Ranjan Adlakha (Brother of MD) (Mother of MD) (Mother of MD) (Brother of MD) Sh. Rajan Adlakha Sh. Rajan Adlakha Smt. Ranjana Chopra Smt. U.Subba Lakshmi (Brother of MD) (Brother of MD) (Sister of MD) (wife of WTD) Smt. Amita Adhlakha Sh. Ranjan Adlakha Smt. Shomna Adlakha (Wife of MD) (Brother of MD) (wife of brother of MD) Smt. Rajni Babbar (Sister Smt. Amita Adhlakha Smt. Rajni Babbar (Sister of MD) (Wife of MD) of MD) Smt. Ranjana Chopra Smt. Rajni Babbar (Sister (Sister of MD) of MD) Smt. Ranjana Chopra (Sister of MD)

133

Particulars 31.03.2008 Nature of Relationship Name of the party Enterprises significantly Uttam Industrial Engg. influenced by KMP or Ltd. RKMP (With whom Lipi Boilers Ltd. transaction taken place) The Standard Type Foundry (P) Ltd. Uttam Sucrotech Ltd. Subham Sugars Ltd. Adharshila Capital Services Ltd. Pariksha Fin-Invest Lease Ltd. Others 30.09.2007 Name of the party Uttam Industrial Engg. Ltd. Lipi Boilers Ltd. The Standard Type Foundry (P) Ltd. Uttam Sucrotech Ltd. Subham Sugars Ltd.

Financial Year ended 30.09.2006 30.09.2005 Name of the party Name of the party Uttam Industrial Engg. Uttam Industrial Engg. Ltd. Ltd. Lipi Boilers Ltd. Lipi Boilers Ltd. The Standard Type The Standard Type Foundry (P) Ltd. Foundry (P) Ltd. Uttam Sucrotech Ltd. Uttam Sucrotech Ltd. Subham Sugars Subham Sugars Ltd.(w.e.f. 16.09.2005) Ltd.(w.e.f. 16.09.2005) New Castle Finance & New Castle Finance & Leasing (P) Ltd. Leasing (P) Ltd. G.M.Colonisers Pvt. Ltd. G.M.Colonisers Pvt. Ltd.

30.09.2004 Name of the party Uttam Industrial Engg. Ltd. Lipi Boilers Ltd. The Standard Type Foundry (P) Ltd. Uttam Sucrotech Ltd.

30.09.2003 Name of the party Uttam Industrial Engg. Ltd. Lipi Boilers Ltd. The Standard Type Foundry (P) Ltd. Uttam Sucrotech Ltd.

Mansingh Group Hotels Mansingh Group Hotels & Resorts Ltd. & Resorts Ltd.

134

Annexure - XVIII(a) Details of Transactions with Related Parties and Details of Outstanding Balances Particulars Nature of Relationship 31.03.2008 (6 Months) Purchases of Goods Purchases of Fixed assets Repair & Maintenance (Machinery & vehicles) Sale of Goods Purchase of Goods Finance Equity contribution recd. Enterprises significantly influenced by KMP or RKMP Enterprises significantly influenced by KMP or RKMP Enterprises significantly influenced by KMP or RKMP Enterprises significantly influenced by KMP or RKMP 658.65 118.51 2.24 3,971.00 1,559.50 1,068.27 1.80 30.09.2007 (12 Months) 3,377.21 140.27 0.06 1.74 77.00 20,997.00 4.20 200.00 1,279.66 93.75 3.60 (Rs. In lacs) Financial year ended 30.09.2006 30.09.2005 30.09.2004 30.09.2003 (12 Months) (12 Months) (12 Months) (12 Months) 6,751.19 26.79 0.12 137.63 177.45 101.88 181.73 8.20 150.00 183.38 3,415.34 12.25 0.33 533.05 24.75 10,870.00 533.05 109.88 400.01 (13.79) 20.20 779.16 37.22 35.58 1,092.46 29.10 0.06 188.96 37.23 2.00 2,475.00 400.00 25.00 18.03 48.60 17.60 305.52 14.51 0.09 450.00 189.00 20.57 5.25 4.20

Enterprises significantly influenced by KMP or RKMP KMP & Relatives Relative of KMP Equity contribution made Subsidiary Investment Associate Guarantee Recd. Enterprises significantly influenced by KMP or RKMP Share Application money Recd. Enterprises significantly influenced by KMP or RKMP KMP & Relatives Share Application money given Associate Share Application Money Refund Enterprises significantly influenced by KMP or RKMP Security Deposits Given /(Refund) Enterprises significantly influenced by KMP or RKMP Loan Received Enterprises significantly influenced by KMP or RKMP Advance Given Associate Enterprises significantly influenced by KMP or RKMP Investment Sale of investment KMP Income Miscellaneous Income Enterprises significantly influenced by KMP or RKMP Expenses Lease Rent of vehicles Enterprises significantly influenced by KMP or RKMP Office Rent Enterprises significantly influenced by KMP or RKMP 135

Particulars

Nature of Relationship 31.03.2008 (6 Months) 89.14 26.56 4.20 2,159.50 1,467.54 1.29 18.53 65,136.00 1,984.85 30.09.2007 (12 Months) 50.18 67.13 4.20 600.00 1,195.41 5.24 11.74 61,165.00 1,568.72

Interest Guarantee Commission Remuneration & Perquisites Outstanding Balances Share Application Money (Pending Allotment) Share Application Money Given (Pending Allotment) Receivables Unsecured Loan Received Payables Loans & Advances Guarantee Received Security Deposits Capital Advance

Enterprises significantly influenced by KMP or RKMP Enterprises significantly influenced by KMP or RKMP KMP & Relatives KMP & Relatives Enterprises significantly influenced by KMP or RKMP Associate Associate Enterprises significantly influenced by KMP or RKMP Enterprises significantly influenced by KMP or RKMP KMP & Relatives Enterprises significantly influenced by KMP or RKMP Enterprises significantly influenced by KMP or RKMP Enterprises significantly influenced by KMP or RKMP Enterprises significantly influenced by KMP or RKMP

Financial year ended 30.09.2006 30.09.2005 30.09.2004 30.09.2003 (12 Months) (12 Months) (12 Months) (12 Months) 42.82 33.16 24.00 24.00 19.50 176.98 201.14 37.57 29.09 77.00 400.00 729.15 127.74 371.90 401.68 537.67 109.88 68.80 250.00 86.46 21,995.00 19.81 779.16 25.00 400.00 48.60 18.28 1.01 11,125.00 33.60 315.71 189.00 407.37 22.84 8,600.00 20.57 75.69

136

Details of significant Transactions with Related Parties and Details of Outstanding Balances Particulars Name of the party 31.03.2008 (6 Months) Purchases of Goods Purchases of Fixed assets Uttam Industrial Engg. Ltd. Lipi Boilers Ltd. Uttam Sucrotech Ltd. The Standard Type of Foundry P. Ltd. Uttam Industrial Engg. Ltd. The Standard Type Foundry (P) Ltd. Uttam Sucrotech Ltd. Lipi Boilers Ltd. Uttam Industrial Engg. Ltd. Uttam Sucrotech Ltd. The Standard Type Foundry (P) Ltd. Lipi Boilers Ltd. Uttam Industrial Engg. Ltd. Uttam Sucrotech Ltd. Lipi Boilers Ltd. New Castle Finance & Leasing (P) Ltd. Shubham Sugars Ltd. Uttam Distelleries Ltd. Shri Raj Kumar Adlakha Smt. Rajni Babbar Smt. Sunna Adlakha Smt. Ranjana Chopra Shr Ranjan Adlakha Shri Uttam Chand Adlakha Uttam Industrial Engg. Ltd. Uttam Sucrotech Ltd. Lipi Boilers Ltd. 137 41.20 274.99 246.36 96.10 82.78 7.51 24.19 4.03 3,971.00 3,971.00 3,971.00

Annexure - XVIII(b) (Rs. In lacs) Financial year ended 30.09.2007 30.09.2006 30.09.2005 30.09.2004 (12 Months) (12 Months) (12 Months) (12 Months) 709.72 695.79 1,230.38 741.32 40.82 41.40 54.37 3.68 0.06 93.75 20,997.00 20,997.00 20,997.00 575.04 1,780.60 3,627.69 767.86 9.42 8.45 8.92 0.04 0.02 0.06 183.38 83.93 49.50 4.20 177.45 11.00 29.93 11.00 49.95 181.73 181.73 181.73 1,797.87 718.98 730.01 2.59 9.46 0.33 0.33 105.00 150.05 238.00 24.75 10,870.00 498.09 361.09 182.74 19.33 8.55 0.06 0.06 36.99 73.97 75.00 2,475.00 -

Repair & Maintenance (Machinery & vehicles)

Sale of Goods

Miscellaneous Income Finance Equity contribution recd.

Guarantee Recd.

Particulars

Name of the party 31.03.2008 (6 Months) 830.00 40.00 59.00 139.27 35.00 100.00 172.25 377.25 875.00 2.24 24.42 41.51 1.80 7.86 13.55 1.80 26.56 138

Share Application money Recd.

Share Application Money Refund Share Application Money Given Security Deposits Given /(Refund) Advance Given

Loan Received

Investment Made Sale of investment Expenses Lease Rent of vehicles Purchase of Sugar Cane Interest

Uttam Industrial Engg. Ltd. Lipi Boilers Ltd. New Castle Finance & Leasing (P) Ltd. Shri Raj Kumar Adlakha Smt. Sunna Adlakha Uttam Industrial Engg. Ltd. Uttam Distelleries Ltd. The Standard Type Foundry (P) Ltd. Uttam Industrial Engg. Ltd. Uttam Distilleris Ltd. Uttam Sucrotech Ltd. The Standard Type Foundry (P) Ltd. Lipi Boilers Ltd. Uttam Sucrotech Ltd. Uttam Industrial Engg. Ltd. Pariksha Fin Invest Ltd. Adharshila Capital Service Ltd. Lipi Boilers Ltd. Uttam Distelleries Ltd. Shubham Sugars Ltd. Shri Raj Kumar Adlakha Shr Ranjan Adlakha The Standard Type Foundry (P) Ltd. Shubham Sugars Ltd. Uttam Industrial Engg. Ltd. Lipi Boilers Ltd. Uttam Sucrotech Ltd. Pariksha Fin Invest Ltd. Adharshila Capital Service Ltd. Smt. Amita Adlakha Shri Raj Kumar Adlakha Shri. VVR Murty

Financial year ended 30.09.2007 30.09.2006 30.09.2005 30.09.2004 (12 Months) (12 Months) (12 Months) (12 Months) 105.00 400.00 150.05 238.00 79.95 25.00 29.93 400.00 4.20 8.20 (13.79) 18.03 20.20 48.60 86.66 80.37 1,193.00 645.55 150.00 200.00 77.00 2.00 37.23 18.63 18.60 1.74 46.50 3.68 3.60 47.95 42.82 156.85 2.25 35.58 30.00 187.17 17.60 24.00 25.18 -

Office Rent Remuneration & Perquisites

Particulars

Name of the party 31.03.2008 (6 Months) 4.20 568.56 324.48 397.00 8.62 30.05 1.29 500.00 1,075.00 35.00 172.25 377.25 0.04 1.77 16.72 1,055.85 40.00 59.00 830.00 87.93 34.95 1.39 6.08 8.48 65,136.00 139

Shri. U.R.K.Rao Outstanding Balances Share Application Money (Pending Allotment) Share Application Money Given (Pending Allotment) Receivables Payables Shri Raj Kumar Adlakha Smt. Sunna Adlakha Uttam Industrial Engg. Ltd. Uttam Distilleris Ltd. Uttam Distilleris Ltd. Uttam Industrial Engg. Ltd. The Standard Type Foundry (P) Ltd. Uttam Sucrotech Ltd. Shubham Sugars Ltd. Lipi Boilers Ltd. Shri. U.R.K.Rao Shri Raj Kumar Adlakha Uttam Industrial Engg. Ltd. Lipi Boilers Ltd. Uttam Sucrotech Ltd. Pariksha Fin Invest Ltd. Adharshila Capital Service Ltd. The Standard Type Foundry (P) Ltd. Uttam Industrial Engg. Ltd. Lipi Boilers Ltd. Lipi Boilers Ltd. Uttam Sucrotech Ltd. The Standard Type Foundry (P) Ltd. Uttam Industrial Engg. Ltd. Uttam Industrial Engg. Ltd. Lipi Boilers Ltd. Uttam Sucrotech Ltd. Pariksha Fin Invest Ltd. Adharshila Capital Service Ltd. Uttam Sucrotech Ltd.

Financial year ended 30.09.2007 30.09.2006 30.09.2005 30.09.2004 (12 Months) (12 Months) (12 Months) (12 Months) 19.18 17.88 9.72 10.29 4.20 584.67 275.26 238.58 1.74 22.44 5.24 400.00 200.00 2.50 9.24 1,185.56 86.66 296.50 69.04 3.68 61,165.00 77.00 250.27 287.78 146.44 1.00 126.74 400.00 21.80 350.10 537.67 44.66 401.68 79.95 29.93 68.80 31.39 41.94 250.00 645.55 80.37 25.00 400.00 48.60 0.76 155.34 95.34 65.11 -

Remuneration payable Unsecured Loan

Loans & Advances

Capital Advances

Interest Payable

Guarantee Received

Particulars

Name of the party 31.03.2008 (6 Months) 65,136.00 65,136.00 -

Security Deposits

Lipi Boilers Ltd. Uttam Industrial Engg. Ltd. The Standard Type Foundry (P) Ltd.

Financial year ended 30.09.2007 30.09.2006 30.09.2005 30.09.2004 (12 Months) (12 Months) (12 Months) (12 Months) 61,165.00 401.68 61,165.00 401.68 21,995.00 11,125.00 19.81 33.60

Note: The above disclosures are required to be made as per the Accounting Standard Interpretation (ASI) - 13 issued by the ICAI. Since ASI -13 was not effective upto the year ended 30.09.03, the audited financial statements do not contain these disclosures. Accordingly, the disclosure as prescribed by ASI - 13 have been made prospectively from the year ended 30.09.04.

140

Annexure - XIX Principle terms of secured loans and assets charged as securities Nature of loan Loan outstanding as on 31.03.08 (Rs. in lacs) Loan availed/ disbursed (Rs. in lacs) Rate Repayment Schedule of No. of Instal. Commencing Interest (%) from Security Offered

Secured Loans

A) Term Loans Industrial Development Bank Of India (IDBI)

Term Loan

9,265.90

860 2,400 4,830 2,520 10,610 150 1,300 787.5 1,000 32,37.5 300 300 1,800 4,000 2,759 9,159 890 600 1,000 1,600 1,700 1,700 2,973.28

9.50 9.00 9.91 11.75 11.75 11.75 11.75 11.75 13.00 13.00 10.75 10.75 12.00

20QI 24 EQI 24 EQI 20 EQI 24 EQI 24 EQI 20 EQI 24 EQI 24 EQI 24 EQI 24 EQI 24 EQI 24EMI

01.10.05 01.01.07 01.10.07 01.01.09 01.09.03 31.12.07 01.01.09 31.12.06

(Refer Note(1) & (4)below)

TOTAL Indian Overseas Bank

Term Loan

9,265.90 2,862.51

(Refer Note(1) & (4)below)

TOTAL Punjab National Bank

Term Loan

2,862.51 5,091.68

Term Loan For Cane Price Payment TOTAL State Bank of India Term Loan

2,729.00 7,820.68 7,823.44

Sep-02 Sep-03 (Refer Note(1) & (4)below) 31.12.06 31.12.07 after the moratorium period of 2 (Refer Note (2) years from the date of disbursment below) ie jan 08 30.10.05 1.10.04 05.10.04 01.01.07 31.12.07 30.06.06 31.12.08

Corporate loan

14.25 13.50 11.50 11.00 11.25 11.00 11.00

20 EQI 20 EQI 14 QI 24 EQI 24 EQI 16 EQI 20 EQI

(Refer Note(1) & (4)below)

141

Secured Loans

Nature of loan Term Loan For Cane Price Payment

Loan outstanding as on 31.03.08 (Rs. in lacs) 606.00

Loan availed/ disbursed (Rs. in lacs) 606

Rate Repayment Schedule Security of No. of Instal. Commencing Offered Interest (%) from 12.00 24EMI after the moratorium period of 2 (Refer Note (2) years from the date of disbursment below ie jan 08 11.25 11.50 24 EQI 20 EQI 31.12.06 01.01.09 (Refer Note(1) & (4)below)

TOTAL Oriental Bank Of Commerce TOTAL Govt. of India, Sugar Development Fund (SDF)

Term Loan

8,429.44 2,435.35 2,435.35

11,069.28 1,200 1,485.35 2,685.35 1,664.56

Term Loan

1,664.56

4.00

5 Annual instalments

After expiry of one year of repayment of IDBI loan and interest thereon or on the expiry of a period of 8 years from the date of disbursement of fund loan to IDBI whichever is earlier.

(Refer Note (5)below)

Interest Accrued and Due on above Total A B) Vehicle loans ICICI Bank Ltd. Kotak Mahindra Premius Ltd. Total B C) Working Capital Facilities: Industrial Development Bank Of India (IDBI ) Oriental Bank Of Commerce Punjab National Bank Indian Overseas Bank State Bank of India Total C Total A + B+C

251.20 32,729.64

38,425.69

Car laon Car laon

19.99 19.99

(Refer Note (6) below)

Working Cap. Working Cap. Working Cap. Working Cap. Working Cap.

406.39 213.12 11,127.63 1,710.30 2,490.09 15,947.52 48,697.15

2,000 1,000 11,245 2,360 3,645 20,250.00 58,675.69

11.50 11.50 10.75 11.75 10.25 (Refer Note (3) below)

142

Security offered Notes: 1. Term Loans from Banks are secured/to be secured on first pari passu charge by way of joint equitable mortgage on Company's immovable properties and third charge by way of hypothecation of movable assets on pari passu basis and subject to prior charge created/to be created on the current assets in favour of Banks to secure the working capital requirements. 2. Term Loans from Banks - Cane Price Payment- being loan for payment of cane dues for the season 2006-2007 & 2007-2008 as per the scheme for extending financial assistance to sugar undertaking 2007 issued by Government of India is secured / to be secured by way of residual charge on Fixed Assets of the company and personal guarantee of Promotor directors. 3. Cash Credit from Banks are secured / to be secured by first pari passu charges by hypothecation / pledge of stocks of raw materials, sugar, molasses, chemicals, stores, spares and other movable assets and third pari passu charge on immovable assets of the Company. 4. Term Loans from Banks and cash credit are guaranted by Managing Director and two other promoter Directors of the Company and corporate guarantees of three Promoter Companies. 5. Term Loan from Govt. of India, Sugar Development Fund through Industrial Finanace Corporation of India Ltd. is secured / to be secured by an exclusive second charge on movable assets (except book debts) and second charge on the company's immovable properties. 6. Car loans from banks and others are secured by way of hypothecation of specific vehicle. Principle terms of Unsecured laons Nature of loan Loan outstanding Repayment Schedule as on 31.03.08 No. of Instal. Commencing from (Rs. in lacs)

Unsecured Loans

From Body Corporate (promoter group companies) Uttam Industrial Engg. Limited Lipi Boilers Limited Uttam Industrial Engg. Limited Uttam Sucrotech Limited Adharshila Capital Services Ltd. Pariksha Fin-Invest Lease Ltd. Soft Loan from Uttaranchal State Government Total

ICD Unsecured Loan Unsecured Loan Unsecured Loan ICD ICD Soft Loan

250 1075 250 35 377.25 172.25 656.68 2,816.18 3 EAI

After repayment of Term Loan of FI 's /Bank Repayable on Demand after Two Years Repayable on Demand after Two Years Repayable on Demand after Two Years Repayable on Demand after Two Years Repayable on Demand after Two Years 3 years after 3.1.05

143

FINANCIAL INDEBTNESS Set forth below is a brief summary of our significant outstanding secured / unsecured borrowings as of June 30, 2008. Principle terms of secured loans and assets charged as securities Loan outstanding as on 30.06.08 (Rs. in lacs) 8,912.01

Secured Loans A) Term Loans Industrial Development Bank Of India (IDBI ) TOTAL Indian Overseas Bank

Nature of loan

Loan availed/ disbursed (Rs. in lacs) 860 2,400 4,830 2,520 10,610 150 1,300 787.5 1,000 3,237.5 300 300 1,800 4,000 1,200 2,759 10,359 890 600 1,000 1,600 1,700 1,700

Rate Repayment Schedule of No. of Instal. Commencing Interest (%) from 9.50 9.00 9.91 10.75 11.75 11.75 11.75 11.75 13.00 13.00 10.75 10.75 13.00 12.00 14.25 13.50 11.50 11.00 11.25 11.00 144 20QI 24 EQI 24 EQI 20 EQI 24 EQI 24 EQI 20 EQI 24 EQI 24 EQI 24 EQI 24 EQI 24 EQI 3 EQI 24EMI 20 EQI 20 EQI 14 QI 24 EQI 24 EQI 16 EQI 01.10.05 01.01.07 01.10.07 01.01.09 01.09.03 31.12.07 01.01.09 31.12.06 Sep-02 Sep-03 31.12.06 31.12.07 31.01.09

Security Offered

Term Loan

(Refer Note (1) & (4) below)

Term Loan

8,912.01 2,760.43

(Refer Note(1) & (4)below)

TOTAL Punjab National Bank

Term Loan

2,760.43 5,995.00

(Refer Note(1) & (4)below)

Term Loan For Cane Price Payment TOTAL State Bank of India Term Loan

2,759.00 8,754.00 7,442.62

after the moratorium period of 2 years (Refer Note (2) from the date of disbursment ie jan 08 below) 30.10.05 1.10.04 05.10.04 01.01.07 31.12.07 30.06.06

(Refer Note(1) & (4)below)

Corporate loan

Secured Loans

Nature of loan

Loan outstanding as on 30.06.08 (Rs. in lacs)

Loan availed/ Rate Repayment Schedule disbursed of No. of Instal. Commencing (Rs. in lacs) Interest (%) from 2,973.28 11.00 20 EQI 31.12.08 606 11,069.28 1,200 1,485.35 2,685.35 12.00 11.25 11.50 24EMI 24 EQI 20 EQI

Security Offered

Term Loan For Cane Price Payment TOTAL Oriental Bank Of Commerce TOTAL Term Loan

606.00 8,048.62 2,385.35 2,385.35

after the moratorium period of 2 years (Refer Note (2) from the date of disbursment ie jan 08 below 31.12.06 01.01.09 (Refer Note(1) & (4)below) (Refer Note (5)below)

Govt. of India, Sugar Development Fund (SDF) Interest Accrued and Due on above Total A B) Vehicle loans ICICI Bank Ltd. Kotak Mahindra Premius Ltd. Total B C) Working Capital Facilities: Industrial Development Bank Of India (IDBI) Oriental Bank Of Commerce Punjab National Bank Indian Overseas Bank State Bank of India Total C Total A + B+C

Term Loan

1,664.56 224.86 32,749.83

1,664.56 39,625.69

After expiry of one year of repayment of IDBI loan and interest thereon or on the expiry of a period of 8 years from 5 Annual the date of disbursement of fund loan to 4.00 installments IDBI whichever is earlier.

Car laon Car laon

16.54 16.54

(Refer Note (6) below)

Working Cap. Working Cap. Working Cap. Working Cap. Working Cap.

611.96 996.22 9,422.98 2,361.35 3,678.39 17,070.90 49,837.27

2,000 1,000 11,245 2,360 3,645 20,250.00 59,875.69

11.50 11.50 11.25 11.75 11.50

(Refer Note (3) below)

145

Security Offered Notes: 1. Term Loans from Banks are secured/to be secured on first pari passu charge by way of joint equitable mortgage on Company's immovable properties and third charge by way of hypothecation of movable assets on pari passu basis and subject to prior charge 2. Term Loans from Banks - Cane Price Payment- being loan for payment of cane dues for the season 2006-2007 & 2007-2008 as per the scheme for extending financial assistance to sugar undertaking 2007 issued by Government of India is secured/to be secure 3. Cash Credit from Banks are secured/to be secured by first pari passu charges by hypothecation/pledge of stocks of raw materials, sugar, molasses, chemicals, stores, spares and other movable assets and third pari passu charge on immovable assets 4. Term Loans from Banks and cash credit are guaranted by Managing Director and two other promoter Directors of the Company and corporate guarantees of three Promoter Companies. 5. Term Loan from Govt. of India,Sugar Development Fund through Industrial Finanace Corporation of India Ltd. is secured / to be secured by an exclusive second charge on movable assets (except book debts) and second charge on the company's immovable prop 6. Car loans from banks and others are secured by way of hypothecation of specific vehicle. Principle terms of Unsecured laons Nature of loan Loan outstanding as on 30.06.08 (Rs. in lacs) Rate of Interest

Unsecured Loans From Body Corporate (promoter group companies) Uttam Industrial Engg. Limited Uttam Industrial Engg. Limited Lipi Boilers Limited Lipi Boilers Limited Uttam Industrial Engg. Limited Uttam Industrial Engg. Limited Uttam Sucrotech Limited Adharshila Capital Services Ltd. Adharshila Capital Services Ltd. Pariksha Fin-Invest Lease Ltd. Soft Loan from Uttaranchal State Government Total

Repayment terms

ICD Unsecured Loan Unsecured Loan Unsecured Loan Unsecured Loan Unsecured Loan Unsecured Loan ICD ICD ICD Soft Loan

250.00 150.00 875.00 200.00 380.00 100.00 35.00 200.00 177.25 172.25 656.68 3,196.18 11% 11% 11% 11% 11% 11% 11.50% 11.50% 11.50%

After repayment of Term Loan of FI 's /Bank Repayable on Demand after Two Years from 15/01/2008 Repayable on Demand after Two Years from 31/01/2008 Repayable on Demand after Two Years from 01/08/2007 Repayable on Demand after Two Years from 20/06/2008 Repayable on Demand after Two Years from 20/02/2008 Repayable on Demand after Two Years from 10/10/2007 Repayable on Demand after Two Years from 05/01/2008 Repayable on Demand after Two Years from 07/11/2007 Repayable on Demand after Two Years from 07/11/2007 In 3 equated annual installments 3 years after 03/01/2005

146

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS You should read the following discussion of our financial condition and results of operations together with our audited restated financial statements under Indian GAAP including the schedules, annexure and notes thereto and the reports thereon, which appear in this Draft Letter of Offer beginning on page [*]. You are also advised to read the Section titled "Risk Factors" beginning on page [*] of this Draft Letter of Offer, which discusses a number of factors and contingencies that could impact our financial condition, results of operations and cash flows. Unless otherwise stated, the financial information used in this Section is derived from our audited restated financial statements under Indian GAAP, as restated. Our financial year ends on September 30 of each year, so all references to a particular financial year are to the 12-month period ended September 30 of that year. Overview We are in the business of manufacturing sugar with a total installed crushing capacity of 22,750 TCD. We started operations in January, 2001 by setting up a 2500 TCD sugar plant in Village Libberheri, Tehsil Roorkee, Haridwar, Uttarakhand. The capacity of the plant has since been increased to 6250 TCD in 2004. We installed and commissioned our second unit for manufacturing of sugar in 2005 with a capacity of 3500 TCD (expanded now to 7000 TCD) at Barkatpur, district Bijnaur, Uttar Pradesh. We have also commissioned two units at Khaikheri in January 2007 & Shermau in April 2007 in Uttar Pradesh with crushing capacity of 4500 TCD & 5000 TCD respectively. Along with the sugar manufacturing unit we also have Co-generation capacity of at all our four sugar units with a total capacity of 81 MW. Our businesses can be categorised into two broad areas, namely Sugar Production & Power Co-generation. However the power co-generation is used for captive consumption. Further we have also decided to venture into production of ethanol from Mollasses to improve the financial viability of our sugar mills. Given below is a detail of our facilities including proposed expansion: Name of Unit / Location Cane crushing capacity per day (TCD) Existing: Libberheri 6,250 Barkatpur 7,000 Khaikheri 4,500 Shermau 5,000 Total 22,750 Proposed (additional capacities): Barkatpur Khaikheri Shermau 2,500 Total 2,500 Co-generation capacity (MW) 16 20 15 30 81 30 10 15 55 Ethanol capacity (KLPD) 75 75

During the Financial year 2006-07 we crushed 216.72 Lac Quintals of Cane and manufactured 21.35 Lac Quintals of sugar at a recovery rate of 9.86% in the crushing season as compared to 112.39 Lac Quintals of cane crushed and 11.12 Lac Quintals of Sugar manufactured for financial year 2005-06. Our sale from sugar increased to Rs. 26,111.81 Lakhs in the financial year 2006-07 from Rs. 19,943.61 Lakhs in the financial year 2005-06. The income from sale of molasses in 2006-07 increased to Rs. 2899.40 Lakhs from 1716.40 Lakhs in 2005-06. In view of downtrend in sugar industry we incurred a net loss of Rs. 4,976.60 lakhs on net sales of Rs. 27,886.55 lakhs in the financial year 2006-07 as against net profit Rs. 2,274.57 lakhs on net sales of Rs. 21,454.90 lakhs in the financial year 2005-06. During the 6 months period ended March 31, 2008 we have incurred a net loss of Rs. 293.04 lakhs on net sales of Rs. 14,310.85 lakhs as per the restated financial statements. Factors affecting our Business Revenues Our revenue arises primarily feom the sales of sugar and the sale of by-products. 147

Sugar Income from sales of sugar including excise duty accounted for 88.09%, 90.39% and 91.43% of the total sales in fiscal 2007, 2006 and 2005 respectively. We sell the `free sale sugar' produced by us to a number of wholesalers and end users. We take the assistance of agents to identify these wholesalers and end users. The agents also assist in getting better realisation prices and collection of our sale proceeds. We appoint these agents based on their track record and history of association with us. These agents have links with wholesalers and end users located in various parts of the country. The agents issue a delivery order to us based on which we deliver the sugar to a representative of the wholesaler. The transportation costs of sugar from our factory are borne by the wholesaler. We raise invoices to the wholesaler and the payment is required to be made as per the sale advise given to the Agents, which normally is one day after dispatch. In the event the payment is not received from the customer within the stipulated period from the date of presentation of the invoice, then the agent who provided the concerned delivery order is required to make payments to us with a penalty as per the sale advise, which normally is Re. 1/- per quintal per day. We do not have any formal agreements with the agents in this regard. However, this arrangement is customary in the sugar industry. Pricing of sugar Sugar has been classified as an essential commodity under Essential Commodities Act, 1955. The pricing of a certain percentage of sugar is fixed by the Ministry of Food and Civil Supplies, Government of India for different levy price zones. This is called the `levy price' and the sugar which is classified to be sold under the levy price is termed `levy sugar'. The sugar which is not classified as levy sugar is termed `free sale sugar'. The current ratio of free sale sugar to levy sugar is 90:10 i.e. 10% of sugar produced is to be sold at prices fixed by Government for different levy price zones in the country. But in our case, for the Libberheri Unit, there is an exemption up to 4.40 lakh quintals of production and only 10% of production over and above 4.40 lakh quintals is required to be supplied under "Levy". The price of free sale sugar is determined by market forces. The country is facing a glut in the sugar production from 2006-07 as a result of which prices of sugar has come down substantially. The whole sale sugar prices which were prevailing Rs 1900 - 2000 per quintal during Oct-Nov. 2006 has come down drastically and touched a low of Rs. 1250 - 1300 per quintal in March - April 2007. The whole sale sugar prices in May 2008 were hovering around Rs. 1450 1500 per quintal. Molasses Sales of molasses, a by product accounted for 9.78%, 7.78% and 8.29% of the revenue including excise duty generated in fiscal 2007, 2006 and 2005 respectively. We sell molasses to chemical companies and distilleries. The respective State Governments have mandated that all sugar mills are required to sell a certain percentage of their total molasses production for production of country liquor. This is termed as `reserve molasses' and the remaining molasses are termed as `free molasses'. Pricing of Molasses The average prices of molasses sold by us were Rs. 316.58 per quintal, Rs. 326.45 per quintal and Rs. 434.45 per quintal in fiscal 2007, 2006 and 2005 respectively. Expenditure Sugarcane The cost of sugarcane constitutes approximately 77% of the total cost of our production (including financing charges). The availability of sugarcane and its price is critical for our financial condition. In the states of Uttaranchal and Uttar Pradesh,sugarcane is procured through cooperative societies formed by sugarcane growers of a particular area falling in our reserved or assigned zone as fixed by the Cane Commissioners of respective State Government. The cooperative societies, based on their estimates of sugarcane production by their members supply us the identified quantities of sugarcane at a price determined in accordance with applicable laws. This enables us to get an estimate of the sugarcane available for crushing and plan our operations accordingly.

148

Sugarcane Pricing Sugarcane price is governed by notifications of the Government of India and the respective State Government. The Government of India determines the minimum price payable to farmers, known as the Statutory Minimum Price ("SMP"). The base SMP is fixed corresponding to a recovery rate of 9% and an additional rate per quintal is fixed in case the average recovery achieved in the previous season is more than the base recovery of 9%. The SMP payable by each factory is computed based on the aforesaid parameters. The SMP for the crushing season 2006-2007 and 2007-08 was Rs. 80.25 and Rs. 81.18 per quintal. In addition, however, several States advice a higher cane price called the State Advised Price ("SAP") to be paid by the sugar mills. The SAP in Uttar Pradesh for crushing seasons 2007-08, 2006-2007, 2005-2006 were Rs. 125 per quintal, Rs. 125 per quintal and Rs. 115 per quintal respectively for the sugarcane supplied at our factory gate. Interest on working capital finance Our operations are working capital intensive. The entire sugar production takes place in the crushing season which has duration of around 160 to 170 days and the sales take place throughout the year. Sale of sugar is controlled by the Directorate of Sugar, Ministry of Consumer Affairs, Food & Public Distribution Department of Government of India. Further, we are required to pay sugarcane price within the statutory time limits. Hence, considerable working capital finance is required to fund the inventories and the interest component of the working capital finance is dependent on the average period of inventory holding. If there are surplus stocks in the country, the liquidation of inventory takes longer and average holding of inventory increases and thus, the interest on working capital finance is high. Seasonality Sugar is a seasonal industry. The crushing season generally starts in October/November and lasts till April/May. The sugar produced during the fiscal and held as inventories at the end of the year, are valued at the cost of production or market value, whichever is lower. The profit or loss on such inventories is realized in the fiscal in which these inventories are liquidated. Thus, the effect of increase in costs in any fiscal to the extent attributable to such inventories, will impact the profitability in the subsequent fiscal in which such inventories are liquidated. Power-generation The electricity produced by the co-generation power plant at our units, less the consumption for sugar manufacturing is provided to our furnace facility. We have entered in to 3 power purchase agreements with UP Power Corporation Limited for sale of surplus electricity produced at our co-generation facilities at Barkatpur, Shermau and Khaiheri. Other Factors Affecting Results of our Operations Salaries, Wages and Benefits These include salaries and wages, bonuses, allowances, benefits, welfare expenses, contribution to Provident Funds and others. The terms of employment and the remuneration payable to most of our employees are decided by the management.Where as, the remuneration of Managing Director and Executive Directors are decided by our Remuneration Committee. Our expenses towards Salaries, Wages and Benefits were approximately 4.89% of our total expenditures in fiscal 2007. Administration Expenses Administration Expenses consists primarily of repair and maintenance of buildings, rents, security, insurance, fees, and expenses for travel and communication and commission on sales. These were approximately 2.03% of our total expenditure in fiscal 2007. Taxes and Duties Our Libberheri unit being in Uttaranchal and having expanded substantially, is exempt from Excise Duty for 10 years and we also have 100% rebate for five years and 30% rebate for the next five years in Income Tax from the date of start of production, however we have to pay Minimum Alternative Tax (MAT).. We are also liable to pay the cess / admin charges on sugar /molasses and entry tax for our both units, which we pass on to the customers. We bear the tax on purchase of sugarcane. Other Factors The other factors which may affect our results in future are as following: 149

Changes in general economic conditions in India and International markets Any delay or cost overrun or time overrun or our inability to successfully implement the proposed projects Any change in our ability to continuously operate and maintain our optimal facilities Any change in our ability to continue obtaining of sugarcane at competitive rates for required quantity Any changes in Interest Rates Any change in government policies, which affect our business adversly Disussion on Results of Operations Financial Year ended Period Income Sales Of Products Manufactured by the Company Less : Excise Duty Net Sales Other Income Increase/(Decrease) in inventories Total Income (A) Expenditure Raw material consumed Other Manufacturing Expenses Salaries, Wages and Benefits Administration and other Expenses Expenditure Earnings Before Depreciation Interest&Tax Depreciation Interest & Financial Charges Total Expenditure (B) 31.03.2008 30.09.2007 As % of 30.09.2006 As % of 30.09.2005 As % of total (12 Months) total (12 Months) total (6 Months) (12 Months) income income income

15227.47 916.62 14310.85 19.08 16,335.05 30,664.98

29640.57 1754.02 27886.55 137.44 4,956.93 32,980.92

89.87% 22064.24 96.35% 19056.15 115.16% 5.32% 609.34 2.66% 262.61 1.59% 84.55% 21454.9 93.69% 18793.54 113.57% 0.42% 203.14 0.89% 3.36 0.02% 15.03% 1,240.87 5.42% (2,249.29) -13.59% 100.00% 22,898.91 100.00% 16,547.61 100.00%

24,165.95 1,879.75 1,126.95 395.05 27567.71

24,969.70 3,334.31 1,665.74 692.76 30662.51

75.71% 10.11% 5.05% 2.10% 92.97%

14,701.94 1,202.03 781.71 458.95 17144.63

64.20% 5.25% 3.41% 2.00% 74.87%

9,664.07 632.71 525.11 371.47 11193.36

58.40% 3.82% 3.17% 2.24% 67.64%

3097.27 1,162.73 1,766.21 30496.65

2318.41 1,888.83 3,436.50 35987.84

7.03% 5.73% 10.42% 109.12%

5754.28 983.10 1,630.51 19758.24

25.13% 4.29% 7.12% 86.28%

5354.25 532.91 1,196.37 12922.64

32.36% 3.22% 7.23% 78.09%

Net (Loss)/Profit before exceptional items & tax (A-B) 168.33 Exceptional Items 2,556.51 Net (Loss)/Profit before Tax and Extraordinary Items Taxation Current Tax Minimum alternative Tax (MAT) Credit Entitlement Deferred Tax Fringe Benefit Tax Net (Loss)/Profit before Extraordinary Items Income Tax for Earlier Years Net (Loss)/ Profit before adjustments Adjustments as per SEBI Guidelines Net Profit as per SEBI Guidelines

(3,006.92)

-9.12%

3,140.67

13.72%

3,624.97

21.91%

(2,388.18) 159.59 12.68 (2,560.45) (2,560.45) 2,267.41 (293.04)

(3,006.92) 0 0 (330.48) 30.77 (2,707.21) 0 (2,707.21) (2,269.39) (4,976.60) 150

-9.12% 0.00% 0.00% -1.00% 0.09% -8.21% 0.00% -8.21% -6.88% -15.09%

3,140.67 287.03 (257.07) 815.58 19.79 2,275.34 0 2,275.34 -0.77 2274.57

13.72% 1.25% -1.12% 3.56% 0.09% -14.82% 0.00% 9.94% 0.00% 9.93%

3,624.97 245.50 0 702.93 5.45 2,671.09 29.76 2,641.33 31.92 2673.25

21.91% 1.48% 0.00% 4.25% 0.03% 16.14% 0.18% 15.96% 0.19% 16.15%

Financial Overview of the half yearly results for the period ended March 31, 2008 The total income from sale of sugar and by product during the 6 months period ended March 31, 2008 net of excise duty is Rs. 14,310.85 Lakhs. During this period the inventory increased by Rs. 16335.05 Lakhs as the period comprises of the sugar crushing season in which sugar mills operate. Sugar produced in this season will be sold durig the entire year. The total income for the period is Rs. 30664.98 Lakhs. The raw material consumed and other manufacturing costs were 78.81% and 6.13% of the total income. The personnel cost remained at 3.68% of the total income. The profit before exceptional items was Rs. 168.33 lakhs. An exceptional item for Rs. 2556.51 was charged to Profit and Loss account towards the price differential for cane procured in financial year 2007. The net loss after tax as per restated financial statements was Rs. 293.04 lakhs. Comparison of the financial year 2006-07 with financial year 2005-06 Revenues During FY 2007, the total sales net of excise duty has kept pace with the past trends and showed an increase of about 34% from the previous financial year. In absolute terms we achieved total net sales of Rs.27886 Lakh for the FY 2007 as compared to Rs.21454 Lakh for the FY 2006. Our total sales increased due to an increase in the sales of sugar from Rs.19943.61 Lakhs in FY 2006 to Rs. 26111.81 Lakhs in FY 2007, which was an increase of 31% and an increase of 69% in sales of Molasses from Rs. 1716.40 Lakhs in FY 2006 to Rs.2899.40 Lakhs in Fy 2007. The increase in sales of sugar was due to increase in quantity of sugar sold by us from 10.39 Lac Quintals in FY 2006 to 17.97 Lac in Quintals FY 2007 an increase of 73%. The average realization price of sugar though decreased from Rs. 1918.96 per quintal in FY 2006 to Rs. 1452.31 per quintal in FY 2007 which was a decrease of 24 %. Expenditure Our total expenditure before the costs of financiang and depreciation, in FY 2007 was Rs.30662.51 Lakhs as compared to Rs. 17144.63 in FY 2006, which is an increase of 79%. Our total expenditure before the cost of financing and depreciation, as a percentage of total income were 93% in FY 2007 and 75% in FY 2006. Material The total expenditure on raw materials in FY 2007 was Rs, 24969.70 Lakhs as compared to Rs. 14701.94 Lakhs in FY 2006. This was an increase of 70%. The increase is on account of higher crushing of 216 Lac quintals in FY2007 at our fully operational four units as compared to 112 Lac quintals in FY2006 crushed at two units, an increase of 93%. The average cost of cane for us was Rs. 121.60 per quintal in FY 2007 as against Rs.133.13 per quintal in FY 2006. Manufacturing and operating Costs Manufacturing costs include cost of consumables, packing material and cost of machine repairs and maintainance. Our expenditure on account of manufacturing and operating cost has increased from Rs. 1202.03 Lakhs in FY 2006 to Rs.3334.31 Lakhs in FY 2007, an increase of 177%. This increase is attributable to start of our two new green field sugar units at Shermau and Khaikheri in FY 2007 leading to increase in total production and thus an increase in manufacturing and operating expenses. Personnel Costs Our cost of personnel has increased from Rs. 781.71 Lakhs in FY2006 to Rs.1665.74 Lakhs in FY 2007, an increase of 90%. This is attributable to the increase in cost of personnel due to start of new units at Shermau & Khaikheri, increament in salaries, dearness allowance and other allowances.to employees and the Directors remuneration. Administration Our cost of administration has increased from Rs. 458.95 Lakhs in FY 2006 to Rs. 692.76 Lakhs in FY 2007, an increase of 51%. This is primarily due to increased business activities in FY 2007 and selling commission to agents. Change in inventory of finished goods and work in progress The change in the inventory of finished goods is a function of production, sales, closing stock and valuation rate. Our inventories have increased by Rs. 4956.93 Lakhs in FY 2007 as compared to Rs. 1240.87 Lakhs. This is primarily due

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to a substantial increase in our sugar production with start of operations of our units at Shermau and Khaikheri in the FY 2007. Earning Before Interest, Tax, Depreciation and Amortization (EBITDA) Our EBITDA in FY 2007 was Rs. 2318.41 Lakhs as compared to Rs. 5754.28 Lakhs in FY 2006. This is a decrease of 60%. This is mainly attributable to decrease in realization price of sugar in FY 2007 as compared to FY 2006. Financing Costs Our financing cost has increased from Rs. 1630.51 in Lakhs in FY 2006 to Rs.3436.50 Lakhs in FY 2007. This is an increase of 111 %. This is attributable to increase in Term loans and working capital facilities for our capacity expansion, raw material procurement and increased inventory. Depreciation Depreciation on assets was higher at Rs. 1888.83 Lakhs in FY 2007 as compared to Rs. 983.10 Lakhs in FY 2006, an increase of 92% due to addition of plant and machinary for our expansion of capacity in FY 2007. Net profit/loss before tax and exceptional item Our net profit before tax and exceptional item declined from Rs. 3140.67 Lakhs in FY 2006 to a loss of Rs. 3006.92 Lakhs a decline of 195%. The decrease is primarily due to substantial decline in the net realizable value on sale of sugar which declined from Rs. 1918 per quintal in FY 2006 to Rs. 1452 per quintal in FY 2007. At the same time our manufacturing expenses and financial cost increased with the commencement of field sugar plants at Shermau and Khaikheri. Current Tax Our Current Tax liability decreased from Rs. 287.03 Lakhs in FY 2006 to Nil in FY 2007 as we incurred losses of Rs. 3006.92 Lakhs in FY 2007. Deferred Tax Our Deferred tax provisions has decreased from Rs. 815.58 Lakhs in FY 2006 to Rs. (330.48) Lakhs in FY 2007 on account of losses incurred during the year which are carried forward as unabsorbed business losses. Net profit/Loss after Tax We incurred a net loss ofRs. 2707.21 Lakhs in FY 2007 as compared to a net profit of Rs. 2275.34 Lakhs in FY 2006. This is primarily due to decrease in realization value on sale of sugar declined from Rs. 1918 per quintal in FY 2006 to Rs. 1452 per quintal in FY 2007. At the same time our manufacturing expenses and financial cost increased with our two new green field sugar plants at Shermau and Khaikheri becoming operational. However out net loss after tax increased to Rs. 4976.60 lakhs for the financial year 2007 on account of adjustment towards the provision of price differential for cane procured during this year and paid in financial year 2008. Comparison of the financial year 2005-06 with financial year 2004-05 Revenues During FY 2006, the total sales net of excise duty has showed an increase of about 14% from the previous financial year. In absolute terms we achieved total net sales of Rs.214.54 Lakh for the FY 2006 as compared to Rs.187.93 Lakh for the FY 2005. Our total sales increased due to an increase in the sales of sugar from Rs.17423.78 Lakhs in FY 2005 to Rs. 19943.61 Lakhs in FY 2006 which was an increase of 14% and an increase of 8.7% in sales of Molasses from Rs. 1578.97 Lakhs in FY 2005 to Rs.171640 Lakhs in FY 2006. The increase in sales of sugar was due to increase in quantity of sugar sold by us from 9.8 Lac Quintals in FY 2005 to 10.39 Lac in Quintals FY 2006 an increase of 6%. The average realization price of sugar increased from Rs. 1760.20 per quintal in FY 2005 to Rs. 1918.96 per quintal in FY 2006, which was an increase of 9 %. Expenditure Our total expenditure before the costs of financiang and depreciation, in FY 2006 was Rs. 17144.63 Lakhs as compared to Rs. 11193.36 in FY 2005, which is an increase of 53%. Our total expenditure before the cost of financing and depreciation, as a percentage of total income were 75% in FY 2007 and 68% in FY 2006. 152

Material The total expenditure on raw materials in FY 2006 was Rs. 14701.94 Lakhs as compared to Rs. 9664.07 Lakhs in FY 2005. This was an increase of 52%. The increase is on account of higher crushing of 112 Lac quintals in FY 2006 as compared to 75 Lac quintals in FY2006, an increase of 50%. The average cost of cane for us was Rs. 133.13 per quintal in FY 2006 as against Rs.128.27 per quintal in FY 2005. Manufacturing and operating Costs Manufacturing costs include cost of consumables, packing material and cost of machine repairs and maintainance. Our expenditure on account of manufacturing and operating cost has increased from Rs. 632.71 Lakhs in FY 2005 to Rs.1202.03 Lakhs in FY 2006, an increase of 90%. This increase is attributable to start of our green field sugar units at Barkatpur in FY 2006 leading to increase in total production and thus an increase in manufacturing and operating expenses. Personnel Costs Our cost of personnel has increased from Rs. 525.11 Lakhs in FY 2005 to Rs.781.71 Lakhs in FY 2006, an increase of 49%. This is attributable to the increase in cost of personnel due to start of new unit at Barkatpur, increament in salaries, dearness allowance and other allowances. Administration Our cost of administration has increased from Rs. 371.47 Lakhs in FY 2005 to Rs. 458.95 Lakhs in FY 2006, an increase of 23%. This is primarily due to increased business activities in FY 2006 and increase in business promotion activities. Change in inventory of finished goods and work in progress The change in the inventory of finished goods is a function of production, sales, closing stock and valuation rate. Our inventories have increased by Rs. 1240.87 Lakhs in FY 2006 as compared to a decrease in inventory by Rs. 2249.29 Lakhs in FY 2005. This is primarily due to a substantial increase in our sugar production with start of operations of our unit at Barkatpur in the FY 2006. Earning Before Interest, Tax, Depreciation and Amortization (EBITDA) Our EBITDA in FY 2006 was Rs. 5754.28 Lakhs as compared to Rs. 5354.25 Lakhs in FY 2005. This is an increase of 7%. This is mainly attributable to increase in realization price and total production of sugar in FY 2006 as compared to FY 2005. Financing Costs Our financing cost has increased from Rs. 1196.37 in Lakhs in FY 2005 to Rs.1630.51 Lakhs in FY 2006. This is an increase of 36 %. This is attributable to increase in Term loans and working capital loans for our capacity expansion and raw material procurement. Depreciation Depreciation on assets was higher at Rs. 983.10 Lakhs in FY 2006 as compared to Rs. 532.91 Lakhs in FY 2005. The increase has been due to major addition of plant and machinary in our fixed assets for our expansion of capacity in FY 2006. Net profit/loss before tax and exceptional item Our net profit before tax and exceptional item declined from Rs. 3624.97 Lakhs in FY 2005 to Rs. 3140.67 Lakhs, a decline of 13%. The decrease is attributable to higher depreciation on account of commissioning of green field sugar plant at Barkatpur and the increase in financing cost. Current Tax Our Current Tax liability reduced from Rs. 245.50 Lakhs in FY 2005 to Rs. 29.96 Lakhs in FY 2006 on account of availment of Minimum alternate tax credit.

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Deferred Tax Our Deferred tax provision has increased from Rs. 702.93 Lakhs in FY 2005 to Rs.815.58 Lakhs in FY 2006 due to timing differences between tax depreciation and book depreciation. Net profit/Loss after Tax We incurred a net profit ofRs. 2275.34 Lakhs in FY 2006 as compared to a net profit of Rs.2641.33 Lakhs in FY 2005. This is a decrease of 14%. The decrease in profits is attributable to increase in Raw material cost whereby our average cost of sugarcane procurement increased from Rs. 128.27 per quintal in FY 2005 to Rs. 133.13 per Quintal in FY 2006. At the same time our manufacturing expenses and financial cost increased with the commissioning of green field sugar plants at Barkatpur. Comparison of the financial year 2004-05 with financial year 2003-04 Revenues Our total sales net of excise duty in fiscal 2005 was Rs. 18793.54 Lakhs as compared to Rs. 9784.23 Lakhs in fiscal 2004, which is an increase of 92%. Our total sales increased due to an increase in the sales of sugar from Rs. 9593.49 Lakhs in fiscal 2004 to Rs. 17423.78 Lakhs in fiscal 2005, which was an increase of 82% and an increase of 69% in sales of Molasses from Rs. 952.07 Lakhs in fiscal 2004 to Rs. 1,578.97 Lakhs in fiscal 2005. The increase of 82% in sales of sugar was due to increase in the quantity of sugar sold by us from 6.59 lakh quintal in fiscal 2004 to 9.90 lakh quintal in fiscal 2005 and an increase in the realization price of sugar from Rs. 1455 per quintal in fiscal 2004 to Rs. 1760 per quintal in fiscal 2005, which is an increase of 26.90%. In addition, there was an increase in the realization prices of molasses from Rs. 288 per quintal in fiscal 2004 to Rs. 434 per quintal in fiscal 2005, which is an increase of 51%. Expenditure Our total expenditure before the costs of financing and depreciation, in fiscal 2005 was Rs. 11193.36 Lakhs as compared to Rs. 7503.71 Lakhs in fiscal 2004, which is an increase of 49.17%. Materials The total expenditure on raw materials in fiscal 2005 was Rs. 9664.07 Lakhs as compared to Rs. 6499.11 Lakhs in fiscal 2004. This was an increase of 48.70%. The increase is on account of higher crushing of 75.34 lakh quintals in fiscal 2005 as against 63 Lakhs quintals in fiscal 2004, an increase of 19.57% and an increase of SAP by Rs. 12/- per quintal. In addition we paid incentives to farmers in the later part of the crushing season 2004-2005. The average cost of Cane for us was Rs. 128.27 per quintal in fiscal 2005 as against Rs. 103.14 per quintal in fiscal 2004. Manufacturing and Operating Costs Manufacturing costs include costs of consumables, lime, certain other chemicals, packing materials and cost of machine repairs and maintenance. Our expenditure on account of manufacturing and operating costs has increased from Rs. 464.89 Lakhs in fiscal 2004 to Rs. 632.71 Lakhs in fiscal 2005, which is an increase of 36.10%. This is primarily because of higher production in fiscal 2005 as compared to fiscal 2004. Personnel costs Our cost of personnel, which includes remuneration, benefits, etc to employees and the whole time Directors, has increased from Rs. 318.67 Lakhs in fiscal 2004 to Rs. 525.11 Lakhs in fiscal 2005, which is an increase of 64.78%. The increase in cost of personnel is due to increments in salaries, dearness allowance and other allowances to employees and the Directors remuneration. Administration costs Our cost of administration has increased from Rs. 221.04 Lakhs in fiscal 2004 to Rs. 371.47 Lakhs in fiscal 2005. This is an increase of 68.06%. This is primarily due to increased business activities in fiscal 2005 and the selling commission to the agents.

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Change in inventory of finished goods and work in progress The change in the inventory of finished goods is a function of production, sales, closing stocks and valuation rate. Our inventories have decreased by Rs. 2249.29 Lakhs in fiscal 2005 as compared to an increase of Rs. 74.85 Lakhs in fiscal 2004. Earnings Before Interest, Tax, epreciation and Amortization (EBITDA) Our EBITDA in fiscal 2005 was Rs. 5354.25 Lakhs as compared to Rs. 2357.90 Lakhs in fiscal 2004. This represents an increase of 127.08%. This is mainly attributable to exemption received on Excise duty on our production at Libberheri unit and increase in realisation prices of sugar and molasses as well as due to higher quantities of sugar being sold. Financing costs Our financing cost has increased from Rs. 790.69 Lakhs in fiscal 2004 to Rs. 1196.37 Lakhs in fiscal 2005. This is an increase of 51.31%. Our financing cost mainly constitutes interest on Term loans, working capital, soft loan from SDF and unsecured, soft loan from Uttaranchal State Government and promoters. As we have expanded our capacity from 2500 TCD to 9750 TCD within a short span of 5 years, the same has resulted in increase of our external borrowing for the period. We had paid higher interest amount for the fiscal 2005 on account of the higher external borrowings. Depreciation Depreciation on assets was higher at Rs. 532.91 Lakhs for fiscal 2005 as against Rs. 315.51 Lakhs in fiscal 2004. The increase has been due to major addition of plant & machinery in our fixed assets for our expansion of capacity in fiscal 2005. Net profit/loss before tax and exceptional items Our net profit before tax and non-recurring income/expenditure is Rs. 3624.97 Lakhs in fiscal 2005 as compared to Rs. 1251.70 Lakhs in fiscal 2004. This represents an increase of 189.60%. The increase is primarily due to increased in volume and prices of sugar and molasses and due to our operational efficiencies. Current tax Our current tax liability has increased from Rs. 97.50 Lakhs in fiscal 2004 to Rs. 245.50 Lakhs in fiscal 2005. This is primarily due to the higher profit before tax. For the fiscal 2004, we have paid income-tax as per the Minimum Alternative Tax (MAT) because of the unabsorbed depreciation carried forward from the previous years. For the fiscal 2005, due to the Income Tax rebate granted for our Libberheri Unit under 80IC of Income Tax Act, we have paid Minimum Alternate Tax. Deferred Tax Our Deferred Tax provision has increased from Rs. 333.85 Lakhs in fiscal 2004 to Rs. 702.93 Lakhs in fiscal 2005. This increase of 110.55 % in Deferred Tax provision is due to the increase in fixed assets after our expansion. Non-Recurring income /expenditure During fiscal 2005, we have paid a previous year's tax of Rs. 29.76 Lakhs as against an extraordinary expenditure of Rs. 606.20 Lakhs towards the provision of price differential for cane procured in previous years in fiscal 2004. Net Profit after Tax Our net profit after tax in fiscal 2005 is Rs. 2641.33 Lakhs as compared to Rs. 214.15 Lakhs in fiscal 2004, which represents an increase of 1133.40%. This is primarily due to increased volumes, better price realization of sugar and molasses, increased in operation efficiencies with lower duties and taxes.

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STOCK MARKET DATA The Equity shares of the Company are listed and traded on NSE and BSE w.e.f April 10, 2006. The share trading data for the equity shares of our Company is as under: Stock Market Data for NSE The closing market price of the equity shares of the Company on the first business day after the Board approved the Issue (i.e. February 01, 2008) was Rs. 82.25 per share on NSE. The high and low closing prices and associated volumes of securities traded duing last 3 years (since the date of listing of our shares) recorded on NSE is as follows: Period January 01, 2008 - July 12, 2008 January 01, 2008 December 31, 2007 April 10, 2006 December 31, 2006 High (Rs.) 144.40 148.70 472.90 Date of High 08/01/2008 12/01/2007 29/04/2006 Volume on date of high (no.of shares) 10,23,413 2,67,428 4,67,565 Low (Rs.) 48.10 71.10 120.00 Date of Low 08/07/2008 24/08/2007 12/12/2006 Volume on date of low (no. of shares) 24,226 23,612 1,99,495 Weighted Average Price (Rs.) 100.35 109.34 263.36

The high and low price, and associated volume of securities traded during the last 6 months on NSE is as follows: Period Upto July 12, 2008 June 2008 May 2008 April 2008 March, 2008 February, 2008 January, 2008 High (Rs.) 64.00 72.00 85.90 86.90 88.00 96.50 144.40 Date of Volume on date of High high (no. of shares) 01/07/2008 22,164 02/06/2008 02/05/2008 30/04/2008 12/03/2008 19/02/2008 08/01/2008 17,982 44,168 78,064 1,02,465 95,584 10,23,413 Low (Rs.) 48.10 55.00 68.00 60.15 54.00 74.90 70.25 Date of Low 08/07/2008 30/06/2008 28/05/2008 04/04/2008 24/03/2008 13/02/2008 22/01/2008 Volume on date of low (no. of shares) 24,226 19,542 25,835 20,043 1,56,581 46,850 41,048 Weighted Average Price (Rs.) 53.88 64.59 77.24 76.42 69.74 86.82 123.58

Latest Stock Market Data for the preceding four weeks from the date of filing of Draft Letter of Offer with SEBI: Week Starting From 07/07/2008 30/06/2008 23/06/2008 16/06/2008 Week ending on 11/07/2008 04/07/2008 27/06/2008 20/06/2008 High Amount (in Rs.) 55.50 64.00 64.80 69.80 Date 11/07/2008 01/07/2008 23/06/2008 18/06/2008 Low Amount (in Rs.) 48.10 50.10 57.50 62.35 Date 08/07/2008 03/07/2008 25/06/2008 16/06/2008 Week's Closing Price (in Rs.) 52.55 52.65 58.90 63.35 Total Traded quantity during the period 2,01,342 3,81,825 91,603 2,56,433

Stock Market Data for BSE The closing market price of the equity shares of the Company on the first business day after the Board approved the Issue (i.e. February 01, 2008) was Rs. 82.70 per equity share on the BSE. The high and low closing prices and associated volumes of securities traded duing last 3 years (since the date of listing of our shares) recorded on NSE is as follows:

156

Year (Months) January 01, 2008 - July 12, 2008 January 01, 2008 December 31, 2007 April 10, 2006 December 31, 2006

High (Rs.) 144.50 148.90 495.00

Date of High 08/01/2008 12/01/2007 08/05/2006

Volume on date of high (no.of shares) 7,03,291 1,53,815 1,73,840

Low (Rs.) 50.00 71.00 120.15

Date of Low 02/07/2008 24/08/2007 13/12/2006

Volume on date of low (no. of shares) 41,316 11,843 1,38,783

Weighted Average Price (Rs.) 99.80 107.65 279.85

The high and low price, and associated volume of securities traded during the last 6 months on BSE is as follows: Month, Year Upto July 12, 2008 June 2008 May 2008 April 2008 March, 2008 February, 2008 January, 2008 High (Rs.) 58.80 72.25 88.00 86.75 85.00 94.40 144.50 Date of Volume on date of High high (no. of shares) 03/07/2008 1,50,222 02/06/2008 02/05/2008 30/04/2008 12/03/2008 19/02/2008 08/01/2008 17,294 46,073 71,053 53,446 70,826 7,03,291 Low (Rs.) 50.00 55.05 68.10 63.00 55.10 74.55 70.30 Date of Volume on date of Low low (no. of shares) 02/07/2008 41,316 30/06/2008 27/05/2008 04/04/2008 24/03/2008 13/02/2008 22/01/2008 15,579 24,129 15,190 83,044 39,567 40,395 Weighted Average Price (Rs.) 53.86 64.58 76.99 76.55 69.27 86.97 123.67

Latest Stock Market Data for the preceding four weeks from the date of filing of Draft Letter of Offer with SEBI: Week Starting From 07/07/2008 30/06/2008 23/06/2008 16/06/2008 Week ending on 11/07/2008 04/07/2008 27/06/2008 20/06/2008 High Amount (in Rs.) 55.50 60.50 63.70 70.00 Date 10/07/2008 30/06/2008 23/06/2008 18/06/2008 Low Amount (in Rs.) 50.05 50.00 56.00 62.35 Date 08/07/2008 02/07/2008 25/06/2008 16/06/2008 Week's Closing Price (in Rs.) 52.30 52.50 58.75 63.55 Total Traded quantity during the period 1,68,439 2,74,134 1,05,612 2,44,363

157

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS Except as described below, there are no outstanding litigations, suits or criminal or civil prosecutions, proceedings or tax liabilities against our Company, our Directors, our Promoters or group companies and there are no defaults, non payment or overdues of statutory dues, banks/Institutional dues and dues payable to holders of any debentures, bonds or fixed deposits,issued by our company, other unclaimed liabilities against our company or promoters or directors or promoter group companies and no disciplinary action has been taken by SEBI or any stock exchange against our Company, our directors and our promoters. Further, except as stated herein, there are no cases of litigations, defaults, etc. in respect of companies/firms/ventures with which the promoter were associated in the past but are no longer associated, in respect of which the name(s) of the Promoters continues to be associated with those litigation(s) Past Penalties imposed by SEBI, Stock Exchanges and other Regulatory Bodies In the past, SEBI has imposed a penalty on one of our Promoters and two Promoter Group entities under SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997 In year 2001, the Adjudicating Officer of SEBI, Mumbai initiated proceedings and imposed a penalty of Rs. 33,500 against Mr. Ranjan Adlakha (one of our promoter and director) for late submission of the requisite report as acquirer and against Mrs. Amita Adlakha, wife of Mr. Raj Kumar Adlakha and New Castle Finance & Leasing Private Limited (one of our group companies) for being considered as acquirer and hence due to non submission of the requisite report as acquirer in the matter of acquisition of shares in Pariksha Fin-Invest-Lease Limited (one of our Promoter Group entity). Summary of litigations outstanding involving our Company and our Promoters: Nature of Litigations Criminal Civil Labour Government / Tax Authorities Notices No. of Cases 5 31 21 11

Summary of litigations outstanding involving our Promoter Group Companies: Nature of Litigations Criminal Civil Labour Government / Tax Authorities Notices Outstanding Litigations against Our Company: S.no. A. Civil Cases: Parties in Case the Suit/ Number / Show Cause Court/ Notices Authority Gram Sabha 34/73/2006 Kulchandi Court of V/s. S.D.M. Uttam Sugar Laksar Mills Ltd. Nature of the Case Amount Involved (Rs.) Present Status No. of Cases 33 2 11

1 (a)

At the time of setting-up Libberheri unit a land having Khasra No.105, area 0.067 Hect., which was a Gram Sabha Chakroad , was coming within the factory premises of USML, Libberheri unit. A suit was filed by Gram Sabha Kulchandi against USML in the court of S.D.M. Laksar to get back this Chakroad. In this suit S.D.M., Laksar has passed an order to 158

Not The case Ascertainabl is pending with S.D.M., e Laksar.

S.no.

Parties in the Suit/ Show Cause Notices

Case Number / Court/ Authority

Nature of the Case

Amount Involved (Rs.)

Present Status

1 (b)

Gram Sabha Khundi V/s. Uttam Sugar Mills Ltd.

35/72/2006 Court of S.D.M. Laksar

2.

State of Uttaranchal Vs Uttam Sugar Mills Ltd. And Uttam Sugar Mills Ltd, Vs State of Uttaranchal

5357/2007 Hon'ble Supreme Court, New Delhi

3.

Mahesh Chander V/s Uttam Sugar Mills Ltd.

147/06 Civil Judge (J.D.) Muzaffarn agar

return this Chakroad to Gram Sabha, Kulchandi and also imposed fine on USML. Against this order USML has filed a restoration application in the court of S.D.M., Laksar. After hearing, S.D.M. Laksar issued an order for restorations vide order-dated 04.04.2007. Meanwhile, USML has filed an application in the court of S.D.M., Roorkee for exchange of this Chakroad, Khasra no.105. At the time of setting-up Libberheri unit a land having Khasra No.43, area 0.020 Hect., which was a Gram Sabha Banjar Land , was coming within the factory premises of USML, Libberheri unit. A suit was filed by Gram Sabha Khundi against USML in the court of S.D.M. Laksar to get back this Banjar Land. In this suit S.D.M., Laksar has passed an order to return this Banjar Land KHASRA No.43 to Gram Sabha, Khundi and also imposed fine on USML. Against this order USML has filed a restoration application in the court of S.D.M., Laksar. After hearing, S.D.M. Laksar issued an order for restoration vide order-dated 04.04.2007. Meanwhile, USML has filed an application in the court of S.D.M., Roorkee for exchange of this Banjar Land KHASRA No.43 USML has submitted an application to Cane Commissioner, Uttarakhand & Government of Uttarakhand reuesting for refixing the enhanced capacity of its sugar factory at Libberheri under section 12 of the U.P. Sugar Cane (Regulation of Supplies & Purchases) Act, 1953. But, the Government of Uttarakhand has rejected the plea on the ground that no prior permission had been obtained by USML from Government of Uttarakhand before effecting such expansion, as required by condition no.6 of the Licence appended to Schedule1 of the Vacuum Pan Sugar Factories Licensing Order 1969 issued by State of U.P. as amended by notification dated 29.09.1997. USML had filed a Writ Petition in the Hon'ble High Court at Nanital against such rejection order. Hon'ble High Court issued an Interim Order wherein the Hon'ble High Court had ordered the Government of Uttarakhand to reconsider the application of USML. This is an injunction suit filed by Mr. Mahesh Chand for restraining the Company from trying to encroaching / tres passing his land (i.e. khasra no.1187) by way of building the boundary wall of Company's new sugar mill, Khaikhery unit on that 159

Not The case is pending with Ascertainabl S.D.M., Laksar. e

Not Against the order of Ascertainabl Hon'ble High Court, e Govt.Uttra-khand has filed a Special Leave Petition in the Hon'ble Supreme Court. Hon'ble Supreme Court has passed an Interim Order, staying the order of the High Court, Nanital and directed USML to submit its written statement.

Not Applicable

The stay order had been passed by the court against the Company. However this stay order has since been vacated by the

S.no.

Parties in the Suit/ Show Cause Notices

Case Number / Court/ Authority

Nature of the Case

Amount Involved (Rs.)

Present Status

4.

Mahesh Chander V/s Uttam Sugar Mills Ltd. 5. Mohan Lal V/s Uttam Sugar Mills Ltd.

49/06 Civil Judge (J.D.) Muzaffarn agar 355/06 Civil Judge (S.D.)

6.

7.

Gram Sabha Khaikheri V/s Uttam Sugar Mills Ltd. Dwarikesh Sugar India Ltd.Vs State & Others

40/06 Tehsildar Judicial Civil Misc. Writ Petition no.68324 of 2005 in the High Court at Allahabad Civil Misc. Writ Petition no 2840/2007 in the High Court at Allahabad. Civil Misc. Writ Petition No. 32710

land and also restraining the Company from destroying the crops standing on that part of land. The Company denied such allegations in the reply filed by it, stating therein that there was no encroachment/trespassing of Mr. Mahesh Chand's land by the Company and the Company is building the boundry wall on the separate land which has alredy been purchased by the Company. This is an application for the contempt of court proceeding against the Uttam Sugar Mills Limited, alleging that the Uttam Sugar Mills Limited had tried to make boundry wall on the Mahesh Chand's land (i.e. the land disputed under case no. 147/ 06, which is already pending in the court of Civil Judge (J.D.), Muzaffarnagar). An injunction suit has been filed against the USML for restraining it from altering the existing form/shape of disputed approach road /passage/route land, which, as claimed by the plaintiff, is being used by him for approaching his fields, by way of unauthorised possession of the disputed land (Khasra No. 1243, 1239, 1240,1252, 1251, 1249) by the Company and also restraining the Uttam Sugar Mills Limited from interfering in cultivation of the standing crops of the plaintiff unless permitted in writing by the plaintiff or until the actual partition of the land. This case has been filed by Gram Sabha Khaikheri alleging unauthorised possession of the public land by the Company & also for damaging the public road by the Company. USML has denied such allegation in the written statement/objections filed by it. Dwarikesh Sugar Ind. Ltd. has filed a writ petition primarily against the State Government and Cane Commissioner. The USML has been made as respondent no. The case relates to the allocation of cane purchase centers/ cane area for the crushing season 2005 - 06. Dwarikesh Sugar Ind. Ltd. has filed a writ petition primarily against the State Government and Cane Commissioner. The USML has been made as respondent no. 3. The case relates to the allocation of cane purchase centers/ cane area for the crushing season 2006-07. An amendment application has also been filed by the Dwarikesh Sugar Ind. Limited in this regard. Yashpal Singh & Another have filled a writ petition before the High Court, Allahabad against the notification 964 SC/18-02-2006-103/2006 dated 26.05.06 issued by the U.P. State Govt. under 160

Hon'ble Civil Judge by order dtd 28/02/07. The final order date has been fixed as 17/07/08.

Not Applicable

For taking further action/ accepting objections the date 17/07/08 has been fixed

Not Applicable

USML has filed its reply against this injunction suit stating therein that the Company is the legal owner of the disputed land. The Company has made the approach roads/ passages as per its own conveniene For taking further action next date is fixed as 03/07/08. 100000 For taking further action next date is fixed as 18/06/08

Amount not The suit is still pending in ascertainable the Hon'ble Allahabad . High Court.

8.

Dwarikesh Sugar India Ltd.Vs State & Others

Amount not The suit is still pending in ascertainable the Hon'ble Allahabad . High Court.

9.

Yashpal Singh & Another V/s State of U.P.

Amount not The suit is still pending in ascertainable the Hon'ble Allahabad . High Court.

S.no.

Parties in the Suit/ Show Cause Notices & Others

Case Number / Court/ Authority of 2006 in the HC at Allahabad. Civil Misc. Writ Petition No. ­ 29340 OF 2007 in the High Court at Allahabad Civil Misc. Writ Petition No. ­ 69820 of 2006 in the High Court at Allahabad.

Nature of the Case

Amount Involved (Rs.)

Present Status

10.

Yashpal Singh & Another V/s State of U.P. & others.

section-4 (1) along with section 17(1) & (4) of Land Acquisition Act, 1894. By State government notification, it is notified for general information that the land as mentioned in notification is needed for USML (Barkatpur). Yashpal Singh & another have filled a writ petition before the Hon'ble High Court, Allahabad against the notification no. 539SC/18-02-2007-103/2006 dtd 25.05.06 issued by the U.P. State Govt. under section 6 of Land Acquisition Act, 1894. By State government notification, it is notified that the Governor is satisfied that land as mentioned in the notification is needed for USML (Barkatpur). A writ petition has been filed by Dhampur Sugar Mills Ltd., primarily against Union of India and Uttam Sugar Mills Ltd. has been made a party to the suit as respondent no. 13, challenging the order Dt. 20.01.06 passed by Chief Director, Directorate of sugar, Department of Food & Public Distribution, Ministry of Consumer Affairs, Food & Public Distribution, Government of India. In this writ petition it contending that this order has been passed by Chief Director without examing his power to determine the distance of 15 Kms. under Sugarcane Control Order, 1966 and thereby resulting in reduction of cane area of Dhampur Sugar Mills Ltd. Dhampur Sugar Mills also requested the Hon'ble High Court to issue direction or pass orders to state government & Union of India to consider & implement the report dt. 2.12.04 as submitted by Tuteja Committee for revitalization of Sugar Industries & frame policies with regard to distance of existing factories & new coming up factories taking into consideration the yield & availability of sugarcane in that area to avoid unhealthy competition. The facts of the case is that Rajneesh Kumar and Others have filed a writ petition against The State of Uttar Pradesh through Principal Secretary, Chinni Udyog Anubhag ­ 2, Government of U.P. Lucknow, also making USML as one of the respondents to the suit, and alleged that The State Government acquired the lands of Petitioners under urgency and for public purpose vide Notification No.3598.C/18.2.2007103/2006 and allotted the same to USML for establishing sugar mill/ Industrial alcohol unit at Bijnor, instead of using/ allotting for Public Purpose. The petitioners have, therefore, requested Hon'ble High Court for issuing orders / directions for quashing the impugned notification and restraining 161

11.

Dhampur Sugar Mills Ltd. Vs. Union of India & others.

Amount not The case is at hearing ascertainable stage and during hearing proceeding Court allowed the USML, to file reply against this writ petition. The reply has thereafter been filled by USML. The suit is still pending in the Allahabad High Court. Amount not The suit is pending in the ascertainable Allahabad High Court.

12.

Rajneesh Kumar and others vs. State of U.P. and others (Uttam Sugar Mills Limited is respondent no. 4)

Civil Misc. Writ Petition No. 38111 of 2007.

Amount not The case is pending with ascertainable Hon'ble High Court Allahabad.

S.no.

Parties in the Suit/ Show Cause Notices

Case Number / Court/ Authority

Nature of the Case

Amount Involved (Rs.)

Present Status

13.

Satish Kumar and Others Vs. USML and Others

14.

15.

Anil Kumar Gupta vs. Uttam Sugar Mills Limited, Barkatpur. Jadish Prasad & others Vs USML

Case no. 379/2006 In the Court Of Civil Judge (Junior Division) Nazibabad. Case no.555/07, Civil Judge (Junior Division), Bijnor. Civil Judge Senior, Division Saharanpur . Case No. 538/04 By Court of Stamp Collector/ ADM (F& R), Bijnor u/s 47-A of Indian Stamp Act, against USML, Barkatpur.

16.

48 notices have been issued

the Respondents from taking Physical Possession of the lands of Petitioners and from interfering in the peaceful possession of the lands of Petitioners. A suit has been filed by Satish Kumar & Others stating therein that USML by forcibly encroaching / possessing the petitioners' land wants to make Residential Construction on the part of land not belonging to it. The petitioner has, therefore, requested the court that the respondents be restrained, through permanent injunction, from undergoing any such construction work at that part of disputed land. Mr. Anil Gupta has filed a petition before the Civil Judge (Junior Division), Bijnor alleging that USML has not yet paid the amount due to him with regard to the sale of sugarcane made by him to USML against slips of confirmation of supply of that sugarcane issued by USML in the year 2006. This is an injunction suit filed by Mr. Jagdish Prasad for restraining the Company from interfering, directly or indirectly, by way of removing the constructed structure & the related materials and also restraining the company from cutting down/destroying the standing crops and trees, which has been claimed to be belonging to the plaintiff. The USML has denied such allegations. The case alleged against USML in all the 48 Notices, is that the USML (at Barkatpur site) short paid stamp duty / registration in the execution of the sales deeds considering the land as agricultural land instead of treating it as for Industrial use. Thereafter the orders have been passed by the Court of Stamp Collector/ ADM (F&R), Bijnor against the USML.

Amount not The suit is pending in the ascertainable court of civil Judge (Junior . Division) Nazibabad.

Rs. 11,806/besides interest and other incidental charges. Not ascertainable

The suit is pending in the court of civil Judge (Junior Division) Nazibabad.

Matter is pending with Civil Judge Senior Division, Saharanpur

35,99,709 + interest thereon. Out of which Rs.1608905 has already been deposited

The USML preferred appeals against the orders of Court of SC/ADM (F&R), Bijnor before Addl Commissioner& Commissioner, Moradabad Div, as per their respective jurisdictions. The Additional Commissioner (Judicial), Moradabad Div, rejected the appeals and upheld the decision passed by the Court of SC/ADM (F&R), Bijnor. USML BKT has paid the amount as per the orders. Aggrieved by this, USML filed a writ petition in the High Court Allahabad and Hon'ble High Court remand back the matter to SC/ADM (F&R).On the other hand in case of the appeals filed before Commissioner,

162

S.no.

Parties in the Suit/ Show Cause Notices

Case Number / Court/ Authority

Nature of the Case

Amount Involved (Rs.)

Present Status

17.

18

19.

A notice has been issued by Court of Stamp Collector/ ADM (F& R), Saharanpur u/s 47-A of Indian Stamp Act, against the USML, Shermau , regarding alleged short payment of stamp duty / registration fee in the sale deeds. M/s. Vishwakarma Projects (India) Pvt. Ltd. Legal Notice M/s. Vishwakarma Projects (India) Pvt. Ltd. Legal Notice

S.D.M. Nukur /A.D.M. F&R),Saha ranpur Case no. 64/843/0405

This notice was received from Stamp Collector Nukud / ADM (F& R), Saharanpur regarding short payment of stamp duty on the registration of Khasra No. 50 of village Shermau at USML's Shermau plant site. USML has filed its reply against this notice.

Moradabad Div, the Commissioner has passed stay orders against the orders of court of SC/ ADM (F&R), Bijnor. Not yet Matter is pending ascertainable with S.D.M./ A.D.M.(F&R), Nukud.

Legal Notice

The Party has claimed an amount of Rs.32,95,965/against construction of Building at Shermau Project Site (Saharanpur U.P.)

32,95,965 and Interest

Claim disputed since the Party has not complied with the terms & conditions of the Contract. Claim disputed since the Party has not complied with the terms & conditions of the Contract.

Legal Notice

The Party has claimed an amount of Rs.71,10,000 against construction of RCC two Chimneys with SLIP Form Technology at Khaikheri (Muzaffarnagar, U.P.) and Shermau (Saharanpur, U.P.) Project Sites.

71,10,000 and Interest

S. no. 1

B.Labour Cases: Parties in Case the Suit/ Number / Show Cause Court/ Notices Authority Lokesh vs Case No. Uttam Sugar 106/2003, Mills pending Limited, before the Labour Court, Dehradun.

Nature of the Case

Amount Involved (Rs.) Exact amount not ascertainable (wages not specified by Lokesh) However, in case Labour

Present Status

The Labour Commissioner of Uttaranchal, Dehradun has made a reference to decide the dispute between Lokesh and USML. The terms of reference are: "Whether the termination of services of Shri Lokesh on 21.10.2001, by Management, is legal and justified, if no, what relief is the workman entitled to?" The case of Lokesh is that he was employed with USML on 1.1.2001 as a helper and while he was cleaning the machines 163

The case is still pending at the stage of evidence before the Labour Court.

S. no.

Parties in the Suit/ Show Cause Notices

Case Number / Court/ Authority

Nature of the Case

Amount Involved (Rs.) Court ultimately awards reinstatement with back wages , the minimum wages as per the Minimum Wages Act will have to be paid for the entire period Exact amount not ascertainable (wages not specified by Laxmikant). However in case Labour Court awards reinstatement with back wages, minimum wages as per the Minimum Wages Act will have to be paid for the entire period. Exact amount not ascertainable (wages not specified by Satya Kumar) However in case labour Court awards reinstatement with back wages, minimum wages, as per the Minimum Wages Act will have to

Present Status

on 22.1.2001, the machine started automatically which resulted in serious injuries to Lokesh, due to which he was under medical treatment for many months. After recovery when he returned to work, he was not taken back on the job, despite many efforts. Finally his services were terminated on 21.10.2001, without any show cause notice or compensation. Lokesh has not stated in his Statement of Claim what his alleged wages were per month. USML has filed its Written Statement in this case and has denied that Lokesh was ever employed by it. The employer/ employee relationship between USML and Lokesh has been denied by USML. Thus USML has claimed that there was no employment and no termination of Lokesh, by USML. 2. Laxmikant Sharma Vs. Uttam Sugar Mills Ltd. C.P. Case No.8/2003, pending before the Assistant Labour Commissio ner & Conciliatio n Officer Haridwar. This is a complaint filed by Laxmikant Sharma under Section 2-A of the U.P. Industrial Disputes Act 1947, claiming that he was appointed as a seasonal weighment clerk on 14.1.2001 and has not been taken on duty in the season 2002-2003 which started with effect from 25.11.2002. USML has filed its written statement and has prayed for the rejection of the complaint on the technical grounds that UP Industrial Disputes Act, 1947 ["UPID Act"] is not applicable to Uttaranchal State and since the Complainant himself had stated that he has not been taken on duty the same cannot be treated either as discharge, dismissal, retrenchment or termination and is thus absolutely out of the purview of Section 2A of UPID Act 1947.

The complaint is pending consideration before the Assistant Labour Commissioner and Conciliation Officer Haridwar.

3.

Satya Kumar Vs. Uttam Sugar Mills Ltd.

I.D. No. 235/2003

The Labour Commissioner of Uttaranchal, Dehradun has made a reference to decide the dispute between Satya Kumar and USML. The terms of reference are: "Whether the termination of services of Shri Satya Kumar on 25.11.2002, by Management, is legal and justified, if no, what relief is the workman entitled to?" The case of Satya Kumar is that he was employed with USML since 17.11.2001 as a clerk but w.e.f. 25.11.2002 when the new season of 2002-2003 started, he was not taken on the job. Satya Kumar has not specified his last drawn wages. USML had filed its reply, while the case was before the Conciliation Officer Haridwar. The stand of USML is that since its factory is in Uttaranchal, the claim which has been raised by Satya Kumar under the UP Industrial Disputes Act is not maintainable since the UP Industrial Disputes Act is not applicable to Uttaranchal. Further, it has been stated by USML that Satya Kumar has never been 164

The case is pending adjudication before the Labour Court and the pleadings are yet to be completed.

S. no.

Parties in the Suit/ Show Cause Notices

Case Number / Court/ Authority

Nature of the Case

Amount Involved (Rs.) be paid for the entire period. Exact amount not ascertainable (wages not specified by Satender Kumar). However, in case labour Court awards reinstatement with back wages, minimum wages, as per the Minimum Wages Act will have to be paid for the entire period. 433820 + interest & other incidental legal expenses

Present Status

4.

Satendra Kumar V/s Uttam Sugar Mills Ltd.

Case No. 85/2005 Labour Court, Dehradun

5.

Dharambiri Devi Mother of Shiv Kumar V/s USML / WCA

Case NO.57/07 Dy.Commis sioner/ Under W.C. Act

6.

Buta Singh and Others V/s. USML and Others

PWA Case No. 2/07 Asst. Labour Commissio ner,

directly employed by USML, therefore there is no question of his services being terminated by USML. In other words, USML has denied any employer and employee relationship with Satya Kumar. The Labour Commissioner of Uttaranchal, Dehradun has made a reference to decide the dispute between Satendra Kumar and USML. The terms of reference are: "Whether the termination of services of Shri Satendra Kumar on 25.11.2002, by Management, is legal and justified, if no, what relief is the workman entitled to?" The case of Satendra Kumar is that he was employed with USML since 13.11.2001 as a clerk but w.e.f. 25.11.2002 when the new season of 2002-2003 started, he was not taken on the job. Satendra Kumar has not specified his last drawn wages. USML filed its reply, while the case was before the Labour Court, Dehradun. The stand of USML is that since its factory is in Uttaranchal, the claim which has been raised by Satender Kumar under the UP Industrial Disputes Act is not maintainable since the UP Industrial Disputes Act is not applicable to Uttaranchal. Further, it has been stated by USML that Satendra Kumar has never been directly employed by USML; therefore there is no question of his services being terminated by USML. In other words, USML has denied any employer and employee relationship with Satendra Kumar. An application has been filed by Smt. Dharambiri Devi Mother of Mr. Shiv Kumar under section 22 of the Workmen Compensation Act, 1923 claiming that her son, who was employed as driver of tractor trolly owned by USML, died while discharging his duties and that she is the dependent of the deceased Mr. Shiv Kumar and therefore entitled to get a sum of Rs. 433820/- as compensation from the USML, the respondent no. 1 and IFFCO TOKIO GENERAL INSURANCE CO. LTD., the respondent no. 2. jointly or severally plus interest and other incidental legal expenses.USML in its written statement has inter alia accepted that the deceased Mr. Shiv Kumar was employed by USML and that he was died while discharging his duties. However USML has stated that it has already taken an insurance Policy in this regard from IFFCO TOKIO GENERAL INSURANCE CO. LTD. and on the death of Mr.Shiv Kumar, it has provided all necessary documents / papers for the claim to such insurance company and therefore such insurance company is now liable to pay any such compensation in this regard Mr. Buta singh and others have filed an application with Ass. Labour Commissioner, Haridwar, claiming that they have been engaged from 23/01/05 to 31/03/05 for the work of erection and fabrication in UML through M/s Vishwakarma Engineering Erection & Fabrication Steel Works Contractor, who is also a respondent no.2 of this 165

The case is pending adjudication before the Labour Court and the pleadings are yet to be completed.

The case is pending till further hearing.

72,934 besides penalty (if any)

USML has not yet filed written statement. The case is pending with Asst Labour Commissioner,

S. no.

Parties in the Suit/ Show Cause Notices Karnail Singh and Others V/s. USML and Others

Case Number / Court/ Authority Haridwar. PWA Case No. 1/07 Asst. Labour Commissio ner

Nature of the Case

Amount Involved (Rs.)

Present Status

7.

8.

Shiv Charan & Others V/s Uttam Sugar Mills Limited. & Other Sudesh Kr. Tomar V/s USML ;

9.

Case No. 15/2007 Asst. Labour Commissio ner Muzaffarna gar. C.P. 03/2007

10.

Surender Singh V/s USML ;

C.P. 02/2007

application and were paid only Rs. 21209/- only out of the total amount due of Rs. 94143/- to them. Mr. Karnail Singh and others have filed an application with Ass. Labour Commissioner, Haridwar, claiming that they have been engaged from 23/01/05 to 31/03/05 for the work of erection and fabrication in UML through M/s Vishwakarma Engineering Erection & Fabrication Steel Works Contractor, who is also a respondent no.2 of this application and were paid Rs.9208/-only out of the total amount due of Rs.200879/- to them. In this Case the applicants were engaged from 23/01/05 to 31/03/05 for the work of erection and fabrication through Vishwakarma Engineering Erection & Fabrication Steel Works Contractor in UML, Rs.200879/- was payable to them for the aforesaid period but were paid only Rs.9208/- by the Contractor. So, the applicants have claimed Rs.72934/- with ten times penalty. A suit has been filed against the USML under Payment Of Wages Act 1936 in the court of Assistant Labour Commissioner, Muzaffarnagar for Non Payment of wages to 15 labourers for 2 months at the rate of Rs.3000/- per month. In its reply, USML has filed a Written Statement, in which, it has denied any such allegations on the ground that no such labour was ever recruited/employed by it, either, directly or indirectly, or through such Contractor. Mr. Sudesh Kumar Tomar has filed an application under section 2A of the Uttar Pradesh Industrial Dispute Act, 1947, with Assistant Labour Commissioner, Bijnor claiming that he should be re-instated/ taken- back on employment by USML with back wages. USML has denied all the allegations made by Mr. Sudesh Kr. Tomar and stated therein that he is not a workman as per the definition of 'WORKMEN' given in section 2A of the U.P. Industrial Dispute Act, 1947 because he is performing his duties in the capacity of 'SUPERVISOR' and look after the work of his subordinates working in his direct control. Also he is getting salary of more than 1600/- p.m. The salary of Rs. 1600/p.m. is the maximum salary for the definition of `WORKMEN' under section 2A of the Uttar Pradesh Industrial Dispute Act, 1947. Mr. Surender Singh has filed an application under section 2A of the Uttar Pradesh Industrial Dispute Act, 1947, with Assistant Labour Commissioner, Bijnor claiming that he should be re-instated/ taken- back on employment by USML with back wages. USML has denied all the allegations made by Mr. Surender Singh and stated therein that he is not a workman as per the definition of 'WORKMEN' given in section 2A of the U.P.Industrial Dispute Act, 1947 because he is performing his duties in the capacity of 'SUPERVISOR' and look after the work of his subordinates working in his direct control. Also he is getting salary of 166

Haridwar. 1,91,671 besides penalty (if any) USML has not yet filed written statement in this regard. The case is pending with Asst. Labour Commissioner Haridwar.

90,000 plus Interest plus penalty

The case is fixed for Evidence on 03-0708.

To be decided The case is under by the conciliation adjudicating proceedings. authority on final decision.

To be decided The case is under by the conciliation adjudicating proceedings. authority on final decision.

S. no.

Parties in the Suit/ Show Cause Notices

Case Number / Court/ Authority

Nature of the Case

Amount Involved (Rs.)

Present Status

11.

Ajay Kumar Dhama V/s USML ;

C.P. 06/2007

12.

Manoj Kumar V/s USML ;

C.P. 10/2007

13.

Upender Singh V/s USML ;

C.P. 09/2007

more than 1600/- p.m.The salary of Rs. 1600/- p.m. is the maximum salary for the definition of `WORKMEN' under section 2A of the Uttar Pradesh Industrial Dispute Act, 1947. The services of Mr. Ajay Dhama have been terminated by the USML on the ground of manipulations/ cheating of the cane purchase resulting in heavy financial losses to the USML. In view of the above, the services of Ajay Dhama were terminated by the USML w.e.f. 31/05/2007. He has filed complaint before the ALC, Bijnor alleging that his attendance, were not recorded by the time office at Barkatpur. The case is under conciliation proceedings with ALC, Bijnor. The services of Mr. Manoj Kumar have been terminated by the USML on the ground of manipulations/ cheating of the cane purchase resulting in heavy financial losses to the USML. In view of the above, the services of Manoj Kumar were terminated by the USML w.e.f. 31/05/2007. He has filed complaint before the ALC, Bijnor alleging that his attendance, were not recorded by the time office at Barkatpur. The services of Mr. Upender Singh have been terminated by the USML on the ground of manipulations/ cheating of the cane purchase resulting in heavy financial losses to the USML. In view of the above, the services of Upender Singh were terminated by the USML w.e.f. 31/05/2007. He has filed complaint before the ALC, Bijnor alleging that his attendance, were not recorded by the time office at Barkatpur.

To be decided The case is under by the conciliation adjudicating proceedings. authority on final decision.

To be decided The case is under by the conciliation adjudicating proceedings. authority on final decision.

To be decided by the adjudicating authority on final decision.

14.

Prashant Kumar V/s USML ;

C.P. 07/2007

15.

Sudhir Kumar V/s USML ;

C.P. 08/2007

The services of Mr. Prashant Kumar have been terminated by the USML on the ground of manipulations/ cheating of the cane purchase resulting in heavy financial losses to the USML. In view of the above, the services of Prashant Kumar were terminated by the USML w.e.f. 31/05/2007. He has filed complaint before the ALC, Bijnor alleging that his attendance, were not recorded by the time office at Barkatpur. The services of Mr. Sudhir Kumar have been terminated by the USML on the ground of manipulations/ cheating of the cane purchase resulting in heavy financial losses to the USML. In view of the above, the services of Sudhir Kumar were terminated by the USML w.e.f. 31/05/2007. He has filed complaint before the ALC, Bijnor alleging that his attendance was not recorded by the time office at Barkatpur. 167

The case is pending with Asst Labour Commissioner, Bijnore. However, Mr. Upender Singh, the complainant has moved an application in the Court of Asst Labour Commissioner, Bijnore for withdrawal of the case. To be decided The case is under by the conciliation adjudicating proceedings. authority on final decision.

To be decided The case is under by the conciliation adjudicating proceedings. authority on final decision.

S. no. 16

Parties in the Suit/ Show Cause Notices Raj Mohan Kumar v/s USML; Anil Kumar Verma v/s USML ; Vimla Devi & Others V/s USML & Others;

Case Number / Court/ Authority C.P. 01/2008.

Nature of the Case

Amount Involved (Rs.) To be decided by the adjudicating authority on final decision. To be decided by the adjudicating authority on final decision. To be decided by the adjudicating authority on final decision.

Present Status

17

C.P.02/2008

18

W.C.A. 18/06

19

S.P.Morya, Labour Enforcement Officer, Bijnore vs. Uttam Sugar Mills Limited Smt. Zareen W/O Late Israar Ahmed and Others. V/S USML and Others.

Case no. PWA 21/07

Raj Mohan Kumar was retrenched by the USML u/s 25N of the Industrial Dispute Act, 1947. USML has received legal notice of advocate against such retrenchment alleging that he has been wrongly retrenched by USML and requiring reinstating him on employment. Anil Kumar Verma was retrenched by the USML u/s 25N of the Industrial Dispute Act, 1947. USML has received legal notice of advocate against such retrenchment alleging that he has been wrongly retrenched by USML and requiring toreinstate him on employment. Vimla Devi, mother of Sanjeev Kumar, filed a complaint before Assistant Labour Commissioner, Bijnore alleging that her son was employed with USML as cane guard & died because of unknown reasons at one of the cane centers of USML. Vimla Devi is claiming the unpaid salary & compensation of her deceased son. Company has denied all the allegations of Vimla Devi & also denied the employment of Sanjeev Kumar in USML. The case alleged against USML is that upon inspection by Mr. S.P.Morya, the Labour Enforcement Officer , it was found that the payment of wages made to the labourers at Barkatpur site of the Company was less than the wages stipulated under the state-order dated 28/04/2005 and also under the Payment of Wages Act, 1948.

The case is pending with Assit Labour Commissioner, Bijnore. The case is pending with Asst Labour Commissioner, Bijnore. The case is pending with Asst Labour Commissioner, Bijnore.

20

21.

4 Show Cause notices, issued to USML and Others,Contr actors by the Workmen compensatio n

Case No.74/07. In the Court of Asst Labour Commissio ner UP, Saharanpur u/s 22 of Workmen Compensati on Act 1923. Notices bearing nos. MWA 61/07, 62/2007, 63/2007 & 64/2007 were issued on various dates in the

This is a compensation suit filed by Smt. Zareen W/O Late Israar Ahmed and his dependants against USML and Proprietor of F.N. Engineering Works, (Contractor) Saharanpur, and has demanded compensation from USML, on the grounds that Late Israar Ahmed was working at USML Distillery Division at Barkatpur through contractor M/S. F.N. Engineering, and during his working hours (on duty) he met with an accident.

The Case is pending before Workmen compensation Commissioner and Authority under Payment of Wages Act, 1936, Bijnore Uttar Pradesh. (Asst Labour Commissioner) To be decided The Case is pending by the with Asst Labour adjudicating Commissioner Uttar authority on Pradesh, final decision. Saharanpur

To be decided by the adjudicating authority on final decision.

The case alleged against USML in all the 4 Show Cause Notices, is that upon inspection by the Labour Enforcement Officer, Bijnore at out cane purchase centres, it was found that the payment of wages made to the labourers was less than the wages stipulated under the Minimum Wages Act, 1948.

To be decided by the adjudicating authority on final decision.

The case is pending with Workmen compensation Commissioner and Authority under Minimum Wages Act, 1948, Bijnore Uttar Pradesh. (Ass. Labour Commissioner)

168

S. no.

Parties in the Suit/ Show Cause Notices Commission er and Authority under Minimum Wages Act, 1948, Bijnore Uttar Pradesh. (Assistant Labour Commission er

Case Number / Court/ Authority year 20062007)

Nature of the Case

Amount Involved (Rs.)

Present Status

S. no. 1

2.

C. Government / Tax Authorities Notices: Parties in Case Nature of the Case the Suit/ Number / Show Cause Court/ Notices Authority This Show Cause Notices have been issued by the Uttam Sugar Commissioner, Central Excise Meerut-1. It is the case Mills Ltd. of the Revenue that USML, Libberheri, Distt Show Cause Haridwar, the manufacturer of V.P. Sugar & Notice No. Molasses has contravened the provisions of Rule 4 V(15) off/ and Rule 8 of the Cenvat Credit Rules, 2002 read Adj/ with Section 3 of the Central Excise Act, 1944 and 230/2005/120 has wrongly cleared the Sugar and Molasses during dated 03-01the period from 03-12-2004 to 30-04-2005 out of the 2006 stocks held on 02-12-2004 (i.e. the opening stock on the date of opting for exemption from payment of excise) without payment of duty amounting to Rs.2,10,40,911/-USML has been asked to show cause as to why the above amount of Rs.2,10,40,911/should not be demanded and recovered from it under Section 11A of Central Excise Act, 1944 together with interest under section 11 AB of the Act and further why penalty should not be imposed under Rule 25(1)(a) of Central Excise Rule, 2002 read with Section 11AC of the Central Excise Act, 1944. USML has contested the show cause notice. Deputy Financial Ex-parte Trade Tax assessment order dated 30-03Commissione Year 20032007 relating to Financial Year 2003-2004. r 2004. (Assessment) Trade Tax, Rishikesh Vs USML

Amount Involved (Rs.)

Present Status

2,10,40,911 Replies have been filed. Commissioner Central Excise Meerut-1 is yet to adjudicate upon show cause Notice.

The Company has deposited Rs.1,29,474 against sales tax demand of Rs.3,08,52,427

USML has filed an application dtd May 8, 2007 for reopening of assessment before Dy Commissioner (Assessmen)Trade Tax, Rishikesh. On rejection, an appeal was filed before Jt.

169

S. no.

Parties in the Suit/ Show Cause Notices

Case Number / Court/ Authority

Nature of the Case

Amount Involved (Rs.)

Present Status

3.

Deputy Commissione r (Assessment) Commercial Tax, Roorkee.

Financial Year 2004-2005

Ex-parte assessment orders dated 30-03-2008 relating to financial year 2004-2005 have been passed by the Deputy Commissioner (Assessment) Commercial Tax, Roorkee under the provisions of erstwhile U.P.Trade Tax Act, Central Sales Tax Act, 1956 and Entry Tax Act.

4.

12 Show Cause notices issued on various dates in the year 2007-2008, to USML

5.

Notices / Orders issued

Notices issued by the Collector & District Magistrate Haridwar under Uttarakhand Sugarcane (S & P) Regulations [Rules 91, 120 & 122] By Trade Tax Department U.P.

6.

Various Show Cause notices issued different dates in the

Show cause Notices by the Collector & District Magistrate

The case alleged against USML in all the 12 Show Cause Notices, is that upon inspection by the Sugar Officer/ Assistant Sugar Commissioner Uttarakhand Haldwani, at the Sugarcane purchase centres of USML, certain ir-regularities were found in the weight measurements, equipments and other concerned matters. In all the above Show Cause Notices, USML has been asked to show cause why the weight license issued to USML for the year 2007-2008 may not be cancelled and why the security deposit made by USML, for obtaining the said license, be not forfeited. Notices/Orders were issued by the Trade Tax Department regarding procedural and other shortcomings during the movement of goods to & from plants situated at Barkatpur / Khaikheri / Shermau. The Company has already deposited the required security with the department for releasing of goods. The alleged case against USML in all these Show Cause Notices is that - upon inspection by the Sugar Officer/Assistant Sugar Commissioner Uttar Pradesh at the Sugarcane sale purchase centre of USML, various irregularities were found in the weight 170

Commissioner (Appeals). II Trade Tax, Uttarakhand who has set aside such ex-party order & remanded back the case before the Assessing Officer. The Company has The total filed an application amount the Dy demanded as per with Commissioner, the Ex-Parte AssessmentComme order is Rs. rcial Tax, Roorkee 8,21,51,935 for reopening the comprises of Rs.3,08,46,847 case. under U.P.Trade Tax Act, Rs. 4,56,00,000 under Central Sales Tax Act,1956 & Rs 57,05,088 under the Entry Tax Act. Failure to satisfy USML has filed its the authorities replies to the show cause notices issued may result in by the Collector and either the cancellation of District Magistrate, the sugar weight Haridwar. license for the year 2007-08. or in the forfeiture of the security deposits. The total aggregate amount covered is Rs. 1,82,220, which has already been deposited. Non ­ satisfaction may result in either the cancellation of the sugar USML has already paid / deposited the amount involved for releasing the goods pending further action in the matter. USML has filed its replies to the show cause notices issued by the Collector and District Magistrate,

S. no.

Parties in the Suit/ Show Cause Notices year 20072008, to USML.

7.

Various show cause notices issued on various dates in the year 2007-08 to USML

Case Number / Court/ Authority Saharanpur under Uttar Pradesh Sugarcane Purchase Regulations, [Rules 91, 120 & 122]. Notices issued by the collectos and District Magistrate, Bijnor under UP Sugarcane Purchase Regulations

Nature of the Case

Amount Involved (Rs.)

Present Status

measurements, equipments and the concerned documents of the USML. By all the above Show Cause Notices, USML has been asked to show cause why the weight license issued to USML for the year 2007-2008 may not be cancelled and why the security deposit made by USML, for obtaining the said license, be not forfeited. The case alleged against USML in all these show cause notices, is that upon inspection by the Sugar Officer / Assisstant Commissioner Bijnor at the sugarcane purchase centres of USML, some deficiencies were found in the weight measurement, equipments and the concerned documents and other related matters. In all the above show cause notices, USML has been asked to show cause why a case should not be filed against USML, Barkatpur or why the security deposit made by USML should not be forfeited

weight license Saharanpur. for the year 2007-08 or may result in the forfeiture of the security deposit If USML fails to satisfy the District Collector and Magistrate Bijnor, by its reply to the show cause notice, the same may result in either filing of a case against USML, Barkatpur or may result in forfeiture of the security deposit 1,72,907 USML has filed its replies to some of these show cause notices issued by the Collector and District Magistrate, Bijnor, UP.

8.

9.

Uttam Sugar Mills Ltd. vs. Dy. Commissione r (Assessment) Trade Tax, Roorkee. Appeal pending before the Jt. Commissione r of Trade Tax, Dehradun (Having Powers of U.P.Tax on Entry of Goods Act, 2000), Dehradun. Uttam Sugar Mills Ltd. vs. Deputy Commissione

Financial Year 1999-2000

This appeal has been filed by USML against the assessment order (in remand case) dated 29.3.2004, passed by the Dy Commissioner (Assessment), Trade Tax (Roorkee). For the financial year 1999-2000 the tax demand is for Rs.1,72,907/-. The Dy. Commissioner (Assessment) has passed this order upon remand from the Jt. Commissioner (Appeal). It is the case of USML that no entry tax is payable on the component parts brought in by USML, into the local area. However, the Deputy Commissioner has held that the fabrication of machinery is not possible without the machinery parts and therefore entry tax of Rs.1,72,907/- has been levied and also penalty proceedings have been initiated for the delay.

This Appeal is pending before the Jt Commissioner of Trade Tax, Dehradun.

Assesment Year 2001-2002

This appeal has been filed by USML against the assessment order dated 30.3.2005, passed by the Dy. Commissioner Trade Tax (Roorkee). For the assessment year 2001-02 the tax demand is for R 2 10 182/ i h d i d f R 30 643/ 171

2,10,182 This Appeal is pending before the Jt Commissioner of Trade Tax,

S. no.

Parties in the Suit/ Show Cause Notices r (Assessment) Trade Tax, Roorkee.

Case Number / Court/ Authority

Nature of the Case

Amount Involved (Rs.)

Present Status

10.

Uttam Sugar Mills Ltd. vs Deputy Commissione r (Assessment) Trade Tax, Roorkee. Uttam Sugar Mills Ltd vs Commissione r of Central Excise, Meerut - I Note: Similar show cause notices have also been issued against Mr. Raj Kumar Adlakha, Managing Director, Mr. Rajan Adlakha and Mr. Ranjan Adlakha, Directors and Mr. T Kannan, ExGeneral Manager of our USML

Assesment Year 2000-2001

11.

Rs.2,10,182/- against the admitted tax of Rs.30,643/-. USML had brought certain components (machinery parts) in the local area for assembling the machinery at site. It is the case of USML that these components cannot be termed as spare parts and no entry tax is leviable thereon under the provisions of the Entry Tax Act. This contention of USML has been negatived by the Deputy Commissioner (Assessment). This appeal has been filed by USML against the assessment order dated 31.3.2004, passed by the Dy. Commissioner Trade Tax (Roorkee). For the A.Y. 2000-01 the tax demand is for Rs.10,99,917- against the admitted tax of Rs.30,643/-. USML had brought certain components (machinery parts) in the local area for assembling the machinery at site. The case of USML is that the said components cannot be termed as spare parts and no entry tax is leviable thereon. However, Dy Commissioner (Assessment) has negatived this contention. These appeals have been filed by USML, Mr. Raj Kumar Adlakha, Mr. Rajan Adlakha, Mr. Ranjan Adlakha & Mr. T Kannan against the Order dated 30.12.2005, passed by Commissioner of Central Excise, Meerut for an amount of Rs. 1,16,76,056/plus interest. A penalty of Rs. 1,16,76,056/- has also been imposed on the Company & separate penalty of Rs. 5,00,000/- each on three directors namely Mr. Raj Kumar Adlakha, Mr.Rajan Adlakha & Mr.Ranjan Adlakha and penalty of Rs. 1,00,000/- on Mr. T. Kannan General Manager has been imposed. It is the case of the Revenue that USML, Libberheri, District Haridwar, the manufacturer of V.P. Sugar & Molasses has contravened the provisions of Rule 6(4) of the Cenvat Credit Rules, 2002 & has wrongly availed CENVAT Credit facility on Capital Goods which were exclusively used in the manufacture of exempted goods. USML has disputed the order of the Commissioner stating that the Capital Goods were used in the manufacture of dutiable sugar during 9.11.2004 to 2.12.2004, i.e. prior to availing of the exemption w.e.f 3.12.2004.USML is relying upon Rule 6(4) of the Cenvat Credit Rules wherein the condition is that the Capital Goods should not have been exclusively used in the manufacture of exempted goods. USML is claiming that in the present case, it cannot be said that the Capital Goods have been used exclusively in the manufacture of exempted goods.

Dehradun.

10,99,917 The appeal is pending before the Jt Commissioner of Trade Tax, Dehradun

2,49,52,112 The Appeal Plus interest pending adjudication CESTAT

is in

172

Outstanding Litigations filed by our Company: S. no. A. Criminal Cases Parties in the Case Suit/ Show Number / Cause Notices Court/ Authority Uttam Sugar Mills Limited & others vs. State of Uttaranchal & others Criminal Misc. Application No. 149 of 2005 filed with High Court of Uttaranchal at Nainital. Nature of the Case Amount Involved (Rs.) Amount not ascertainable Present Status

1

2.

3.

4.

5.

Uttam Sugar Mills Ltd. V/s. Shri. Ashwani Kumar Prop. : M/s Sant Sugar Suppliers; Saharanpur U.P. Uttam Sugar Mills Ltd. V/s. Shri. Ashwani Kumar Prop. : M/s Sant Sugar Suppliers; Saharanpur U.P. Uttam Sugar Mills Ltd. V/s. Vishal Bansal Prop. M/s Vprom's Control India Uttam Sugar Mills Ltd. V/s. M/s Vishwakarma Projects (India) Pvt. Ltd. & Others

Complaint No. 676/2008 in the Court of Judicial Magistrate Ghaziabad Complaint No. 688/2008 in the Court of Judicial Magistrate Ghaziabad. Complaint No.835/1/0 7 MM, New Delhi Complaint No.712/1/0 6 MM, New Delhi

Mr. Sudesh Kumar & others have filed a suit with the Ist Upper Civil Judge (JD), Roorkie alleging therein that the USML wanted to buy the piece of land comprising in Khasra No. 113 situated at Mauja Kulchandi Manglore, Tehsil, Roorkee and on his refusal to sell this piece of land, the USML discharged the polluted / waste water of the sugar mill in his field thereby his standing crops got damaged. The First Upper Civil Judge Roorkie, thereafter, passed the order dated 15th January 2004 inter-alia for issuing summons on the officers/ Director of the Company. Aggrieved by this order, USML has filed a criminal Misc. Application No. 149/2005 with High Court of Uttaranchal at Nainital, Wherein it refutes all the allegations made by Mr. Sudesh Kumar and others. USML also requested the High Court to quash the entire criminal proceedings against the company and its Directors/ Officers and set aside the impugned summoning order dated 15th January, 2004 of the first Upper Civil Judge, Roorkie A complaint u/s 138 of the Negotiable Instrument Act 1881 has been filed by the USML for dishonour of Cheque.

The case is pending with High Court of Uttaranchal at Nainital.

18,19,743 Complaint is Pending In the Court of Judicial Magistrate Ghaziabad. 14,12,991 Complaint is Pending In the Court of Judicial Magistrate Ghaziabad. 1,55,000 Complaint Pending is

A complaint u/s 138 of the Negotiable Instrument Act 1881 has been filed by the USML for dishonour of Cheque.

A complaint u/s 138 of the Negotiable Instrument Act 1881has been filed by the Company for dishonour of Cheque.

A complaint u/s 138 of the Negotiable Instrument Act 1881has been filed by the Company for dishonour of Cheque.

7,90,000/- Complaint Pending

is

173

S. no. 1

B. Civil Cases: Parties in Case the Suit/ Number / Show Cause Court/ Notices Authority Uttam Sugar 55/899/200 Mills Ltd., 6 V/s Court of Genda Ram Tehsildar, Roorkee

Nature of the Case

Amount Involved (Rs.) Not Ascertainable

Present Status

2.

Uttam Sugar Mills Ltd., V/s Subhash/ Surjeet

49/2006 Court of Tehsildar, Roorkee

3.

USML Vs Netra Pal and others.

Applicatio n / Case No.8/2008. Submitted in the court of Civil judge Senior Division, Roorkie

At the time of purchase of land for setting-up Libberheri Unit, the mutation of land bearing Khasra No. 110 measuring 0.1220 Hect. from Mr. Genda Ram to Uttam Sugar Mills Ltd. could not be done. USML has, now, filed an application to Tehsildar, Roorkee for mutation of above land from Mr. Genda Ram to Uttam Sugar Mills Ltd. Objection were raised by Manga S/o Genda Ram, against mutation of above land as Mr. Manga is claiming that he is the Legal heir of Late Mr.Genda Ram and Mr. Genda Ram had not sold such Land to USML during his lifetime. At the time of purchase of land for setting-up Libberheri Unit, the mutation of land bearing Khasra No. 74, measuring 0.236 Hect. from Mr. Subhash to Uttam Sugar Mills Ltd. could not be done. USML has, now, filed an application to Tehsildar, Roorkee for restoration of file from Haridwar. After the restoration of file, USML will submit application for mutation of land from Subhash to Uttam Sugar Mills Ltd. USML has made a petition in the court of Civil judge Senior Division, Roorkie seeking the permanent injunction order against Mr. Netra Pal Singh and others so as to stop them from making agitations/ demonstrations and damaging the property of the USML and obstructing the main entrance of the Mill thereby causing to obstruct the supply of the sugarcane into the factory and also from stopping them to make such agitations/ demonstrations within a diameter of 200 meters of the USML`s premises at Roorkie and by this way stopping them to interfere directly and indirectly in the crushing work & the management/ administration of the mill.

The case is pending in the court of Tehsildar, Roorkee.

Not Ascertainable

Restoration Application is pending in the court of Tehsildar Roorkiee.

Not Ascertainable

4.

Uttam Sugar Mills Ltd. &

Civil Misc. Writ

USML has obtained an IEM to establish a new sugar unit in Sikandrabad, Dist. Bijnore (U.P.) on 05.05.2006. On 174

Not Ascertainable

The Hon'able Civil court has passed an interim order to stop the respondents from making agitations /demonstrations and damaging the property of the USML and obstructing the supply of the sugarcane into the factory and also from stopping the respondents to make such agitations/ demonstrations within a diameter of 200 meters of the USML`s premises at Roorkie. Thus stopping them to interfere directly and indirectly in the crushing work & the managemen/ administration of the mill. The matter is pending with Chief

S. no.

Parties in the Suit/ Show Cause Notices others V/s Union of India & others.

Case Number / Court/ Authority Petition No. 31799 of 2006 High Court, Allahabad& Chief Director (Sugar) Directorate of Sugar, Department of Food and Public Distribution, Ministry of Consumer Affairs Food & Public Distribution

Nature of the Case

Amount Involved (Rs.)

Present Status

5.

Uttam Sugar Mills Ltd. vs. State of UP and others.

Special Leave Petition (C) No. 18846 of 2005, Supreme Court of India

the basis of above IEM, permission from Commissioner, Moradabad has been obtained for purchasing of land (more than 12.5 acre) for setting-up a sugar unit in Sikandarabad, Dist. Bijnore (U.P.), as, required under Uttar Pradesh Zamidari Act. M/s.Bajaj Hindusthan has also obtained permission from Commissioner, Moradabad to purchase land for setting-up a sugar unit at Jahanabad. USML has challenged the IEM issued to Bajaj Hindusthan on the grounds that the IEM issued to USML has a prior date than the IEM issued to Bajaj Hindusthan & also that Bajaj Hindusthan's proposed site is not fulfilling the distance criteria as required between the two sugar mills. The Hon'ble High Court, Allahabad has ordered that the matter will be heard & adjudicated by the Chief Director (Sugar), Delhi. After personal hearings the Chief Director (Sugar), New Delhi ordered to constitute a committee to conduct a resurvey to ascertain distances between proposed and existing sugar mills in that area and submit the report to him. The committee has accordingly been constituted. In this regard the representatives of survey of India informed the members of the committee that the said distances will be measured by PC Tablet Machine. The USML has objected to the measurement of distances by PC Tablet Machine as this machine is not so accurate and requested for measurement of distance by Differential Point GPS method, as the dispute regarding the distance is only about 100 meters. This Special Leave Petition has been filed by USML in the Supreme Court of India, seeking to challenge the judgment and final order dated 11.5.2005 passed by the High Court of Allahabad. USML was not a party before the High Court but it claims that the impugned order of the High Court may affect its rights therefore, the Petitioner be permitted to challenge the order of the High Court. It is the case of USML that after the creation of the State of Uttaranchal, the cane centres which were originally with the Petitioner (the Petitioner is now in Uttaranchal) were deleted from being reserved for the Petitioner by the UP Government's order passed through the Cane Commissioner. It is further the case of the Petitioner that in an identical case filed by Laxmi Sugar Mills, which is identically situated like the Petitioner, in Uttaranchal, the Special Secretary, Government of UP had heard the appeals filed by Laxmi Sugar Mills and vide its order dated 5th January 2005 had set aside the reservation/assignment order dated 8.10.2004 so far as it pertained in favour of Respondent No. 3 i.e. Triveni Engineering & Industries Limited. Aggrieved by the aforesaid order dated 5th January 2005, 175

Director (Sugar), Department of Food and Public Distribution, Ministry of Consumer Affairs Food & Public Distribution, Govt. of India, New Delhi

Not ascertainable

The case is pending before the Supreme Court and notice has been issued to the Respondent. Based on Memorandum of Understanding dt 19.03.2001 as extended under G.O. dt 29.10.2004 read along with the provisions of section 60/87 of the U.P. Reorganisation Act, 2000 & various other Grounds of Appeal, the S. C granted Stay on High Court Order. The Supreme Court has further directed that the present matter be tagged

S. no.

Parties in the Suit/ Show Cause Notices

Case Number / Court/ Authority

Nature of the Case

Amount Involved (Rs.)

Present Status

6.

Uttam Sugar Mills Ltd. & others vs. State of Uttarakhand & others-- Appeal against writ petition no.204/08 (M/B) & 205/08 (M/B) of High Court of Uttarakhand.

Special Leave Petition (Civil) No. 1051610517 of 2008, Supreme Court of India

Triveni Engineering & Industries Limited filed Writ Petition No. 9105 of 2005 in the High Court of Allahabad and by the impugned order, while allowing the writ petition, the High Court held that Laxmi Sugar Mills had no legal claim to seek reservation/assignment of sugarcane areas situated within the State of UP as Laxmi Sugar Mills was situated outside the territorial limits of the State of UP, thus Laxmi Sugar Mills had no legal right to file an appeal against the order of reservation/assignment passed by the Cane Commissioner of UP. It is the case of the Petitioner that although it was not a party before the High Court, however, if the impugned order of the High Court is allowed to be sustained than it may affect the rights of the Petitioner too since it is identically situated in Uttaranchal, just like Laxmi Sugar Mills. The fact of the case is that the state government notified the State Advised Price for the sugar mills of the state of Uttarakhand. Several writ petitions were filed before the Allahabad High court by the Sugar Mills of U.P. challenging the State Advised Price for the crushing season 2006-07 & 2007-08. In this batch of petitions the High court by way of interim order has fixed the State Advised Price of the sugarcane at Rs. 110/- per quintal. However vide notification dated 23/01/08, the state Government of Uttarakhand has fixed the purchase price of sugarcane at Rs. 132/- per quintal for early maturing variety and Rs. 127/- per quintal for the normal variety for the crushing season 2007-08. Aggrieved by this State Advised Price, the petitioners have filed writ petitions before the Uttarakhand High court at Nainital, challenging the above State Advised Price of the purchase of the cane. The High court at Nainital, however, dismissed these writ petitions and upheld the above said notification dtd 23/01/08 & also notification dtd 28/12/08. Aggrieved by this. USML & others have filed a Special Leave Petition with Supreme court, to appeal against the final judgment dt 31/03/08 passed by the High Court of Uttarakhand vide which the High court has dismissed the writ petition no. 204 of 2008(M/B) for the crushing season 2007-08 and writ petition no.205 of 2008(M/B) for the crushing season 2006-07. It is also prayed in the petition for intrim relief as to stay the operation and effect of the impugned order and judgement dtd 31/03/08 passed by the High court of Uttarakhand in the above said writ petitions and also to restrain the respondents from taking coercive steps against the petitioners.

with Special Leave Petition No. 13912 of 2005, which has been filed by Laxmi Sugar Mills.

Amount not ascertainable

The Supreme Court, as an interim order dtd 15/05/2008, has directed, inter alia, that for the crushing season 2007-08, the rate fixed by the Lucknow bench, Allahabad High Court shall be applicable to the sugar mills in Uttarakhand. Therefore, the sugar mills in Uttarakhand shall pay the amount payable at the rate fixed by the Lucknow bench, Allahabad High court after adjustment of amount already paid.

176

S. no. 7.

Parties in the Suit/ Show Cause Notices Uttam Sugar Mills Limited Vs Vinay Tyagi & Mohan Lal

Case Number / Court/ Authority Appeal No. 49/ 2008 with SDM,court , Muzafarna gar against order dtd 23/04/08 of Tehsildar (JudicialM uzafarnaga r in Case No.659/06

Nature of the Case

Amount Involved (Rs.) Not Ascertain able

Present Status

8.

Uttam Sugar Mills Ltd Vs State of U.P and Others

CMWP 3491/2007 High Court at Allahabad.

9.

USML Vs. Bhishma Singh and Others

Civil Misc. Writ Petition No.­ 462 of 2007.

An application has been filed by Mr. Vinay Tyagi for the mutation of land (i.e.land comprising in Khasra No. 1239) purchased by him from Mr. Mohan Lal. This land was, in fact, allotted to USML in the partition order passed by S.D.M.Muzafarnagar and in the revenue records the name of USML was entered. USML has filed objections to this application on the grounds that Mr.Mohan Lal has no legal title with regard to that land and therefore not entitled to sell that land and the application filed in the office of Tehsildar for mutation is not mantainable. Therefore, USML has requested the Tehsildar (Judicial) Muzafarnagar in its written statement for dismissing/rejection of this application on the said grounds. However, Tehsildar (Judicial) Muzafarnagar has rejected our submissions and passed orders for the mutation of the said land in favour of Mr. Vinay Tyagi. Aggrieved by this order USML has filed an appeal before SDM court, Muzafarnagar along with an application for stay of the execution of the order dated 23/04/2008 of Tehsildar (Judicial) Muzafarnagar till the decision of the appeal. The SDM court, Muzafarnagar has accepted our stay application vide its order dated 08/05/2008. The Khasra bearing no 1243 at Khaikheri Project site of the Company having an area 0.143 Hec belongs to Mr Rambhool. Sec 161 of Uttar Pradesh Zamidari Abolition Act & Land Reforms Act, 1950, provides for the exchange of land for which permission is required from the concerned Assistant Collector. An application has been filed by the Company, jointly with Mr. Rambhool, with the Assistant Collector, Muffarnagar. On the said application a report was called from Naib Tahsildar and other authorities. During the enquiry it was found that the land is registered as Talab in the revenue records. According to the above report, the recommendation was made for cancellation of allotted land in favour of Mr. Rambhool and for exchanging the same with the Company on the condition that the Company shall provide 0.143 Hec. of land in exchange to the Gram Sabha for making pond. Ignoring these recommendations the SDM, Sadar, Muzaffarnagar rejected our application. Thereafter a revision application was made before Commissioner, Saharanpur that has been rejected by him. The SDM Court, Muzafarnagar has accepted our stay application vide its order dated 08/05/2008. Hence a Writ Petition was filed before the Hon"ble High Court, at Allahabad. In this case USML has made a petition in the court of Civil judge (Junior Division), Najibabad from restraining Mr. Bhishma Singh and others from interfering in the possession of the USML's land by way of cutting the standing crops of sugarcane or ploughing the fields 177

The appeal is pending with SDM, court, Muzafarnagar

Not Ascertainable

Counter has been called from the respondents by the High Court, at Allahabad.

Amount not ascertainable

The case is pending with Civil Judge (Junior Division) Najibabad.

S. no.

Parties in the Suit/ Show Cause Notices USML Vs. Mukul Kumar and Others

Case Number / Court/ Authority Civil Misc. Writ Petition No. ­ 33 of 2008.

Nature of the Case

Amount Involved (Rs.) Amount not ascertainable.

Present Status

10.

11.

Uttam Sugar Mills Ltd. vs. State of U.P.

Civil Misc. Writ Petition No. 210/2008.

12.

Uttam Sugar Mills Ltd. Vs. State of Uttar Pradesh & Others

Civil Misc. Writ Petition No.4729 (MB) of 2007; High Court, Allahabad, Luknow Bench.

belonging to USML or otherwise. USML has made a petition in the court of Civil judge Senior Division, Bijnor seeking permanent injunction against Mukul Kumar and other respondents from making agitations/ demonstrations within the premises of the factory or within a diameter of 200 meters there from and from damaging the property of the USML and obstructing the main entrance of the Mill and also stopping them to interfere directly and indirectly in the crushing work, weight and measurement works & the management/ administration of the mill. The USML has filed a return of Entry tax with the trade tax department Nazibabad, U.P. for the month of April 2007. It was alleged by the department that the details of the total sale of sugar within the state as well as Ex. U.P. sale were incorrect & therefore the sales of sugar which have been shown as Ex. U.P. sales in the documents submitted in the sales Tax Department were in fact sales within the state of U.P. hence liable for levy of entry tax .The department has, thereafter, issued a demand notice regarding this entry tax. Aggrieved by this USML has filed an appeal before Joint. Commissioner (Appeals), Trade Tax, Bijnore. Joint. Commissioner (Appeals), Trade Tax, Bijnore has rejected our appeal. Thereafter, the USML has filed writ petition before the Hon'ble High Court, Allahabad praying for the stay of realization of this entry tax for the assessment year 2007-2008 during the pendency of this writ petition. The USML in this writ petition also challenged the legality, validity and constitutionality of the Act No. 30 of 2007, known as Uttar Pradesh Tax on Entry of Goods into Local Area Act, 2007. USML filed a writ petition in the Hon'ble High Court of Allahabad for quashing the recovery proceedings against the Uttam Sugar Mills Limited & for passing necessary instructions to the Government of U.P. to consider USML's application dated 12/04/2007 for capital subsidy which is due to USML under the Sugar Promotion Incentive Scheme 2004 of U.P. Government. The first part of the writ petition has since been settled because of the general order dated 27/02/2008 of the Hon'ble Supreme Court favoring sugar mills situated in the state of U.P. & directing therein to the state government of U.P. not to charge any recovery charges from these sugar mills.

The case is pending with Civil judge Senior Division, Bijnor.

Amount involved is Rs.1,33,83,16 2

The Hon'ble High Court Allahabad has, vide its order dtd 06/02/08, stayed the realization of the disputed entry tax subject to the furnishing of the bank guarantee and other security. USML has submitted the required security/ undertaking as per the satisfaction of the department in compliance with the order The case is pending in High court, Allahabad. However, USML are, now, going to request the Hon'ble High court to permit the Company for withdrawing of the this writ petition & to file a fresh writ petition for getting the capital subsidy and other benefits under the Sugar Promotion Incentive Scheme 2004 of U.P. Government.

Not ascertainable.

178

Pending Litigations against our Promoter Group Companies (A.) Uttam Industrial Engineering Limited (UIEL) Civil Cases filed against the Company Sl. Parties to Case No./ Details No. the Suit Court Dynaspede I.A.183/ The party supplied material and gave a performance 1. Integrated 2004guarantee. It was found during operation that there was some Engineering O.S. technical fault in one no.15 HP Eddy Current Drive System Ltd. 7/2001 supplied by the party. Company complained about that fault Vs Subbut party did not take any initiative for rectification and hence Ordinate invoked performance bank guarantee amounting Rs.36,091/-. UIEL Judge The party filed a civil suit in local court at Hosur and Hosur, succeeded in getting ex-parte decree, which the Company Tamil challenged in the same court. Nadu Civil Cases filed by the Company Uttam 1295/1999 Plot No. 11 measuring 300 Sq. mtr., Old Bus Stand, Industrial Allahabad Ghaziabad was allotted to the Company in public auction @Rs.15300 /-per sq. meter. Company deposited Rs. Engineering High Ltd. Court 7,18,000/- towards part payment of plot cost. However, GDA Vs. failed to give the possession of the plot to the Company. Ghaziabad Meanwhile Nagar Nigam, Ghaziabad claimed that the plot Developme belongs to them. GDA initiated process for cancellation of nt Authority plot. The Company approached Hon'ble High Court and filed a writ petition. (B.) Uttam Distilleries Limited (UDL) Civil Cases filed against the Company D.B. Civil Tarun A Public Interest litigation (PIL) has been filed by Tarun 1. Writ Bharat Bharat Sangh (NGO) and others in the Rajasthan High Court Petition Sangh and at Jaipur Bench, Jaipur requesting therein inter-alia to declare (PIL) No. others v/s the order, passed by State Goverenment Rajasthan, allowing 6205/2006 State of the grant of new licences to Distilleries/ Breweries / Bottlers Rajasthan to be established in the Alwar / Jaipur Districts, as & others unreasonable and unjust and to quash / set aside the said order, and also to issue an appropriate writ / direction to respondents to issue directions to such licenesed units not to commence production in such units which have already been established,and also not to establish such units in that area. The UDL is the respondent No. 10 of this petition and is in the process of establishing a Distillery unit at Alwar. In its reply the UDL stated that the proposed project of the Company is a grain based and zero % discharge plant and in no way it contributes depletion in the ground water levels in the concerned area.Further the UDL has already taken all the necessary approvals / permissions from the concerned authorities including State Enviornmental Authorities, Ministry of Enviornment etc. This proposed project has highly efficient ground water recharge system and in addition to that UDL would also implement the roof top rain harvesting method. Thus the ground level discharge would be more than that of the ground water abstraction. 2.. 179

Amount (in Rs.) 36,091 Plus Interest, Cost and other Charges.

Present Status The delay has not been condoned by the Sub Judge at Hosur and the case has been decided against the company. However the Company has not yet deposited the amount due. Hon'ble High Court stayed the GDA order for cancellation.

No financial liability

Not ascertainable

The Public Interest Litigation (PIL) is pending in the Rajasthan High Court at Jaipur Bench, Jaipur.

(C) Shubham Sugars Limited Government / Tax Authorities Notices: 1. Notice of U/s-156 of The Company filed a 'NIL' income return for the Assessment demand dt. the Income Year 2004-05 as the Company did not have any taxable 28.12.2006 Tax Act, income. However, the Assessing Officer treated certain loans 1961 and advances given by the Company as deemed dividend u/s 2(22) (e) of the Income Tax Act, 1961 and made high pitched assessment resulting in a demand. Aggrieved by the order of the Assessing Officer, the Company has filed an appeal before the first Appellate Authority viz. Commissioner of Income Tax (Appeals), Ghaziabad. Simultaneously the Company has also filed an application before the Additional Commissioner of Income Tax, Range II, Ghaziabad for the stay of disputed demand till the disposal of appeal pending before CIT (Appeals) Ghaziabad. (D.) Uttam Properties Private Limited Civil Cases filed against the Company Ghaziabad 107/1997, The Company own two plots numbered as 18A & 18B at New 1. Developme Allahabad Arya Nagar, Ghaziabad. While construction G.D.A. stopped the construction carrying on by the Company on its plots at nt Authority High Vs. Court New Arya Nagar, Ghaziabad. Company approached the Uttam Lower Court at Ghaziabad for relief, which was granted by Properties ordering for commencement of construction. Against this Pvt. Ltd. order G.D.A. filed an Appeal before Hon'ble High Court at Allahabad.

4,11,711 plus interest and penalty, if any.

Appeal filed before C.I.T. (Appeals). Hearing completed and order awaited.

No financial liability

Hon'ble High Court at Allahabad passed an order to complete the construction. However till further order company cannot dispose off the building. The Hon'ble High Court ordered for status-quo regarding possession of the property.

(E.) Uttam Sucrotech Limited Civil Cases filed against the Company Moti Ram RSA No. Company purchased an agricultural plot measuring 3-7 Bigha 1. Vs. 442 of at Kothi Mharaja Shansha, Kullu at a price of Rs. 3,70,000/-. Uttam 2000 This amount was paid at the time of executing agreement to Sucrotech Hon'ble sell, power of Attorney etc. Possession was handed over to the Limited High company after execution of above documents. Later on there Court of was a price rise in this Area and the Seller revoked the Power Himachal of Attorney and wrote a letter to the Company to return the Pradesh of possession of plot & take money. Thereafter, the Seller filed a Shimla case in Lower Court at Kullu which was rejected. Subsequently the Seller appealed before Distt. Court. This appeal was rejected. Now, Seller filed an Appeal before Hon'ble High Court at Shimla. Civil Cases filed by the Company Uttam In the Uttam Sucrotech has filed a case against M/s Dango Dienthal 2. Sucrotech Court of India Pvt. Ltd. on the grounds that M/s Dango Dienthal India Limited V/s Civil Pvt Ltd. failed to submit with USL Form ­ F of Central M/s. Dango Judge Sales Tax Act 1956 as per the agreed terms and conditions Dienthal (Senior between both the parties, against the Job work undertaken / India Pvt. Division) done by USL, and in the absence of which assessing Ltd. Ghaziabad authority has passed an order directing the USL to submit the ., Suit No. said form else USL will be liable to pay 10% CST on value of 405/2008 goods plus interest @14% p.a. as leviable as per Trade Tax Rules. Government / Tax Authorities Notices: 180

No financial liability.

N/A

M/s Dango Dienthal India Pvt. Ltd. has yet to file its reply.

Assessmen The Dy. Commissioner (Assessment) ­ 4, Trade Tax, Uttam t year Ghaziabad rejected Form III-B deposited with Department Sucrotech 1999-2000 and passed an order u/s 22 to deposit Rs. 22,00,145/-. The Ltd. Writ (Tax) Company filed a writ petition in Hon'ble High Court at Vs. State of No.843/20 Allahabad who stayed the operation of order passed by Dy. 05 Commissioner (Assessment)-4, Ghaziabad dt. 27.04.05. U.P. through The Secretary Institutional Finance U.P. Govt. Lucknow & others (F.) The Standard Type Foundry Private Limited Civil Cases filed by the Company WP15492/ There was a change in the Shareholding and Directorship of The 1. 1999 the Company in the year 1995. Mr. Raj Kumar Adlakha, Mr. Standard Allahabad Rajan Adlakha & Mr. Ranjan Adlakha became the new Type High shareholders and directors of the Company. The Company Foundry Court applied to UPSIDC for approval of site plan. But, UPSIDC Pvt. Ltd. declined to pass the site plan and according to them change of Vs. Directors/ Shareholders will tantamount to transfer of plot. U.P. State Hence, transfer levy clause is applicable.The Company Industrial approached Hon'ble High Court and filed a writ petition. Developme nt Corporation Ltd. The 19851/200 UPSIDC has cancelled the lease agreement with the Company 2. Standard 7 High with regard to the plot no A-11 situated in Industrial Area Court at Site-III, Meerut Road Industial Area, Meerut Road, Type Foundry Pvt Allahabad Ghaziabad, on 23.03.07 vide its letter no.22586 dated Ltd, Vs 23.03.07 terming show room of Toyota Vehicles (a division U.P.State of the Company) as violation of clause 2 (h) of the aforesaid Industrial lease deed. As per this letter UPSIDC has made allegation on Developme the Company that the Company is using the said plot for the nt commercial purpose (i.e. showroom of Uttam Toyota) in Corporation violation of condition mentioned in clause 2 (h) of the lease &Others agreement. Company has challenged this cancellation order of UPSIDC by making a writ petition no. 19851/2007 in the Hon'ble High Court at Allahabad as action of UPSIDC is absolutely arbitrary and cannot be sustained in law. (G.) Uttam Toyota (A division of The Standard Type Foundry Private Limited) Civil Cases filed against the Company Rajeev Case No.- A complaint has been filed, with District Consumer 1. Kumar 121-2007 Protection Forum, Moradabad, by Rajeev Kumar Agarwal Agrawal District alleging that a cut was found on fifth extra tyre of 'Innova' car V/s Consumer purchased by him from Uttam Toyota,Ghaziabad. Uttam Uttam Protection Toyota in its written statement stated that as per clauses of Toyota, Forum-II, warrantee booklet, it has been clearly mentioned that 'Tyres Ghaziabad Moradaba are warranted under a separate warranty provided by the Tyre & others. d. manufacturer ie. Bridgestone Company.Hence, there arises no laibility on the part of Uttam Toyota. 3.

22,00,145 + Interest

The Hon'ble High Court stayed demand dt 27.04.2005

Not ascertainable.

Hon'ble High Court ordered for approval of lay out plan subject to further order of the court.

Not ascertainable.

The case is pending in the Hon'ble High Court at Allahabad.

Not ascertainable at present.

The case is pending with District Consumer Protection Forum, Moradabad. A written statement has already been filed by Uttam Toyota. The next

181

2.

Vivek Kohli (M/s Stag Internationa l) V/s Uttam Toyota & others.

Case No.122-2007; District Consumer Forum, Ghaziabad .

3.

Rachna Metal Industries Pvt. Ltd. V/s Uttam Toyota, Ghaziabad & Others. Rashid Hussain V/s Uttam Toyota & others

Case No.117/2007; Consumer Disputes Redressal Forum, New Delhi.

A complaint has been filed by Vivek Kohli in District Consumer Forum, Ghaziabad against Uttam Toyota & others alleging that air bags fitted in the 'Innova' car sold by Uttam Toyota, Ghaziabad did not open on collision with 'Ambassador' car from the front and thereby resulting serious injury to the driver. In its written statement, Uttam Toyota denied these allegations stating that it is clearly mentioned in the owner's manual & safety book provided with the car as to under what circumstances this SRS airbag would work. But in this case, the reason for non opening of SRS airbag was because of side collusion or collusion with lesser intensity. A complaint has been filed by M/s. Rachna Metals Industries Pvt. Ltd. against Uttam Toyota & Others alleging the negligence and deficiency of services and also claiming for the refund of the amount of Rs. 25000/- which has been advanced to Uttam Toyota, Ghaziabad.

Not ascertainable at present.

date for argument/ hearing is 04/07/2008. The case is pending with District Consumer Forum, Ghaziabad. Next date for arguments/ hearing is 10/09/08. The case is pending with Consumer Disputes Redressal Forum, New Delhi. Next date for argument/ hearing is 29/07/2008. The case is pending with District Consumer Forum, Moradabad. Next date for argument/ hearing is 16/07/2008. The case is pending with District Consumer Disputes Redressal Forum, Delhi. Next Date for judgement is 25/06/08.

Not ascertainable at present.

4.

Case No. 45/2007; Distt. Consumer Forum, Moradaba d

A complaint has been filed by Rashid Hussain claiming for the replacement of Tank cleaning & injection pump assembly under warranty which is fitted in the 'Innova' car purchased by him from Uttam Toyota, Ghaziabad. Uttam Toyota in its reply stated that on inspection it was found that such pump assembly was damaged due to adulterated/inferior fuel used by the complainant which is not covered under the warranty clause. Virender Ganda has filed a complaint in District Consumer Disputes Redressal Forum, Delhi for a number of defects arisen from time to time in the 'Corolla' car purchased from Uttam Toyota, Ghaziabad. Uttam Toyota in its written statement stated that the defects alleged have already been removed & some parts were replaced on free of cost basis & some on chargeable basis and the complainant has filed a fabricated case with ill motive and malafide intention.

Not ascertainable at present

5.

Virender Ganda V/s Uttam Toyota & others.

Case No. 775/2005; District Consumer Disputes Redressal Forum, Delhi.

Not ascertainable at present.

182

6.

Geetika Kansal vs. T.K.M., Uttam Toyota & Others

7.

Mr. Vinay Khetan V/s Uttam Toyota, Noida & Uttam Toyota,Gha ziabad

Restoratio n application no. 37/07 in case no. 28/2002 (already decided/ dismissed) , District consumer forum, Ghaziabad Case No. 60/2008; District Consumer Protection Forum Noida

Due to use of adulterated petrol, engine of 'Qualis' car purchased from Uttam Toyota, Ghaziabad stopped working. The Company replaced the parts on chargeable basis. But customer claims that, replacement should be free of cost. So, a complaint against TKM, Uttam Toyota & others, is filed by the Complainant for Rs. 60,000/-, regarding mal-functioning of engine of such 'Qualis' car. Because of the non attendance of the complainant, the district court, Ghaziabad has dismissed the case vide its order dated 09/02/2007. The complainant has, now, filed a restoration application in the district court Ghaziabad. A complaint has been filed, with District Consumer Protection Forum, Noida , by Vinay Khetan alleging that Toyota Qualis purchased by him from Toyota Uttam Noida, started corrosion after 3 months of purchase and asked for replacement of the said vehicle but Toyota Uttam repaired the vehicle after taking repair charges for the same.But the vehicle again started corrosion but instead of replacement it was repaired by Toyota Uttam by taking repair charges again on the grounds that Toyota has discontinued the production of the model Qualis.The complainant has now demanded for compensation which includes cost of car, loss due to repairs losses, mental torture, legal charges and Compensation for providing faulty Car.

Not ascertainable at present.

The application for restoration is pending with Distt Consumer Forum, Ghaziabad. The next date for arguments on restoration application is 11.07.08. The case is pending with District Consumer Protection Forum, Noida, Gautam Budh Nagar .A written statement has already been filed by Uttam Toyota.The next date for argument/ hearing is 30/07/2008. A written statement has already been filed by Uttam Toyota. In which Uttam Toyota has requested the Forum that its name be removed from the said complaint as no relief has been sought against the Uttam Toyota. The case is pending with District Consumer Protection Forum, Delhi. The next date for argument/ hearing is 07/07/2008.

1409300

8.

Vidhur Gopal Bhardwaj vs. ICICI Bank Limited & others

Case No.35/2008; District Consumer Protection Forum Delhi.

Mr. Vidhur Gopal Bhardwaj, the complainant, has filed a complaint in the District Consumer Protection Forum Delhi, alleging that his Qualis vehicle, which was purchased by him from Uttam Toyota Ghaziabad & financed from Standard Chartered Bank (which loan account has since been transferred to ICICI Bank Limited by the Standard Chartered Bank), has been repossessed by ICICI Bank. This is purely a loan transaction between the complainant and the financer (i.e. ICICI BANK LIMITED) and therefore Uttam Toyota had no role to play therein. However, Uttam Toyota has been made as respondent no. 3 in the complaint.

Amount not ascertainable.

183

A legal notice has been received from the advocate of Sachin Sood. In this notice, Sachin Sood has claimed for the compensation and damages from Uttam Toyota, Ghaziabad & others on the ground that the air bags fitted in the 'Corolla' car sold by Uttam Toyota, Ghaziabad did not open on collision with bus from the front and thereby resulting serious injury to him. (H.) Lipi Boilers Limited, Pune (LBL) Civil Cases filed against the Company 1. T.I & M Suit No. The tubes were rejected by Lipi Boilers Limited. However, Ltd. Vs 536/1988 the party has filed a petition which came up for hearing in Lipi Boilers High 1985 in Bombay High Court. The High Court asked the Lipi Ltd. Court, Boilers Limited to pay Rs.70000/- as security deposit against Bombay. claims of T.I.M. Ltd., for hearing the case on merits. Accordingly Rs.70000/- paid in the Bombay High Court. TISCO's test certificate for rejection has also been filed by Lipi Boilers Limited in the High Court. 9.

Sachin Sood employee of M/s Patni Computers Systems Pvt. Ltd.

Legal Notice by Sachin Sood dt. 06.04.07

------

Advocate's Notice.

Rs.1,64,268/-

2.

M/s Shah Brothers V/s Lipi Boilers Ltd.

Suit No: 1886/1987 High Court, Bombay.

3.

ATC Clearing and Shipping V/s Lipi Boilers Ltd.

Suit No: 118/1990 High Court, Bombay.

4.

Hiralal Mondal Vs Lipi Consultants Private Ltd. & others.

Suit No: 1 of 1995 3rd Court of Asst. Divisional Judge at Howrah.

The party has filed Recovery petition in Bombay High Court. The party had supplied Boiler Quality Plates to LBL. In its petition, the party alleged that Lipi Boilers Pvt. Ltd. had not made payment in respect of supply of boiler quality plates. Lipi Boilers Pvt. Ltd. contented in the written statement that some of the plates as supplied by Shah Brothers, were found defective after inspection and hence rejected. Lipi Boilers has manufactured Dished Ends out of these plates & these were also lying as rejected in its work shop. The party is the clearing & forwarding agents of Lipi Boilers Pvt. Ltd (now a public Limited Company) .They filed a recovery suit for Rs.28724/- due from Lipi Boilers plus interest @ 18% p.a. Lipi Boilers Pvt. Ltd (now a public Limited Company) filed a written statement stating that services were not rendered by ATC Clearing and Shipping properly for clearing the goods from Bombay Sea Port i.e. all technical & procedural formalities were not attended by them properly, hence payment was not made, also there was no condition for payment of interest in the contract & ATC Clearing and Shipping is wrongly demanding interest & additional charges under the head 'Octroi Procedure'. The party, Mr.Hiralal Mondal, was the supplier of casting and grate bars on regular basis to Lipi Consultants Private Limited. The suit is filed against Lipi Consultants for their non-payment for the supply of casting and grate bars by Mr. Hiralal Mondal. Lipi consultants disputed the claim & paid Rs. 15000/- only against total outstanding dues of Rs.54,705/.Lipi Boilers Private Limited (now a public Limited Company) and Uttam Industrial Engineering Private Limited (now a public Limited Company) have also been made parties in the suit.

Rs.3,97,593/-

The Company's written statement and objections for Jurisdiction of Courts, filed on 04.01.07 in Bombay High Court and the matter is pending in the Hon'ble Bombay High Court. The matter is pending for final disposal.

Principal of Rs. 28724/plus Interest of Rs. 34964/aggregating to Rs.63689/-

Nothing has been done since 1994 & the case is still to come up for hearing.

Outstanding dues Rs.54705 Plus Interest Rs.19345 plus Damages Rs. 2000 aggregating to Rs.76050

Matter is pending in Howrah Court; matter is still to come up for hearing.

184

5.

Plant & Projects Services Vs Lipi Engg. & Lipi Boilers Ltd.

Suit No: 707/1989 City Civil Court at Chennai.

6.

A.N. Instruments Pvt. Ltd. Vs Lipi Boilers

Case No: 30/1989 4th Court of Additional Judge, Alipore, Calcutta.

7.

Greaves Cotton & Co. Ltd. Vs Mysore Cotton Seed Industries.

Suit No. 726/96 OS No. 34/92 Bijapur Court Applicatio n No.130 of 1989, U/S 33C (2) of ID Act, 1947. High Court, Bangalore Karnataka Company Petition No. 505 / 1992 High Court,

8.

Poddar Tyres Ltd. Vs Lipi Boilers (Private) Limited

Plant & Projects Services alleged that Lipi Boiler Pvt. Ltd. & Lipi Engineering Services Pvt. Ltd. had made a contract with them for erection of 1 no. STPH coal cum Rice husk fired Boiler at the site of M/s Lipton India Ltd., Ghaziabad after the entire civil work of the foundation etc of the boiler is done. Lipi Boiler Pvt. Ltd. & Lipi Engineering Services Pvt. Ltd. Plant & Projects Services alleged that erection of the boiler could not be started due to non-cooperation & breach of contract of Lipi Boiler & Lipi Engineering. However, Lipi Boiler Pvt. Ltd. filed W.S. & denied all the allegations made & stated that due to delay by the plaintiff, Lipton India cancelled the order, it also stated that this court has no jurisdiction to entertain this case & further stated that as there was no direct contract between Lipi Boilers Pvt. Ltd. & Plant & Projects Services therefore it is not in any way connected with the plaintiff or in this suit. The party, A.N. Instruments Pvt. Ltd. was the supplier of various scientific & industrial instruments to Lipi Boilers Pvt. Ltd (now a public Limited Company) under normal course of business & a sum of Rs. 34930/- was pending as on 21.03.88. A.N. Instruments Pvt. Ltd filed recovery suit against the Lipi Boilers Private Limited (now a public Limited Company) for the amount outstanding plus interest @ 18% p.a.. Lipi Boilers Pvt. Ltd. (now a public Limited Company) has filed a written statement stating therein, that a number of flow meters as supplied by A.N. Instruments Pvt. Limited, were found defective & Lipi Boilers Private Limited (now a public Limited Company) had returned them vide Debit note no. 21A dt. 30.04.88. & is willing to pay the balance, these facts were not, however, mentioned by A.N. Instruments Pvt. Ltd in the suit. A suit had been filed by Mysore Cotton Seed Industries (Later on converted into Private Limited Company namely, Mangalwedhe Agro Extraction Private Limited.) for breach of contract and recovery of money against Greaves Cotton and Company Limited in the Court of Bijapur and Lipi Boilers Private Limited had subsequently been impleaded as defendant no. 2. In this suit the plaintiff alleged that the Greaves Cotton, the defendant no. 1 had not supplied the boiler as per the terms and conditions of the contract entered into with them. In its written statement Lipi Boilers Private Limited contended the allegations made by the plaintiff and also for unnecessarily impleading it in the suit. The Bijapur Court had passed a judgment against Greaves Cotton for payment of Rs.2.00 Lakhs against the disputed amount of Rs. 8.43 Lakhs and suit against Lipi Boilers private Limited had been dismissed. Against the orders of Bijapur court, Greaves cotton has preferred an appeal in the Hon'ble High Court, Bangalore and made Lipi Boiler a party as respondent no. 3 The party, Poddar Tyres Limited, has filed a winding up petition for recovery in 1992. In this petition it has been mentioned that Poddar Tyres Limited had made advance for purchasing Boiler from Lipi Boilers Private Limited. As alleged by Poddar Tyres Limited in this petition that Lipi Boilers had not supplied the said boiler and also not refunded 185

(i) Rs.16000/+ interest thereon (ii) Damages for tools & machinery costing Rs.10000/-

There has been no correspondence since 1991 & is pending in Chennai Court.

Principal Rs. 34930/plus Interest of Rs.11003/aggregating to Rs.45933/-

There has been no further correspondence since 1992 & the case is still pending at Calcutta High Court.

Rs.2,00,000 plus interest.

The matter is pending since 1997. The case is still to come up for hearing.

Principal Rs.1600000/plus interest of Rs.1007441/plus penalty of Rs.175000/-

The case is still to come up for hearing.

Bombay.

9.

Silver Bright

Pune Court, Civil Appeal No.. 304/03 Pune court

the amount already advanced to it. In the written statement filed by the Lipi Boilers Private Limited against this petition, it was stated that Punjab Industrial Development Corporation had sanctioned a loan to Poddar Tyres Limited for purchase price of said boiler and the last date for taking the loan was about to lapse in absence of payment of advance to Lipi Boilers. Accordingly, it was suggested by Poddar Tyres Limited (though not in writing) that, Poddar Tyres Limited would be paying Rs.11 Lakhs as advance to Lipi Boilers and the same was to be returned back to its sister concern Poddar Sales Corporation by Lipi Boilers (Private Limited) and this amount was again to be paid to Lipi Boilers Private Limited as soon as the boiler got ready.Accordingly, Rs.11.00 Lakhs were paid to Poddar Sales Corporation by Lipi Boilers Private Limited and for which Lipi Boilers Private Limited had got receipts/acknowledgement. However, Poddar Tyres Limited has not made the facts of payment received by Poddar Sales Corporation in the petition & claimed the entire amount with interest in the winding up petition. The case is already more than 10 years and is likely to come up for hearing in any movement. A suit was filed by Silver Bright; a Partnership firm against the Company for the recovery of Rs. 134983 on account of unpaid price of the material and also the charges for storing the defendants' material in the factory of the plaintiff. This suit was decided expartie. At that time the Company was in dire state. The situation was such that no body was there to look after the management & affairs of the Company and several legal proceedings. The expartie order was not challenged by the Company .Thereafter, after the changeover of the management, the Lipi Boiler on becoming aware of the said expartie order had immediately filed an application before the Hon'ble Civil Judge, session Division, Pune as special Darkhast no. 183 of 1996 for stay of the said expartie order. Outstanding amount of Rs.12700/- plus interest Rs.1302/-, against supply of stationery to the Lipi Boilers Limited from time to time. Outstanding amount of Rs.110032/- against supply of ID,FD,SA and PA fans during 2001-02.

Rs.134893

10.

M/s Essem Agencies

Legal Notice dt.17.06.0 3 Legal Notice dt.04.08.0 4

11.

M/s Industrial Systems & Equipments

Rs.14002 + Rs.500 towards charges of the legal notice. Rs.110032 plus interest

12.

Perfect Engineering works Nirman

Legal Notice

13.

Legal

Actual outstanding was Rs.87,000/-and settled for the same. Monthly instalment of Rs.17400/- started paying from. 01-122005. Final instalment was to be paid before 30.04.06 but hold for the compliance of consent terms by the Perfect Engineering Works. Actual outstanding was Rs.231200/- but settled for 186

Rs.17400+ Interest, if any.

The appeal was filed by the Lipi Boilers Ltd in Bombay High Court. Therafter the case transferred to Pune Court from Bombay High Court. Lipi Boilers Ltd's counter claim is also filed for the material lying with them. Recovery suit not yet filed. The Company is trying to settle their dues. Recovery suit not yet filed. The Company is trying to settle the dues by making instalment payment soon. Advocate's Notice.

Rs.69,000 +

Advocate's

14.

15.

1.

Rs.1,88,000/- 1st installment of Rs.50,000/- paid remaining amount was to be paid by monthly installment of Rs.34500/starting from Jan,2006. Last two installments not paid by LBL, due to non compliance of Consent Terms by the party. Labour Cases against the company: Mr. R.N. Applicatio A suit was filed by R. N. Das in the Labour court claiming Das Vs n No. 130 unpaid balance salary, leave salary, bonus etc. The case of Lipi Boilers of 1989, R.N.Das was that he was appointed as Sr. Asstt. (Accounts). Ltd. U/S 33C He tendered his resignation by giving 30 days clear notice. (2) of ID But as alleged by him, the Company failed to pay the amount Act, 1947. finally due to him. Lipi Boilers Pvt. Ltd. filed a written Labour statement regarding jurisdiction of the suit as R.N.Das could Court, not be classified as 'workman' under section-2(s) of Industrial Pune. Disputes Act, 1947. The Complainant Mr.J.K. Dhokale was appointed as Mr.J.K.Dho Labour Mechanical Draftsmen as per the agreed terms and conditions kale Vs Lipi Court, of appointment letter. Mr. Dhokale was found irregular and Boilers Ltd. Pune Complaint undisciplined and negligent as he took unauthorized leaves No. 116 of without sanction or prior permission on various occasions as per the company's records. Therefore his services were 2005 terminated by the Company & all his legal dues were duly Industrial paid and a criminal complaint against Mr.Dhokale was lodged Court, on 06.10.2005 in Bund Garden Police Station, Pune for his Pune wrongful behavior. Then Mr.J.K. Dhokale filed detailed Labour complaint under Unfair Labour Practices against the Court, Company in the Labour Court at Pune on 01.11.2005. The Pune Labour Court directed Lipi Boilers Ltd. to pay 50% wages to Mr.J.K. Dhokale from the date of its order till the final Revision Applicatio decision. Dissatisfied with this decision, LBL filed Revision n (ULP) Application before the Hon'ble Industrial Court at Pune, for No.106/06 grant of 'stay' till the final disposal of the said case & any other relief the court may deem fits The Industrial Court Bombay Pune rejected the plea of LBL and instead of granting relief it High Court Writ directed LBL to Deposit 100% wages payable to Mr. Dhokale in the Court till the disposal of complaint & also Petition directed to labour Court to dispose of the complaint within a No.1699 period of 9 months. Dissatisfied, with above ,Lipi Boilers Ltd. of 2007 filed a Writ Petition in the High Court, Bombay against the Bombay order of Industrial Court, Pune and Labour Court Pune, for High grant of stay on their orders High Court passed an order Court directing LBL to deposit 50% backwages from the date of filing of the complaint with Labour Court till the end of Dec 2007 within a period of 4 weeks with Labour Court Pune, and that the complaint would be decided within 6 months from 1.1.2008.Thus the order of the Industrial Court stood modified as per the directions of the Hon'ble High Court Bombay. Government / Tax Authorities Notices: The Show Lipi Boilers Limited cleared the exempted goods after Commission Cause voluntary payment of Central Excise Duty for the er, Central Cum convenience of Company's customers to enable them to avail Excise & Demand modavt/cenvat credit paid by the Company. Department Customs, Notice Hqr raised queries which converted into proceedings and Show Aurangabad Sr. No. Cause Notice was then issued. Company submitted its reply to V/s. Lipi /45/C. the Department. 187

Engineering Projects.

Notice

Interest, if any.

Notice.

Rs.14,768/-

The case is pending in Labour Court, Pune since 1990.

Rs.121585/-

1,67,04,748 besides Interest U/s 11AB of Central Excise Act, 1944 and Penalty U/s

Hearing completed & submissions have been made by Lipi Boilers Ltd. Commissioner,

Boilers Ltd. Period 01.09.1999 to 31.03.2004 2. Commission er, Central Excise and Customs, Aurangabad V/s Lipi Boilers Ltd., Aurangabad . The deptt. appeal is pending with Central Custom, Excise and Service Tax Appellate Tribunal. Period -01.04.00 to 30.06.00

EX/2004 dt. 01.10.200 4 Show Cause Cum Demand Notice Sr. No.4/2005 / C.EX/ dtd. 28.04.200 5. CESTAT, West Zonal Bench-Appeal No. E/ 1377/ 2007.MU M Lipi Boilers Limited undertook composite contracts for supply of its goods/ brought out items & other charges such a supervision of erection etc. Excise Duty has been paid on manufactured goods. Department issued a Show Cause cum demand notice alleging that there is a case of under valuation of manufactured goods. Company submitted its reply to the Department. The Assistant Commissioner Central Excise & Customs Aurangabad had issued a Show Cause cum demand notice alleging that there is a case of under valuation of manufactured goods. Company submitted its reply against such notice. The Assistant Commissioner Central Excise & Customs Aurangabad being satisfied with the reply and submissions filed by the Company, dropped the Central Excise demand including interest and penalty against the Company. Dissatisfied with this order Department then filed an appeal with Commissioner (Appeals) Central Excise & Customs Aurangabad. Commissioner (Appeals) Central Excise & Customs Aurangabad has passed order in favour of the Company. Dissatisfied again with such order the Department has preferred an appeal with Central Custom, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai. The Company has submitted its cross objections to such Appeal. Lipi Boilers Limited cleared the exempted goods after voluntary payment of Central Excise Duty for the convenience of Company's customers to enable them to avail modavt/cenvat credit paid by the Company. Department raised queries which converted into proceedings and Show Cause Notice was then received. Company submitted its reply to the Department.

11AC of Central Excise Act, 1944.(if any) 224375 besides Interest U/s 11AB of Central Excise Act, 1944 and Penalty U/s 11AC of Central Excise Act, 1944.(if any).

Central Excise & Customs, Aurangabad is yet to adjudicate upon the Show Cause Notice. The Department appeal is pending with Central Custom, Excise and Service Tax Appellate Tribunal, West Zonal Bench, Mumbai.

3.

4.

The Joint Commission er of Central Excise & Customs, Aurangabad V/s Lipi Boilers Ltd., Aurangabad Period 01.04.04 to 31.03.05 The Commission er of Central Excise and Customs, Aurangabad V/s Lipi Boilers Ltd., Aurangabad Period 01.07.00 to 31.03.05.

Show Cause Cum Demand Notice Hqr Sr. No.24/ C.EX/200 5 dtd. 05.05.200 5 Show Cause Cum Demand Notice Sr. No.32/200 5/ CEX/2005 dtd. 05.08.200 5

1515998 besides Interest U/s 11AB of Central Excise Act,1944 And Penalty U/s 11AC of Central Excise Act, 1944 (if any) Rs.69123229 Besides Interest U/s 11AB of Central Excise Act, 1944 & Penalty U/s 11AC of Central Excise Act, 1944(if any)

Replies have been filed by Lipi Boilers Ltd. and Joint Commissioner, Central Excise & Customs, Aurangabad is yet to adjudicate upon the Show Cause Notice. Replies have been filed by Lipi Boilers Ltd. and Commissioner Central Excise & Customs, Aurangabad is yet to adjudicate upon the Show Cause Notice.

Lipi Boilers Limited undertook composite contracts for supply of its goods/ brought out items & other charges such a supervision of erection etc. Excise Duty has been paid on manufactured goods. Department issued a Show Cause cum demand notice alleging that there is a case of undervaluation of manufactured goods. Company submitted its reply to the Department

188

Show Lipi Boilers Limited undertook composite contracts for The supply of its goods/ brought out items & other charges such a Commission Cause supervision of erection etc. Excise Duty has been paid on er of Central Cum manufactured goods. Department issued a Show Cause cum Excise and Demand Notice Sr. demand notice alleging that there is a case of under valuation Customs, of manufactured goods. Company submitted its reply to the Aurangabad No.47/CE Department. V/s Lipi X/2007 Boilers Ltd., dtd.. Aurangabad 24.05.200 7 Period 01.04.2005 to 31.03.2006 - Show Cause Notices have been received from the Office of 6. Show Cause U/S Registrar of Companies, Pune for alleged violation of Notice from 621A Of the provisions of Section 217(3), 209(3)(b), 297, 211 and 212 of ROC, Pune U/s - Companie the Companies Act, 1956. The Company has replied to these s Act, notices and also made applications to Company Law Board, 217(3); Western Region Bench, Mumbai for Compounding of 209(3) (b); 1956. Offences u/s 621A of the Companies Act, 1956. 297; 211; & Company 212 of the Law Board, Companies Act, 1956. Western Region Financial Bench year covered 2001-02, 2002-03, 2003-04 (I.) Lipi Consultants Private Limited, Pune Civil Cases filed against the Company M/s. Matter M/s. Refractory & Minerals Bombay has supplied Fire Bricks 1. Refractory concerned and other allied items, worth of Rs.1,77,750/- during the year & Minerals U/s 433, 1989 and Lipi Consultants have paid Rs.90,000/- as part V/s Lipi 434, 439 payment against their dues during the year 1990, 1991 and Consultants of the 1992. Due to sudden death of Mr. K. Mukherji, Director of Pvt. Ltd. Companie the Company, this Company was practically closed and no s Act,1956 proper person was there to look after day to day functions of Bombay the Company. Due to various reasons Lipi Consultants Pvt. High Ltd. became sick and could not clear dues Rs.87,750.20 of Court Refractory and Minerals, Bombay. Thereafter winding up petition filed by M/s. Refractory and Minerals Bombay 400 003, vide Company Petition no 23 of 1993 for their Dues Rs. 87,750.20 + plus interest Rs.59,670/- from 01.01.1990 to 27.11.1992 Total Rs. 1,47,420.20 (Rupees One Lac Forty Seven Thousand Four Hundred Twenty & Paise Twenty Only) M/s. Lipi Consultants Pvt. Ltd. has not challenged the petition and also not filed written statement in the matter. Government / Tax Authorities Notices: Show Cause Demand Lipi Boilers Limited has entered into a contract for erection 2. Notice Notice Commissioning job with M/s. Kisan Sahakari Chini Mills Ltd. No.635803 Nanauta Dist Saharanpur on 25.07.1997 for their expansion , dt.14-02- plan worth Rs.1.00 Crore, the contract got executed by Lipi 05, under Boilers Limited through its sub contractors. Bills were raised UP Trade in 1998-99 and 1999-2000. Trade Tax officer Saharanpur 5. 189

109,48,843 besides Interest U/s 11AB of Central Excise Act, 1944 and Penalty U/s 11AC of Central Excise Act, 1944(if any) Not Ascertainable

Replies have been filed by Lipi Boilers Ltd. and Commissioner Central Excise & Customs, Aurangabad is yet to adjudicate upon the Show Cause Notice. These applications are pending as on date.

1,47,420

Matter is pending in Bombay High Court and may come up for hearing at any time.

Rs.363790 /-.

The case is yet to be decided by the appellate authority

(U.P) had passed Ex-party best Judgement orderunder section 21 of the U.P. Trade Tax Act, 1948. In this order the assessing authorities have assessed the turnover of the various items only on surmises, conjecture and presumption without any basis or evidence on record about any transfer of propertry in goods in execution of Labour job contract.Lipi Boilers Limited had filed Grounds of appeal for re-assessment and stay for disputed demand of Rs.646620/- till the decision of appeal. During the provisional assessment period TDS of Rs.283830/had been adjusted and remaining amount of Rs.363790/- was to be paid within 30 days from the date of receipt of Notice Cum Demand No. 635803 dt. 14.02.2005 Under U.P. Trade Tax Rules 1948. Since the above matter is still pending with Appellate Authority, Lipi Boilers Limited has not yet paid the balance Trade Tax amount. (J.) Telma Trading Private Limited Civil Cases against the Company Telma Trading Private Limited (i.e. TTPL) has purchased a Regular Regular 1. civil suit- Civil Suit plot of land measuring 4610 sq. meters in the year 2001. With a view to build a compounding wall TTPL has carried out the No. Mr.H.B. measurement of the plot on two occasions and notices were 764/2007 Ruia also being served by the City Survey office. On such V/s. Telma measurements it was found that neighbouring plot owner Trading Pvt. Mr.H.B. Ruia, has criminally trespassed / encroached on Ltd. TTPL's land over a strip of approx 10 ft. wide & 207 ft. long. On refusal by Mr.H.B.Ruia for peaceful return of the Appeal possession of the said part of land, TTPL then lodged police Telma complaint against Mr.H.B. Ruia. Meanwhile, Mr.H.B. Ruia, Trading Pvt. filed suit against TTPL in the Court of Civil Judge Senior Ltd. V/s. Misc. Division, Pune for Temporary & Permanent injunction Civil Mr.H.B. restraining, inter alia, the TTPL from dispossession of the suit Appeal Ruia property forcibly and otherwise than in the due course of law No. and also from causing construction of compound wall inside 313/2007 the suit property , pending final determination of suit on merit. The Pune Court then granted temporary injunction against TTPL till the final disposal of suit. (K.) Pariksha Fin-Invest-Lease Limited Civil Cases filed against Company Show Cause U/S - The Company has made two applications to Company Law 1. Notice from 621A Board, Northern Region Bench, New Delhi for Compounding ROC, Delhi Company of Offences u/s 621A of the Companies Act, 1956 in respect & Haryana Law of alleged violation of provisions of Section 211 and 383A of U/s - 211 Board, the Companies Act, 1956. These applications are pending as read with Northern on date. Schedule VI Region & 383A of Bench, the New Companies Delhi. Act,1956. (L.) Uttam Sucrotech International Private Limited Government / Tax Authorities Notices:

Tax Rules, 1948. Dy. Commissi oner, Trade Tax, Saharanpu r

Not Ascertainable

TTPL, thereafter, filed a Misc. Appeal in Pune District.

Not Ascertainable.

Case is pending.

190

By Deptt Various Notices have been issued by the Department of Trade of Trade & & Taxes Office of Value Added Tax Officer (AUDIT (VAT)) Taxes, New Delhi under sections 32, 33, 86 of the Delhi Value added Value Tax Act, 2004 and/or section 9(2) of the Central Sales Tax Added Tax Act. The Company has filed objections against these notices Officer with Additional Commissioner of VAT, Department of Value (AUDIT Added Tax, New Delhi. (VAT)) New Delhi. (M.) New Castle Finance And Leasing Private Limited Government / Tax Authorities Notices: Income Tax A.Y 2006- Assessment completed u/s 143(3) of the Income Tax Act, 1. Deptt. 07 1961 in respect of Assessment Year 2006-07, disallowing certain credits, which resulted in higher taxable income and increased tax liability. Besides show cause notice also issued by the assessing officer for the purpose of levy of penalty. 1.

Notices issued

The aggregate amount of the Tax, interest and penalty covered in these notices amounted to Rs.33,44,442

The case is pending before Additional Commissioner of VAT, Department of Value Added Tax, New Delhi

6,48,922 (including interest) besides penalty any).

The matter pending. (if

is

Material developments after last Balance Sheet: Other than the payments of cane dues to farmers for the crushing season 2007-08 as per the interim price of Rs. 110/per quintal as per th order of Hon'ble High Court of Allahabad dated November 15, 2007 and subsequently upheld as interim measure by the Hon'ble Supreme Court vide its order dated May 15, 2008, we are not aware of any circumstances that may materially or adversely or are like to affect the operation of our Company. Amount due to small scale industires As on March 31, 2008, we owed an amount of Rs. 58.89 lakhs to small scale industrial underterakings for a period of more than 30 days. Following are the names of Small Scale Undertakings to whom we owed more than Rs. 1,00,000. Name of Small Scale Industrial Undertaking Alpha Control Instrument Private Limited Material Conveying Engineers Material Handing Engineers Milteck Engineering Works Omfa Rubber Private Limited Puri Industries Quest Computer Forms & Paper Private Limited Spray Engineering Devices Limited Superior Engineering & Manufacturing Co. Vikas Pumps & Projects Amount (in Rs.) 1,87,570 1,22,887 1,16,659 6,13,964 1,62,415 7,88,857 5,85,258 22,19,272 3,38,674 1,23,041

191

GOVERNMENT APPROVALS On the basis of the indicative list of approvals provided below, the Company can undertake this Issue and its current business activities and no further major approvals from any Government or regulatory authority, are required to undertake the Issue or continue these activities. Unless otherwise stated, these approvals are valid as of the date of this Letter of Offer. The Board of Directors has, pursuant to resolution passed at its meeting held on January 31 2008 and July 02, 2008, authorised the Issue of equity shares on rights basis. Approvals for the Comapny A. INCORPORATION & OTHER STATUTORY REGISTRATIONS / APPROVALS Date of grant 27.11.2007 16.09.1999 16.09.1999 22.01.2002 25.02.2008 Registration No. L99999UR1993PLC032518 PAN No. AAACU2186Q Registration. No. 5060200 Recognition Certificate No. RK 438 AAACU2186QXM001 AAACU2186QST001 Authority Ministry of Corporate Affairs Income Tax Department CST Department Sales Department Tax Applicable Law Companies Act Income Tax Act CST Act Section 4-B of the UP Sales Tax Act,1948 Under Rule 9 Central Excise Rules, 2001 Certificate of Registration Under Section-69 Finance Act, 1994 CST Act Section 4-B of the UP Sales Tax Act, 1948 Foreign Trade (Development & Registration Act) 1992 Under Rule 9 Central Excise Rules, 2001 Certificate of Registration Under Section-69 Finance Act, 1994 Rule 57, U.P. Trade Tax Rules, 1948 Under Rule 9 Central Excise Rules, 2001 Under Rule 9 Central Excise Rules, 2001 Employees PF & Purpose Fresh Certificate of Registeration for change of state. General Disclosure For unit (Uttaranchal) For unit (Uttaranchal) For unit (Uttaranchal) For unit (Uttaranchal) at at at at Libberheri Libberheri Libberheri Libberheri

Central Excise Department Central Excise Department Sales Department Sales Department Tax Tax

22/05/2006 22.05.2006 15.07.2003

NJ 5027111 NJ 0056118 IEC No.0503023426

Ministry of Commerce, DGFT Central Excise Department Central Excise Department Department of U.P. Trade Tax Central Excise Department Central Excise Department EPFO, UP Region 192

For joining the units Khaikheri & Shermau (UP) under the Registration Granted earlier For joining the units Khaikheri & Shermau (UP) under the Registration Granted earlier Certificate of Importer ­Exporter Code (IEC) For unit at Barkatpur , Bijnor UP For unit at Barkatpur , Bijnor UP

10.05.2005 01.04.2008

AAACU2186QXM003 AAACU2186QST004

06.01.2005 10.04.2006 18.05.2006 02.01.2002

Reg. Certificate No.0056118, Dated 06.01.2005 AAACU2186QXM004 AAACU2186QXM005 Letter No. UA/26001/ DDN

For unit at Barkatpur , Bijnor UP For unit at Khaikheri, UP For unit at Shermau, Saharanpur, UP Applicability of Employees PF

Date of grant 10.01.2006 01.12.2006 01.01.2007

Registration No. Letter No. 90010/SRO /Circle ­II/UP/37828 Letter No. 91526/SRO/ Circle ­II/UP/40664 Letter No. 90105/SRO/ Circle ­II/UP/40820

Authority EPFO, UP Region EPFO, UP Region EPFO, UP Region

Applicable Law Miscellaneous Provisions Act, 1952 Employees PF & Miscellaneous Provisions Act, 1952 Employees PF & Miscellaneous Provisions Act, 1952 Employees PF & Miscellaneous Provisions Act, 1952

Purpose & Miscellaneous Provisions Act, 1952 on Uttam Sugar Mills For unit at Barkatpur , Bijnor UP For unit at Khaikheri, UP For unit at Shermau, Saharanpur, UP

B. LICENCES, APPROVALS & REGISTRATION FOR CONDUCTING BUSINESS Date of approval 31.03.1994 Authority granting approval Ministry of Industry Approval/ registration number 190(94) LOI - 1997 1737/SIA/IMO/2001 LOI No.LI:190(1994) Dated 31/03/1994 Applicable law Industrial (Development & Regulation) Act, 1951 Industrial (Development & Regulation) Act, 1951 Nature of approval Industrial License for manufacture of sugar at Haridwar Acknowledgement for memorandum for the manufacturing sugar with a capacity of 2500 TCD & molasses with a capacity of 230000.00 QTLS PA for unit at Libberheri, Uttaranchal Acknowledgment for memorandum for the manufacturing sugar with a capacity of 5000 TCD & molasses with a capacity of 460000.00 QTLS PA for unit at Libberheri, Uttaranchal Acknowledgement for memorandum for manufacture of sugar (with capacity of 6500 TCD) & molasses with a capacity of 430000.00 MT & bagasse with a capacity of 2800000.00 MT at Libberheri in Uttaranchal License for factory at Libberheri at Uttaranchal Validity Continuing

03.08.2001

Ministry of Commerce & Industry, Secretariat for Industrial Assistance

Continuing

12.08.2002

Ministry of Commerce & Industry, Secretariat for Industrial Assistance

1900/SIA/IMO/2002

Industrial (Development & Regulation) Act, 1951

Continuing

27.04.2004

Ministry of Commerce & Industry, Secretariat for Industrial Assistance

1468/SIA/IMO/2004

Industrial (Development & Regulation) Act, 1951

Continuing

20.11.2004

Director of Factories, Uttaranchal

H.W.R-91

Rule 7(1) of Factories Act, 1948 UP Reconstitution Act 2000 & Sugar Control 193

19.11.2001

Secretary of Sugar Industries

UA-1/LI/ 2000-01

License for U.P. Vacum Pan & Sugar Manufacturing sugar factories at Libberheri in Uttaranchal

31.12.2007 Applied for Renewal on October 19, 2007 Continuing

Date of approval 11.03.2003

Authority granting approval Ministry of Commerce & Industry, Secretariat for Industrial Assistance

Approval/ registration number 684/SIA/IMO/2003

Applicable law Order, 1966 IDRA 1951

Nature of approval Acknowledgement for memorandum for manufacture of sugar (capacity 5000 TCD), molasses (capacity 410000 QTLS PA) & bagasse(capacity 2700000 QTLS PA) at Pudrikhurd, Bijnor in U.P. Amendment to IEM vide approval for increasing the capacity for manufacture of sugar to 7000 TCD, molasses to 550000 QTLS PA & bagasse to 3900000 QTLS PA at Pudrikhurd, Bijnor in U.P. No objection Certificate for operating unit at Libberheri, Roorkee NOC for operating unit at Barkatpur License for manufacture, storage & sale of sugar for unit at Libberheri, Roorkee at Uttaranchal License for unit at Libberheri, Roorkee at Uttaranchal

Validity Continuing

26.07.2005

Ministry of Industry, Secretariat for Industrial Assistance

684/SIA/IMO/2003

IDRA 1951

Continuing

25.10.1999

Uttar Pollution Board

Pradesh Control

G22746/NOC/1178/3/9 9 F - 49150/ C-7/ N.O.C. ­ 219 / 05 MS-121/ 2008-09

Environment (Protection) Act, 1986 Environment (Protection) Act, 1986 Prevention of Food Adulteration Act, 1954 Water (Prevention & Control of Pollution) Act, 1974 and Air ((Prevention & Control of Pollution) Act, 1981 Rule 7(1) of Factories Act, 1948 UP Vaccum Pan & Sugar Manufacturing license order, 1997 Prevention of Food Adulteration Act, Rule 1995 IDRA 1951

Continuing

27.07.2005 01.04.2008

Uttar Pradesh Pollution Control Board Chief Health Officer, Haridwar Uttarakhand Enviornment Protection & Pollution Control Board

Continuing 31.03.2009

01.04.2008

UEPPCB/HO/Consent/ U-2/08/136

31.03.2009

24.06.2006

Dy.Director Factories, UP

of

B.J.R. ­ 508

Registration & license for factory at Barkatpur, UP

09.11.2005

Secretary of Sugar Industries, Govt. Of U.P. Chief Health Officer, Barkatpur, Bijnor Ministry of

5/2005

License for Vaccum Pan & sugar factories at Barkatpur, Bijnor in U.P. License for manufacturing & selling Sugar in Barkatpur, Bijnor in U.P. Acknowledgement of

31.12.2007 Applied for Renewal on October 24, 2007 Continuing

21.05.2007

NBD/139/2007-08

01.10.2002

2329/SIA/IMO/2002 194

31.03.2008 Applied for Renewal on Feb 25, 2008 Continuing

Date of approval

21.03.2003

Authority granting approval Commerce & Industry, Secretariat for Industrial Assistance Ministry of Commerce & Industry, Secretariat for Industrial Assistance

Approval/ registration number

Applicable law

Nature of approval memorandum for manufacture of Mild Steel Ingots (capacity 11000) at Libberheri, Uttaranchal Acknowledgement of memorandum for manufacture of Industrial alcohol, Extra Neutral Alcohol, Ethanol & Absolute Alcohol (capacity 22500 KL) at Pudrikhurd, Bijnor UP Acknowledgement of memorandum (including amendment no. 1 & 2 dtd 18.04.2002 & 30.04.2002 respectively) to manufacture Sugar (Capacity 2500 TCD) & molasses (capacity of 230000 QTLS PA for unit at Khaikheri, UP Acknowledgement for memorandum of manufacture Sugar (capacity 2500 KL), molasses (capacity of 205000 QTLS) & bagasse (capacity of 1350000 QTLS) at Shermau, UP Acknowledgement of amendment for increase in manufacturing capacity of Sugar (capacity 7500 KL), molasses 610000 QTLS & bagasse 4700000 QTLS at Shermau, UP License to set up for manufacture & sale of Rectified Spirit, ENA, Ethanol, Absolute Alcohol (capacity 22500 KL) at Barkatpur, UP License to store Petroleum at Barkatpur, UP

Validity

755/SIA/IMO/2003

IDRA 1951

Continuing

14.03.2002

Ministry of Commerce and Industry Secretariat for Industrial Assistance

659/SIA/IMO/2002

IDRA 1951

Continuing

27.01.2004

Ministry of Commerce & Industry Secretariat for Industrial Assistance

1467/SIA/IMO/2004

IDRA 1951

Continuing

30.03.2006

Ministry of Industry Secretariat for Industrial Assistance

Amendment no. 1 to 1467/SIA/IMO/2004

IDRA 1951

Continuing

30.10.2006

Office of Excise Commissioner

3151-55/2-P.D. -76

Excise Manual Part - I

29.10.2008

29.05.2006

19.10.2007 31.03.2006

Ministry of Commerce & Industry Joint Chief Controller of Explosives, Agra Asst Director of Factories & Boilers, Uttaranchal Director, Boilers, UP, Kanpur

P/CC/UP/15/1698(P14 5245)

Rule 149 of Petroleum Rules, 2002 Indian Boiler Act, 1923 Indian Boiler Act, 1923

31.12.2008

UR/39, UP/5757 & UP/5758, And UP/3362 UP - 6156 195

License for 3 Boilers at Libberheri Registration of Boiler at Barkatpur, UP

18.10.2008 Continuing

Date of approval 06.01.2006 21.03.2006

Authority granting approval Director, Boilers, UP, Kanpur Assistant Labour Officer

Approval/ registration number UP - 6132 BJCR ­ 01/2006

31.03.2006

Registering Officer, Regional Dy. Labour Commissioner Weights & Measures Department Weights & Measures Department Directors of Factories, Muzzafarnagar, UP Chief Secretary, Department of Sugar Industry, U P Chief Health Officer, Muzzafarnagar Controller of legal Metrology

146/DCL/06

07.11.2007

05.11.2007

23.05.2007

M J R -1098

Applicable law Indian Boiler Act, 1923 Contract Labour (Regulation & Abolition) Act, 1970 Contract Labour (Regulation & Abolition) Act, 1970 Standard of Weight & Measurement Act 1976 Standard of Weight & Measurement Act 1976 Factories Act, 1948

Nature of approval Registration of Boiler at Barkatpur, UP Registration certificate to employ Contract labour at establishment at Barkatpur, UP Registration certificate to employ Contract labour at Libberheri, UP Certified Licenses for various measuring equipments for Libberheri Certified Licenses for various measuring equipments for Barkatpur Registration & License to work a Factory - for Employing not more than 500 person and for motive power at Khaikheri License for vaccum pan & sugar manufacturing sugar factories at Khaikheri License for unit at Khaikheri, in UP Certificate of Registration for manufacturing and packing, unit at Khaikheri, in UP In respect of Khaikheri, in UP unit at

Validity Continuing Continuing

Continuing

Continuing

Continuing

19.12.2007 03.03.2008

License No. 10/2007 CFI- 09/ 2008-09

15.05.2007

UP/PCR/MRT/154/07

29.08.2006

Uttar Pollution Board

Pradesh Control

No Objection Certificate F025451/C3/N.O.C. -123/5/06

05.06.2007

Dy. Director Factories U P

of

License No. S.P.R. 855 License No. 01/2008 196

Sugar (Control) Order, 1966 Prevention of Food Adulteration Act Standards of Weights & Measures (Packaged Commodities) Rules, 1977 Water (Prevention & Control of Pollution) Act, 1974 and Air (Prevention & Control of Pollution) Act, 1981 Factories Act, 1948 [Under Rule 7] UP Vaccum Pan & Sugar

31.12.2007 Applied for Renewal on October 19, 2007 Continuing 31/03/2009

Continuing

Continuing

Registration & License to work a Factory at Shermau Saharanpur, in UP License for Vaccum Pan & sugar manufacturing

23.01.2008

Chief Secretary, Department of Sugar

31.12.2007 Applied for Renewal on Oct 19, 2007 Continuing

Date of approval

Authority granting approval Industry, U P Licensing Officer

Approval/ registration number

31.03.2008

License No. 14/2008-09 &

GH/M-

28.11.2007

Weights Measurement Department Uttar Pollution Board

29.08.2006

Pradesh Control

NOC No. F05452/C3/N.O.C. -124/6/06

11.06.2008

Uttar Pradesh Pollution Control Board, Lucknow Uttar Pradesh Pollution Control Board, Lucknow Uttar Pradesh Pollution Control Board, Lucknow Uttar Pradesh Pollution Control Board, Lucknow

Consent Order No. 147/Consent/Water/158 /08 Consent Order 147/Consent/Air/ 158/08 No.

11.06.2008

22.05.2007

Consent Order No. 17349/C-3/ Water/596 /06/07 Consent Order No. 17348/C3/Water/596/06/07

22.05.2007

Applicable law Manufacturing license order, 1997 Prevention of Food Adulteration Act Standard of Weight & Measurement Act 1976 Water (Prevention & Control of Pollution) Act, 1974 and Air ((Prevention & Control of Pollution) Act, 1981 Water (Prevention and Control of Pollution) Act, 1974 Air (Prevention and Control of Pollution) Act, 1981 Water (Prevention and Control of Pollution) Act, 1974 Air (Prevention and Control of Pollution) Act, 1981

Nature of approval factories License to manufacture crystal sugar for unit at Shermau, in Saharanpur, U P Certified Licenses for various measuring equipments at Shermau, Saharanpur, in U P NOC certificate for unit at Shermau, Saharanpur U.P.

Validity

31/03/2009

Continuing

Continuing

NOC for unit at Shermau, Saharanpur

31.12.2008

NOC for unit at Shermau, Saharanpur, U.P

31.12.2008

NOC for unit at Khaikheri, UP

31.12.2007 Applied for Renewal on Jan 4, 2008 31.12.2007 Applied for Renewal on Jan 4, 2008

NOC for unit at Khaikheri, UP

C. APPLICATIONS FILED FOR APPROVALS/ RENEWALS Fresh/Old License Ref.no. Fresh 17348/C3/Water/596/06/ 07 17349/C3/Water/596/06/ 07 Date of Application 09/05/2008 04/01/2008 04/01/2008 Authority Dy. Chief Controller of Explosives , Explosives Department, Agra Uttar Pradesh Pollution Control Board, Lucknow Uttar Pradesh Pollution Control Board, Lucknow 197 Form / Nature of Application Purpose Construction approval for HSD storage tank at, Libberheri UP NOC for unit at Khaikheri, UP NOC for unit at Khaikheri, UP

NBD/139/200708 Fresh

25/02/2008 15/01/2008

Chief Health Officer, Barkatpur, Bijnor Secretary, UP Pollution Control Board Lucknow Secretary, UP Pollution Control Board Lucknow Director of Boiler Dy Director of Factories, UP Director of Factories, Uttaranchal Directors of Muzzafarnagar, UP Factories, Form No. 4-B Form No. 4-B Form 1 (under rule 3) Form 1 (under rule 27)

Fresh

15/01/2008

Boiler No. UP 6347 (for inspection) B.J.R - 508 H.W.R-91 MJR - 1098 S.P.R - 855 Fresh Fresh PD-33 Fresh

29/10/2007 24/10/2007 19/10/2007 19/10/2007 19/10/2007 20/07/2007 20/07/2007 29/03/2008 17/05/2007

Licence for manufacturing & selling sugar in Barkatpur, Bijnor, UP Consent for discharge under section 25/26Water Prevention and control of Pollution) Act, 1974 for unit at Barkatpur UP Consent for emission under section 21 Air Prevention and control of Pollution) Act, 1981 for unit at Barkatpur UP For the inspection of Boiler No. UP 6347at Shermau in Up Renewal of licence for factory at Barkatpur, UP Renewal of Licence for factory at Libberheri, Uttranchal Renewal of Factory Licence for the year 2008 at Khaikheri, Muzzafarnagar, UP Renewal of Factory Licence for the year 2008 Bijnore, UP For approval of the HSD storage tank construction at Shermau, Saharanpur UP For approval of the storage of sulphur at Shermau, Saharanpur UP For the grant of PD -2 License, for the unit at Barkatpur UP For obtaining NOC for setting up of HSD consumer pump at unit Khaikheri, UP

Asst Director of Factories, Saharanpur, UP Public Works Department, Saharanpur UP Public Works Saharanpur UP Department,

Excise Commissioner, Allahabad, UP Distt. Magistrate, Muzzaffernagar, UP

Form PD-34 Under PE50

198

STATUTORY AND OTHER INFORMATION Authority for the Present Issue This issue is pursuant to the resolution passed by the Board in their meeting held on January 31, 2008 and July 02, 2008. The Company has decided to offer 64,42,250 Equity shares of Rs. 10/- each at premium of Rs. [*] per share aggregating Rs. [*] to the existing Equity shareholders of the Company on rights basis in the ratio of one equity shares for the every four equity share held as on the Record Date [*] along with one detachable warrant per equity share offered. Each detachable warrant shall be entitled to issue and allotment of one equity share of face value of Rs. 10/each at a premium of Rs. 40/- per equity share. Prohibition by SEBI Neither our Company, nor our Promoters, our Directors or any of the Promoter Group Entities, or companies or entities with which the Company's Directors are associated with, as directors or promoters, have been prohibited from accessing or operating in the capital markets under any order or direction passed by SEBI. Neither we nor our Directors, our Promoters, Promoter Group Entities or relatives of Promoters have been detained as willful defaulters by RBI / Government authorities and there are no proceedings relating to violations of securities laws pending against them and there are no violations of securities laws committed by them in the past. Eligibility for the Issue Uttam Sugar Mills Limited is an existing company registered under the Indian Companies Act, 1956, whose Equity Shares are listed on the NSE and BSE. It is eligible to offer this Issue in terms of Clause 2.4.1(iv) of the SEBI (DIP) Guidelines. Disclaimer Clause of SEBI AS REQUIRED, A COPY OF THIS DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. "IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF DRAFT LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR 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 FOR 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, SPA MERCHANT BANKERS LIMITED HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (DISCLOSURES AND INVESTOR PROTECTION) GUIDELINES IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING AN INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT, WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT LETTER OF OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER SPA MERCHANT BANKERS LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED JULY 14, 2008 IN ACCORDANCE WITH THE SEBI (MERCHANT BANKERS) REGULATIONS, 1992, WHICH READS AS FOLLOWS: 1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC. AND OTHER MATERIALS MORE PARTICULARLY REFERRED TO IN THE ANNEXURE HERETO IN CONNECTION WITH THE FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO THE SAID ISSUE; 199

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, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND 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; (b) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY THE BOARD, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND (c) 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 (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 AND OTHER APPLICABLE LEGAL REQUIREMENTS.

3.

WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT LETTER OF OFFER ARE REGISTERED WITH THE BOARD AND THAT TILL DATE SUCH REGISTRATION IS VALID. WE HAVE SATISFIED OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS TO FULFILL THEIR UNDERWRITING COMMITMENTS. - NOT APPLICABLE WE CERTIFY THAT WRITTEN CONSENT FROM SHAREHOLDERS HAS BEEN OBTAINED FOR INCLUSION OF THEIR SECURITIES AS PART OF PROMOTERS' CONTRIBUTION SUBJECT TO LOCK-IN AND THE SECURITIES PROPOSED TO FORM PART OF PROMOTERS' CONTRIBUTION SUBJECT TO LOCK-IN, WILL 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 WE CERTIFY THAT CLAUSE 4.6 OF THE SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000, WHICH RELATES TO SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE CLAUSE HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER. - NOT APPLICABLE WE UNDERTAKE THAT CLAUSES 4.9.1, 4.9.2, 4.9.3 AND 4.9.4 OF THE SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS' CONTRIBUTION AND SUBSCRIPTION FROM ALL FIRM ALLOTTEES WOULD 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 COMPANY ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE. - NOT APPLICABLE WE CERTIFY THE REQUIREMENTS OF PROMOTERS' CONTRIBUTION ARE NOT APPLICABLE TO THE ISSUER UNDER CLAUSE 4.10 (C).

4. 5.

6.

7.

8.

200

9.

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.

10. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SECTION 73(3) OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE DRAFT LETTER OF OFFER. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION. 11. WE CERTIFY THAT NO PAYMENT IN THE NATURE OF DISCOUNT, COMMISSION, ALLOWANCE OR OTHERWISE SHALL BE MADE BY THE ISSUER OR THE PROMOTERS, DIRECTLY OR INDIRECTLY, TO ANY PERSON WHO RECEIVES SECURITIES BY WAY OF FIRM ALLOTMENT IN THE ISSUE. 12. 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 13. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER; (a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE SHALL BE ONLY ONE DENOMINATION FOR THE SHARES OF THE COMPANY AND (b) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME. THE FILING OF DRAFT LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR 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 RIGHTS ISSUE. SEBI, FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD MERCHANT BANKER ANY IRREGULARITIES OR LAPSES IN THE DRAFT LETTER OF OFFER." CAUTION / DISCLAIMER CLAUSE OF THE ISSUER AND THE LEAD MANAGER The Company and the Lead Manager accepts 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 by any other persons at the instance of the Company and anyone placing reliance on any other source of information would be doing so at his / her / their own risk. 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 Law and the applicable rules and regulations there under. The distribution of the 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 the legal requirements prevailing in those jurisdictions. Persons in whose possession this Draft Letter of Offer may come are required to inform themselves 201

about and observe such restrictions. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Uttarakhand, India only. Filing This Draft Letter of Offer was filed with SEBI, Plot No. C4-A, `G' Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051. All legal requirements applicable till date of filing this Draft Letter of Offer with the Stock Exchanges have been complied with. A copy of the Letter of the Offer, required to be filed under SEBI Guidelines would be filed with the Designated Stock Exchange. Listing The existing Shares are listed on the National Stock Exchange of India Limited (NSE) and the Bombay Stock Exchange Limited (BSE). The company has made applications to NSE and BSE for permission to deal in and for an official quotation in respect of the securities being offered in terms of this Draft Letter of Offer. The Company has received in-principle approvals from the NSE & BSE by letters dated [*] and [*]. The company will apply to NSE and BSE for listing of the securities to be issued pursuant to this issue. If the permission to deal in and for an official quotation of the securities is not granted by any of the Stock Exchanges mentioned here within 42 days from the Issue Closing Date, the Company should forthwith repay, without interest, all monies received from the applicants in pursuance of this Letter of Offer. If such money is not repaid within eight days after the Company becomes liable to repay it, then 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 Section 73 of the Companies Act 1956. Designated Stock Exchange The Designated Stock Exchange for the purpose of this Issue will be The National Stock Exchange of India Limited (NSE) Disclaimer Clause of The National Stock Exchange Limited, 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 the filing with Stock Exchange. Disclaimer Clause of the Bombay Stock Exchange Limited (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 the filing with Stock Exchange. Impersonation As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of subsection (1) of Section 68A of the Companies Act which is reproduced below: "Any person a. who 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" Dematerialised Dealing The Company has agreements dated March 03, 2006 and March 03, 2006 with NSDL and CDSL respectively and its Equity Shares bear the ISIN No. INE786F01031.

202

Consents Consents in writing of the Auditors, Lead Manager, Legal Advisor, Registrar to the Issue and Banker to the Issue to act in their respective capacities have been obtained and filed with SEBI, along with a copy of the Draft Letter of Offer and such consents have not been withdrawn up to the time of delivery of this Draft Letter of Offer for registration with the Stock Exchange. The Auditors of the Company have given their written consent for the inclusion of their Report in the form and content as appearing in this Draft Letter of Offer and such consents and reports have not been withdrawn up to the time of delivery of this Draft Letter of Offer for registration for registration with the stock exchange. To the best of the Company's knowledge there are no other consents required for making this Issue. However, should the need arise, necessary consents shall be obtained by the Company. Expert Opinion, if any The Company has not obtained any expert opinion in relation to this issue except as mentioned in the IDBI appraisal report of February 2007 Other Expenses of the Issue The other expenses of the Issue payable by the Company including, printing and distribution expenses, publicity, listing fees, stamp duty and other expenses are estimated at Rs. [*] Lakhs (around [*]% of the total Issue size) and will be met out of the proceeds of the Issue. The following table provides a break up of estimated issue expenses: Particulars Fees: Lead Manager to the Issue, Registrar to the Issue, Legal Counsel to the Issue & Auditors Advertising & Marketing expenses Printing, Stationary, Dispatch Stamp Duty, Listing, SEBI Fee and other expenses Total Amount (Rs. in Lakhs) [*] [*] [*] [*] [*]

Fees Payable to the Lead Manager to the Issue The fee payable to the Lead Manager to the Issue is set out in the engagement letter dated March 05, 2008 and other terms as set out in Memorandum of Understanding entered into by the Company with SPA Merchant Bankers Limited, copies of which are available for inspection at the Registered Office of the Company. Fees Payable to the Registrars to the Issue The fee payable to the Registrars to the Issue is as set out in the relevant documents, copies of which are kept open for inspection at the Registered Office of the Company. Underwriting commission, brokerage and selling commission No underwriting commission, brokerage and selling commission will be paid for this Issue. Previous Issues by the Company Except the Initial Public Offering of our equity shares in 2006, we have not made any Public or Rights Issue during the preceding 5 years. The details of the Initial Public Offering are as under: Date of opening of Issue Date of Closing of Issue Date of allotment under IPO Date of commencement of trading of our equity shares on NSE & BSE Face Value per equity share offered Issue Price per equity share offered Number of equity shares offered March 16, 2006 March 21, 2006 April 03, 2006 April 10, 2006 Rs. 10/Rs. 340/40,00,000

203

Previous Issue Of Shares Otherwise Than For Cash We have not made any issue of shares otherwise than for cash. Commission Or Brokerage On Previous Issues The Company has not paid any commission or brokerage on previous issue. Promise versus Performance We have made an Initial Public Offering of 40,00,000 equity shares of Rs. 10 each in March 2006 to part finance the project cost for setting up sugar mills and co-generation facilities at Khaikheri and Shermau where we had made certain promises in relation to the objects and capacity utilisation. Particulars Setting up of Unit III at village Khaikheri Setting up of Unit III at village Shermau Capacity & Capacity Utilization: Libberheri Unit Capacity in TCD Crushing Duration (in days) Capacity Utilization (in %) Barkatpur Unit Capacity in TCD Crushing Duration (in days) Capacity Utilization (in %) Khaikheri Unit Capacity in TCD Crushing Duration (in days) Capacity Utilization (in %) Shermau Unit Capacity in TCD Crushing Duration (in days) Capacity Utilization (in %) Promise To start Commercial Production by the end of October 2006 To start Commercial Production by the end of October 2006 2005-06 2006-07 2007-08 6250 165 82% 7000 150 75% 6250 165 82% 7000 160 75% 4500 160 75% 5000 160 75% 6250 165 82% 7000 160 80% 4500 160 80% 5000 160 80% Performance Commercial Production commenced in January 2007 Commercial Production commenced in April 2007 2005-06 2006-07 2007-08 6250 168 73.34% 7000 117 68.77% 6250 167 72.30% 7000 168 80.39% 4500 148 49.33% 5000 58 45.41% 6250 134 65.52% 7000 131 75.65% 4500 132 55.93% 5000 133 72.05%

The delay in implementation of the Project was due to delay in supply and erection of critical equipments and prolonged trial period. We have not been able to achieve the capacities as per the promise made in our public offer document due to short supply of sugarcane during the crusing season. We have not made any financial projections in the offer document of our previous capital issues. The funds raised from the Initial Public Offering have been utilized for the Objects as mentioned in the Offer Document. Investor Grievances and Redressal System The Company has adequate arrangements for redressal of Investor complaints and well-arranged correspondence system developed for letters of routine nature. The share transfer and dematerialization for the Company is being handled by our registrar and share transfer agent (Intime Spectrum Registry Limited). Letters are filed category wise after having attended to. Redressal norm for response time for all correspondence including shareholders complaints is 15 days. For details of Shareholder / Investor Grievance committee, please refer to the section titled "Our Management" on page [*] of this Draft Letter of Offer.

204

The investor grievances arising out of the Issue will be handled by Mr. G Ramarathnam, Legal & Corporate Affairs & Company Secretary & Compliance Officer, and Intime Spectrum Registry Limited who are the Registrars to the Issue. The Registrars will have a separate team of personnel handling only our post-Issue correspondence. The agreement between us and the Registrars will provide for retention of records with the Registrars for a period of 90 days from the date of closure of issue to enable the Registrars to redress grievances of Investors. All grievances relating to the Issue may be addressed to the Registrars to the Issue giving full details such as folio no., name and address, contact telephone / cell numbers, email id of the first applicant, number and type of shares applied for, Application Form serial number, amount paid on application and the name of the bank and the branch where the application was deposited, along with a photocopy of the acknowledgement slip. In case of renunciation, the details of the Renouncee should be furnished. The average time taken by the Registrar for attending to routine grievances will be one month from the date of receipt. In case of non-routine grievances where verification at other agencies is involved, it would be the endeavor of the Registrar to attend to them as expeditiously as possible. We undertake to resolve the Investor grievances in a time bound manner. Investors are advised to contact the Compliance Officer / Company Secretary in case of any pre-Issue / post-Issue related problems such as non-receipt of letters of allotment / share certificates / demat credit / refund orders etc. Mr. G Ramarathnam Legal and Corporate Affairs & Company Secretary & Compliance Officer A-2E, III Floor, CMA Tower Sector-24, Noida - 201 301 Tel.: +91 120 6545766 Fax: +91 120 2412715 E-mail: [email protected] Website: www.uttamsugar.com ISSUE SCHEDULE The subscription will open upon the commencement of the banking hours and will close upon the close of banking hours on the dates mentioned below: Issue Opening Date Last date for receiving requests for split application forms Issue Closing Date Changes in Auditors during the last 3 years There has been no change in the Statutory Auditors in the last 3 years. Revaluation of Assets There has been no revluation of assets during the last 5 years. Changes in Accounting Policies in the last 3 years There has been no change in the accounting policies in the last 3 years. Capitalisation of Reserves or Profits We have not issued any bonus share ssince inception. [*] [*] [*]

205

TERMS AND PROCEDURE OF THE ISSUE The Equity Shares now being offered are subject to the provisions of the Act and the terms and conditions of this Draft Letter of Offer, the CAF, the Memorandum and Articles of Association of the Company, the approvals from the Government of India, FIPB and RBI, if applicable, Guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued by Government of India and / or other statutory authorities and bodies from time to time, Listing Agreements entered into by the Company with Stock Exchanges, terms and conditions as stipulated in the allotment advise or letter of allotment or Security Certificate and rules as may be applicable and introduced from time to time. Authority for the issue This issue is pursuant to the resolution passed by the Board in their meeting held on January 31, 2008 and July 02, 2008. Ranking of equity shares The Equity Shares allotted pursuant to Letter of Offer shall rank pari-passu in all respects with the existing fully paid up Equity Shares of the Company including in respect of dividend, if any, declared by the Company, for the financial year, in which these Equity Shares are allotted. Mode of payment of dividend The dividend is paid to all the eligible shareholders in terms of the provisions of the Companies Act, 1956 with regard to payment of dividend. The unclaimed dividend if any are transferred to Investor Protection Fund as prescribed under the Act. Principal terms and conditions of the Issue: Equity Shares 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 either 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 of free transferability of shares; and · Such other rights, as may be available to a shareholder of a listed public company under the Companies Act and our Memorandum and Articles of Association. Face value Each Equity Share shall have the face value of Rs. 10/-. Issue Price Equity Share of face value of Rs. 10/- is being offered at a price of premium of Rs. [*] per share. Each equity share offered will have a detachable warrant attached. The holder of the warrant shall be entitled to acquire at his option, one equity share of Rs. 10/- each per warrant at a premium of Rs. 40/- per share. For further details of the principal terms of warrants, please refer to page no. [*]. Terms of payment Due date On application On allotment Total Face Value 5/5/10/Premium [*] [*] [*] Total [*] [*] [*]

206

Forfeiture If there is a failure to pay the call money on or before the day appointed for the payment of the same in accordance with the provisions of the articles of association of the Company, the Board may, at any time during which any part of the call or installment remains unpaid, serve a notice on such member of the Company requiring him to pay the same together with any interest that may have accrued. The notice shall fix a date and a place or places on and at which such call or installment and such interest as aforesaid are to be paid. The notice shall also state that in the event of nonpayment at or before the time and at the place or places appointed, the shares in respect of which such call was made or installment is payable and to which the notice relates will be liable to be forfeited. If the requisites of such notice are not complied with, any shares in respect of which such notice has been given may, at any time thereafter before payment of all calls or installments, interest and expenses due in respect thereof, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture. Any share so forfeited shall be deemed to be the property of the Company, and the Board may sell, re-issue or otherwise dispose of the same in such manner as they think fit. Rights entitlement ratio As your name appears as beneficial owner in respect of Equity Shares held in electronic form or appear in the register of members as an Equity Shareholder of the Company as on [*], i.e. the Record Date, you are entitled to the number of Equity Shares set out in Part A of the enclosed CAF. The Equity Shares are being offered on rights basis to the existing Equity Shareholders of the Company in the ratio of one Equity Share for every four Equity Share held as on the Record Date. Fractional entitlements If the shareholding of any of the Equity Shareholders is not in multiples of four, then the fractional entitlement of such holders shall be ignored. Equity Shareholders whose fractional entitlements are being ignored would be given preference for one equity share in allotment of additional Equity Share each if they apply for additional shares. Arrangement for Odd Lot Equity Shares The Company has not made any arrangements for the disposal of odd lot Equity Shares arising out of this Issue. The Company will issue certificates of denomination equal to the number of Equity Shares being allotted to the Equity Shareholder. Market lot The Equity Shares of the Company are tradable only in dematerialized form. The market lot for Equity Shares in dematerialised 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"). In respect of the Consolidated Certificate, the Company will, upon receipt of a request from the Equity Shareholder, split such Consolidated Certificate into smaller denomination within one month's time from the request of the Equity Shareholder in accordance with the provisions of the Articles of Association. 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. 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 dematerialised 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 applicant requires change in the nomination, they are requested to inform their respective DP.

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Separate ISIN for partly paid up equity shares and their listing and trading The partly paid up equity shares proposed to be issued on rights basis shall be listed and admitted for trading on NSE and BSE for which the Company has made an application to NSDL and CDSL for allotment of new ISIN through letters dated [*] and [*] respectively. The formalities for listing and trading of partly paid up equity shares will be completed with in 7 working days from the date of allotment. The Company has received in-principal approval from the NSE through letter no. [*] date [*] and from the BSE through letter no. [*] dated [*]. Restrictions on transfer and transmission of shares and on their consolidation / splitting There are no restrictions on transfer and transmission and on their consolidation / splitting of shares issued pursuant to this Issue. 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 NSE. Principal terms and conditions of the Issue: Detachable Warrants Rights of Warrant Holders · Subject to the above, the Detachable Warrants shall be transferable and transmittable in the same manner and to the same extent and be subject to the same restrictions and limitations and other related matters as in the case of Equity Shares of the Company. · The Detachable Warrants shall not confer upon the holders thereof any right to receive any notice of the meeting of the Shareholders of the Company or Annual Report of the Company and or to attend / vote at any of the General Meetings of the Shareholders of the Company held, if any. · Save and except the right of subscription to the Company's Equity Shares as per the terms of the Issue of Detachable Warrants, the holders of the Detachable Warrants in their capacity as Detachable Warrant holders shall have no other rights or privileges. · The equity shares arising from the exercise of warrants shall be subject to the Memorandum and Articles of Association of the Company and shall rank pari passu in all respects with existing equity shares of the Company including dividends. Except that the shares arising from conversion of warrants shall be eligible for dividends only after payment of Warrant exercise price and allotment of the equity shares. · The Warrant holders inter-se, shall rank pari passu without any preference or priority of one over the other or others. A separate register of warrant holders would be maintained by the Company. Entitlement and Warrant Exercise Price For every equity share offered through this issue, the applicant will be entitled for one detachable warrant. Each Detachable Warrant is exchangeable into one Equity Share of face value of Rs.10/- each at a premium of Rs. 40/- per share i.e. at a price of Rs. 50/- per equity share. This share entitlement on each Warrant upon exercise shall be proportionately adjusted for any further corporate action done by the Company like bonus issue or sub - division or consolidation of the face value of equity shares. The warrant exercise price shall be payable in full on exercise of warrants for allotment of equity shares. Warrant Exercise Period The warrants shall be convertible into equity shares at the end of 18 months from the date of allotment under this Issue. The Company shall fix a record date for the purpose of determining the detachable warrant holders who would be eligible to exercise their right for making an application for equity shares of the Company. The warrant exercise period shall commence from the date of completion of 18 months from the date of allotment upto such date as may be decided by the Board of Director, but not being a date earlier than 30 days from the completion of 18 months. The warrants that are not exercised during this period shall lapse, i.e. the warrant holders shall not be entitled to 208

exercise or claim issue of equity shares after expiry of the warrant exercise period and no equity shares shall be allotted against such detachable warrants. The Application Form will be sent by the Company to all the warrant holders on the record date The application form for exercise of warrants shall be sent by the Company to all the warrant holders, whose name appears in the register of warrant holders of the Company on the record date. The Application Form would also be available to all warrant holders on request with the Registrar during the Warrant Exercise Period and can be downloaded from the Company's website www.uttamsugar.com. During the Warrant Exercise Period, the Warrant holder should send their application to the Registrar and Transfer Agent of the Company by filling up the said application form. It should be accompanied by a cheque / demand draft for the requisite amount. Procedure for issue of equity shares in exchange of Warrants Warrant holders can apply for such number of shares as they desire by surrendering relevant warrants (1 equity share per warrant) together with the appropriate amounts as per procedure detailed below: In case of Warrant held in Physical Mode During the Warrant Exercise Period, the Warrant holder should send his application for issue of Equity Shares to the Registrar of the Company by filling up the requisite particulars on the Warrant Exercise Application Form and by discharging on the reverse of the Warrants certificate. For Resident Shareholders / Applicants and Non-resident Equity Shareholders / Applicants applying on a nonrepatriation basis, the application should be accompanied by a cheque/demand draft favoring "USML - Warrant Issue" payable at New Delhi for the requisite amount. For Non-resident Equity Shareholders / Applicants applying on a repatriation basis, the application should be accompanied by a cheque / demand draft favouring "USML - Warrant Issue-NR" payable at New Delhi for the requisite amount. For making the payment, Non-resident Equity Shareholders / Applicants are required to follow the similar procedures as specified in `Mode of payment for Non-Resident Equity Shareholders/ Applicants' on page [*] of this Draft Letter of Offer. In case of Warrant held in Dematerialised Mode The Registrar and Transfer Agent of the Company, M/s Intime Spectrum Registry Limited will, before the warrant exercise period open a special depository account with NSDL "USML - Warrant Conversion Escrow Account" with a Depository Participant (the "Special Depository Account"). The Company will open the Special Depository Account through the Registrar with NSDL at least 2 days prior to the commencement of the warrant exercise period. Shareholders of USML having the depository account with CDSL must use inter depository delivery instruction slip for the purpose of crediting their warrants in favour of the Special Depository Account with the NSDL. Beneficial owners who wish to tender their warrants for conversion, will be required to send their application for issue of equity shares on the prescribed application form sent separately, accompanied by a cheque / demand draft along with a photocopy of the delivery instruction in "off market" mode or counterfoil of the delivery instruction in "off market" mode, duly acknowledged by the depository participant ("DP") in favour of the special depository account, to the Registrars, M/s Intime Spectrum Registry Limited before the close of warrant exercise period. For Resident Shareholders / Applicants and Non-resident Equity Shareholders / Applicants applying on a nonrepatriation basis, the application should be accompanied by a cheque / demand draft favouring "USML - Warrant Issue" payable at New Delhi for the requisite amount. For Non-resident Equity Shareholders / Applicants applying on a repatriation basis, the application should be accompanied by a cheque / demand draft favouring "USML - Warrant Issue-NR" payable at New Delhi for the requisite amount. For making the payment, Non-resident Equity Shareholders / Applicants are required to follow the similar procedures as specified in `Mode of payment for Non-Resident Equity Shareholders/ Applicants' on page [*] of this Draft Letter of Offer. In case the warrants along with the cheques/drafts towards full payment of the Warrant Exercise Price do not reach the Registrar by the end of warrant exercise period then the same shall lapse. Warrants with payments for lesser amounts shall be rejected & returned. Any excess conversion price beyond the call option price shall be refunded by the Company. Shares allotted on exercise of valid warrants will be dispatched / credited to the applicant's electronic account within 15 days from the expiry of warrant exercise period, subject to requisite approvals from the statutory authorities. On allotment, Company shall apply for listing of resulting equity shares. 209

Variance in the terms of the Warrants The rights, privileges and conditions attached to the warrants may be modified or varied or abrogated with the consent of the holders of the warrants by a Special Resolution passed at a meeting of the warrant holders, provided that nothing in such resolution shall be operative against the Company when such resolution modifies or varies the terms and conditions governing the warrants if the same is not acceptable to the Company. At a meeting of the warrant holders, every warrant holder, and in the case of joint holders the one whose name stands first in the Register, shall be entitled to vote, either in person or by proxy, in respect of such warrants. The warrant holder will be entitled to one vote on a show of hands and his / her voting rights on a poll shall be in proportion to the outstanding number of the warrants held by him / her. The quorum for such meetings shall be at least five warrant holders present in person. The proceedings of the meeting of the warrant holders shall be governed by the provisions contained in the Articles and such other rules in force for the time being to the extent applicable and in relation to matters not otherwise provided for in terms of the Issue. Caution: · Each warrant application form shall be accompanied by a single instrument of payment. Clubbing of folios / securities for the purpose of making a consolidated payment is not permitted · Cheques / DD should be payable at Mumbai for the full amount and payments for less amount will be rejected. · Investors are advised not to close or transfer their demat account between the period of application for exercise of warrant(s) till the time of allotment/receipt of credit in their account so as to avoid rejection of credit from the Depositories and resultant delay in receiving the intimation of allotment Separate ISIN for warrants and their listing and trading The Detachable Warrants proposed to be issued along with equity shares on rights basis shall be listed and admitted for trading on NSE and BSE for which the Company has made an application to NSDL and CDSL for allotment of new ISIN through letters dated [*] and [*] respectively. The formalities for listing and trading of warrants will be completed with in 7 working days from the date of allotment. The Company has received in-principal approval from the NSE through letter no. [*] date [*] and from the BSE through letter no. [*] dated [*]. The equity shares issued pursuant to the allotment made to warrant holders would also be listed on NSE and BSE within 21 days of the expiry of the warrant exercise period. Minimum Subscription If the company does not receive the minimum subscription of 90% of the issued amount on the date of closure of the issue, or if the subscription level falls below 90% after the closure of issue on account of cheques having being returned unpaid or withdrawal of applications, the company shall forthwith refund the entire subscription amount received. If there is a delay beyond 8 days after the company becomes liable to pay the amount, the company shall pay interest as per Section 73 of the Companies Act, 1956. The Issue will become under-subscribed, if the number of shares applied for falls short of the number of shares offered, after considering the number of shares applied for as per the entitlement plus additional shares. The undersubscribed portion can be applied for only after the closure of the Issue. The Promoters can subscribe to such undersubscribed portion as per relevant provisions of law. Some members of the promoter group intend to subscribe to additional shares beyond their entitlement if the issue is under-subscribed. The acquisition of additional securities in such an event shall be exempt from making an open offer in terms of proviso to Regulation 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. Further this acquisition will not result in change of control of the management of the Company. For further details please refer to section titled "Basis of Allotment" beginning on page [*] of this Draft Letter of Offer.

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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. Offer to non-resident equity shareholders / applicants Applications received from NRIs and non-residents for allotment of Equity Shares and Detachable Warrants 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 receipt and refund of application moneys and the allotment of Equity Shares and the Detachable Warrants, issue of letter of allotment / share and warrant certificates, dividends, etc. General permission has been granted to any person resident outside India to purchase shares offered on rights basis by an Indian company in terms of FEMA and regulation 6 of notification No. FEMA 20/2000-RB dated May 3, 2000. The Board may at its absolute discretion, agree to such terms and conditions as may be stipulated by RBI while approving the allotment of the Equity Shares and Detachable Warrants, payment of dividend etc. to the non-resident shareholders. The Equity Shares and the Detachable Warrants 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. FIIs will not need permission of the FIPB / RBI for investment in the Issue to the extent of their Rights Entitlement. However, in case of applications from such entities in excess of their Rights Entitlement, allotment will be subject to restrictions under applicable laws, including existing ceilings on FII holdings in the Company and the sectoral caps on FDI in the Company, as applicable. Letter of Offer and CAF to non resident Equity Shareholders shall be dispatched only to their address mentioned in the Register of Members in India as provided under Section 53 of the Companies Act. 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 and one Hindi national daily with wide circulation and / or will be sent by ordinary post to the registered holders of the Equity Share from time to time. Issue of duplicate equity share certificate If any Equity Share certificate(s) is/are mutilated or defaced or the cages for recording transfers of Equity Shares are fully utilized, the Company against the surrender of such certificate(s) may replace the same, provided that the same will be replaced as aforesaid only if the certificate numbers and the distinctive numbers are legible. If any Equity Share certificate(s) is/are destroyed, stolen, lost or misplaced, then upon production of proof thereof to the satisfaction of the Company and upon furnishing such indemnity/surety and/or such other documents as the Company may deem adequate, duplicate Equity Share certificate(s) shall be issued. Option to subscribe Equity Shares / Warrants in dematerialized form Applicants to the Equity Shares / Warrants of the Company issued through this Issue shall be allotted the securities in dematerialized form at the option of the applicant. 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. Responsibility for correctness of information 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. The Equity Shares / Warrants pursuant to this Offer 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. Renouncees will also have to provide the 211

necessary details about their beneficiary account for allotment of securities in this Issue in demat form. In case these details are incomplete or incorrect, the application is liable to be rejected. INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN BE TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM. Issue procedure The CAF would be printed in black ink for all shareholders. 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, Intime Spectrum Registry Limited, for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address. The applicant can renoune the right to apply for equity shares offered either in full or in part in favour of any other person or persons. Such renouncees can only be Indian Nationals / Limited Companies incorporated under and governed by the Act, statutory corporations / institutions, trusts (unless registered under the Indian Trust Act), minors (through their legal guardians), societies (unless registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust / society is authorised under its constitution / bye laws to hold equity shares in a company and cannot be a partnership firm, more than three persons including joint-holders, HUF, foreign nationals (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of this Draft Letter of Offer could be illegal or require compliance with securities laws Option available to the Equity Shareholders The Composite Application Form clearly indicates the number of Equity Shares that the Equity Shareholder is entitled to. Equity Shareholder shall have the following options: · Apply for his entitlement in full; · Apply for his entitlement in full and apply for additional Equity Shares; · Apply for his entitlement in part; · Apply for his entitlement in part and renounce the other part; · Renounce his entire entitlement. Additional equity shares The equity shareholders are eligible to apply for additional equity shares provided the applicant has applied for all the equity shares offered to him without renouncing them in full or in part. The application for the additional equity shares shall be considered and allotment shall be made at the sole discretion of the Board and in consultation if necessary with the Designated Stock Exchange. This allotment of additional equity shares will be made on equitable basis with reference to number of shares held by the applicant on the record date. Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additional Equity Shares. Renunciation This Issue shall be deemed to include 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 subject to the approval of the Board. Such renouncees can only be Indian Nationals (including minor through their natural / legal guardian) / limited companies incorporated under and governed by the Act, statutory corporations / institutions, trusts (registered under the Indian Trust Act), societies (registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust/society is authorized under its constitution / bye laws to hold equity shares in a company and cannot be a partnership firm, foreign nationals or nominees of any of them (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of this Letter of Offer could be illegal or require compliance with securities laws of such jurisdiction or any other persons not approved by the Board. Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to other 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 Foreign Exchange Management Act, 1999 (FEMA) and other applicable laws and such permissions should be attached to the CAF. Applications not accompanied by the aforesaid approval are liable to be rejected. 212

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 the Company who do not wish to subscribe to the Equity Shares being offered but wish to renounce the same in favour of renounces shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s). Your attention is drawn to the fact that the Company shall not allot and / or register any Equity Shares in favor of: · More than three persons including joint holders · Partnership firm(s) or their nominee(s) · Minors · Any Trust or Society (unless the same is registered under the Societies Registration Act, 1860 or any other applicable Trust laws and is authorized under its Constitutions to hold Equity Shares of a Company) The right of renunciation is subject to the express condition that the Board / Committee of Directors shall be entitled in its absolute discretion to reject the request for allotment to renouncee(s) without assigning any reason thereof. Procedure for renunciation To renounce the whole offer in favour of one renouncee 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 renounces must sign Part C of the CAF. 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. Please note that the Warrant being attached to equity shares offered, cannot be renounced separately. Any renouncement of equity shares automatically renounces the right to entitlement of warrant. 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. 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 by the applicant for the Split Application Form should reach the Company 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. 213

How to Apply Applications should be made on the enclosed CAF provided by the Company. The enclosed CAF should be completed in all respects, as explained in the instructions indicated in the CAF. Applications will not be accepted by the Lead Manager or by the Registrar to the Issue or by the Company at any offices except in the case of postal applications as per instructions given elsewhere in the Letter of Offer. Payment should be made in cash (not more than Rs.20,000/-) or by cheque / bank draft / drawn on any Bank (including a Co-operative Bank) which is situated at and is a member or a sub-member of the bankers clearing house located at the centre where the CAF is submitted and which is participating in the clearing at the time of submission of the application. Outstation cheques/money orders/postal orders will not be accepted and CAFs accompanied by such cheques/money orders/postal orders are liable to be rejected. The CAF consists of four parts: · Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares · Part B: Form for renunciation · Part C: Form for application for renouncees · Part D: Form for request for split application forms Option Option Available Action Required A. Accept whole or part of your entitlement Fill in and sign Part A of the CAF (All joint holders must without renouncing the balance. sign) B. Accept your entitlement in full and apply Fill in and sign Part A including Block III relating to the for additional Equity Shares acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign) C. Renounce your entitlement in full to one Fill in and sign Part B (all joint holders must sign) person (Renouncee) (Joint renounces not indicating the number of Equity Shares renounced and exceeding three are considered as one hand over the entire CAF to the renouncee. The renouncee). renouncees must fill in and sign Part C of the CAF (All joint renouncees must sign) D. 1.Accept a part of your entitlement and Fill in and sign Part D (all joint holders must sign) renounce the balance to one or more requesting for Split Application Forms. Send the CAF to renouncee(s) the Registrar to the Issue so as to reach them on or before the last date for receiving requests for Split Forms. OR Splitting will be permitted only once. On receipt of the Split Form take action as indicated 2. Renounce your entitlement to all the below. Equity Shares offered to you to more than (i) For the Equity Shares you wish to accept, if any, fill in one renouncee and sign Part A of one split CAF (only for option 1). (ii) 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. (iii) Each of the renouncees should fill in and sign Part C for the Equity Shares accepted by them. E. Introduce a joint holder or change the This will be treated as a renunciation. Fill in and sign Part sequence of joint holders B and the renouncees must fill in & sign Part C. For applicants residing at places other than designated Bank Collecting branches. Applicants residing at places other than the cities where the Bank collection centres have been opened should send their completed CAF by registered post / speed post to the Registrars to the Issue, alongwith bank drafts, net of bank charges and postal charges, payable at Mumbai in favor of "USML - Rights Issue" crossed "A/c Payee only" so that the same are received on or before closure of the Issue (i.e. [*]). The Company will not be liable for any postal delays and applications received through mail after the closure of the Issue, are liable to be rejected and returned to the applicants. Applications by mail should not be sent in any other manner except as mentioned below. All application forms duly completed together with cash / cheque / demand draft for the application money must be submitted before the close of the subscription list to the Bankers to the Issue named herein or to any of its branches mentioned on the reverse of the CAF. The applicants are requested to strictly adhere to these instructions. Failure to do 214

so could result in the application being liable to be rejected with the Company, the Lead Manager and the Registrars not having any liabilities to such applicants. Non-resident Equity Shareholders Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares shall, inter alia, be subject to the conditions as may be imposed from time to time by the RBI, in the matter of refund of application moneys, allotment of Equity Shares, issue of letters of allotment / certificates / payment of dividends etc. 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 number 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. Request for Split Forms · Request for split forms should be addressed to the registrar to the issue so as to reach them on or before the last date for receiving of request for split forms by filling in Part D of the CAF. · Requests for Split Forms will be entertained only once. 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. 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 Uttam Sugar Mills Limited. Name and address of the Equity Shareholder including joint holders Registered Folio Number / DP ID No. and Client ID No. Number of shares held as on Record Date Certificate numbers and distinctive numbers, if held in physical form. Number of Rights Equity Shares entitled Number of Rights Equity Shares applied for out of entitlement Number of additional Equity Shares applied for, if any Total number of Equity Shares applied for Amount paid on application at the rate of Rs. [*]/- per Equity Share of face value of Rs. 10/- each (includes payment of Rs. 5/- towards face value and Rs. [*]/- towards securities premium) 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 In case of Non Resident Shareholders, NRE / FCNR / NRO account no., name and address of the Bank and branch should be given PAN number of the applicant and in case of joint applicants, for each of the applicant, irrespective of the total value of the equity shares applied pursuant to this issue. Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of the Company and Payments in such cases, should be through a cheque / demand draft payable at Mumbai be drawn in favor of "USML - Rights Issue" and marked "A/c payee only" in case of resident shareholders and non-resident shareholders applying on non-repatriable basis and in favor of "USML - Rights Issue NR" in case of non-resident shareholders applying on repatriable basis and marked "A/c payee only".

Please note that those who are making the application on plain paper 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 215

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. Application under Power of Attorney In case of application under power of Attorney or by Limited Companies or Bodies Corporate or Societies registered under the applicable laws, a certified copy of the Power of Attorney or the relevant authority, as the case may be, along with the certified copy of Power of Attorney or the relevant authority, as the case may be, along with the certified copy of Memorandum & Article of Association or Bye-Laws, as the case may be, must be lodged separately by registered post at the office of the Registrar to the Issue simultaneously with the submission of the CAF, indicating the serial number of CAF and the name of the bank and the branch office where the application is submitted within 10 days of closure of the offer, failing which the application is liable to be rejected. In case the Power of Attorney is already registered with the company, then the same need not be furnished again. However, the serial number of the Registration under which the Power of Attorney has been registered with the Company must be mentioned below the signature of the Applicant. Quoting of Permanent Account Number in the application forms In terms of circular no. SEBI/CFD/DIL/DIP/28/2007/29/11 dated November 29, 2007, every applicant shall disclose the Permanent Account Number (PAN), allotted under the Income Tax Act, 1961, in the application form, irrespective of the amount for which application is made. Application forms without this information will be considered incomplete and are liable to be rejected. Note on cash payment (Section 269 SS) Having regard to the provisions of Section 269 (SS) of the Income Tax Act, 1961, if the amount payable is Rs. 20,000/- or more, subscriptions against applications for securities should not be effected in cash and must be effected only by `Account Payee' cheques or `Account Payee' bank drafts. In case payment is effected in contravention of this provision, the application is liable to be rejected. Last date of application The last date for receipt of the duly filled in CAF by the Bankers to the Issue, together with the amount payable on application is [*]. If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar to the Issue 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 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 the section entitled "Basis of Allotment". Incomplete Application CAF's, which are not complete or are not accompanied with the application money amount payable, are liable to be rejected. Mode of payment for Resident Shareholders / Applicant Payment(s) must be made by cheque/demand draft and drawn on any bank (including a co-operative bank) which is situated at and is a member or a sub-member of the Bankers' Clearing House located at the centre where the CAF is submitted. A separate cheque/draft must accompany each CAF. Only one mode of payment should be used. Money orders, postal orders and outstation cheques will not be accepted and applications accompanied by any such instruments will be rejected. Shareholders/Applicants residing at places other than those mentioned in the CAF and applicants who wish to send their applications but not having collection centres should send their application by Registered Post, only to the Registrar to the Issue enclosing a Cheque / Demand draft, net of bank charges and postal charges, drawn on a clearing Bank and payable at Mumbai only before the closure of the issue. Such cheque / drafts should be payable to "USML - Rights Issue". All cheque/ drafts must be crossed `A/c Payee only'. No receipt will be issued for the application money received. However, the Collection Centre receiving the application will acknowledge receipt of the application by stamping and returning the acknowledgement slip at the bottom of each CAF. The Company is not responsible for any postal delay/ loss in transit on this account. 216

Mode of payment for Non-Resident Equity Shareholders/ Applicants As regards the application by non-resident Equity Shareholders, the payment must be made by demand draft / cheque payable at Mumbai (net of demand draft charges and postal charges) or funds remitted from abroad in any of the following ways: 1. Application with repatriation benefits (a) By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from abroad (submitted along with Foreign Inward Remittance Certificate); or (b) By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained and drawn on Mumbai; or (c) By Rupee draft purchased by debit to NRE/ FCNR Account maintained elsewhere in India and payable at Mumbai; or (d) FIIs registered with SEBI must remit funds from special non-resident rupee deposit account. (e) Non resident investors applying with repatriation benefits should draw cheques / drafts in favour of "USML Rights Issue NR" / "USML - Warrant Issue NR" payable at Mumbai and must be crossed "account payee only" for the full application amount. 2. 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 Mumbai or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Mumbai. In such cases, the allotment of Equity Shares will be on non-repatriation basis. All cheques/drafts submitted by nonresidents should be drawn in favour of the Bankers to the Issue and marked "USML - Rights Issue" or "USML-Warrant Issue" payable at Mumbai and must be crossed "Account 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 the Issue Closing Date. A separate cheque or bank draft must accompany each CAF. Applicants may note that where payment is made by drafts purchased from NRE / FCNR / NRO 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 / NRO account should be enclosed with the CAF. Otherwise the application shall be considered incomplete and is liable to be rejected. Note: · In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment in Equity Shares/Warrant can be remitted outside India, subject to tax, as applicable according to IT Act. · In case Equity Shares/Warrant are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity Shares/Warrant 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 CAFs 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. Investments by FIIs In accordance with the current regulations, the following restrictions are applicable for investment by FIIs: The Issue of Equity Shares under this Issue and the issue of Equity Shares on exercise of Warrants to a single FII should not exceed 10% of the post-issue paid up capital of the Company. In respect of an FII investing in the Equity Shares on behalf of its sub-accounts the investment on behalf of each sub-account shall not exceed 5% of the total paid up capital of the Company. At present, investments in companies manufacturing sugar fall under the RBI automatic approval route for FDI / NRI investment up to 100%.

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APPLICATIONS WILL NOT BE ACCEPTED BY THE LEAD MANAGER OR THE COMPANY Rights Entitlement As your name appears in the Register of Members of the Company on the Book Closure Date, you are entitled to this Rights Offer on the basis mentioned above. The number of equity shares to which you are entitled as a Shareholder of the company is shown in part A of the CAF. Bank details of the applicant The applicant must fill in the relevant column in the CAF giving particulars of saving Bank/Current Account Number and the Name of the Bank with whom such account is held, to enable the registrar to the issue to print the said details in the refund orders, if any, after the name of the Payees. Please note that provision of Bank Account details has now been made mandatory and applications not containing such details are liable to be rejected. Application number on the Cheque or Demend Draft To avoid any misuse of instruments, the applicants are advised to write the application number and name of the first applicant on the reverse of the cheque/demand draft. General instructions for applicants All applications should be made on the printed CAF provided by the Company and should be complete in all respects. Applications, which are not complete in all respects or are made otherwise than as herein provided or not accompanied by proper application money in respect thereof will be refunded without interest. · · · · · · Please read the instructions in the enclosed CAF carefully. All communications in connection with your application for the equity shares including any change in your registered address should be addressed to the registrar to the issue. Application Forms must be filled in ENGLISH in BLOCK LETTERS. Signatures should be either in English or Hindi or the languages specified in the Eighth Schedule to the Constitution of India. Signatures other than in the aforementioned languages or thumb impressions must be attested by a Notary Public or a Special Executive Magistrate under his/her official seal. In case of Joint Holders, all joint holders must sign the relevant parts of the Application Form in the same order and as per the specimen signatures recorded with the Company. In case of joint applicants, refunds and all payments will be made to the person whose name appears first on the application form and all communications will be addressed to him/her. To prevent any fraudulent encashment of refund orders by third parties, the Sole/First Applicant must indicate Saving / Current Account number and the name of the bank and its branch with whom such account is held in the space provided in the CAF for the purpose so that Refund Orders are printed with these details after the name. Applications without this information are liable to be rejected. The Application Form should be presented to the Bank in its entirety. If any of the Part(s) A, B, C and D of the Application Form(s) is /are detached or separated, such application will forthwith be rejected. All shareholders must submit the CAF along with remittance only to the Bankers to the Issue mentioned elsewhere in this Letter of Offer and not to the Company, the Registrar or the Lead Manager. Any dispute or suit action or proceedings arising out of or in relation to this Letter of Offer or in respect of any matter or thing herein contained and claimed by either party against the other shall be instituted or adjudicated upon or decided solely by the appropriate Court where Registered Office of the Company is situated. The last date for receipt of CAF alongwith the amount payable is [*]. However, the Board will have the right to extend the same for such period as it may determine from time to time, but not exceeding 60 days from the date of opening of the subscription list. If the CAF together with the amount payable thereunder is not received by the bankers to the issue on or before the closure of the banking hours on the aforesaid date, or such date as may be extended by the Board, the offer contained in this Letter of Offer shall be deemed to have been declined and the Board shall be at liberty to dispose the Rights hereby offered. For further instructions please read CAF carefully.

· · · ·

Grounds for technical rejection 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; 218

· · · · · · · · · · · ·

Age of first applicant not given; PAN not given irrespective of the amount of application; 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 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.

Basis of allotment The basis of allotment shall be finalized by the Board of the Company or Committee of Directors of the Company authorized in this behalf by the Board of the Company. The Board of the Company or the Committee of Directors as the case may be, will proceed to allot the equity Share in consultation with NSE in the following order of priority. 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 favor, in full or in part. b) Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them 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 under-subscribed portion after making full allotment in (a) above. The allotment of such Equity Shares will be made on a fair and equitable basis in consultation with the Designated Stock Exchange. c) Allotment to the renouncees who having applied for the Equity Shares renounced in their favour have also applied for additional Equity Shares, provided there is an under-subscribed portion after making full allotment in (a) and (b) above. The allotment of such additional Equity Shares will be made on a proportionate basis at the sole discretion of the Board/ Committee of Directors but in consultation with the Designated Stock Exchange, as a part of the Issue and not as a preferential allotment. d) Allotment to any other person as the Board may in its absolute discretion deem fit provided there is surplus available after making full allotment under (a), (b) and (c) above. e) The Company shall not retain any over-subscription. After taking into account allotment to be made under (a) and (b) 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 (c), (d) and (e) above. The Promoters has provided an undertaking to the Company to apply for additional Equity Shares and Warrants in the Issue, to the extent of the unsubscribed portion of the Issue. As a result of this subscription and consequent allotment, the Promoters may acquire shares over and above their entitlement in the Issue, which may result in an increase of the shareholding being above the current shareholding with the entitlement of Equity Shares under the Issue. This subscription and acquisition of additional Equity Shares by the Promoters 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 on "Objects of the Issue" on page [*] of this Letter of Offer, 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, in this Issue, the Promoters' shareholding in the Company exceeds their current shareholding. In the event of oversubscription, allotment will be made within the overall size of the issue. 219 a)

Allotment to the Promoter of any unsubscribed portion, over and above their entitlement shall be done in compliance with Clause 40A of the Listing Agreement and the other applicable laws prevailing at that time. Allotment Letters / Share Certificates / Demat Credit The Company will issue and dispatch letters of allotment/ share certificates/ demat credit and/ or letters of rejection along with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a period of six weeks from the Issue Closing Date. If such money is not repaid within eight days from the day the Company becomes liable to pay it, the Company shall pay that money with interest as stipulated under Section 73(2)/(2A) of the Companies Act. In case of those shareholders who have opted to receive their Right Entitlement Shares in dematerialised form by using electronic credit under the depository system, an advice regarding the credit of the Equity Shares shall be given separately. In case the Company issues letters 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 Act or other applicable provisions, if any. Allottees are requested to preserve such letters of allotment, which would be exchanged later for the share certificates. Letters of allotment/ share certificates/ demat credit/ refund orders above the value of Rs. 1,500 will be dispatched by registered post/ speed post to the sole/ first applicant's registered address. However, refund orders for value not exceeding Rs. 1,500 shall be sent to the applicants by way of certificate of posting. Such cheques or pay orders will be payable at par at all the centres where the applications were originally accepted and will be marked `A/c payee' and would be drawn in the name of the sole/ first applicant. Adequate funds would be made available to the Registrar to the Issue for the dispatch of such letters of allotment/ share certificates/ demat credit and refund orders. The Company shall ensure at par facility is provided for encashment of refund orders/ pay orders at the places where applications are accepted. Underwriting The present Issue is not underwritten. Mode of payment of refund Applicants should note that on the basis of name of the applicants, Depository Participant's name, Depository Participant-Identification number and Beneficiary Account Number provided by them in the Composite Application Form, the Registrar to the Issue will obtain from the Depositories, the applicant's bank account details including nine digit MICR code. Hence, applicants are advised to immediately update their bank account details as appearing on the records of the depository participant. Please note that failure to do so could result in delays in credit of refunds to applicants at the applicant's sole risk and neither the Lead Manager nor the Company shall have any responsibility and undertake any liability for the same. The payment of refund, if any, would be done through various modes in the following order of preference: 1. ECS - Payment of refund shall be undertaken through ECS for applicants having an account at any of the following 68 centres: Ahmedabad, Bangalore, Bhubaneshwar, Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna, Thiruvananthapuram (managed by RBI); Baroda, Dehradun, Nashik, Panaji, Surat, Trichy, Trichur, Jodhpur, Gwalior, Jabalpur, Raipur, Calicut, Siliguri (Non-MICR), Pondicherry, Hubli, Shimla (Non-MICR), Tirupur, Burdwan (Non-MICR), Durgapur (Non-MICR), Sholapur, Ranchi, Tirupati (Non-MICR), Dhanbad (Non-MICR), Nellore (Non-MICR) and Kakinada (NonMICR) (managed by State Bank of India); Agra, Allahabad, Jalandhar, Lucknow, Ludhiana, Varanasi, Kolhapur, Aurangabad, Mysore, Erode, Udaipur, Gorakpur and Jammu (managed by Punjab National Bank); Indore (managed by State Bank of Indore); Pune, Salem and Jamshedpur (managed by Union Bank of India); Visakhapatnam (managed by Andhra Bank); Mangalore (managed by Corporation Bank); Coimbatore and Rajkot (managed by Bank of Baroda); Kochi/Ernakulum (managed by State Bank of Travancore); Bhopal (managed by 220

2. 3. 4.

Central Bank of India); Madurai (managed by Canara Bank); Amritsar (managed by Oriental Bank of Commerce); Haldia (Non-MICR) (managed by United Bank of India); Vijaywada (managed by State Bank of Hyderabad); and Bhilwara (managed by State Bank of Bikaner and Jaipur). This mode of payment of refunds would be subject to availability of complete bank account details including the MICR code as appearing on a cheque leaf, from the Depositories. One of the methods for payment of refund is through ECS for applicants having a bank account at any of the abovementioned 68 centres. The payment of refunds is mandatory for applicants having a bank account at any of the centres mentioned in the aforesaid circular, except where the applicant, being eligible, opts to receive refund through direct credit or RTGS. Direct Credit - Applicants having bank accounts with the Refund Banker(s), in this case being, [*] shall be eligible to receive refunds through direct credit. Charges, if any, levied by the Refund Bank(s) for the same would be borne by the Company. RTGS ­ Investors desirous of taking direct credit of refund through RTGS, will have to provide the IFSC code in the CAF. For all other applicants, 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 and above. Such refunds will be made by cheques, pay orders or demand drafts drawn on the [*] and payable at par.

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 mandatorrily required to be given 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. In case the share held in demat mode, such bank account particulars will be obtained from the Depository. The Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud. Interest in case of delay on allotment / dispatch The Company agrees that as far as possible allotment of securities offered to the existing shareholders on Rights basis shall be made within 30 days of the closure of the issue. Share certificate, letter of allotment or letter of rejection as the case may be will be despatched to the registered address of the first named applicant and/or the respective beneficiary accounts will be credited within six weeks, from the date of closure of the Issue. In case of delay beyond eight days, the Company agrees that it shall pay interest at the rate of 15% per annum. Disposal of application and application money No receipt will be issued for the application moneys received. 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. In the event of shares not being allotted in full, the excess amount paid on application will be refunded to the applicant within 6 weeks of the closure of the Issue. The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and 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 six weeks 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. Undertakings by the Company 1. The complaints received in respect of the Issue would be attended to be as expeditiously and satisfactorily 2. 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 are taken within seven working days of finalization of Basis of Allotment 3. The funds required for dispatch of refund orders/ allotment letters/ certificates shall be made available to the Registrars to the Issue by the Issuer 221

4. That where the refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicants within 30 days of the closure of the issue giving details of the Bank where refunds shall be credited along with amount and expected date of electronic credit of refund. 5. The dispatch of Share Certificates/ refund orders and demat credit is completed and the allotment and listing documents will be submitted to the Stock Exchanges within two working days of finalization of Basis of Allotment 6. The certificates of the securities/ refund orders to the Non-Resident Indians shall be dispatched within specified time 7. The Company agrees that it shall pay interest @ 15% p.a. if the allotment is not made and / or the refund orders are not dispatched to the investors within 30 days from the date of closure of the Issue for the period of delay beyond 30 days. 8. No issue of securities shall be made till the securities offered through this Letter of Offer until the shares are listed or application moneys refunded on account of non-listing/ under subscription. Utilisation of Issue Proceeds The Board of Directors declares that: 1. The funds received against this Issue will be transferred to a separate bank account other than the bank account referred to sub-section (3) of Section 73 of the Act. 2. Details of all moneys utilised 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 moneys has been utilised. 3. Details of all such unutilised moneys out of the Issue, if any, shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the form in which such unutilised moneys have been invested. The funds received against this Issue will be kept in a separate bank account and the Company will not have any access to such funds unless it satisfies the Designated Stock Exchange with suitable documentary evidence that the minimum subscription of 90% of the Issue has been received by the Company. 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 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 superscribed `USML RIGHTS ISSUE' on the envelope) to the Registrar to the Issue at the following address: Intime Spectrum Registry Limited C-13, Pannalal Silk Mills Compound LBS Marg, Bhandup (West) Mumbai - 400 078 Tel.: +91 22 2596 0320 Fax: +91 22 2596 0328 - 29 E-mail: [email protected] Website: www.intimespectrum.com Contact Person: Ms. Awani Thakkar It is to be specifically noted that this Issue of Equity Shares is subject to the section entitled `Risk Factors' beginning on page [*] of this Draft Letter of Offer. The Issue will not be kept open for more than 30 days unless extended, in which case it will be kept open for a maximum of 60 days.

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MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF OUR COMPANY Share Capital 3. The Authorised Share Capital of the Company shall be such as given in part V of the Memorandum of Association or altered from time to time, with the power to increase, reduce, sub-divide or to repay the same or to divide the same into several classes and to attach thereto any rights and to consolidate or sub-divide or reorganise the shares and subject to Section 106 of the Act, to vary such rights as may be determined in accordance with the regulations of the Company. 4. Subject to the provisions of these Articles and of the Act, the shares shall be under the control of the Board of Directors, who may allot or otherwise dispose of the same to such persons, on such terms and conditions and at such time as they think fit and with full power to give any person to the option to call of or be allotted shares of the Company of any class, either at a premium or at par or at a discount and for such time and for such consideration as the Board of Directors think fit (subject to the provisions of section 78 and 79 of the Act), provided that option or right to call of shares shall not be given to the person except with the sanction of the Company in General Meeting. The Board shall cause to be made the returns as to allotment provided for the Section 75 of the Act. 4A (ii) Where at the time after the expiry of two years from the formation of the company or at any time after the expiry of one year from the allotment of shares in the company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the company by allotment of further shares either out of the unissued capital or out of the increased share capital then: a) Such further shares shall be offered to the persons who at the date of the offer, are holders of the equity shares of the company, in proportion, as near as circumstances admit, to the capital paid up on those shares at the date. b) Such offer shall be made by a notice specifying the number of shares offered and limiting a time not less than thirty days from the date of the offer and the offer if not accepted, will be deemed to have been declined. c) The offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to them in favour of any other person and the notice referred to in sub clause (b) hereof shall contain a statement of this right. PROVIDED THAT the Directors may decline, without assigning any reason to allot any shares to any person in whose favour any member may renounce the shares offered to him. d) After expiry of the time specified in the aforesaid notice or on receipt of earlier intimation from the person to whom such notice is given that he declines to accept the shares offered, the Board of Directors may dispose off them in such manner and to such person(s) as they may think, in their sole discretion, fit. (iii) Notwithstanding anything contained in sub-clause (1) thereof, the further shares aforesaid may be offered to any persons (whether or not those persons include the persons referred to in clause (a) of sub-clause (1) hereof) in any manner whatsoever. b) If a special resolution to that effect is passed by the company in General Meeting, or c) Where no such special resolution is passed, if the votes cast (whether on a show of hands or on a poll as the case may be) in favour of the proposal contained in the resolution moved in the general meeting (including the casting vote, if any, of the Chairman) by the members who, being entitled to do so, vote in person, or where proxies are allowed, by proxy, exceed the votes, if any, cast against the proposal by members, so entitled and voting and the Central Government is satisfied, on an application made by the Board of Directors in this behalf that the proposal is most beneficial to the company. (iv) Nothing in sub-clause (c) of (1) hereof shall be deemed ; a) To extend the time within which the offer should be accepted; or b) To authorise any person to exercise the right of renuciation for a second time on the ground that the person in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation. (v) Nothing in this Article shall apply to the increase of the subscribed capital of the company caused by the exercise of an option attached to the debenture issued or loans raised by the company : i) To convert such debentures or loans into shares in the company; or ii) To subscribe for shares in the company (whether such option is conferred in these Articles or otherwise). 223

4B

4C 5.

6.

7. 10.

11.

11A

PROVIDED THAT the terms of issue of such debentures or the terms of such loans include a term providing for such option and such term : a) Either has been approved by the Central Government before the issue of the debentures or the raising of the loans or is in conformity with Rules, if any, made by that Government in this behalf; and b) In the case of debentures or loans or other than debentures issued to or loans obtained from Government or any institution specified by the Central Government in this behalf, has also been approved by a special resolution passed by the company in General Meeting before the issue of the debentures or raising of the loans. Any debentures, debenture-stock or other securities may be issued at a discount, premium or otherwise and may be issued on condition that they shall be convertible into shares of any denomination and with any privileges and conditions as to redemption, surrender, drawing, allotment of shares, attending (but not voting) at the General Meeting, appointment of Directors and otherwise Debentures with the right to conversion into or allotment of shares shall be issued only with the consent of the Company in the General Meeting by a Special Resolution. Subject to the provisions of Article of Association of the Company, Companies Act, 1956 and Depository Act, 1956, the Company may issue shares either in physical form or in demateralised form from time to time as may be decided by Board of Directors." Any publication singed by or on behalf of an applicant for shares in the Company, followed by an allotment of any shares therein, shall be an acceptance of shares within the meaning of these Articles, and every person who thus or otherwise accepts any shares and whose name is on the register shall, for the purposes of the Articles, be a member. (1) If at any time the share capital is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, subject to the provisions of Section 106 and 107 of the Act and whether or not the company is being wound up be varied with the consent in writing of the holders of three fourths of the issued shares of that class or with a sanction of a resolution passed at a separate meeting of the holders of the shares of that class. (2) Subject to the provisions of Section 170 (2) (a) and (b) of the Act, to every such separate meeting, the provisions of these regulations relating to meetings shall mutatis mutandis apply, but so that the necessary quorum shall be five persons at least holding or representing by proxy or one-third of the issued shares of the class in question. The rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not unless otherwise provided by the terms of issue of the shares of that class be deemed to be varied by the creation or issue of further shares ranking pari passu therewith. (1) Every person whose name is entered as a member in the register of members shall be entitled to receive within three months after allotment (or within such other period as the conditions of issue shall provide) or within one month after the application for the transfer of registration is received by the Company, a. one certificate for all his shares without payment, or b. several certificates, each for one or more of his shares, provided that any sub-division, consolidation or splitting of certificates required in marketable lots shall be done be done by the Company free of any charges. (2) Every certificate shall be under the seal and shall specify the shares to which it relates and the amount paid up thereon. (3) In respect of any share or shares held jointly by several persons, the Company shall not be bound to issue more than one certificate, and delivery of a certificate for a share to one of several joint holders shall be sufficient delivery to all such holders. The Company agrees, that it will not charge any fees exceeding those which may be agreed upon with the Stock Exchange. (i) for issue of new certificates in replacement of those that are torn, defaced, lost or destroyed :(ii) for sub-division and consolidation of shares and debenture certificates and for sub-division of Letters of Allotment and Split, consolidation, Renewal and Pucca Transfer Receipts into denominations other than those fixed for the market units of trading". If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the back thereof for endorsement of transfer, then upon production and surrender thereof to the Company, a new Certificate may be issued in lieu thereof, and if any certificate lost or destroyed then upon proof thereof to the satisfaction of the company and on execution of such indemnity as the company deem adequate, being given, an a new 224

Certificate in lieu thereof shall be given to the party entitled to such lost or destroyed Certificate. Every Certificates under the Article shall be issued without payment of fees if the Directors so decide, or on payment of such fees (not exceeding Rs.2/- for each certificate) as the Directors shall prescribe. Provided that no fee shall be charged for issue of new certificates in replacement of those which are old, defaced or worn out or where there is no further space on the back thereof for endorsement of transfer. Provided that notwithstanding what is stated above the Directors shall comply with such Rules or Regulation or requirements of any Stock Exchange or the Rules made under the Act or the rules made under Securities Contracts (Regulation) Act, 1956 or any other Act, or rules applicable in this behalf. 12. 13 The provisions of this Article shall mutatis mutandis apply to debentures of the Company. The Company may issue such fractional certificates as the Board may approve in respect of any of the shares of the Company on such terms as the Board thinks fit as to the period within which the fractional certificates are to be converted into share certificates. If any share stands in the names of two or more persons, the person first named in the register of members shall, as regards receipt of dividends, the service of notices and subject to the provisions of these Articles, all or any other matter connected with the Company except the issue of share certificates, voting at meeting and the transfer of the share, be deemed the sole holder thereof. (1) The Company shall have a first and paramount lien upon every share ( not being a fully paid up share), for all money (whether presently payable or not) called or payable at a fixed time in respect of that share. Unless otherwise agreed the registration of a transfer of a share shall operate as a waiver of the Company's lien if any, on such shares. The Board of Directors may at any time declare any shares to be wholly or in part to be exempt from the provisions of this article. (2) The Company's lien, if any, on a share shall extend to all dividends payable thereon, subject to section 205A of the Act. The company may sell, in such manner as the Board thinks fit, any share on which the Company has a lien provided that no sale shall be made :(a) unless a sum in respect of which the lien exists is presently payable : or (b) until the expiration of thirty days after a notice in writing demanding payment of such part of the amount in respect of which the lien exists as is presently payable, have been given to the registered holder for the time being of the share or the person entitled thereto by reason of his death or insolvency and stating that amount so demanded if not paid with the period specified at the Registered Office of the Company the said shares shall be sold. (1) To give effect to any such sale, the Board may authorise some person to transfer the shares sold to the purchaser thereof. (2) The purchaser shall be registered as the shareholder of the shares comprised in any such transfer. (3) The purchaser shall not be bound to see to the application of the purchase money, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the sale. (1) The proceeds of the sale shall be received by the company and applied in payment of the whole or a part of the amount in respect of which the lien exist as is presently payable. (2) The residue, if any, shall, subject to a like lien for sums not presently payable as existed upon the shares at the date of sale, be paid to the person entitled to the shares at the date of the sale.

Lien 14.

15.

16.

17.

Calls of Shares 18. (1) The Board of Directors may, from time to time, make calls upon the members in respect of money unpaid on their shares (whether on account of the nominal value of the shares or by way of premium) and not by the condition of allotment thereof made payable at fixed times. (2) Each member shall, subject to receiving at least thirty days notice specifying the time or times and place of payment of the call money pay to the Company at the time or times and place so specified, the amount called on his shares. (3) A call may be revoked or postponed at the discretion of the Board 23. Subject to the provisions of Section 92 and 292 of the Act, the Board :a) may, if it thinks fit, receive from any member willing to advance all or any part of the money uncalled and 225

unpaid upon any shares held by him; and b) if it thinks fit, may pay interest upon all or any of the moneys advanced in uncalled and unpaid shares (until the same would but for such advance become presently payable) at such rate not exceeding, unless the Company in general meeting shall otherwise direct, 9% (nine percent) per annum as may be agreed upon between the Board and the members paying the sums or advances, Money so paid in advance shall not confer a right to dividend or to participate in profits. Transfer of Shares 30. The Board of Directors may, subject to the right of appeal conferred by Section 111 of the Companies Act, 1956, decline to register :(a) the transfer of a share not being a fully paid up share, to a person of whom they do not approve ; or (b) any transfer of the share on which the Company has a lien, provided that the registration of transfer shall not be refused on the ground of transferor being either alone or jointly with any person or persons indebted to the Company on any account except a lien. (c) Notice of refusal to transfer shares to transferor or transferee shall be sent within 30 days. 31. The Board may also decline to recognize any instrument of transfer unless ­ (a) the instrument of transfer is accompanied by the certificate of the shares to which it relates, and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer; and (b) the instrument is in respect of only one class of shares. 32. All instruments of transfer which shall be registered shall be retained by the Company, but may be destroyed upon the expiration of such period as the Board may from time to time determine. Any instrument of transfer which the Board declines to register shall (except in any case of fraud) be returned to the person depositing the same. 33. (a) the registration of transfers may be suspended at such times and for such periods as the Board may, from time to time, determine. Provided that such registration shall not be suspended for more than forty-five days in the aggregate in any year or for more than thirty days at any one time. (b) There shall be no charge for : (a) registration of shares or debentures; (b) sub-division and or consolidation of shares and debenture certificates and sub-division of Letter of Allotment and split consolidation, renewal and pucca transfer receipts into denominations corresponding to the market unit of trading; (c) sub-division of renouncible Letters of Right; (d) issue of new certificates in replacement of those which are decrepit or worn out or where the cages on the reverse for recording transfers have been fully utilised; (e) registration of any Powers of Attorney, Letter of Administration and similar other documents. Transmission of Shares 34. (1) On the death of a member, the survivor or surviors where the member was a joint holder and his legal representative where he was a sole holder shall be the only person recognized by the Company as having any title to his interest in the shares. (2) Nothing in clause (1) shall release the estate of a deceased joint holder from any liability in respect of any share which had been jointly held by him with other persons. 35. (1) Any person becoming entitled to a share in consequence of the death or insolvency of a member may, upon such evidence being produced as may from time to time properly be required by the Board and subject as hereinafter provided elect, either ­ a. to be registered himself as holder of the share; or b. to make such transfer of the shares as the deceased or insolvent member could have made. (2) The Board shall, in either case, have the same right to decline or suspend registration as it would have had, if the deceased or insolvent member had himself transferred the share before his death or insolvency. 36. (1) If the person so becoming entitled, shall elect to be registered as holder of the share himself, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects. (2) If the person aforesaid shall elect to transfer the share, he shall testify his election by executing a transfer of the share. (3) All the limitations, restrictions and provisions of these regulations relating to the right to transfer and the registration of transfers of shares shall be applicable to any such notice or transfer as aforesaid as if the death 226

37.

or insolvency of the member had not occurred and the notice of transfer were a transfer signed by that member. On the transfer of the share being registered in his name a person becoming entitled to a share by reason of the death or insolvency of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he was the registered holder of the share and that he shall not, before being registered as a member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company; Provided that the Board may, at any time, give notice requiring any such person to elect either to be registered himself or to transfer the share and if the notice is not complied with within 90 (ninety) days, the Board may thereafter with hold payment of all dividends, bonus or other moneys payable in respect of the share, until the requirements of the notice have been complied with.

Forfeiture of shares 40. If a member fails to pay any call or installment of a call, on the day appointed for payment thereof, the Board may, at any time thereafter during such time as any part of the call or installment remains unpaid, serve a notice on him requiring payment of so much of the call or installment as is unpaid together with any interest which may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment. 41. The notice aforesaid shall :(a) name a further day (not earlier than the expiry of 30 (thirty) days from the date of service of notice) on or before which the payment required by the notice is to be made; and (b) state that, in the event of non-payment on or before the day so named, the shares in respect of which the call was made, will be liable to be forfeited. 42. If the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has been given may, at any time, thereafter before the payment required by the notice has been made, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the date of forfeiture, which shall be the date on which the resolution of the Board is passed forfeiting the shares. 43. (1) A forfeited share may be sold or otherwise disposed of on such terms and in such manner as the Board thinks fit. (2) At any time before a sale or disposal, as aforesaid, the Board may annul the forfeiture on such terms as it thinks fit. 45. (1) A duly verified declaration in writing that the declaration is a director or the secretary of the Company and that a share in the company has been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts stated therein stated as against all persons claiming to be entitled to the share. (2) The Company may receive the consideration, if any, given for the share on any sale or disposal thereof and may execute a transfer of the share in favour of the person to whom the share is sold or disposed of. (3) The transferee shall thereupon be registered as the holder of the share. (4) The transferee shall not be bound to see to the application of the purchase money, if any, nor shall his title to the share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the share. 46. The provisions of these regulations as to forfeiture shall apply, in the case of non-payment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the nominal value of the share or by way of premium, as if the same had been payable by virtue of a call duly made and notified. 47. The forfeiture of a share shall involve the extinction of all interest in and also of all claims and demands against the Company in respect of the share, and all other rights incidental thereto except only such of those rights as by these Articles are expressly save. 48. Upon any sale, after forfeiture or for enforcing a lien in purporting exercise of powers hereinbefore given, the Board may appoint some person to execute an instrument of transfer of the shares sold and cause the purchaser's name to be entered in the Register in respect of the shares sold and the purchaser shall not be bound to see to the regularity of the proceedings or to the application of the purchase money and after his name has been entered in the Register in respect of such shares, the validity, of the sale shall not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the company exclusively. 49. Upon any sale, re-allotment or other disposal under the provisions of these Articles relating to lien or to forfeiture, the certificate or certificates originally issued in respect of the relative shares shall (unless the same shall on demand by the Company have been previously surrendered to it by the defaulting member) stand cancelled and 227

become null and void and of no effect. When any shares, under the powers in that behalf herein contained are sold by the Board and the certificate in respect thereof has not been delivered up to the Company by the former holder of such shares, the Board may issue a new certificate for such shares distinguishing it in such manner as it may think fit, from the certificate not so delivered. Conversion of shares into stock 51. The Company may, by an ordinary resolution :(a) convert any paid-up shares into stock; and (b) reconvert any stock into paid-up shares of any denomination authorised by these regulations. 54. Such of the regulations of the Company (other than those relating to share warrants), as are applicable to paid-up shares shall apply to stock and the words "share" and "shareholders" in those regulations shall include "stock" and "stockholders" respectively. Share Warrants 55. The Company may issue share warrant, subject to and in accordance with, the provision of Section 114 and 115 of the Act and accordingly the Board may in its discretion, with respect to any share which is fully paid up, on application in writing signed by the person registered as holder of the share and authenticated by such evidence (if any) as the Board may, from time to time, require as to the identity of the person signing the application and on receiving the certificate (if any) of the share; and the amount of the stamp duty on the warrant and such fee as the Boar may, from time to time, require, issue a share warrant. 58. The Board may, from time to time, make rules as to the terms on which (if it shall think fit) a new share warrant or coupon may be issued by way of renewal in case defacement, loss or destruction of the original. Alteration of Capital 59. The Company may, from time to time, by ordinary resolution increase its share capital by such sum, to be divided into shares of such amount, as the resolution shall specify. 60. The Company may by ordinary resolution in general meeting :(a) consolidate and divide all or any of its capital into shares of larger amounts than its existing shares ; (b) sub-divide its shares or any of them, into shares of smaller amounts than is fixed by the Memorandum of Association, so however, than in the sub-division the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived; (c) cancel any share which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled. 61. The Company may, from time to time, by special resolution and on compliance with the provisions of Section 100 to 105 of the Act, reduce its share capital and any capital reserve fund or share premium account. General Meetings 65. All General Meetings other than the Annual General Meetings of the Company shall be called Extraordinary General Meetings. 66. (1) The Board may, whenever it thinks fit call an Extra ordinary General Meeting. (2) If at any time there are not within Indian Directors capable of acting who are sufficient in number to form a quorum, any Director or any two members of the Company may call an extraordinary general meeting in the same manners, as nearly as possible, to that in which such a meeting may be called by the Board. Conduct of General Meetings 67. No general meeting, annual or extraordinary, shall be competent to enter upon, discuss or transact any business which has not been stated in the notice by which it was convened or called. 68. (1) No business shall be transacted at any general meeting, unless a quorum or members is present at the time when the meeting proceeds to business. (2) Save as otherwise provided in Section 174 of the Act, a minimum of five members present in person shall be the quorum. A body corporate, being a member, shall be deemed to be personally present if it is represented in accordance with Section 187 of the Act.

228

Votes of Members 76. Subject to any rights or restrictions for the time being attached to any class or classes of shares :(a) on a show of hands, every member present in person shall have one vote; and (b) on a poll, the voting rights of members shall be as laid down in section 87 of the Act. 79. No member shall be entitled to vote at any general meeting unless all calls, and other sums presently payable by him in respect of shares in the Company or in respect of shares on which the Company has exercise any right of lien, have been paid. 81. The instrument appointing a proxy and the power of attorney or other authority, if any under which it is signed or a notarially certified copy of that power or authority shall be deposited at the registered office of the Company, not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, or in the case of a poll, not less than 24 hours before the time appointed for the taking of the poll; and in default the instrument of proxy shall not be treated valid. Board of Directors 86. At every Annual General Meeting of the Company one third of such of the Directors for the time being as are liable to retire by rotation in accordance with the provisions of Section 255 of the Act or if their number is not three or a multiple of three, then the number nearest to one third shall retire from office in accordance with the provisions of Section 256 of the Act. 87. (1) Non-Executive Directors of the Company may be paid sitting fees for each meeting of Board or Committee thereof, attended by him/ her a sum not exceeding such amount as decided by Board of Directors but subject to the first proviso of section 310 of the Companies Act, 1956 and Rules made thereunder from time to time." (2) Subject to the provisions of Section 309,310 and 314 of the Act, the Directors shall be paid such further remuneration, whether in the form of monthly payment or by a percentage of profit or otherwise, as the Company in General meeting may, from time to time, determine and such further remuneration shall be divided among the Directors in such proportion and in such manner as the Board may, from time to time, determine and in default of such determination, shall be divided among the Directors equally or if so determined paid on a monthly basis. (3) The remuneration of the Directors shall, in so far as it consists of a monthly payment, be deemed to accrue from day to day. (4) Subject to the provisions of Section 198, 309, 310 and 314 of the Act, if any Director be called upon to perform any extra services or make special exertions or efforts ( which expression shall include work done by a Director as a member of any committee formed by the Directors) the Board may pay such Director special remuneration for such extra services or special exertions or efforts either by way of a fixed sum or by percentage of profit otherwise and may allow such Director at the cost and expense of the Company such facilities or amenities (such as rent free house, free medical aid and free conveyance) as the Board may determine from time to time. (5) In addition to the remuneration payable to them in pursuance of the Act, the Directors may be paid in accordance with Company's rules to be made by the Board all travelling, hotel and other expenses properly incurred by them ­ a. in attending and returning from meetings or adjourned meeting of the Board of Directors or any committee thereof ; or b. in connection with the business of the Company. 90. If it is provided by any trust deed securing or otherwise in connection with any issue of debentures of the Company that any person or persons shall have power to nominate a Director of the Company then in the case of any and every such issue of debentures, the persons having such power may exercise such power, from time to time and appoint a Director accordingly. Any Director so appointed is herein referred to as a Debenture Director. A Debenture Director may be removed from office at any time by the person or persons in whom for the time being is vested the power under which he was appointed and another Director may be appointed in his place. A debenture Director shall not be liable to retire by rotation, but he shall be counted in determining the number of retiring Directors. 91. Notwithstanding any thing to the contrary contained in these Articles, so long as any moneys remain owing by the Company to the INDSUTRIAL DEVELOPMENT BANK OF INDIA (IDBI), Industrial Finance Corporation of India (IFCI), The Industrial Credit & Investment corporation of India (ICICI) and Life Insurance Corporation of India (LIC) or to any other Finance Corporation or Credit Corporation or to any other Financing Company or Body out of any Loans granted by them to the Company or so long as IDBI, IFCI, ICICI, LIC and Unit Trust of 229

94.

India (UTI) or any other Financing Corporation or Credit Corporation or any other Financing Company or Body (each of which IDBI,IFCI, ICICI, LIC and UTI or any other Finance Corporation or Credit Corporation or any other Financing company or Body is herein after in this Article referred to as "the corporation") continue to hold debentures in the Company by direct subscription or private placement, or so long as the Corporation holds shares in the company as a result of underwriting or direct subscription or so long as any liability of the company arising out of any Guarantee furnished by the Corporation on behalf of the Company remains outstanding, the Corporation shall have a right to appoint from time to time, any person or persons as Director or Directors, whole time or non-whole time, (which Director or Directors is/are hereinafter referred to as "Nominee Director/s") on the Board of the Company and to remove from such office any person or persons so appointed and to appoint any person or persons in his or their place/s. The Board of Directors of the Company shall have no power to remove from office the Nominee Director/s. At the option of the Corporation such Nominee Director/s shall not be required to hold any share qualification in the Company. Also at the option of the Corporation such Nominee Director/s shall not be liable to retirement by rotation of Directors. Subject as aforesaid , the Nominee Director/s shall be entitled to the same rights and privileges and be subject to the same obligations as any other Director of the Company. At Nominee Director/s so appointed shall hold the said office only so long as any moneys remain owing by the Company to the Corporation or so long as the Corporation holds Debentures in the Company as a result of direct subscription or private placement or so long as the Corporation holds shares in the Company as a result of underwriting of direct subscription or the liability of the Company arising out of the Guarantee is outstanding and the Nominee Director/s so appointed in exercise of the said power shall ipso facto vacate such office immediately the money owing by the Company to the Corporation are paid off or on the Corporation ceasing to hold Debentures/Shares in the Company or on the satisfaction of the liability of the Company arising out of the Guarantee furnished by the Corporation. The Nominee Director/s appointed under this Article shall be entitled to receive all notices of and attend all General Meetings, Board Meetings and of the Meetings of the Committee of which the Nominee Director/s is/are member/s as also the minutes of such meetings. The Corporation shall also be entitled to receive such notices and minutes. The Company shall pay to the Nominee Director/s sitting fees and expense to which the other Directors of the Company are entitled, but if any other fees, commission, monies or remuneration in any form is payable to the Directors of the Company, the fees, commission, monies and remuneration in relation to such Nominee Director/s shall accrue to the Corporation and the same shall accordingly be paid by the Company directly to the Corporation. Any expenses that may be incurred by the Corporation or such Nominee Director/s in connection with their appointment or Directorship shall also be paid or reimbursed by the Company to the Corporation or, as the case may be, to such Nominee Director/s. Provided that if any such Nominee Director/s is an officer of the Corporation the sitting fees, in relation to such Nominee Director/s shall also accrue to the corporation and the same shall accordingly be paid by the Company directly to the Corporation. In the event of the Nominee Director/s being appointed as Whole time Director/s, such Nominee Director/s shall exercise such powers and have such rights as are usually exercised or available to a whole time Director in the management of the affairs of the Company. Such Whole time Director/s shall be entitled to receive such remuneration, fees, commission and monies as may be approved by the Corporation. Every nomination, appointment or removal of a Special Director shall be in writing and accordance with the rules and regulations of the government, corporation or any other institution. A Special Director shall be entitled to the same rights and privileges and be subject to same obligations as any other Director of the Company.

Borrowing Power 101. Subject to the provisions of section 58A, 292 and 293 of the Act, and Regulations made thereunder and directions issued by the R.B.I. the Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property (both present and future) and uncalled capital, or any part thereof and to issue debentures, debenture-stock and other securities whether outright or as security for any debt, liability or obligation of the Company or of any third party. 102. The payment or repayment of moneys borrowed as aforesaid may be secured in such manner and upon such terms and conditions in all respects as the Board may think fit and in particulars by a resolution passed at a meeting of the board (and not by circulation) by the issue of debenture of debenture stock of the Company, charged upon all or any of the property of the Company (both present future), including its uncalled capital for the time being. 230

103.

104.

Any debentures, debenture-stock or other securities may be issued at a discount, premium or otherwise, may be made assignable free from any equities between the Company and person to whom the same may be issued and may be issued on the condition that they shall be convertible into shares of any authorised denomination, and with privileges and conditions as to redemption, surrender, drawings, allotment of shares, attending (but not voting) at general meetings, appointment of Directors and otherwise, provided that debentures with the right to allotment of or conversion into shares shall not be issued except with the sanction of the Company in General meeting. All cheques, promissory notes, drafts, hundies, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company, shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, by such person and in such manner as the Board may, from time to time, by resolution determine.

Proceedings of Board 110. Subject to the restrictions contained in Section 292 and 293 of the Act, the Board may delegate any of its powers to committees of the Board consisting of such member or members of its body as it thinks fit and it may, from time to time, revoke such delegation and discharge any such committee of the Board either wholly or in part, and either as to persons or purposes, but every committee of the Board so formed shall in the exercise of the powers so delegated conform to any regulations that may from time to time be imposed on it by the Board. All acts done by any such Committee of the Board in conformity with such regulations and in fulfillment of the purposes of their appointment but not otherwise, shall have the like force and effect as if done by the Board. 114. All acts done by any meeting of the Board or by a committee thereof by any person acting as a Director shall, notwithstanding that it shall afterwards be discovered that there was some defect in the appointment or continuance in office of any such Directors or persons acting as aforesaid: or that they or any of them were disqualified or had vacated office or were not entitled to act as such, or that the appointment of any of them had been terminated by virtue of any provisions contained in the Act or in these Articles, be as valid as if every such person had been duly appointed, had duly continued in office, was qualified, had continued to be a Director, his appointment had not been terminated and he had been entitled to be a Director provided that nothing in this Article shall be deemed to give validity to any act done by a Director after his appointment has been shown to the Company to be invalid or to have terminated. 115. Subject to Section 289 of the Act and except a resolution which the Act requires specifically to be passed in any board meeting, a resolution in writing, signed by the majority members of the Board or of a committee thereof, for the time being entitled to receive notice of a meeting of the Board of committee, shall be as valid and effectual as if it had been passed at a meeting of the Board or committee, duly convened and held. Managing Director(s) and Whole Time Direcor(s) 116. Subject to provisions of Sections 197A, 269, 198 and 309 of the Act, the Board of Directors may, from time to time, appoint one or more of their body to the office of Managing Director/s or whole time Director/s for a period not exceeding 5 (five) years at a time and on such terms and conditions as the Board may think fit and subject to the terms of any agreement entered into with him, may revoke such appointment, and in making such appointments the Board shall ensure compliance with the requirements of the Companies Act, 1956 and shall seek and obtain such approvals as are prescribed by the Act, provided that a Director so appointed, shall not be whilst holding such office, be subject to retirement by rotation but his appointment shall be automatically determined if he ceases to be a Director. However, he shall be counted in determining the number of retiring Directors. 117. The Board may entrust and confer upon Managing Director/s or Whole time director/s any of the powers of management which would not otherwise be exercisable by him upon such terms and conditions and with such restrictions as the Board, may think fit, subject always to the superintendence, control and direction of the Board and the Board may, from time to time revoke, withdraw, alter or vary all or any of such powers. Secretary 118 (1) Subject to section 383A of the Act, a Secretary of the Company may be appointed by the Board on such terms, at such remuneration and upon such conditions as it may think fit, and any Secretary so appointed may be removed by the Board. (2) A Director may be appointed as a Secretary. 119. Any provision in the Act of these regulations requiring or authorizing a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as, or in place of the Secretary. 231

The Seal 120. (1) The Board shall provide a common seal for the purposes of the Company and shall have power, from time to time, to vary or cancel the same and substitute a new seal in lieu thereof. The Board shall provide for the safe custody of the seal for the time being. (2) Subject to any statutory requirements as to Share Certificates or otherwise, the seal of the Company shall not be affixed to any instrument except by authority of a resolution of the Board or of a Committee of the Board authroised by it in that behalf and except in the presence of atleast one Director and of the Secretary or of two Directors who shall sign every instrument to which the seal of the Company is so affixed in their presence. This is, however, subject to Rule 6 of the Companies (Issue of Share Certificates) Rules, 1960. (3) The Board shall also be at liberty to have an official seal in accordance with Section 50 of the Act, for use in any territory, district or place outside India. The Company shall, however, comply with Rule 6 of the Companies (Issue of Share Certificates) Rules, 1960. Dividends and Reserve 121. The Company in General meeting may declare dividends but no dividend shall exceed the amount recommended by the Board. 122. The Board may, from time to time, pay to the members such interim dividends as appear it to be justified by the profits earned by the Company. 123. (1) The Board may, before recommending any dividend, set aside of the profits of the Company, such sums, as it may think proper, as reserve or reserves which shall at the discretion of the board, be applicable for any of the purposes to which the profits of the Company may be properly applied, including provisions for meeting contingencies or for equalising dividends and pending such applications may at the like discretion either be employed in the business or the Company or be invested in such investments (other than shares of the Company) as the Board may, from time to time, think fit. (2) The Board may also carry forward any profits which it may think prudent not to divide, without setting them aside as a reserve. 125. The Board may deduct from any dividend payable to any member all sums of money, if any, presently payable by him to the Company on account of calls or otherwise in relation to the shares of the Company subject to section 205A of the Act. 126. (1) Any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or warrant sent through the post direct to the registered address of the holder or, in case of joint holders, to the registered address of that one of the joint holders who is first named on the register of members, or to such person and to such address as the first named holder or joint holders may in writing direct. (2) Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. 128. Notice of any dividend that may have been declared shall be given to the persons entitled to share therein in the manner mentioned in the Act. 129 No dividend shall bear interest against the Company, irrespective of the reason for which it has remained unpaid. 129A. Where the Company has declared a dividend but which has not been paid or the dividend warrant in respect thereof has not been posted within 42 days from the date of declaration to any shareholder entitled to the payment of the dividend, the Company shall within 7 days from the date of expiry of the said period of 42 days, open a special account in that behalf in any scheduled bank called "Unpaid Dividend of Uttam Sugar Mills Limited" and transfer to the said account, the total amount of dividend which remains unpaid or in relation to which no dividend warrant has been posted. Any money transferred to the unpaid dividend account of the Company which remains unpaid or unclaimed for a period of three years from the date of such transfer, shall be transferred by the Company to the Investor Education and protection Fund established the Central Government. A claim to any money so transferred to the above fund may be preferred to the Central Government/Committee appointed by the Central Government by the shareholders to whom the money is due. No unclaimed or unpaid dividend shall be forfeited by the Board. Accounts 130. (1) The Board shall cause proper books of accounts to be maintained under section 209 of the Act. (2) The Board shall, from time to time, determine whether and to what extent and at what times and places and under what conditions or regulations, the accounts and books of the Company or any of them, shall be open to the inspection of members not being Directors. 232

(3) Subject to provisions of section 209 of the Act, no member (not being a Director) shall have any right of inspection any account or book or document of the Company, except as conferred by law or authorised by the Board or by the Company in General Meeting. Audit 132. (1) The first auditor of the Company shall be appointed by the Board of Directors within one month after its incorporation who shall hold office till the conclusion of the First Annual General Meeting. (2) The Board of Directors may fill up any Casual Vacancy in the office of the Auditors. (3) The remuneration of the auditors shall be fixed by the Company in the annual general meeting except that remuneration of the first or any auditors appointed by the directors may be fixed by the directors.

Capitalisation of Profits 133. (1) The Company in General Meeting may, upon the recommendation of the Board resolve :a. that it is desirable to capitalise any part of the amount for the time being standing to the credit of any of the Company's reserve accounts or to the credit of the Profit and Loss Account, or otherwise available for distribution; and b. that such sum be accordingly set free for distribution in the manner specified in clause (2) among the members who would have been entitled thereto, if distributed by way of dividend and in the same proportions. (2) The sum aforesaid shall not be paid in cash, but shall be applied, subject to the provisions contained in clause (3), either in or towards :(i) paying up any amounts for the time being unpaid on any shares held by such members respectively; (ii) paying up in full, unissued shares of the Company to be allotted and distributed, credited as fully paid up, to and amongst such members in the proportions aforesaid: or (iii) partly in the way specified in sub-clause (i) and partly in that is specified in sub-clause (ii). (3) Any share premium account and any capital redemption reserve fund may, for the purpose of this regulation, only be applied in the paying up of unissued share to be issued to members of the Company as fully paid bonus shares. (4) The Board shall give effect to the resolution passed by the Company in pursuance of this regulation. 134. (1) Whenever such a resolution as aforesaid shall have been passed, the Board shall :a. make all appropriations and applications of the undivided profits resolved to be capitalized thereby and allotment and issue of fully paid shares, if any; and b. do all acts and things required to give effect thereto. (2) The Board shall have full power :(a) to make such provision, by the issue of fractional certificates or by payment in cash or otherwise as it thinks fit in the case of shares becoming distributable in fractions: and also (b) to authorise any person to enter, on behalf of all the members entitled thereto, into an agreement with the Company providing for the allotment to him respectively, credited as fully paid up, of any further shares to which that may be entitled upon such capitalisation or (as the case may be require) for the payment by the company on their behalf, by the application thereto of their respective proportions of the profits resolved to be capitalised, of the amounts or any part of the amounts remaining unpaid on their existing shares. (3) Any agreement made under such authority shall be effective and binding up all such members. Secrecy 135. Subject to the provisions of law of land and the Act, no member or other person (not being a Director) shall be entitled to visit or inspect the Company's works without the permission of the Board of Directors or the Managing Director to require discovery of any information respecting any details of the Company's business, trading or customers of any matter which is or may be in the nature of a trade secret, mystery of trade or secret process or any other matter which may relate to the conduct of the business of the Company or which in the opinion of the Directors, it will be inexpedient in the interest of the Company to disclose. Winding up 136. (1) If the company shall be wound up, the liquidator may, with the sanction of a special resolution of the Company and any other sanction required by the Act, divide amongst the members, in specie or kind, the 233

whole or any part of the assets of the Company, whether they shall consist of property of the same kind or not. (2) For the purpose aforesaid, the liquidator may set such values as the deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the members or different classes of members. (3) The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as the liquidator, with the like sanction, shall think fit but so that no member shall be compeled to accept any shares or other securities whereon there is any liability. Indemnity 137. Subject to the provisions of Section 201 of the Act, every Director, auditor, secretary and other officer or servant of the Company (all of whom are hereinafter referred to as officer or servant) shall be Indemnified by the Company and it shall be the duty of the Directors out of the funds of the Company to pay, all bonafide costs, losses and expenses which any such officer or servant may incur or become liable to by reason of any contract entered into or act or thing done or omitted by him as such officer or servant or in any way in the discharge of his duties; and in particular and so as not to limit the generality of the foregoing provisions, against any liability incurred by such officer or servant in defending any bonafide proceedings whether civil or criminal in which a judgement is given in his favour or in which he is acquitted or discharged or in connection with any application under Section 633 of the act in which relief is granted to him by the Court. The amount for which such indemnity is provided shall immediately attach as a charge on the property of the Company.

234

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The following contracts (not being contracts entered into 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 into 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 Village Libberheri, Roorkee, District Haridwar - 247 667 from 10.00 AM to 12.00 Noon from the date of the Draft Letter of Offer until the date of closure of the Rights Issue. A. Material Contracts 1. MOU dated May 31, 2008 entered between our Company and Lead Manager 2. MOU dated May 24, 2008 entered between our Company and Registrar to the Issue 3. Agreement dated [*] entered between our Company and Banker to the Issue B. Documents available for inspection 1. Certificate of Incorporation of the Company dated August 29, 1981, Fresh Certificate of Incorporation dated November 24, 1998 issued pursuant to the change of name of the Company and Fresh Certificate of registeration dated November 27, 2007 for change of State. 2. Memorandum and Articles of the Company. 3. Copy of the Board Resolution dated January 31, 2008 and July 02, 2008 approving this Issue. 4. Consents of the Directors, Lead Manager to the Issue, Legal Counsel, Registrar to the Issue, Bankers to the Company, Auditors and Bankers to the Issue to include their names in the Draft Letter of Offer to act in their respective capacities. 5. Consent of the Company Secretary to act as Compliance Officer. 6. Appraisal report of IDBI Limited dated February 2007 and their consent for use of the Report. 7. Copy of resolution appointing the Managing Director. 8. Shareholders Resolution passed at the Annual General Meeting held on February 29, 2008 re-appointing B K Kapur & Company, Chartered Accountants, as statutory auditors. 9. Annual Reports of the Company for the last five Financial Years. 10. Statement of Tax Benefits dated July 2, 2008 received from the Auditors of the Company. 11. The Report of the Auditors, B K Kapur & Company, Chartered Accountants as set out herein dated June 17, 2008 in relation to the restated financials of the Company for the last five financial years. 12. In-principle listing approval for the current Rights Issue filed with NSE & BSE. 13. Due Diligence certificate dated July 14, 2008. 14. Tripartite agreements dated March 03, 2006 entered into with NSDL. 15. Tripartite agreements dated March 03, 2006 entered into with CDSL. 16. SEBI Observation letter no. [*] dated [*] 17. Three Power Purchase Agreements dated August 22, 2007 with UP Power Corporation Limited

235

DECLARATION No statement made in this Draft Letter of Offer contravenes any of the provisions of the Companies Act, 1956 and the rules made thereunder. All the legal requirements connected with the said issue as also the guidelines, instructions etc. issued by SEBI, Government of India and any other competent authority in this behalf have been duly complied with. We further certify that all statements in this Draft Letter of Offer are true and correct. On behalf of the Board of Directors of Uttam Sugar Mills Limited

Mr. Raj Kumar Adlakha Managing Director

*Mr. Rajan Adlakha Director

Mr. Ranjan Adlakha Director

*Mr. Narendra Kumar Sawhney Director

Mr. Prabhakaran Singh Lalli Director

Dr. Ramasamy Vasudevan Director

Mr. Vikram Singh Tandon Director

Mr. Sanjay Bhandari Chief Financial Officer * through duly constituted Power of Attorney Place: Noida Date: July 14, 2008

G Ramarathnam Chief - Legal & Corporate Affairs & Company Secretary & Compliance Officer

236

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