OCL IRON AND STEEL LIMITED · OCL IRON AND STEEL LIMITED Registered Office & Works: Village. Lamloi, P.O. Garvana, Rajgangpur, Orissa - 770 017. Phone: +91 6624 2451320 Fax: +91 6624

OCL IRON AND STEEL LIMITED

Registered Office & Works: Village. Lamloi, P.O. Garvana, Rajgangpur, Orissa - 770 017. Phone: +91 6624 2451320

Fax: +91 6624 222564 Contact person: Mr.Sambit Sarangi

Website: www.oclsteel.in Email: [email protected]

(We were incorporated as a public limited company on February 20, 2006 as OCL Iron and Steel Limited with our registered office at Village. Lamloi, P.O. Garvana, Rajgangpur, Dist. Sundargarh, Orissa - 770 017) INFORMATION MEMORANDUM FOR LISTING OF 13,41,43,160 EQUITY SHARES

OF RE 1 EACH

GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest in the equity shares of OCL Iron and Steel Limited unless they can afford to take the risk of losing part or all of their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in the shares of OCL Iron and Steel Limited. For taking an investment decision, investors must rely on their own examination of the Company including the risks involved. The securities have neither been recommended nor approved by The Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy of this document.

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

LISTING The Equity Shares of OCL Iron and Steel Limited are proposed to be listed on the Bombay Stock Exchange Limited, the designated stock exchange and the National Stock Exchange of India Limited.

REGISTRAR AND TRANSFER AGENT CB Management Services Private Limited Address: P-22, Bondal Road, Kolkata - 700019 (West Bengal) Tel No: +91 33 22806692-94/2280 2486 Fax No: +91 33 2287 0263 Email: [email protected] Contact Person: Mr S Ghosh

TABLE OF CONTENTS

PRATICULARS PAGE NO SECTION I –GENERAL DEFINITIONS, ABBREVIATIONS & INDUSTRY RELATED TERMS 1-3 CERTAIN CONVENTIONS; USE OF MARKET DATA 4 FORWARD LOOKING STATEMENTS 5 SECTION II – RISK FACTORS RISK FACTORS 6-9 SECTION III – INTRODUCTION SUMMARY 10-12 GENERAL INFORMATION 13-14 CAPITAL STRUCTURE 15-19 SCHEME OF ARRANGEMENT 20-32 STATEMENT OF TAX BENEFITS 33-42 SECTION IV – ABOUT US HISTORY 43-44 BUSINESS 45-51 MANAGEMENT 52-56 PROMOTER 57-59 CURRENCY OF PRESENTATION 60 DIVIDEND POLICY 60 SECTION V – FINANCIAL INFORMATION FINANCIAL INFORMATION OF THE COMPANY 61-79 FINANCIAL INFORMATION OF GROUP COMPANIES 80-89 MANAGEMENT DISCUSSION & ANALYSIS 90 SECTION VI – LEGAL & OTHER INFORMATION OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS 91-119 GOVERNMENT APPROVALS 120 SECTION VII – OTHER REGULATORY AND STATUTORY DISCLOSURES REGULATORY AND STATUTORY DISCLOSURES 121-124 MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION 125-136 SECTION VIII – OTHER INFORMATION MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 137-138 DECLARATION 139

Information Memorandum

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DEFINITIONS, ABBREVIATIONS & INDUSTRY RELATED TERMS

Term Description “OISL” or “Company” or “Our Company” or “Resulting Company” or “OCL Iron and Steel Limited”

OCL Iron and Steel Limited, a public limited company incorporated under the provisions of the Companies Act, 1956.

Articles/Articles of Association Articles of Association of OCL Iron and Steel Limited

Auditors The statutory auditors of OCL Iron and Steel Limited

Appointed Date January 1, 2007

Board of Directors/Board/Directors The Board of Directors of OCL Iron and Steel Limited

BSE Bombay Stock Exchange Limited

CDSL Central Depository Services (India) Ltd

Companies Act The Companies Act, 1956, as amended from time to time

Current Financial Year April 1, 2007 to March 31, 2008

“OCL” or “OCL India Limited” OCL India Limited, an existing Company under the Companies Act, incorporated under the provisions of the Companies Act

DSE Designated Stock Exchange

EPS Earning per equity share

Equity Shares Equity shares of the Company of Re 1 each unless otherwise specified in the context thereof

Effective Date

December 20, 2007

Financial year/fiscal/FY The twelve months ended March 31 of a particular year unless otherwise stated


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HUF Hindu Undivided Family

Information Memorandum This document filed with the Stock Exchanges is known as and referred to as the Information Memorandum

I.T. Act The Income Tax Act, 1961, as amended from time to time

Memorandum/Memorandum of Association

The Memorandum of Association of OCL Iron and Steel Limited

NSDL National Securities Depository Limited

NSE

The National Stock Exchange of India Limited

RTA Registrar and Share Transfer Agent

RBI Reserve Bank of India

Registered office of Company At/Po Rajgangpur, Dist. Sundargarh, Orissa - 770 017

ROC Registrar of Companies, Cuttack

Scheme of Arrangement (‘Scheme’) Scheme of Arrangement between OCL India Limited, OCL Iron and Steel Limited, Landmark Property Development Company Limited (formerly known as ‘Konark Minerals Limited’) and Dalmia Cement (Meghalaya) Limited and their respective shareholders and creditors under Sections 391 – 394 of the Companies Act, 1956, as sanctioned by the Hon’ble High Court of Orissa on November 27, 2007 and the Hon’ble Gauhati High Court on October 15, 2007. Upon coming into effect of the Scheme on December 20, 2007, the ‘Steel Undertaking’ stands demerged from OCL India Limited and transferred to and vested in the Company on a going concern basis

SEBI The Securities and Exchange Board of India constituted under the Securities and Exchange Board of India Act, 1992


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SEBI Act Securities and Exchange Board of India Act, 1992 as amended from time to time.

SEBI Guidelines Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 issued by Securities and Exchange Board of India effective from January 27, 2000, as amended, including instructions and clarifications issued by Securities and Exchange Board of India from time to time

Shares Equity shares of the Company

Stock Exchange BSE & NSE


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CERTAIN CONVENTIONS; USE OF MARKET DATA Unless stated otherwise, the financial data in this Information Memorandum is derived from our consolidated financial statements prepared in accordance with Indian GAAP. Our current financial year commenced on April 1, 2007 and ended on March 31, 2008. In this Information Memorandum, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding-off. For definitions, please see the section titled "Definitions, Abbreviations and Industry Related Terms". All references to “India” contained in this Information Memorandum are to the Republic of India. All references to “Rupees” or “Rs” or “Re” are to Indian Rupees, the legal currency of the Republic of India. All references to the “Government” are to the Governments of India, central or state, as applicable. Unless stated otherwise, industry information used throughout this Information Memorandum has been obtained from industry publications. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe that industry information used in this Information Memorandum is reliable, it has not been independently verified and is subject to change. The information included in this Information Memorandum about the various other companies is based on their respective Annual Reports and information made available by the respective companies.


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FORWARD-LOOKING STATEMENTS In this Information Memorandum, the terms “we”, “us”, or “our”, unless the context otherwise implies, refers to OCL Iron and Steel Limited and its subsidiaries. The terms “OCL Iron and Steel Limited” and the “Company”, unless the context otherwise implies, refer to “OCL Iron and Steel Limited”. We have included statements in this Information Memorandum, that contain words or phrases such as “will”, “aim”, “will likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions or variations of such expressions that are “forward-looking statements”. All forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results and property valuations to differ materially from those contemplated by the relevant statement. Important factors that could cause actual results to differ materially from our expectations include, among others: • General economic and business conditions in India and other countries; • Our ability to successfully implement our strategy, our growth and expansion

plans and technological changes; • Changes in the value of the Rupee and other currency changes; • Changes in Indian or international interest rates; • Changes in laws and regulations in India; • Changes in political conditions in India; and • Changes in the foreign exchange control regulations in India. For further discussion of factors that could cause our actual results to differ, see the section titled “Risk Factors”. By their nature, certain 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. Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to, those discussed under “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Industry” and “Business”. We do not have any obligation to, and do not intend to, update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.


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RISK FACTORS An investment in equity shares involves a high degree of risk. You should carefully consider all of the information in this Information Memorandum, including the risks and uncertainties described below. If any of the following risks actually occur, 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. I. Internal Risk Factors This Information Memorandum also contains forward-looking statements that involve risks and uncertainties. Issuer's actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the considerations described below and elsewhere in this Information Memorandum. Internal risk factors and risks relating to our business. The operations of the Company are subject to the assumptions in demand and supply position in terms of quantity and price of raw material and finished goods. Our business is heavily dependent on the performance of the STEEL MARKET and the availability of basic raw materials viz. iron-ore. Any mishaps or accidents at our facilities or any emission or leakage from our factory could lead to property damage, production loss and accident claims. Any mishap or accident in our facilities could result in claims against us for damages by our employees. We could suffer loss of production, receive adverse publicity and experience diversion of management attention and resources in defending such claims. Any such significant event could have an adverse effect on our business, financial condition and results of operations. The manufacturing process does not emit any hazardous effluents. The Steel unit has obtained a No Objection Certificate from Orissa Pollution Control Board. Any emission or leakage from our factory could lead to environmental hazards, receive adverse publicity and experience diversion of management attention and resources in defending such claims. Any such significant event could have an adverse effect on our business, financial condition and results of operations. Our operating results depend on competitive advantage we enjoy with our key large customers. Our strategy is to focus on large customers, who are limited in number, and therefore we are required to be competitive in the market. This will bring pressures on our margins and consequently our results of operations and our business may be affected.


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Our customers may terminate supply contracts before completion or choose not to renew contracts, which may adversely affect our profitability. Any failure to meet a customer's expectations could result in the cancellation or nonrenewal of contracts. Generally, our contracts with customers do not commit our customers to provide us with a specific volume of business and can be terminated by them with or without cause, with little advance notice and without penalty. Such cancellations would reduce our revenues. In addition, there are factors beyond our control which could cause loss of a customer such as a customer may demand price reductions, change their outsourcing strategy by moving more work in-house, or replace their existing products with a substitute, any of which may have an adverse effect on our business, financial condition and results of operations. Input cost or non-availability of inputs could reduce our profitability. The major input costs consist of iron ore, steel scrap, power & fuel, which are not in our control excepting power which is captive. We may not be able to pass on any or all increase in the cost of raw materials and other inputs, if any, to our customers. An increase, if any, in input costs could have an adverse effect on our business, financial condition and results of operations. Non-availability of these inputs can also affect operations leading to stoppage of production and in loss of customer orders. Our inability to secure requisite amounts of financing, to manage expansion process can have an adverse effect on our business, financial condition and results of operations. Our success will depend, among other things, on our ability to secure significant amounts of financing, to manage the expansion process, to assess potential markets, to make timely capital investments with the price cycle, to control input costs, to attract new customers and to maintain sufficient operational and financial controls. We expect our growth to place significant demands on our management and other resources and require us to continue developing and improving our operational, financial and other internal controls. Our inability to secure requisite amounts of financing, to manage expansion process can have an adverse effect on our business, financial condition and results of operations. We could become liable to customers, suffer adverse publicity and incur substantial costs as a result of defects in our products or services. Our contracts involve providing products that are critical inputs to the products of our customers. Any failure or defect in our products could result in a claim against us for damages. We could also incur costs, receive adverse publicity and experience diversion of management resources in defending a claim. Settlement of any substantial claim(s) for


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damages could have an adverse effect on our business, financial condition and results of operations. Our ability to proceed with major plans and also obtain financing is subject to our lender's covenants. The agreements in respect of some of the debt contain certain covenants including maintenance of financial ratios, compliance reporting requirements and other restrictions which may significantly limit our ability to borrow additional money, alter share capital, make expansions and diversifications, make capital expenditure and investments, merge or incur additional liens. Our success depends in large part upon our management team and key personnel and our ability to attract and retain such persons. Attracting and retaining talented professionals is a key element of our strategy and we believe it to be a significant source of competitive advantage. An inability to attract and retain talented professionals, or the resignation or loss of key management personnel, may have an adverse impact on our business, future financial performance and the price of our Equity Shares. Cordial relationship with the employees is crucial for smooth functioning of our operations. Our operations rely heavily on employees and on the employees ability to provide high-quality services. In the event there is a shortage of skilled labour or stoppage caused by disagreements with employees in future, it could affect our ability to meet the quality standards and timely completion of orders, which could lead to reduce business or may potentially damage our reputation. There is outstanding litigation against our Promoter, our Promoter Group Companies and their employees. We are defendants in legal proceedings incidental to our business and operations. These legal proceedings are pending at different levels of adjudication before various courts and tribunals. Should any new developments arise, such as a change in Indian law or rulings against us by appellate courts or tribunals, we may need to make provisions in our financial statements, which could increase our expenses and our current liabilities. There are certain claims pending in various courts and authorities at different levels of adjudication against our Promoter, our Promoter Group Companies and their employees. II. External Risk Factors Changes in the emission norms may impact us. Government regulations regarding emission levels for manufacturing operations are likely to become more stringent. The cost for complying with these regulations can be


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significant. Thus, we may be required to incur significant capital costs in future to meet the stringent norms. Revenues from export may face exchange rate risks. Presently a significant portion of the Revenues is from exports mainly in US dollars and a significant portion of our expenses are incurred in Rupees. Exports are likely to increase in the future. The strengthening of the Rupee, particularly with respect to the US dollar, could adversely impact our profitability. We may import certain capital equipments for future expansion. An adverse change in currency exchange rates will increase the cost of these imports. Our business is significantly affected by external factors. Our results may be significantly affected by factors outside our control such as political unrest, cross-border hostilities, civil commotion and acts of terrorism either in India or outside India. Other factors include potential negative changes in environmental regulations, government regulations. We are also subject to the risk of loss of revenues and assets due to fire or natural disasters. The occurrence of all such event including natural disasters could interrupt our business for significant periods. Changes in the Government of India/State Government(s) policies could impact the liberalization of the Indian economy and adversely affect economic conditions in India generally and our business in particular. A significant change in India's economic liberalization and deregulation policies could affect business and economic conditions in India generally and our business in particular. A significant change in the Indian government's or the state government's economic liberalisation and deregulation policies could adversely affect business and economic conditions in India generally and our business and financial condition and prospects in particular. After listing, the prices of our Company's shares may be volatile, or an active trading market for our Company's shares may not develop. There has been no public market for the Company's equity shares till now and the prices of the Company's shares may fluctuate after listing. There can be no assurance that an active trading market for the shares will develop or be sustained after this listing. The Company's share price could be volatile.


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INTRODUCTION Summary You should read the following summary together with the risk factors and the more detailed information about us and our financial results included elsewhere in this Information Memorandum. INDUSTRY OVERVIEW Steel industry

The economic reforms initiated by the Government since 1991 have added new dimensions to industrial growth in general and steel industry in particular. Licensing requirement for capacity creation has been abolished, except for certain locational restrictions. Steel industry has been removed from the list of industries reserved for the public sector. Automatic approval of foreign equity investment upto 100% is now available. Price and distribution controls have been removed from January, 1992, with a view to make the steel industry efficient and competitive. Restrictions on external trade, both in import and export have been removed. Import duty rates have been reduced drastically. Certain other policy measures such as reduction in import duty of capital goods, convertibility of rupee on trade account, permission to mobilize resources from overseas financial markets and rationalization of existing tax structure for a period of time have also benefited the Indian Steel Industry.

The Indian steel industry can be divided into two distinct producer groups:

Major producers : Also known as Integrated Steel Producers (ISPs), this group includes large steel producers with high levels of backward integration and capacities of over 1 MT. Some of the major producers produce steel using the blast furnace/basic oxygen furnace (BF/BOF) route that uses iron ore, coal/coke as the basic input mix for producing finished steel. Some other major producers use routes other than BF/BOF for producing steel or employ Electric Arc Furnace (EAF) route that uses sponge iron, melting scrap or a mix of both as input.

Other producers: This group consists of smaller stand-alone steel plants that include producers and processors of steel.

- Processors/Rerollers: Units producing small quantities of steel (flat/long products) from materials procured from the market or through their own backward integration system.

- Stand alone units making pig iron and sponge iron. - Small producers using scrap-sponge iron-pig iron combination produce steel

ingots (for long products) using Electric Arc Furnace (EAF) or Induction Arc Furnace (IAF) route.

The Major producers are strategic in nature and account for most of the mild steel production in the country. The group produces most of the flat steel products in the


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country including Hot Rolled, Cold Rolled and Galvanized steel. The majors also produce a small proportion of Long products and other special steel being produced in the country.

National Steel Policy, as formulated by Indian Ministry of Steel envisages the following -

i. Crude steel production of 110 million tones by 2019-20 at CAGR of 7.1% from 2004-05.

ii. The demand of steel by 2020 is likely to be 90 million tones at CAGR of 6.9% from 04-05.

iii. Steel exports by 2020 is likely to grow at CAGR of 13.3% from 04-05 to 26 million tones.

iv. Steel imports to the country by 2020 shall grow at CAGR of 7.1% from 04-05 to 6 million tones.

As per the news paper reports (Eco. Times dt.14-11-07), Steel Minister has projected India's steel production to be around 124 million tones by 2012 and a capacity of around 275 million tones by 2019-20.

During the year 06-07, India produced around 49 million tones of finished steel which was higher by 11 % over 05-06. During April - Sept.'07 following has been the performance-

i. Crude steel prod. at 25.7 million tones, exhibited a growth of 5 % over corresponding period last year.

ii. Exports at 2.6 million tones shows an increase by around 8% over the same period of last year.

Apparent Consumption of steel during April-Sept'07 was 22 million tones which was an increase by 11 % over April-Sept'06. While long products (excl. semis) at 12.3 million tones registered a growth of 9%, the flat products consumption at 12.5 million tones indicated an increase of 12%.

With due focus on infrastructure development and strong economic indicators, the demand for steel in India shall continue to remain robust.

(Source: www.steel.nic.in & www.indiansteelalliance.com)

Sponge Iron Industry

Sponge Iron India Ltd. was the first sponge iron plant in India which was set up with installed capacity of 0.03 Mt pa at Paloncha in Andhara Pradesh in 1980. It was coal based SLRN process. Since coal was adequately available, production of sponge iron by coal based route was considered a feasible option. In the late eighties of the last century, Indian producers became enthusiastic towards setting up a gas based sponge iron projects in the country. The first gas based sponge iron plant was built in 1990.


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During 1991-92 the installed capacity of sponge iron in India was 12 lac tones, the installed capacity increased to 95 lac tones per annum, which further increased to 250 lac tones during the FY 2007. This accomplishment has put India on the world map of metallic for the steel industry. It is estimated that the additional capacities of approximately 70 lac tones of sponge iron will further added in the next five years. During 2004-05 India had recorded production of 10.06 million tones of sponge iron ranking the largest producer of sponge iron in the world and contributing approximately 15.5% share of the world production. For the year 2005-06, India has achieved this distinction for the second consecutive year. In 2006-2007, India’s production of sponge iron was 15.75 million tones, way ahead of other countries. In the aftermath of de-licensing and priority allocation of natural gas and non-cooking coal to DRI (Direct Reduction of Iron Ore) units, the production of sponge iron in India metamorphosed into thriving and fast growing economic activity. The sponge iron based industry looks forward to similar growth in next 5-10 years to meet the fast growing demand of quality metliks by the steel industry in the line with the national steel policy. The demand for sponge iron is expected to increase in geometric progression because of difficult availability of steel melting scrap, limited reserves of cooking coal, in addition to unprecedented price increase of these materials. Sponge iron has also found its use as preferred source of quality metallic not only in EAF/IF but also in charge mix of blast furnaces. With the projected rise in demand for steel the future of sponge iron industry seems bright and secure. Further, because of regular difficulties in availability of contracted quantities of natural gas, no fresh investments are being made in the gas-based sector. The industry therefore, has to heavily depend on coal based sponge iron, at least for next 5 years.

(Source: Iron & steel review/March-08)


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GENERAL INFORMATION

OCL Iron and Steel Limited was originally incorporated on February 20, 2006, under the Companies Act, 1956 as a public limited company which was a wholly owned subsidiary of OCL. In pursuance of the Scheme approved by the Hon’ble High Court of Orissa, the assets and liabilities of ‘Steel Undertaking’ of OCL is vested in the company with effect form the Appointed Date. Address of Registered Office of Company: Vill. Lamloi, P.O. Garvana Rajgangpur, Dist. Sundargarh Orissa-770 017 Tel: +91 661 2451320 Fax: +91 6624 222564 Registration Number: U27102OR2006PLC008594 ISIN Number: INE196J01019 Address of Registrar of Companies: Registrar of Companies, 2nd Floor, Chalchitra Bhawan, OFDC, Buxi Bazar, Cuttack – 753 001, Orissa Board of Directors as on the date of filing of the draft Information Memorandum S No Name of Directors 1 Dr. Sheoraj Jain 2 Shri. Raghu Hari Dalmia 3 Shri. Krishan Murari Poddar 4 Shri. Surendra Kumar Dalmia 5 Shri. Badalchand Parakh 6 Shri. Sabyasachi Mishra 7 Shri. Praveen Chand

For further details of the Board of Directors of the Company, please refer – the section titled “Management” Compliance Officer and Company Secretary Mr. Sambit Kumar Sarangi Address: OCL Colony, Rajgangpur, Orissa - 770 017 Telephone: 09437577825 Email: [email protected]


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Bankers to the Company: UCO Bank Rajgangpur, Orissa – 770 017 Telephone: 06624- 220773

HDFC Bank Choudhry Complex, Pamposh Road, Rourkela Dist. Sundargarh, Orissa – 769 004 Phone No. 0661-2401811 Email: [email protected]

State Bank of India Rajgangpur, Orissa – 770 017 Telephone: 06624- 220584

AXIS BANK Mangalkunj, Kacheri Road, Rourkela Dist. Sundargarh, Orissa – 769 012 Phone No. 0661-2514138 Email: [email protected]

Auditors: V Sankar Aiyer & Co. Chartered Accountants Address: Flat No.202, 203, Satyam Cinema Complex, Ranjit Nagar Community Centre New Delhi – 110 008 Telephone: +91 11 2570 2074/2691 Fax: + 91 11 2570 5010 Email: [email protected] Contact Person: Mr. V Rathinam Registrar and Transfer Agent: CB Management Services Private. Limited Address: P-22, Bondal Road, Kolkata-700019 (West Bengal) Tel No: +91 33 22806692 Fax No: +91 33 2287 0263 Email: [email protected] Contact Person: Mr. S Ghosh


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CAPITAL STRUCTURE SHARE CAPITAL Consequent to issue and allotment of shares pursuant to the Scheme, the Share Capital of the Company is as follows:

Rs. Authorized share capital 14,00,00,000 equity Shares of Re 1 each

14,00,00,000

Issued, subscribed and paid-up capital (before the implementation of the Scheme) 5,00,000 equity shares of Re 1 each

5,00,000

Issued, subscribed and paid-up capital (after the implementation of the Scheme) 13,41,43,160 equity shares of Re 1 each

13,41,43,160

Capital Reserve: Before the Scheme After the Scheme (March 31, 2008)

Nil 56,46,51,670

1) The Authorized share capital of the Company at the time of Incorporation was

Rs 1,00,00,000 divided in to 1,00,00,000 equity shares of Re 1 each.

2) Authorized share capital of the Company has been increased to Rs 5,00,00,000 divided into 5,00,00,000 equity shares of Re 1 each vide extra ordinary general meeting of the shareholders dated March 28, 2006.

3) Authorized share capital of the Company was thereafter increased to

Rs 14,00,00,000 divided into 14,00,00,000 equity shares of Re 1 each in terms of Clause 8.2 of the Scheme vide extra ordinary general meeting of the shareholders dated November 8, 2007.

4) Prior to the allotment of shares pursuant to the Scheme, the issued, subscribed and

paid up share capital of the Company was Rs.5,00,000 divided into 5,00,000 equity shares of Re 1 each.

5) As per the Clause 7.1 of the Scheme, the Company has issued and allotted

13,36,43,160 equity shares to the members of OCL.


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Notes to Capital Structure: 1. Share Capital history of our Company:

* Date of Allotment

Consideration No of Equity Shares

Face Value and Issue Price (Re)

% of post Scheme paid-

up capital

Lock-in period

04.04.2006 5,00,000 5,00,000 1/- 0.37% No lock in period

31.03.2008 Pursuant to the Scheme

13,36,43,160 1/- 99.63% No lock in period

* Prior to the allotment of shares pursuant to the Scheme, the issued, subscribed and

paid up share capital of the Company was Rs 5,00,000 divided into 500,000 equity shares of Re 1/- each and all the shares were held by OCL.

2. Shareholding pattern before and after the Scheme:

Shareholding pattern of OISL subsequent to the allotment of shares to the eligible shareholders of OCL, in pursuance of clause 7.1 of the Scheme

CATEGORY Pre Demerger Post Demerger

No. of equity shares

% holding

No. of equity shares

% holding

A PROMOTERS HOLDING 1 Promoters Indian Promoters -Individual /HUF 5,31,19,566 39.60 - Bodies Corporates 500,000* 100 14,00,000* 1.04 - Any other 2,77,17,351 20.66 Sub Total 5,00,000 100 8,22,36,917 61.30 B NON-PROMOTERS HOLDING 2 Institutional Investors (a) Mutual Funds and UTI 0 0.00 88,500 0.07 (b) Banks, Financial Institutions,

Insurance Companies (Central/ State Govt. Institutions, Non-Government Institutions)

0 0.00 3,28,125 0.17

(c) Foreign Institutional Investors 0 0.00 9,57,516 0.71 (d) Foreign Financial Institution 0

0.00 900 0.00


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Sub Total 0 0.00 13,75,041 1.03 3 Others (a) Private Corporate Bodies 0 0.00 2,48,37,390 18.52 (b) Individuals

- Individuals shareholders holding nominal share capital upto Rs. 1 Lakh

- Individual shareholders holding nominal share capital in excess of Rs. 1 Lakh

0

0

0.00

0.00

1,71,88,446

77,22,660

12.81

5.76

(c) NRIs 0 0.00 5,80,005 0.43 (d) Foreign National 0 0.00 54,240 0.04 (e) Clearing member 0 0.00 1,48,461 0.11 Sub Total 0 0.00 5,05,31,202 37.67 GRAND TOTAL7 5,00,000 100 1,34,143,160 100.00

* 5,00,000 equity shares of the Company is being held by OCL along with its

nominees and joint holders. The shares of the Company are not yet listed and as such are not tradable. The information as to the top 10 shareholders as on the date of filing of the Information Memorandum (considering allotment of shares) and as on the date 10 days prior to it is as follows: I a) Top ten shareholders 10 days prior to the date of the Information Memorandum Sr. No. Name of Shareholders Number of

Equity Shares % to total capital

1. OCL India Limited with joint holders and/ or nominees

5,00,000 100%

I b) Top ten shareholders of the Company on the date of Information Memorandum Sr. No.

Name of Shareholders Number of Equity Shares

% to total capital

1. Yadu Hari Dalmia 3,40,56,879 25.39%

2. Mridu Hari Dalmia (C/o M H Dalmia Parivar Trust

2,76,55,227 20.62%

3. Dharti Investments and Holdings Limited

1,05,22,899 7.84%

4. Mridu Hari Dalmia 70,62,930 5.27%


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5. Abha Dalmia 58,87,803 4.39%

6. Raghu Hari Dalmia 34,74,465 2.59%

7. Skil Sez Infrastructure Holdings Private Limited

22,67,364 1.69%

8. Jai Kumar Jain 22,02,621 1.64%

9. Shreevallabh Orthopedic Instrument (P) Limited

20,47,500 1.53%

10. Yugalshree Tonics & Foods Pvt. Ltd. 20,47,500 1.53%

(II)(a) Statement showing details of Depository Receipts (DRs)

Sr. No. Type of

outstanding DR (ADRs, GDRs,

SDRs, etc.)

Number of outstanding

DRs

Number of shares

underlying outstanding DRs

Shares underlying outstanding DRs as a percentage of total

number of shares {i.e., Grand Total (A)+(B)+(C) indicated in Statement at para (I)(a) above}

1. 0 0 0 0 TOTAL 0 0 0 0

(II)(b) Statement showing Holding of Depository Receipts (DRs), where underlying

shares are in excess of 1% of the total number of shares

Sr. No. Name of the DR Holder

Type of outstanding DR (ADRs,

GDRs, SDRs, etc.)

Number of shares underlying

outstanding DRs

Shares underlying outstanding DRs as a percentage of total

number of shares {i.e., Grand Total (A)+(B)+(C) indicated in Statement at para (I)(a) above}

1. 0 0 0 0 TOTAL 0 0 0 0

Note: 1. Prior to the Demerger the entire share capital of OISL comprising of 5,00,000 equity

shares of Rs 1 each, was held by OCL.


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List of the entities comprising Promoters & Promoter group Given below is a list of entities constituted by promoter group of OISL either by themselves or jointly with other entities and their group companies. Kabirdas Investments Limited Sri Madhava Minerals & Properties Limited Dalmia Agencies Pvt. Limited Sri Shanmugha Mines & Minerals Limited Swank Services Pvt. Ltd. Sri Swaminatha Mines & Minerals Limited Marathwada Refractories Limited Sri Subramanya Mines & Minerals Limited Hari Machines Limited Sri Trivikrama Mines & Properties Limited National Synthetics Limited Sri Dhandauthpani Mines &Minerals Limited Dalmia Group Udyog Ltd. Sri Madhusudana Mines & Properties Limited First Capital India Limited Eswar Cements Private Limited Himalayan Natural Products Limited Dalmia Cement (Meghalaya) Limited Satya Miners and Transporters Limited Anupama Investment Limited Kanika Investments Ltd. Debikay Systems Ltd D. I. Properties Limited Dapel Investments Pvt. Ltd Geetee Estates Limited Dalmia Institute of Scientific & Industrial Research Avnija Properties Ltd. Dalton International Ltd Ishita Properties Ltd. Grandeur Travels & Tours (P) Ltd Mayuka Investment Ltd. Parsvnath Landmark Developers (P) Ltd Keshav Power Ltd. Landmark Landholdings (P) Ltd Sita Investment Company Ltd. Ansal Landmark Township (P) Ltd. Shree Nirman Ltd. Epic Mercantiles Ltd. Shri Natraj Ceramic & Chemical Industries Ltd. and its subsidiary

Eik Rivers Ceramics Ltd.

Shri Chamundesawari Minerals Ltd. Lions Commercial Company Ltd. Sri Rangam Properties Limited. Dalmia Cement (Bharat) Limited Hemshila Properties Limited. Artech Infosystems (P) Ltd. Himshikar Investment Limited. Agrico Ltd. Dalmia Minerals & Properties Limited. Astir Properties Pvt. Ltd. Shree Radha Krinshna Broker & Holdings Limited.

M/s. Kashmissa Industries Ltd.

Seeta Estates & Brokers Limited Madhukar Investments Ltd. Shri Rangam brokers & Holdings Limited Landmark Property Development Company Ltd Arjuna Brokers & Minerals Limited Sri Kesava Mines & Minerals Limited


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SCHEME OF ARRANGEMENT Rationale as provided in the Scheme: a. OCL India Limited (“OCL”) is a listed company presently engaged inter alia in the

following businesses - manufacture and sale of cement and refractory products, manufacture and sale of steel and sponge iron products and operations relating to the real estate sector.

b. Dalmia Cement (Meghalaya) Limited (“DCML”) is a wholly owned subsidiary of

Dalmia Cement (Bharat) Limited (“DCBL”) and is pursuing the cement manufacturing business. DCML is evaluating various projects in the eastern region, with the objective of building manufacturing capacity in that region.

c. As part of an overall scheme of restructuring, the managements of OCL and

DCML have concurred on a plan whereby OCL will demerge its 2 businesses of steel and real estate related operations to two standalone entities. Post-demerger, OCL would be a pure ‘cement and refractory products’ player. As the next step of restructuring, it is planned that DCML be consolidated with OCL via amalgamation to pool the like businesses.

d. The management is of the opinion that the segregation of OCL will bring about the

desired amount of management focus on each of the 3 businesses and unlock value for its stakeholders; further, consolidation of DCML with OCL would lead to pooling of capacities, building scale, synergies in operations, cost savings, etc for the 2 similar businesses.

e. Thus, the present Scheme of Arrangement (hereinafter referred to as “this

Scheme”) would involve transfer on a going concern basis, of the Steel Undertaking (“Demerged Undertaking 1” as defined later in this Scheme) into OCL Iron and Steel Limited (“OISL”, a wholly owned subsidiary of OCL) and of the Real Estate Undertaking (“Demerged Undertaking 2” as defined later in this Scheme) into Konark Minerals Limited (“KML”, a wholly owned subsidiary of OCL), with OCL focusing on the “Remaining Business” (as defined later in this Scheme), and in consideration thereof, issue of equity shares by OISL and KML to the shareholders of OCL on a proportionate basis, pursuant to sections 391 to 394 and other relevant provisions of the Companies Act, 1956 and in compliance with the norms laid down under section 2 (19AA) of the Income Tax Act, 1961. Subsequently, to facilitate consolidation of DCML with post-demerger OCL, this Scheme also involves transfer on a going concern basis of the entire assets and liabilities of the Merged Undertaking of DCML (“Merged Undertaking” as defined later in this Scheme) into OCL and in consideration thereof, issue of equity shares by OCL to the shareholders of DCML on a proportionate basis, pursuant to sections 391 to 394 and other relevant provisions of the Companies Act, 1956 and in compliance with the norms laid down under section 2 (1B) of the Income Tax Act, 1961.


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f. This restructuring is intended to rationalize and simplify the structure of holding and ownership in companies so that there is alignment of interest of all shareholders and to provide greater business focus to OCL, OISL and KML. This will also provide scope for individual collaboration and expansion without committing the existing organization in its entirety.

g. Post this restructuring, OCL is expected to be better poised for meeting future

growth opportunities, gain the advantage of cost savings and improvement of its earnings potential.

h. The Board of Directors of OCL, OISL, KML and DCML are of the opinion that the

merger and demerger should benefit the shareholders, creditors, employees of all these companies and the general public.

. Details of the Scheme: The salient features of the Scheme, as reproduced here, are:- a) In the Scheme

(i) “Transferor Company” means OCL in context of Demerger 1 and

Demerger 2 and DCML in context of Merger, and should be construed accordingly.

(ii) “Transferee Company” means OISL in context of Demerger 1, KML in

context of Demerger 2 and OCL in context of Merger and should be construed accordingly.

b) Appointed Date

(i) Appointed Date for Demerger of Steel Undertaking of OCL into OISL and Real Estate Undertaking of OCL into KML is January 1, 2007

(ii) Appointed Date for Merger of DCML with OCL is July 1, 2007.

c) Transfer of Undertaking

(i) With effect from the Appointed Date all assets and liabilities of the Steel

Undertaking of OCL, without any further act or deed shall be transferred to OISL.

(ii) With effect from the Appointed Date all assets and liabilities of the Real

Estate Undertaking of OCL, without any further act or deed shall be transferred to KML.


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(iii) With effect from the Appointed Date all assets and liabilities of DCML without any further act or deed shall be transferred to OCL.

d) Dissolution (i) DCML shall be dissolved without the process of winding up, upon the

coming into effect of this Scheme, in accordance with the provisions of the Act and the rules made thereunder.

e) Issuance of Shares

(i) 3 shares of face value Rs 1 each in OISL for every 1 share of face value Rs 2 each held in the OCL as on the Specified Date (as defined in the Scheme of Arrangement);

(ii) 3 shares of face value Rs 1 each in KML for every 1 share of face value Rs 2 each held in OCL as on the Specified Date (as defined in the Scheme of Arrangement); and

(iii) 61 shares of face value Rs 2 each in OCL for every 100 shares of face value

Rs 2 each held in DCML as on the Specified Date (as defined in the Scheme of Arrangement).

f) Contracts and Deeds

(i) Upon the coming into effect of this Scheme and subject to other provisions of this Scheme, all contracts, deeds, bonds, agreements, schemes, engagements, arrangements and other instruments of whatsoever nature in relation to the Merged Undertaking/ Demerged Undertaking to which the Transferor Company is a party or to the benefit of which the Transferor Company may be eligible, and which are subsisting or having effect immediately before the Effective Date, shall be in full force and effect by or against or in favour, as the case may be, of the Transferee Company and may be enforced as fully and effectually as if, instead of the Transferor Company, the Transferee Company had been a party or beneficiary or obligee thereto.

(ii) Without prejudice to other provisions of the Scheme and notwithstanding

that vesting of the Merged Undertaking/ Demerged Undertaking with the Transferee Company occurs by virtue of this Scheme itself, the Transferee Company may, at any time after the coming into effect of this Scheme in accordance with the provisions hereof, if so required under any law or if it is otherwise considered necessary or expedient, execute deeds, confirmations or other writings or tripartite arrangements with any party to any contract or arrangement to which the Transferor Company was a party or any writings as may be necessary to be executed merely in order to give formal effect to the above provisions. The Transferor will, if necessary, also


23

be a party to the above to the extent permissible. The Transferee Company shall be deemed to be authorized to execute any such deeds, writings or confirmations and to implement or carry out all formalities required on the part of the Transferor Company to give effect to the provisions of this Scheme.

g) Legal Proceedings

(i) Upon the coming into effect of this Scheme, all legal or other proceedings (including before any statutory or quasi-judicial authority or tribunal) by or against the Transferor Company under any statute, whether pending on the Appointed Date, or which may be instituted any time in the future (relating to any period prior to the appointed date) and in each case relating to the relevant Merged Undertaking/ Demerged Undertaking shall be continued and enforced by or against the Transferee Company after the Effective Date and shall not abate or be discontinued nor be in any way prejudicially affected by reason of the demerger of the relevant Merged Undertaking/ Demerged Undertaking or anything contained in the Scheme. In the event of any difference or difficulty in determining whether any specific legal or other proceeding relates to a given Merged Undertaking/ Demerged Undertaking or not, the decision of the Board of Directors of the Transferor Company in this regard shall be conclusive evidence of the relationship with the relevant Merged Undertaking/ Demerged Undertaking.

(ii) The Transferee Company undertakes to have all legal proceedings initiated

by or against the Transferor Company referred to in Clause 16.1 of the Scheme transferred into its name and to have the same continued, prosecuted and enforced by or against the Transferee Company to the exclusion of the Transferor Company. The respective companies shall make relevant applications in that behalf to the extent permissible. All costs and consequences of such proceeding shall be borne by the Transferee Company.

(iii) In the event that the legal proceedings referred to herein require the

Transferor Company to be jointly treated as party thereto, the Transferee Company shall prosecute or defend such proceedings in co-operation with the Transferor Company at its cost and consequence.

(iv) Notwithstanding the aforesaid, OCL agrees to have the legal proceedings

with regard to the Captive Coal Block, continued, prosecuted and enforced in its name, including with regard to the share of OISL in the Captive Coal Block. However, the costs of such legal proceedings shall be shared between OCL and OISL in their respective share of extractable reserves in the Captive Coal Block.

(v) Notwithstanding the above, in case the proceedings referred to in Clause

16.1 of the Scheme cannot be transferred for any reason, or the transfer


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takes time, till such transfer the Transferor Company shall defend the same in accordance with the advice of the relevant Transferee Company and at the cost and consequences of the Transferee Company, and the relevant Transferee Company shall reimburse, indemnify and hold harmless the Transferor Company against all liabilities and obligations incurred by the Transferor Company in respect thereof.

(vi) On and from the Effective Date, the Transferee Company shall and may, if

required, initiate any legal proceedings in relation to the rights, title, interest, obligations or liabilities of any nature whatsoever, whether under contract or law or otherwise, of the Transferor Company in the same manner and to the same extent as would or might have been initiated by the Transferor Company.

h) Taxes

It is clarified that all taxes (direct or indirect), cess, fee or other charges payable or any refunds and claims receivable by the Transferor Company, relating to the Demerged Undertaking 1/ Demerged Undertaking 2 and by DCML, from the Appointed Date onwards shall, for all purposes, be treated as the tax liabilities or refunds and claims of the Transferee Company. Accordingly, upon the Scheme becoming effective, the Transferor Company and Transferee Company are expressly permitted to revise their tax returns and related documents, and to claim refunds/ credits, pursuant to the provisions of this Scheme.

i) Saving of Concluded Transactions

Transfer and vesting of the assets, liabilities, rights and obligations of the Merged Undertaking and the Demerged Undertaking 1/ Demerged Undertaking 2 and continuance of the proceedings by or against the Transferee Company shall not in any manner affect any transaction or proceedings already completed by the Transferor Company on or before the Appointed Date to the end and intent that the Transferee Company accept all such acts, deeds and things done and executed by and/ or on behalf of the Transferor Company as acts, deeds and things done and executed by and on behalf of the Transferee Company.

j) Applications to High Court/ Other Authority

(i) The Transferor Company and Transferee Company shall, with all reasonable dispatch, make applications to the relevant Hon’ble High Courts seeking orders for dispensing with or convening, holding and conducting the meetings of the respective classes of the members and/ or creditors as may be directed by the said Hon’ble High Courts.


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(ii) On the Scheme being agreed to by the requisite majorities of the classes of the members and/or creditors of the Transferor Company and Transferee Company as directed by the Hon’ble High Courts, the Transferor Company and Transferee Company shall, with all reasonable dispatch, apply to the relevant Hon’ble High Courts, for sanctioning the Scheme under Sections 391 and 394 of the Act, and for such other order or orders, as the said Hon’ble High Courts or such other authority having jurisdiction under law may deem fit for carrying this Scheme into effect.

(iii) For the purpose of issue of equity shares pursuant to the Demerger, the

Transferee Company may obtain such approvals and clearances as may be required under applicable law. Where necessary, with respect to a shareholder or class of shareholders, as may be appropriate, without prejudice to Clause 3 of the Scheme, the Transferee Company shall be entitled to make such other arrangements as may be required for the issue and allotment of shares, including the setting up of a trust to hold and/ or to dispose off the shares with the understanding that the interests of shareholders shall be protected at all times subject to applicable law and taxes.

k) Conduct of Business/ Employees

(i) With effect from the Appointed Date and up to and including the Effective

Date, the Transferor Company:

(a) shall be deemed to have been carrying on all business and activities relating to the Merged Undertaking/ Demerged Undertaking and stand possessed of all assets, rights, title, interest and authorities of the Merged Undertaking/ Demerged Undertaking for and on account of, and in trust for, the Transferee Company; and

(b) all profits accruing to the Transferor Company, or losses arising or

incurred by them (including the effect of taxes, if any, thereon), relating to the Merged Undertaking/ Demerged Undertaking shall for all purposes, be treated as the profits, taxes or losses, as the case may be, of the Transferee Company.

(ii) The Transferor Company undertakes that it will from the date of approval

of the Scheme by its Board of Directors and also from approval of the Board of Directors of the Transferee Company, or the Appointed Date, whichever is earlier, and up to and including the Effective Date preserve and carry on the Merged Undertaking/ Demerged Undertaking with diligence and prudence and agree that it will not, in any material respect, without the prior written consent of the relevant Transferee Company, alienate, charge or otherwise deal with or dispose off the Merged Undertaking/ Demerged Undertaking or any part thereof except in the ordinary course of business


26

or undertake substantial expansion of the Merged Undertaking/ Demerged Undertaking, other than expansions which have already been commenced.

(iii) The Transferee Company undertakes to engage, such employees as are

determined under Clause 1 of this Scheme, as being substantially engaged in the relevant Merged Undertaking/ Demerged Undertaking and who are in the employment of the Transferor Company immediately preceding the Effective Date, on terms and conditions not less favourable than those on which they are engaged by the Transferor Company, without any interruption of service as a result of the transfer of Merged Undertaking/ Demerged Undertaking to the Transferee Company. The Transferee Company agree that for the purpose of payment of any compensation, gratuity and other terminal benefits, the past services of such employees with the Transferor Company shall also be taken into account, and agree and undertake to pay the same as and when payable in accordance with prevailing law.

(iv) Upon the Scheme coming into effect, the accounts of the employees, who

are employed by the Transferor Company and who fall under Clause 17.3 of the Scheme, relating to the Provident Fund, Gratuity Fund and Pension and/or Superannuation Fund and any other Fund, shall be identified, determined and transferred to the respective funds of the Transferee Company and the employees shall be deemed to have become members of such trusts/ respective funds set up by the Transferee Company or set up under any statutory provisions/ schemes framed by Life Insurance Corporation or any other qualified insurer. The Transferor Company and the Transferee Companies shall co-operate and take all such steps as may be necessary to give effect to the provisions of this clause, with the end and intent that the interests of employees are protected. The Transferor Company agrees to stand in and support the Transferee Company, during the period that the Funds or employee benefit arrangements of Transferee Company are set up, subject to applicable law.

(v) Notwithstanding anything else contained in this Scheme, between the

Appointed Date and Effective Date, OCL shall be entitled to raise funds for the expansion of Remaining Business or any other purpose, in any manner as considered suitable by the Board of Directors of OCL, whether by means of rights issue, preferential issue, public issue or any other manner whatsoever. Further, such funds may be raised by means of any instrument considered suitable by the Board of Directors of OCL, including equity/ equity linked instruments, convertible/ non convertible bonds, debentures, debt etc. While proceeding with such capital raising plans, OCL shall ensure that the interests of shareholders of OCL and DCML shall not be prejudicially affected, given the pendency of the Scheme, and it shall take appropriate steps for preserving their interests. Further, if considered appropriate, the terms of issue of the instrument used for capital raising may provide that the funds shall be utilized solely for the purpose of


27

Remaining Business and that the instrument holders shall not be entitled to any shares in OISL and KML. Prior to undertaking any steps pursuant to this Clause, the approvals of the Boards of OCL, OISL, KML and DCML shall be duly obtained.

l) Liabilities

In accordance with clause 4.7 and 5.7 and other relevant provisions of the Scheme, upon the coming into effect of the Scheme, the following liabilities and obligations of OCL as on the Appointed Date and being a part of the Demerged Undertakings shall, without any further act or deed be and shall stand transferred to OISL and KML respectively:

(i) the liabilities which arose out of the activities or operations of the

Demerged Undertakings;

(ii) specific loans or borrowings raised, incurred and utilized solely for the activities or operations of the Demerged Undertakings;

(iii) in cases other than those referred to in sub-clauses (a) and (b) above,

proportionate part of the general or multipurpose borrowings and liabilities of OCL allocable to the Demerged Undertakings in the same proportion in which the value of the assets transferred under this Scheme bears to the total value of the assets of OCL immediately before the demerger.

Accordingly, the multipurpose borrowings including but not limited to listed debentures and fixed deposits will be split in accordance with the method prescribed under the Income Tax Act, 1961. Consequent to the aforesaid split, the companies (ie OCL, OISL and KML) will take all necessary steps including reissue of securities, dealing with fractional entitlements, listing with exchanges, obtaining approvals, entering into arrangements with interested parties etc.

m) Modification or Clarification

(i) The Transferor Company (by their Directors or their committee thereof) and the Transferee Company (by their Directors or their committee thereof) may assent to any modification(s) or amendment(s) in this Scheme which the Court and/ or any other Authority or any other body may deem fit to direct or impose or which may otherwise be considered necessary or desirable for implementing and/ or carrying out the Scheme or which may be considered necessary due to any change in law and the Transferor Company (by their Directors or their committee thereof) and the Transferee Company (by their Directors or their committee thereof) be and are hereby authorized to take such steps and do all acts, deeds and things as may be necessary, desirable or proper to give effect to this Scheme and to resolve


28

any doubts, difficulties or questions whether by reason of any orders of the Court or of any directive or orders of any other authorities or otherwise howsoever arising out of, under or by virtue of this Scheme and/ or any matters concerning or connected therewith.

(ii) The expression ‘any other Authority’ in the preceding Clause shall include

Securities and Exchange Board of India (SEBI) and the stock exchanges with which the shares of the OCL are listed and with which a copy of this Scheme is filed in terms of the Listing Agreement.

(iii) Any issue as to whether any asset or liability pertains to or is relatable to

the Demerged Undertaking 1/ Demerged Undertaking 2 or not shall be solely decided by the Board of Directors of OCL, on the basis of evidence that they may deem relevant for the purpose (including the books or records of the Transferor Company).

(iv) If any part of this Scheme is found to be unworkable for any reason

whatsoever, the same shall not, subject to the decision of the respective Boards of Directors of the Transferor Company and Transferee Company, affect the adoption or validity or interpretation of the other parts and/ or provisions of this Scheme. It is hereby clarified that the Board of Directors of the Transferor Company and Transferee Company may in their absolute discretion, adopt any part of this Scheme or declare the entire Scheme to be null and void and in that event no rights and liabilities whatsoever shall accrue to or be incurred inter se by the parties or their shareholders or creditors or employees or any other person. In such case each Company shall bear its own cost or bear costs as may be mutually agreed.

n) Conditionality of Scheme

The Scheme is conditional upon and subject to:

(i) The Scheme being agreed to by the respective requisite majorities of

the various classes of members and creditors (where applicable) of the Transferor Company and Transferee Company as required under the Act and the requisite sanction and orders of the Hon’ble High Courts being obtained; and

(ii) The certified copies of the above orders of the Hon’ble High Courts

being filed with the jurisdictional Registrar of Companies by Transferor Company and Transferee Company.

o) Effect of Non-Approvals

In the event of this Scheme failing to take effect finally by December 31, 2008 or by such later date as may be agreed upon by the respective Boards of Directors of the Transferor Company and Transferee Company, this


29

Scheme shall become null and void and in that event no rights and liabilities whatsoever shall accrue to or be incurred inter se by the parties or their shareholders or creditors or employees or any other person. In such case each company shall bear its own cost or as may be mutually agreed.

p) Costs, Charges and Expenses

All past, present and future costs, charges, levies, duties, and expenses in relation to or in connection with or incidental to the Scheme or the implementation thereof shall be borne by OISL & KML in the ratio of 50:50 respectively. Notwithstanding the aforesaid, stamp duty costs (if any) shall be borne by OCL (for Merger), OISL (for Demerger 1) and KML (for Demerger 2). All the aforesaid expenses shall be referred to as “Expenses of Scheme”.

Definition of “Demerged Undertaking 1” or “Steel Undertaking” as per the Scheme of Arrangement “Demerged Undertaking 1” or “Steel Undertaking” as described in sub-clause (i) of Part I of the Scheme means the undertaking of OCL constituted in the business of manufacture of sponge iron, power generation, steel billets and related products and shall include all assets (moveable and immoveable), liabilities, rights and powers of OCL comprised in and /or pertaining to the Steel Undertaking including without limitation the following: • all properties and assets, moveable and immoveable, tangible and intangible,

corporeal and incorporeal, in possession, or in reversion, present and contingent of whatsoever nature, wheresoever situate, including all lands relating to the Steel Undertaking at Lamloi, Jaurumal, Kutunia and other villages, if any, of Sundargarh district, Orissa more fully described in the Land schedule (Schedule – B) attached hereto, with all buildings, machinery, electrical installations, capital work in progress, vehicles, equipment, furniture, sundry debtors, inventories, cash and bank balances, bills of exchange, deposits, loans and advances as appearing in the books of accounts of OCL pertaining or relatable to the Steel Undertaking and leases and agency of OCL pertaining to the Steel Undertaking and all other interests or rights in or arising out of or relating to the Steel Undertaking together with all respective rights, powers, interests, charges, privileges, benefits;

• all the entitlements, carbon credits under Clean Development Mechanism Scheme,

industrial and other licenses, registrations, the contract for supply of 3 MVA of electrical energy for the use of Steel Undertaking included under the common agreement(s) for supply of electrical energy entered into with WESCO and/or other generating and distributing companies for the use of different undertakings of OCL and continue routing of such power to Steel Undertaking through 132 KV line of OCL, and including in particular all subsisting agreements relating to electrical contract demands with liberty granted to OISL to continue to draw such supply through 132 KV sub-station of OCL, quotas;


30

• all liabilities present and future (including the liabilities allocable as per Clause 4.7 (c) of this Scheme) and the specific contingent liabilities pertaining to or relatable to the Demerged Undertaking 1;

• all debts, liabilities, duties and obligations of OCL, statutory, contractual or

otherwise, relating to the Steel Undertaking pertaining to a period prior to the Appointed Date , including any liability under the Income Tax Act arising out of disallowance of expenditure, addition to income, denial or reduction, inadmissible deduction, allowance, exemption, relief, rebate etc. relating or attributable to the Steel Undertaking, (whether recorded/ provided in the books of accounts or not, whether claimed or demanded before or after the date immediately preceding the Appointed Date,),.

• the trade marks, patents, copyrights, liberties, easements and advantages

pertaining to the Steel Undertaking and/ or to which OCL is entitled to in respect of the Steel Undertaking, of whatsoever kind, nature or description held, applied for or as may be obtained hereafter together with the benefit of all respective contracts and engagements and development rights (whether vested or potential and whether under agreements or otherwise);

• all rights and licenses, contract, agreements, arrangements, all assignments and

grants thereof, all permits, registrations, environmental clearances, quota rights, import quotas, rights (including rights under any agreement, contracts, applications, letters of intent, or any other contracts), subsidies, grants, tax credits, incentives or schemes of central/ state governments including under Duty Entitlement Pass Book scheme, quality certifications and approvals, product registrations, regulatory approvals, entitlements, industrial and other licenses, municipal permissions, goodwill, approvals, consents, tenancies, if any in relation to the office and/or residential properties for the employees, cash balances, bank balances, deposits, advances, recoverable, receivables, easements, advantages, financial assets, hire purchase and lease arrangements, the benefits of guarantees issued by Transferor Company in relation to the Demerged Undertaking 1, privileges, all other claims, rights and benefits (including under any powers of attorney issued by the Transferor Company in relation to the Demerged Undertaking 1 or any powers of attorney issued in favour of the Transferor Company or from or by virtue of any proceeding before a legal, quasi judicial authority or any other statutory authority to which OCL was a party), powers and facilities of every kind, nature and description whatsoever, rights to use and avail of telephones, telexes, facsimile connections and installations, utilities, electricity, water and other services, provisions, funds, benefits of all agreements, contracts and arrangements and all other interests in connection with or relating to the Demerged Undertaking 1;

• all employees of OCL substantially engaged in the Demerged Undertaking 1 and

those employees that are determined by the Board of Directors of OCL , to be substantially engaged in or in relation to the Demerged Undertaking 1;


31

• all deposits and balances with Government, Semi-Government, local and other authorities and bodies, customers and other persons, earnest moneys and/ or security deposits paid or received by OCL, directly or indirectly in connection with or in relation to the Demerged Undertaking 1;

• all books, records, files, papers, product specifications and process information,

records of standard operating procedures, computer programmes along with their licenses, manuals and back up copies, drawings, other manuals, data catalogues, quotations, sales and advertising materials, packing, packaging, labeling or similar materials of any kind, lists of present and former customers and suppliers, customer credit information, customer pricing information, and other records whether in physical or electronic form, directly or indirectly in connection with or relating to the Demerged Undertaking 1;

Approvals with respect to the Scheme of Arrangement The Hon’ble High Court of Orissa, Cuttack vide its Order dated November 27, 2007 and Hon’ble Gauhati High Court vide its Order dated October 15, 2007 has approved the Scheme of Arrangement amongst OCL, OISL, KML and DCML and their respective shareholders and creditors (the “Scheme”). In accordance with the said Scheme, the equity shares of OISL issued subject to applicable regulations shall be listed and admitted to trading on the BSE and NSE Such listing and admission for trading is not automatic and will be subject to such other terms and conditions as may be prescribed by the Stock Exchanges at the time of application by OISL seeking listing. The aforesaid Order of the Hon’able High Court of Orissa at Cuttack was filed by OCL and OISL with the Registrar of Companies (“ROC”), Orissa and the Scheme was made effective from December 20, 2007. Subsequently, SEBI, vide its letter no. CFD/DIL/19(2)(b)/PB/EHM/131459/ 2008 dated July 10, 2008 has granted relaxation from the strict enforcement of the requirement of Rule 19(2)(b) of the Securities Contract Regulation (Rules), 1957 (SCRR) for the purpose of listing of shares of OISL subject to the transferee company, viz., OISL, complying with all the provisions of clause 8.3.5 of the SEBI (DIP) Guidelines, 2000. OISL has submitted its Information Memorandum, containing information about itself, making disclosures in line with the disclosure requirement for public issues, as applicable, to BSE and NSE for making the said Information Memorandum available to public through their websites This Information Memorandum is made available on the website of OISL www.oclsteel.in. OISL will publish an advertisement in the newspapers containing its details in line with the details required as per clause 8.3.5.4 of SEBI (DIP) Guidelines. The advertisement will draw a specific reference to the availability of this Information Memorandum on the website of OISL as well as the Stock Exchanges.


32

OISL also undertakes that all material information about itself shall be disclosed to stock exchanges on a continuous basis so as to make the same available to public, in addition to the requirements, if any, specified in Listing Agreement for disclosures about the subsidiaries.


33

STATEMEMT OF TAX BENEFITS The Board of Directors OCL Iron and Steel Limited Rajgangpur, Dist. Sundargarh Orissa – 770 017 Dear Sirs, Statement of Possible Tax Benefits available to OCL Iron and Steel Limited and its shareholders We report that the enclosed statement states the possible tax benefits available to OCL Iron and Steel Limited (‘the Company’) and to the shareholders of the Company under the Income Tax Act, 1961 and Wealth Tax Act, 1957, 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 statute. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon their fulfilling such conditions, which based on business imperatives the Company faces in the future, the Company may or may not choose to fulfill. The benefits discussed in the enclosed statement are not exhaustive. This statement is only intended to provide general information and is neither designed nor intended to be a substitute for professional tax advice. We do not express any opinion or provide any assurance as to whether:

i) the Company or its share holders will continue to obtain these benefits in future; or ii) the conditions prescribed for availing the benefits have been / would be met with.

The contents of the enclosed statement are based on information, explanations and representations obtained from the Company and on the basis of their understanding of the business activities and operations of the Company.

Place: New Delhi Dated: 01.07.08

For V. Sankar Aiyar & Co. Chartered Accountants

Ajay Gupta

Partner Membership No. 90104


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STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO OCL IRON AND STEEL LIMITED (THE “COMPANY”) AND ITS SHAREHOLDERS UNDER THE INCOME TAX ACT, 1961 (‘IT ACT’) I. BENEFITS AVAILABLE TO THE COMPANY DEDUCTIONS UNDER CHAPTER VI A OF THE IT ACT.

Subject to the conditions specified under Section 80-IA of the IT Act, the Company is eligible for 100% deductions of the profits derived from power generation from captive power plant.

II. BENEFITS AVAILABLE TO THE COMPANY AND PROSPECTIVE RESIDENT

SHAREHOLDERS OTHER THAN DOMESTIC COMPANIES 1. DIVIDENDS EXEMPT UNDER SECTION 10(34) OF THE IT ACT

Any income by way of dividends (declared, distributed or paid on or after 1 April, 2003) from a domestic company are exempt in the hands of the Company / shareholders, if the same is subject to dividend distribution tax as referred to in Section 115-O, as per the provisions of section 10(34) of the IT Act. However, Section 94(7) of the IT Act provides that the losses arising on account of sale / transfer of shares purchased up to three months prior to the record date and sold within three months after such date will be disallowed to the extent of dividend on such shares are claimed as tax exempt by the shareholder.

2. INCOME OF MINOR EXEMPT UNDER SECTION 10(32) OF THE IT ACT

Any income of minor children clubbed with the total income of the parent under section 64(1A) of the IT Act, will be exempt from tax to the extent of Rs. 1500/- per minor child under section 10(32) of the IT Act.

3 INCOME FROM CAPITAL GAINS

3.1 Section 48 of the IT Act, categorizes capital assets into two major categories viz. Long term Capital Assets and Short Term Capital Assets. If the shares are held for a period more than 12 months it is termed as a long term asset and otherwise as a short term asset. Any profit or loss arising on account of sale / transfer of such Long Term Assets are termed as long term capital gains and short term assets as short term capital gains.


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3.2 Section 48 of the IT Act, which prescribes the mode of computation of capital gains, provides for deduction of cost of acquisition / improvement and expenses incurred wholly and exclusively in connection with the transfer of a capital asset, from the sale consideration to arrive at the amount of capital gains. However, as per second proviso to Section 48 of the IT Act, in respect of long term capital gains arising from transfer of shares of Indian Company, it offers a benefit by permitting substitution of cost of acquisition / improvement with the indexed cost of acquisition / improvement, which adjusts the cost of acquisition / improvement by a cost inflation index, as prescribed annually.

3.3 Provisions of Section 112 of the IT Act, permit taxing long term capital

gains (which are not exempt under Section 10(38) of the IT Act) arising on transfer of shares in the Company at a rate of 20 percent (plus applicable surcharge and education cess) after factoring the indexation benefit.

However, the share holder may opt for the tax on long term gains

computed at the rate of 10 percent (plus applicable surcharge and education cess), if the tax on indexed long term capital gains resulting on transfer of listed securities calculated at the rate of 20 percent exceeds the tax on long term gains computed at the rate of 10 percent without Indexation benefit.

3.4 Provisions of Section 111A of the IT Act, prescribes for taxing the short-

term capital gains arising from sale of equity shares in the Company at a rate of 10 percent (plus applicable surcharge and education cess) where such transaction of sale is entered on a recognized stock exchange in India and is liable to securities transaction tax.

3.5 Provisions of section 10(38) of the IT Act, exempts from tax the long term

capital gains arising on sale of equity shares in the Company where the sale transaction has been entered on a recognized stock exchange of India and is liable to securities transaction tax.

3.6 In accordance with and subject to the conditions and to the extent specified

in Section 54EC of the IT Act, the shareholder would be entitled to exemption from tax on gains arising from transfer of the long term capital asset (not covered by section 10(36) and section 10 (38)) if such capital gain is invested in any of the long-term specified assets in the manner prescribed in the said section. Where the long-term specified asset is transferred or converted into money at any time within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the long-term specified asset is transferred or converted into money.


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3.7 Subject to the conditions specified under the Provisions of Section 54F of

the IT Act, long-term capital gains (which are not exempt from tax under Section 10(38) of the IT Act) arising to an individual or a Hindu Undivided Family (‘HUF’) on transfer of shares of the Company will be exempt from capital gains tax if the sale proceeds from transfer of such shares are used for purchase of residential house property within a period of 1 year before or 2 years after the date on which the transfer took place or for construction of residential house property, within a period of 3 years after the date of such transfer.

4. Where the total income of a person includes income chargeable under the

head” Profits and Gains of business or profession” arising from purchase or sale of equity shares in a company entered into a recognized stock exchange, i.e. from taxable securities transactions, he shall get a rebate equal to the securities transaction tax paid by him in the course of his business, he shall get deduction u/s 36(1)(xv) equal to the securities transactions tax paid by him.

III BENEFITS AVAILABLE TO CORPORATE RESIDENT SHAREHOLDERS

(DOMESTIC COMPANIES). 1. DIVIDENDS EXEMPT UNDER SECTION 10(34) OF THE IT ACT

Any income by way of dividends (declared, distributed or paid on or after 1 April, 2003) from a domestic company are exempt in the hands of the Company/shareholders, if the same is subject to dividend distribution tax as referred to in Section 115-O, as per the provisions of section 10(34) of the IT Act. However, Section 94(7) of the IT Act provides that the losses arising on account of sale/transfer of shares purchased up to three months prior to the record date and sold within three months after such date will be disallowed to the extent dividend on such shares are claimed as tax exempt by the shareholder.

2. INCOME FROM CAPITAL GAINS

2.1 Section 48 of the IT Act, categorizes capital assets into two major categories viz. long term capital assets and short term capital assets. If the shares are held for a period more than 12 months it is termed as a long-term asset and otherwise short-term asset. Any profit or loss arising on account of sale / transfer of such long term assets are termed as long term capital gains and short term assets as short term capital gains.

2.2 Section 48 of the IT Act, which prescribes the mode of computation of

capital gains, provides for deduction of cost of acquisition / improvement


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and expenses incurred wholly and exclusively in connection with the transfer of a capital asset, from the sale consideration to arrive at the amount of capital gains. Further, in respect of long term capital gains from transfer of shares of Indian Company, it offers a benefit by permitting substitution of cost of acquisition / improvement with the indexed cost of acquisition / improvement, which adjusts the cost of acquisition / improvement by a cost inflation index, as prescribed annually.


gains (which are not exempt under Section 10(38) of the IT Act) arising on transfer of shares in the Company at a rate of 20 percent (plus applicable surcharge and education cess) after factoring the indexation benefit. However, the share holder may opt for the tax on long term gains computed at the rate of 10 percent (plus applicable surcharge and education cess), if the tax on indexed long term capital gains resulting on transfer of listed securities calculated at the rate of 20 percent exceeds the tax on long term gains computed at the rate of 10 percent without indexation benefit.


term capital gains arising from sale of equity share in the Company at a rate of 10 percent (plus applicable surcharge and education cess) where such transaction of sale is entered on a recognized stock exchange in India and is liable to securities transaction tax.


capital gains arising on sale of equity shares in the Company where the sale transaction has been entered into on a recognized stock exchange of India and is liable to securities transaction tax, subject to the condition that the income by way of long-term capital gain of the company shall be taken into account in computing the book profit and income tax payable under Section 115JB.




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IV BENEFITS AVAILABLE TO MUTUAL FUNDS

Provisions of Section 10(23D) of the IT Act exempts the Mutual Funds registered under the Securities and Exchange Board of India or Mutual Funds set up by Public Sector Banks or Public Financial Institutions or authorized by the Reserve Bank of India and subject to the conditions specified therein, from income tax on their income.

V BENEFITS AVAILABLE TO FOREIGN INSTITUTIONAL INVESTORS (‘FIIS’) 1. DIVIDENDS EXEMPT UNDER SECTION 10(34) OF THE IT ACT

Any income by way of dividends (declared, distributed or paid on or after 1 April, 2003) from a domestic company are exempt in the hands of the Company / shareholders, if the same is subject to dividend distribution tax as referred to in Section 115-O, as per the provisions of section 10(34) of the IT Act. However, Section 94(7) of the IT Act provides that the losses arising on account of sale / transfer of shares purchased up to three months prior to the record date and sold within three months after such date will be disallowed to the extent dividend on such shares are claimed as tax exempt by the shareholder.


2.1 Provisions of Section 115AD of the IT Act, provides for taxing income of FIIs arising from securities (not covered by Section 10(38))(other than income by way of dividends referred to in section 115(O) of the IT Act) at concessional rates, as follows:

Nature of income Rate of tax (%) Income in respect of securities 20 (other than units referred to in Section 115AB) Long Term Capital Gains 10 Short term capital gains (other than short term capital gain referred to in Section 111A) 30

The above tax rates would be increased by the applicable surcharge and education cess. The benefits of indexation and foreign currency fluctuation protection as provided under Section 48 of the IT act are not available to a FII.


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term capital gains arising from sale of equity share in the Company at a rate of 10 percent (plus applicable surcharge and education cess) where such transaction of sale is entered on a recognized stock exchange in India and is liable to securities transaction tax.

2.3 Provisions of the Double Taxation Avoidance Agreement between India

and the country of residence of the FII would prevail over the provisions of the IT Act, as per section 90(2) of the IT Act, to the extent they are more beneficial to the FII.


capital gains arising on sale of equity shares in the Company where the sale transaction has been entered on a recognized stock exchange of India and is liable to securities transaction tax.


head ”Profits and Gains of business or profession” arising from purchase or sale of equity shares in a company entered into a recognized stock exchange, i.e. from taxable securities transactions, he shall get a rebate equal to the securities transaction tax paid by him in the course of his business, he shall get deduction u/s 36(1)(xv) equal to the securities transactions tax paid by him.

VI BENEFITS AVAILABLE TO NON-RESIDENTS / NON-RESIDENT INDIAN

SHAREHOLDERS (OTHER THAN MUTUAL FUNDS, FIIS AND FOREIGN VENTURE CAPITAL INVESTORS)

1. DIVIDENDS EXEMPT UNDER SECTION 10(34) OF THE IT ACT

Any income by way of dividends (declared, distributed or paid on or after 1 April, 2003) from a domestic company are exempt in the hands of the Company/shareholders, if the same is subject to dividend distribution tax as referred to in Section 115-O, as per the provisions of section 10(34) of the IT Act. However, Section 94(7) of the IT Act provides that the losses arising on account of sale / transfer of shares purchased upto three months prior to the record date and sold within three months after such date will be disallowed to the extent dividend on such shares are claimed as tax exempt by the shareholder.


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2.1 In terms of first proviso to Section 48 of the IT Act, in case of a non-resident, while computing the capital gains arising from transfer of shares in or debentures of the Company acquired in convertible foreign exchange (as per exchange control regulations) protection is provided from fluctuations 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. The capital gains/ loss in such a case is computed by converting the cost of acquisition, sales consideration and expenditure incurred wholly and exclusively in connection with such transfer into the same foreign currency which was utilized in the purchase of shares.


gains (which are not exempt under Section 10(38) of the IT Act) arising on transfer of shares in the Company at a rate of 20 percent (plus applicable surcharge and education cess) after factoring the indexation benefit. However, the share holder may opt for the tax on long term gains computed at the rate of 10 percent (plus applicable surcharge and education cess), if the tax on indexed long term capital gains resulting on transfer of listed securities calculated at the rate of 20 percent exceeds the tax on long term gains computed at the rate of 10 percent without indexation benefit.


term capital gains arising from sale of equity share in the Company at a rate of 10 percent (plus applicable surcharge and education cess) where such transaction of sale is entered on a recognized stock exchange in India and is liable to securities transaction tax. Short term capital gains arising from transfer of shares in a company other than those covered by Section 111A of the IT Act would be subject to tax as calculated under the normal provisions of the IT Act.

2.4 Provisions of the Double Taxation Avoidance Agreement between India

and the country of residence of the FII would prevail over the provisions of the IT Act, as per section 90(2) of the IT Act, to the extent they are more beneficial to the non-resident.


capital gains arising on sale of equity shares in the Company where the sale transaction has been entered into on a recognized stock exchange of India and is liable to securities transaction tax.


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2.6 Subject to the conditions specified under the Provisions of Section 54F of the IT Act, long-term capital gains (which are not exempt from tax under Section 10(38) of the IT Act) arising to an individual or a Hindu Undivided Family (‘HUF’) on transfer of shares of the Company will be exempt from capital gains tax if the sale proceeds from transfer of such shares are used for purchase of residential house property within a period of 1 year before or 2 years after the date on which the transfer took place or for construction of residential house property within a period of 3 years after the date of such transfer.

3. Where shares of the Company have been subscribed in convertible foreign

exchange, Non-Resident Indians (ie. An individual being a citizen of India or person of Indian origin who is not a resident) have the option of being governed by the provisions of Chapter XII-A of the IT Act, which inter alia entitles them to the following benefits:

3.1 Under Section 115E, where the total income of a non-resident Indian

includes any income from investment or income from capital gains of an asset other than a specified asset, such income shall be taxed at a concessional rate of 20 per cent (plus applicable surcharge and education cess). Also, where shares in the company are subscribed for in convertible foreign exchange by a non-resident Indian, long-term capital gains arising to the non-resident Indian shall be taxed at a concessional rate of 10 percent (plus applicable surcharge and education cess). The benefit of indexation of cost and the protection against risk of foreign exchange fluctuation would not be available.

3.2 Under Section 115F of the IT Act, long-term capital gains (in cases not

covered by section 10(38) of the IT Act) arising to a non-resident Indian from transfer of shares of the company, subscribed in convertible foreign exchange (in case not covered under Section 115E of the IT Act), shall be exempt from income tax, if the entire net consideration is reinvested in specified assets/saving certificates referred to in Section 10(4B) within 6 months of the date of transfer. Where only a part of the net consideration is so reinvested, the exemption shall be proportionately reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified assets/saving certificates are transferred or converted into money within 3 years from the date of their acquisition.

3.3 Under Section 115G of the IT act, it shall not be necessary for a non-resident

Indian to furnish his return of income under Section 139(1) if his income chargeable under the IT Act consists of only investment income or long term capital gains or both, arising out of assets acquired, purchased or subscribed in convertible foreign exchange and tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the IT


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Act.� Under Section 115I of the IT Act, a Non-Resident Indian may elect not to be governed by the foregoing provisions for any assessment year by furnishing his return of income for that assessment year under Section 139 of the IT Act, declaring therein that the provisions of Chapter XII-A shall not apply to him for that assessment year and accordingly his total income for that assessment year will be computed in accordance with the other provisions of the IT Act.

3.4 In accordance with the provisions of Section 115H of the IT Act, when a

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



BENEFITS AVAILABLE UNDER THE WEALTH TAX ACT, 1957 Investment in shares of companies are excluded from the definition of the term “asset” as given under section 2(ea) of the Wealth Tax act, 1957, and hence the shares held by the shareholders would not be liable to Wealth tax. BENEFITS AVAILABLE UNDER THE GIFT TAX ACT Gift tax is not leviable in respect of any gifts made on or after 1st October 1998. Therefore, any gift of shares of the Company will not attract gift tax.


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ABOUT OCL IRON AND STEEL LIMITED HISTORY OISL was incorporated on February 20, 2006, as public limited company with the Registrar of Companies, Orissa under the provisions of the companies Act, 1956 and obtained Certificate for Commencement of Business on March 20, 2006 from the Registrar of Companies, Orissa. OISL was a wholly owned subsidiary of OCL and as a result of the reorganization by way of demerger, the Steel Undertaking of OCL together with all its assets and liabilities stands transferred to and vested in OISL. The corporate identification number of OISL is U27102OR2006PLC008594. The objects for which the OISL has been established are set out in its Memorandum of Association. The main objects are set out hereunder: Main Objects: (1) To produce, manufacture, purchase, import, export, sell and to deal in all kinds

and forms of iron including sponge iron, grey iron, alloy iron, ductile iron, malleable iron, pig iron cast iron and special iron and all kinds of steel in all forms and/or bye products thereof and all kinds of goods, products, articles or merchandise whatsoever manufactured wholly or partly from iron or steels and/or other metals and alloys bearing metals.

(2) To carry on the business of re-rolling mill for all kinds of mild steel, high carbon

special steels, alloy steels and other metals and to carry on the trade or business as manufacturers, processors importers, exporters, dealers and traders as miners, iron ore processors, metallurgical explorers, iron master, steel makers, iron & Steel converters, mines proprietors, coke manufacturers, manufacturers of Ferro manganese, Ferro alloys, Ferro chrome, sponge iron, plate makers, iron founders, forged steel producers, billet and ingot manufacturers, wire drawers, tool makers, hard ware, tubes and spare parts manufacturers, brass scrap iron & steel dealers and manufacturers of all kinds of metals, minerals and mineral products and their bye products.

(3) To search for, get, work, raise, recover, mine, make merchantable, purchase, sell

and deal in iron, iron ore, iron and steel scrap, sheets and coils, coal, quartzite, Chromite, stone, lime, limestone, manganese, Ferro manganese, magnesite, clay, fire clay, china clay, Ball clay and any other clay, brick-earth, bricks and other metals, minerals and substances, and to manufacture and sell briquettes and other fuel, and generally to undertake and carry on any business, transaction or operation commonly undertaken or carried on by explorers, prospectors, or concessionaires and to search for, win, work, get, calcine, reduce, amalgamate, dress, refine and prepare for the market silica, quartzite and other ores and mineral substances and to buy, sell, manufacture and deal in minerals and mineral products of all kinds, plant and machinery and other things capable of being used in connection with the mining or metallurgical operations or


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required by the workmen and others employed by the Company and to explore, prospect, take on lease or on royalty basis or otherwise acquire mines, mining rights and lands or any interest therein and to quarry, mine, dress, reduce, draw, extract, calcine, smelt, refine, manufacture, process and otherwise acquire, buy, sell or otherwise dispose of and deal in all types, qualities and descriptions of ores, metal and mineral substances in connection with any of the foregoing.

Change in Memorandum of Association since the Company’s inception Date Particulars

28.03.2006

Alteration in the capital clause so as to increase the authorized capital from the previous Rs.1,00,00,000 divided into 1,00,00,000 equity shares of Re 1 each to Rs.5,00,00,000 divided into 5,00,00,000 equity shares of Re 1

08.11.2007

Alteration in the capital clause so as to increase the authorized capital from the previous Rs. 5,00,00,000 divided into 5,00,00,000 equity shares of Re 1 each to Rs.14,00,00,000 divided into 14,00,00,000 equity shares of Re 1 each (the change was affected in pursuance of the Scheme of Arrangement for Demerger of the ‘Steel Undertaking’ of OCL India Limited into OCL Iron and Steel Limited, which was approved by the Hon’ble High Court of Orissa at Cuttack on November 27, 2007 and which came into effect on December 20, 2007.


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BUSINESS The Company was incorporated under the name OCL Iron and Steel Limited on 20th February 2006. The Certificate for commencement of Business was obtained on March 20, 2006. Pursuant to a Scheme of Arrangement for de-merger of the Steel Undertaking (Sponge Iron Works) of OCL India Limited and transfer to and vesting of all assets and liabilities of the said Undertaking into the company as a going concern with effect from 20th December 2007. The objective of the Scheme is to demerge the Steel undertaking for speedy growth in the area of manufacture of semi steel products. It is expected that the demerger will improve capacity utilization & productivity of the Steel undertaking and shall enhance the synergies between Steel Undertaking and Company’s plans in the steel sector. The Steel undertaking was set up in the year 2002 at Rajgangpur, Orissa with state of the art sponge-iron unit having a capacity of 120000 tpa. The unit was commissioned and started commercial production in the year 2002. Land Building, Plant and Machinery The factory is located at Village Lamloi, P.O Garvana, Rajgangpur, Orissa, India. The factory land admeasures approximately 100 acres of land. The factory consists of factory building, administrative block, lab, finishing good warehouse, raw material godown, store, canteen, conference etc. The Company is in the process of setting up a blast furnace for which an area of approximately 9 acres is earmarked. 14 MW Power Plants A Power Plant of 14 MW capacity installed w.e.f. May 13, 2006, which is partly run on waste heat available at the Sponge Iron Plant and partly coal based.


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MANUFACTURING PROCESS OF STEEL BILLETS

INDUCTION FURNACE: 2nos. 12T Capacity each

LADDLE REFINING FURNACE: 1no 14T capacity

CONTINUOUS CASTING M/C: 1no 2Strand 6/11 meter radius

Based on the above facilities following is process flow sheet: -

INDUCTION MELTING FURNACE Principle of inductioion melting :- The principle of melting in Induction Furnace is that the electrical coil surrounding the cylindrical crucible acts as primary and the metallic charge as secondary. When an electrical current is passed through the primary coil the electromagnetic field causes induced current to flow through the metallic charge making it melt.

INDUCTION FURNACE

LADLE REFINING FURNACE

CONT. CASTING MACHINE

STEEL BILLET

CHARGE MIX Sponge Iron + Pig Iron + Scrap + Ferro Alloy

SLAG (Approx... 13%of charge) OFF GAS DUST (Approx. 0.9% of charge)

OFF GAS DUST

Recoverable scrap @ 2.1% Mill scale, Scarf & [email protected]%

Liquid metal (Yield Approx. 86.5% of charge)


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Induction furnace operation :- When the electrical current is switched on, the eddy currents developed between primary copper coil and heavier secondary current in the metallic charge melt in the charge to the desired temp.The charge is placed in this crucible and it acts as the secondary winding. The crucible is surrounded by several turns of water cooled copper tubing which carries the high frequency primary current. The charge consists of sponge iron, pig iron, Ms-scrap. After reaching temperature the gangue material present in the charge comes out in the form of slag and float in the molten bath. The slags are removed through tapping and manually. LADLE REFINING FURNACE Heats from the induction furnace will be tapped in to a ladle. This ladle will be transported to the ladle-refining furnace by 35/10T capacity E.O.T Cranes. In the ladle furnace fluxes are added, arcing is done through three electrodes on the metal interface to refine the steel. The L.R.F is used to disulphide (if required), Ferro-alloys additions to adjusts carbon, Silicon& manganese, raise the temp. to the required casting temp. at C.C.M. (LADDLE PREHEATERS are provided to heat the ladle to about 1100C temp. so as to limit the temp. drop of the liquid while pouring in the ladle from the induction furnaces.)Additions in the ladle of lime, silico-manganese, met coke etc.will be done manually. Some additions will be done at the time of pouring from the induction furnace in the ladle and some at the ladle furnace station. CONTINUOUS CASTING MACHINE Casting Operation: 35/10t capacity EOT crane will lift the ladle furnace and bring it to the ladle stand of one of the billet casting machines. Liquid steel shall flow from the ladle to a tundish below by controlling open of the slide gate. From the tundish the liquid steel will flow in to a curved mould, which shapes and forms a billet. The required starting ladle temperature for the subject rebar grade at CCM is about 16200c to16400c. The hot billet goes through a water spray cooling chamber in a4m radius and comes to straightening cum withdrawal machine, which is a set of individually driven and hydraulically pressed rollers. The withdrawal machine also varies the speed of the billet to keep the level of the mold constant as the steel flow into it varies when then the metering nozzle erodes with time. After they withdrawal machine, a manual oxy-fuel cutting torch cuts the billet into 6m lengths. The billet by the time it reaches the cutting machine has solid core. Billets of two strands then come out on to run out roller table and go in to the run-in roller table of the cooling beds. Transportation of the billets from the run-in roller table onto the cooling beds is done by a kick off. Further pushing is done by a billet pusher on a skid type cooling bed.

The 10t capacity EOT crane equipped with a magnet removes the billets from the CCM’s

cooling bed and stores them in stacks in the billet bay.


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MANUFACTURING PROCESS OF SPONGE IRON The process of producing sponge iron involves the following – KILN SECTION The kiln is 42 m long and 3m diameter. The kiln shell is made up of high boiler mild steel. From inlet up to 16.5 meter it is internally lined with LC45A refractory cast and rest 25.5 meter with LC62A refractory cast of 200-mm thickness. The inlet cone diameter after castable is 1250 mm & outlet cone diameter after castable is 1175 mm.Two ends of kiln are named as feed end & discharge end. The materials coming from the stock house consisting of I/O, F/C & Dolomite are fed to the kiln from the feed end by means of feed chute. One sealing air fan is mounted at the feed chute to prevent the leakage of inside air and to keep the kiln in +ve pressure. Seven shell air fans of 29cm suction diameter are mounted in the kiln. The shell air fans are provided with dampers to control the quantity of air to be put in. From the dampers the air passes to the kiln through air tube made up of HK 40 of 1.6m length and 820 mm outer diameter and 220 mm inner diameter. On the kiln 7 K type (Cr & Al) thermocouple are fitted at the seven zones to measure the temperature. A variable speed AC drive of 75 KW and 100 HP rotate the kiln at the required rpm. It is also provided an auxiliary drive of 3.7 KW, which helps to keep the kiln in rotation when the kiln is in hold condition for any reason. The kiln is inclined at an angle 1.4°. The kiln rests on two tires one at inlet side and another at outlet side. The tires are made up of IS 7018(cast steel). The material passes from kiln to cooler through a chute, which is called Transfer chute. A hydraulic cylinder is fitted in it to open it in case of material jamming. Rotary lobe compressor of 1500 NM3/Hr supplies compressed air required for pneumatic injection of coal. This air through Rotary air lock feeder (RALF1 & RALF2) insert to the kiln carrying injection coal from kiln outlet through coal through pipe made up of HK-40 of 80 mm inner diameter. A combustion air fan stationed on the ground supplier air through a central burner placed in the kiln outlet hood co-axially into the kiln. Air supplied from this fan through CB pipe of 3000mm long made up of mild steel and covered with castable material, aids combustion in the kiln discharge end and also burns down site air borne injected coal particles. There is a swirler in the C.B pipe of outer diameter 265 mm and 100 mm long. This swirler aids in heating kiln outlet hood area. In between air tube 5 & air tube 4 there are 9 slip rings from which power is supplied to the electrical accessories in the kiln accessories such as thermocouples, QRT elements, and shell air fans. The slip rings are made up of extended profile copper.

Kiln:- We have 4 nos. of Kiln each having 100 ton capacity per day. The kiln is 42 m long and 3m diameters. The kiln shell is made up of high boiler mild steel. Inside of the kiln is lining with refractory castables, having thickness of 200mm. The kiln is 5 mtrs. high from the earth, which are supported with angle, beams and channels. Feed Chute:- The raw material such as iron ore, dolomite and coal from the stock house are flowed through conveyor belt and fed into the kiln though chute which is called feed chute. It is made of with M.S Plate, and supported by beams, channels etc.


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Transfer Chute:- The material passes from kiln to cooler through a chute, which is called Transfer chute. It is made of with M.S Plate, beams, channels etc. COOLER SECTION The cooler is 22-meter long and 2.3-meter diameter. It is also inclined at an angle of approximately and rotates at a speed of 0.3 to 1.2 rpm. The hot material of kiln after reduction comes to the cooler through the transfer chute. Water from the water tanker connected with water pipes is sprayed on the top of the shell to cool the material indirectly to 100°C and is discharged through the DP (double pendulum) valve on the cooler discharge belt conveyer, which is heat resistance belt conveyer (HR). The cooler is provided with longitudinally parallel plates called checkers plate, with a goal to avoid free roll of the material for better cooling. The use of DP valve is to stop entering air from outside to the cooler. There is a screen before the DP valve where the oversized materials are screened and the oversized materials are discharged through oversize-chute, which is operated through pneumatic valve. The cooler shell is made with mild steel plate and supported with beam, joist, channel etc. PRODUCT SEPARATION SECTION After the reduction of iron ore the product from the cooler discharge is fed to the cooler discharge conveyer. This product contains Sponge iron & charcoal is then conveyed to product separation system through 3 cooler discharge conveyers. The necessity of 3 conveyers is to allow the product material to cool down as much as possible. The material is screened first through a double deck screen of 3mm and 16mm. The –3 mm size fractions are called sponge fines and +3mm fraction are called sponge lumps. Two drum magnetic separators each of 15 TPH separates both from char and dolo-char (char fines & calcined lime dust). Then the fines, lumps & char are stored in separate bunkers. There is an intermediate bunker in between product house and cooler discharge belt called I-bin. In case of emergency of product house maintenance the cooler discharge can be stored in this bin. A bucket elevator of 5 TPH is provided with the bin to send the material to product house in good condition. Hence the product separation system consists of the following equipments such as 3 nos. of Cooler discharge conveyor, separation screen cloths, Magnetic Separators, I-Bin etc. Conveyor Belts consists of the following items such as Rubber Belt, Motor, Gear Box, Drive Pulley, Tie Pulley, Bend Pulley, Carrying Idler, Return Idler, Impact Idler, and the structural items such as channel, angle, plates, flats, pipes etc. After the separation the finished product are kept in hoppers. There are five hoppers, one is for Grade-A Sponge Iron Lumps, One is for Grade-B Sponge Iron Lumps, one is for Sponge Iron Fines and other is for Chars. The body of hoppers is made of with Iron plates and supported by beams, joist, channels etc. From the above description it is proved that huge quantity of iron & steel items such as plates, joists, channels, beams used for the sponge iron plant. For smooth running of the


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plant the above equipments need repair and maintenance work. For the repair and maintenance work the iron & steel items such as plates, joists, channels, beams etc are required. Gas and electrodes also required. Gas and electrodes is the maintenance consumables item. Gas is used for cutting the iron and steel items into the appropriate sized and Electrodes are used welding the above materials with the above instruments. Electrical Goods:- Electrical inputs such as cable, fuse, wires, switch, capacitor, sun light coil, motor bearing, contactor, choke, carbon tetra chloride, H. R. C. fuse, Carbon brush, Relay, flexible cables etc are used for running of the various motors and equipments for the production purposes. Hand Gloves, Asbestos Hand Gloves and Helmet:- We have 4 nos. of kiln of 100 TPD each. Each kiln is shutdown once in a month to clean the dust and waste from the kiln. The workers use the hand gloves and hammer to clean the kiln. Hand gloves are also used for packing the finished goods into HDPE bags. Asbestos Hand Gloves are used by the worker for holding the hot metal such as the thermocouple tips to measuring the temperature. Safety helmet used by the worker while working in the plant. Laboratory:- Laboratory is used to testing chemical of the raw material and finished goods. Various chemicals, slide, beakers, mercuric chlorides are used for testing the materials. Raw Materials The main raw material required for MS billet and sponge iron are iron ore, coal, Pig Iron, Scrap and Ferro Alloy. The requirement is met locally from major suppliers located in and around Rajgangpur. Utilities Power The power requirement for the unit is 14 MW this has been generated ourselves. In addition, the Company has 6 generators having combined capacity of 3640 KVA. Water The water requirement for the unit for cooling, circulation, drinking and sanitation purpose is 4250 cubic meters per day and is being met from spent mines of Lanjiberna Queries and bore-well at the factory premises. EFFLUENTS The manufacturing process does not emit any hazardous effluents. The unit has obtained a No Objection Certificate from Orissa Pollution Control Board.


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MANPOWER The total manpower requirement for the plant is 889 persons and will be met mostly from the local population. The detailed classification of the required manpower is as under: Classification Number

Skilled - 432 Semi skilled - 103 General - 354

MOU with Government of Orissa for establishment of a Steel plant A MOU dated November 27, 2004 entered into with Government of Orissa for setting up a 0.25 million tonne per annum of steel plant and 14 MW captive power plant at Vill. Lamloi, Rajgangpur, Orissa with an estimated investment of about Rs.204.21 crores. PRODUCT AND END USERS Our main products are sponge iron and MS Billets. These products are used by producer/manufacturer of finished/ semi finished steel products.


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MANAGEMENT As per the Articles of Association of the Company, until otherwise determined by the Company in General Meeting, the number of Directors shall neither be less than three nor more than twelve. The Promoters have not been granted any special powers under the Articles of Association. Board of Directors as on date Particulars of Directors Other Directorships 1 Name Mr. Sheoraj Jain (a) Neelachal Ispat Nigam Limited

Age 73 Years (b) Universal Cables Limited Designation : Chairman (c) OCL India Limited (d) Consteel India Pvt. Ltd. S/O Late Shri Maniklal Jain

Address N-15/1, DLF Qutab Enclave, Phase-II, Gurgaon – 122 002 (Haryana)

2 Name Shri Raghu Hari Dalmia (a) Gandeur Travels & Tours Pvt. Ltd.

Age 57 Years (b) Dalmia Agencies Private Limited Designation: Vice Chairman (c)Debikay Systems Limited S/O Mr. Jai Dayal Dalmia (d)Hari Machines Limited Address No.1, Tees January Marg, New

Delhi – 110 011 (e) Himalaya Natural Products Limited

(f) Dapel Investments Private Limited (g) Kabirdas Investments Limited

3 Name Shri Krishna Murari Poddar (a) Ceeta Industries Limited Age 63 Years (b) Mind stream Technologies Private

Limited

Designation: Director (c) Techno Electric & Engineering Co. Ltd.

S/O Late Shri Ram Niwas Poddar (d) DOMCO Private Limited

Address 10D, Alipore Park Place, Kolkata – 700 027 West Bengal

4 Name Shri Surendra Kumar Dalmia (a) Suryaa Sponge Iron Limited Age 54 Years (b) Utkal Securities Private Limited Designation: Director (c) Vikash Constructions Private Limited S/O Late Shri Onkarmal Dalmia (d) Rampyari Properties Private Limited


53

Address B-40, Sahid Nagar, Bhubaneswar, Orissa – 751 007

(e)Dalmia Properties Private Limited

5 Name Shri. Badalchand Parakh Age 65 Years Designation: Director S/O Late Chhagal Mal Parakh Address Bungalow No.6A, OCL Colony,

Rajgangpur – 17, Orissa

6 Name :Shri Sabyasachi Mishra (a) Hari Machines Limited Age : 40 Years (b) Kiran Resources Limited Designation: Managing Director S/O : Shri Prakash Chandra Mishra Address: Bungalow No.7, East Colony,

Rajgangpur – 770017

7 Name Shri Praveen Chand (a) Kiran Resources Limited Age 48 Years (b) Shree Govind Metals Pvt. Ltd. Designation: Whole-time Director S/O Shri M L Chand Address : O-1, Civil Township, Rourkela –

769 004, Orissa

Brief Biography of the Directors 1. Dr. Sheoraj Jain, aged about 73 years, a Mechanical Engineering from the Pilani

Institute, is an independent Director and Chairman of our Company. He was the former Chairman of Steel Authority of India (SAIL). SAIL is the India’s largest steel producing company. He was also Chairman of Coal India Limited and Heavy Engineering Corporation Limited. Prior to this, he was Managing Director of Bhilai Steel Plant. He has variety of experience in the business arena with specialty in steel and heavy industry. His voter identity card number is HR/07/61/529127.

2. Raghu Hari Dalmia, aged 57 years is the Director and Vice-Chairman of our

Company. He is a member of the leading Dalmia industrial family with substantial business interests mostly in India, UK and USA. Dalmia Group is a leading business conglomerate with interests in cement, industrial ceramics, real estate, information technology, investments, engineering and trading. He is also the director of various other group companies like, Hari Machines Limited, Debikay Systems Limited etc. He has been associated with various industry organizations. He has been the President of Indian Refractory Makers Association and is presently and an active member of the same. He was the chairman of the


54

Environment Committee of PHD Chamber of Commerce. Mr. R. H. Dalmia holds a bachelors degree in technology from IIT, New Delhi. His voter identity card number is DL/01/002/231011 and driving license is P02051999106541.

3. Mr. Krishna Murari Poddar aged about 63, Commerce Graduate from Kolkata, an

Independent Director in the Company. He has a 40 years of business experience in man made fiber industry, polymer industry etc. His voter identity card number is WB/23/148/234138 and driving licence is WB-91-297499.

4. Mr. Surendra Kumar Dalmia aged about 57, an industrialist, a Director of the

Company since November 9, 2006. He has a vast experience in sponge-iron business. His voter identity card number is DL/01/002/231011 and driving license is P02051999106541.

5. Mr. Badalchand Parakh, aged about 66, a director of the Company since July 11,

2007, Cost Accountant. He is working with OCL India Ltd. in a capacity of Sr. General Manager, Commercial. He has vast experience in finance and accounts. His driving licence is 52/08 RKL.

6. Mr. Sabyasachi Mishra, aged about 40 years, Electrical Engineer from Indira

Gandhi Institute of Technology, Sarang (Talcher, Orissa), is the Managing Director of the Company. He is also founder Director of the Company. He is also Executive Director of Hari Machines Limited. He has vast experience in heavy engineering. His voter identity card number is OR/20/137/182978.

7. Mr. Praveen Chand, aged about 48, an eminent Chartered Accountant, is Director

(Marketing & Finance) of the Company. He has rich and vast experience in marketing and finance field. His voter identity card number is OR/20/137/330034 and driving licence is 509/97-98 RKL.

Compensation of Managing Directors / Whole time Directors Mr. Sabyasachi Mishra and Mr. Praveen Chand have been appointed Managing Directors and Director (Marketing & Finance) on whole-time basis respectively of the Company with effect from December 8 2007. Mr Sabyasachi Mishra is entitled to get remuneration Rs.2, 10,000 per month approximately and Mr. Praveen Chand is entitled for a remuneration of Rs.1, 66,000 per month approximately. Corporate Governance The provisions of the listing agreement to be entered into with the Stock Exchanges with respect to corporate governance will be applicable to OISL immediately upon the listing of its Equity Shares on the Stock Exchanges. To comply with the requirements of Clause 49 of the listing agreement to be entered into with the Stock Exchanges, OISL has appointed independent directors to its Board. The


55

Audit Committee and Shareholders / Investors Grievances Committee are also constituted and their details are as follows: Audit Committee: Audit Committee constituted vide board meeting dated January 27, 2008 consists of the following members: Shri Surendra Kumar Dalmia Chairman Shri Krishna Murari Poddar Member Shri Praveen Chand Member

Shareholders/ Investors Grievances Committee: Shareholders/ Investors Grievances Committee constituted vide board meeting dated January 27, 2008 consists of the following members:

The role, powers, scope of functions and duties of the Audit Committee and Shareholders/ Investors’ Grievance Committee of the Board are as per the applicable provisions of the Companies Act, 1956 and Clause 49 of the Listing Agreement. Change in Board of Directors since the Company’s inception Name of the Director Date of change Reasons for change Shri S Pasupathy November 15, 2006 Resignation Shri Sabyasachi Mishra December 8, 2007 Appointed as Managing Director Shri Surendra Kumar Dalmia November 9, 2006 Appointed as Director Shri Sheoraj Jain July 7, 2007 Appointed as Director Shri Badalchand Parakh July 7, 2007 Appointed as Director Shri Krishna Murari Poddar July 7, 2007 Appointed as Director Shri Praveen Chand December 8, 2007 Appointed as Director (Marketing

& Finance) Date of expiration of current term of office of directors Mr. Sabyasachi Mishra has been appointed as the Managing Director of the Company and Shri Praveen Chand appointed as Director (Marketing & Finance) on whole-time employment basis with effect from 8th December 2007 for a period of five years by the Board of Directors of the Company. In terms of the Articles of Association of the Company, office of Managing Director and Whole-time Director shall not be subject to retirement by rotation. All other Directors term of office is subject to retirement by rotation in terms of the provisions of the Companies Act, 1956.

Shri Krishna Murari Poddar Chairman Shri Sabyasachi Mishra Member Shri Praveen Chand Memeber


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Shareholding of Directors Sr. No.

Name of the Director Number of Shares held

1. Mr. Raghu Hari Dalmia 3474465 2. Mr. Badalchand Parakh 1 3. Mr. Sabyasachi Mishra 92724 4. Mr. Praveen Chand 95097

Key Management Personnel Name Age Designation Qualification Total

Experience Previous employment

Date of Joining

Shri Kailash Agrawal

44 General Manager (Commercial)

Chartered Accountant

20 years MSP Steel & Power Ltd.

18.01.2005

Shri T K Samantry

43 Head Power Plant

Diploma in Mechanical Engineer

18 years OCL India Limited

04.11.1994

Shri Shiv Kumar Singh

46 Asst. General Manager

Metrological Engineer

15 years Scan Steel Limited

06.03.2006

Shri Manoj Pathak

40 Sr. Manager (DRI & Material)

Chartered Accountant

13 years OCL India Limited

01.04.1996

Shri Sambit Kumar Sarangi

37 Manager Legal cum Company Secretary

ACS & LLB 10 years S K S Limited,

07.07.2006

Employees: In addition to the key management personnel as described above, there are more than 150 employees on the rolls of the Company. Pursuant to the Scheme, certain employees from OCL have been transferred to the Company and consequently the number of employees of the Company has increased. The detailed modalities of the transfer of employees are finalized.


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PROMOTERS Currently the promoters of OISL consists of M/s OCL India Limited, Mr. Mridu Hari Dalmia, Mr. Raghu Hari Dalmia, Mr. Yadu Hari Dalmia, Mr. Gaurav Dalmia, Mrs. Abha Dalmia, Mrs. Padma Dalmia, Mrs. Usha Devi Jhunjhunwala, M/s. Gautam Dalmia (HUF), Mridu Hari Dalmia Parivar Trust, Sumana Trust and Shree Nirman Limited. The brief profile of our promoters are as follows: 1. OCL India Limited

For information on OCL India Limted, please refer information on Group companies.

2. Shri Mridu Hari Dalmia, aged 66 years is the President & CEO of OCL, the

Promoting Company. He has been associated with OCL since 1970. He is a member of the leading Dalmia industrial family with substantial business interests mostly in India, UK and USA. Dalmia Group is a leading business conglomerate with interests in cement, industrial ceramics, real estate, information technology, investments, engineering and trading. He has been associated with various industry organizations in the past. He is a member of the Managing Committee of the Associated Chambers of Commerce and Industry. He was the President of Indian Refractories Manufacturers Association and of Cement Manufacturers Association. He was also the President of National Council for Cement and Building Materials during 1986-89 and a member of the Managing Committee of the FICCI during 1987-89. Mr. M. H. Dalmia holds a bachelors degree in chemical engineering from Jadavpur University, Kolkata. He was awarded a gold medal in 1961 for best engineering student. His voter identity card number is DL/01/002/222133 and driving license number is P02091998101288. His residential address is 4, Scindia House, Connaught Place, New Delhi – 110001.

3. Shri Raghu Hari Dalmia, aged 58 years is the Vice-Chairman of our Company. He

has been associated with our Company since its inception. He is also President of OCL over two and half a decades. He is a member of the leading Dalmia industrial family with substantial business interests mostly in India, UK and USA. Dalmia Group is a leading business conglomerate with interests in cement, industrial ceramics, real estate, information technology, investments, engineering and trading. He is also the director of various other group companies like, Hari Machines Limited, Debikay Systems Limited etc. He has been associated with various industry organizations. He has been the President of Indian Refractories Makers Association and is presently and an active member of the same. He was the chairman of the Environment Committee of PHD Chamber of Commerce. Mr. R. H. Dalmia holds a bachelors degree in technology from IIT, New Delhi. His voter identity card number is DL/01/002/231011 and driving license number is P02051999106541. His residential address is 4, Scindia House, Connaught Place, New Delhi – 110001.


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4. Shri Yadu Hari Dalmia, aged 60 years is an eminent industrialist having rich and varied experience of over thirty-two years. He is a member of the leading Dalmia industrial family. Dalmia Group is a leading business conglomerate with interests in cement, industrial ceramics, real estate, information technology, investments, engineering and trading. Mr. Y. H. Dalmia is the President of Dalmia Cement (Bharat) Limited heading the cement division, finance and taxation of that company. He is also Director of OCL. He has been associated with various industry organizations. He was the President of Cement Manufacturers Association for the year ending 1999-2000. He was also the Chairman of National Council for Cement and Building Materials Administration and Finance Committee during 1996-98 and Chairman of the Board of Governors of NCB during 1999 and 2000. Mr. Yadu Hari Dalmia holds a bachelors degree in commerce from Delhi University and is a fellow member of the Institute of Chartered Accountants of India. His voter identity card number is DL/01/002/231091 and driving license number is P02072004133700. His residential address is 4, Scindia House, Connaught Place, New Delhi – 110001.

5. Shri Gaurav Dalmia, aged 43 years is the Joint President of OCL. He is a member

of the leading Dalmia industrial family with substantial business interests mostly in India, UK and USA. Dalmia Group is a leading business conglomerate with interests in cement, industrial ceramics, real estate, information technology, investments, engineering and trading. He had started ‘First Capital’ a private equity investment firm. He had also co-founded ‘Infinity’, India’s first angel investment fund with a corpus of $35 million. He is a member of the General Partner of Gujarat Venture Finance Limited, a specific venture capital firm, co-sponsored by CDS/Actis, a leading private equity firm. Mr. Gaurav Dalmia was selected as the Global Leader for Tomorrow for the year 2000 by the World Economic Forum. Mr. Gaurav Dalmia holds a bachelor’s degree in computer science form Salford University, UK and has completed his MBA with Beta Gamma Sigma honors (top 5% class) from Columbia University, USA. His driving license number is P02102005137927. His residential address is 4, Scindia House, Connaught Place, New Delhi – 110001.

6. Ms Abha Dalmia, aged 62 years is the wife of Mr. Mridu Hari Dalmia. She holds a

bachelor’s degree in Arts from Kolkata University. Her voter identity card number is DL/01/002/222134.

7. Ms Padma Dalmia, aged 55 years is the wife of Mr. Raghu Hari Dalmia. She holds

a bachelor’s degree in Home Science from Mumbai University. Her voter identity card number is DL/01/002/231166.

8. Ms Usha Devi Jhunjhunwala, aged 64 years is the wife of Mr. Giridhari Lal

Jhunjhunwala. She holds a degree in Prabhakar in Hindi from Punjab University. Her driving license number is MH01-2004-13468. Her residential address is 59, Samachar Marg, Sonawala Bldg, Fort, Mumbai – 400021.


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9. M/s Gautam Dalmia (HUF)

M/s Gautam Dalmia is a hindu undivided family recognized under the Indian Law. Mr. Gautam Dalmia is the karta of the HUF and is authorized to take all decisions in relation to the assets and properties of the HUF.

10. Mridu Hari Dalmia Parivar Trust

Mridu Hari Dalmia Parivar Trust was formed pursuant to Trust deed dated May, 28th 1999 and is unregistered. The trustees of the trust are Mr. M.H.Dalmia, Mrs. Abha Dalmia, Mr. Y.H.Dalmia, Mr. Parag Dalmia, Mr. Gaurav Dalmia, Mr. Gautam Dalmia and Mr. Puneet Dalmia and the trust was set up for the benefit of the beneficiaries of the trust. The beneficiaries of the Trust are Mr. Mridu Hari Dalmia, Mrs. Abha Dalmia, Mr. Gaurav Dalmia, Mrs. Sharmila Dalmia, Mrs. Kanupriya Somany, Ms. Devanshi Dalmia, Mr. Aryaman Hari Dalmia, Ms. Aanyapriya Dalmia and the spouses and children of persons named above.

11. Sumana Trust

Sumana Trust was formed pursuant to the trust deed dated November, 17th 2000 and supplemental deed dated November, 29th 2004 and is unregistered. The trustees of the trust are Mr. J.H.Dalmia, Mrs. Kavita Dalmia, Mr. Gautam Dalmia and Mrs. Anupama Dalmia and the trust was set up for the benefit of the beneficiaries. The beneficiary of the Trust is Ms. Sumana Dalmia.

12. Shree Nirman Limited

Shree Nirman Ltd. is having its Registered Office at 4, Scindia House, New Delhi-110001. It falls under the category of others associated with the promoters of the Company.


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CURRENCY OF PRESENTATION In this Information Memorandum all references to “Rupees” or “Rs” or “Re” are to Indian Rupees, the legal currency of the Republic of India. DIVIDEND POLICY The Company does not have any formal dividend policy vis a vis the equity shares. The declaration and payment of equity dividend in a company is recommended by our Board of Directors and approved by the shareholders, at their discretion, and will depend on a number of factors, including but not limited to our profits, capital requirements and overall financial condition. The Company has not paid any dividend on its equity shares so far.


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FINANCIAL INFORMATION The Board of Directors, OCL Iron and Steel Limited Rajgangpur, Orissa - 770 017

Re: Listing of OCL Iron and Steel Limited Dear Sirs, A. Financial Statements 1. We have examined the books and accounts of OCL Iron and Steel Limited (‘OISL’

or ‘the Company) for the three financial year / period ended 31st March, 2008, being the last date upto which the accounts of the Company have been made up and audited by us/other auditors for presentation to the members.

2 In accordance with the requirements of: a. Paragraph B (1) of Part II of Schedule II to the Companies Act, 1956 b. The Securities and Exchange Board of India (Disclosure and Investor

Protection) Guidelines 2000 issued by SEBI on January 19, 2000 (in pursuance of Section 11 of SEBI Act, 1992), and as amended.

c. Instructions dated 25th June 2008 received from the Company, requesting us to carry out work in connection with the listing of equity shares by the Company.

The financial information referred to in this report is proposed to be included in the Information Memorandum of the Company to be filed with the SEBI. We report that: The attached restated summary statement of assets and liabilities of the Company for the above period / years as set out in Annexure I and the attached restated summary statement of profits and losses and the attached restated statement of cash flows for period / years ended on that date as set out in Annexure II & III have been made, after charging all expenses including depreciation and after making such adjustments and regrouping as, in our opinion are considered appropriate and more fully described in notes appearing in Annexure IV. B. Other Financial Information We have examined the following financial information relating to OISL proposed to be included in the Information Memorandum, as approved by you and annexed to this report. 1. Specified ratios for the respective years (Annexure V). 2. Capitalization statement as at 31st March, 2008 (Annexure VI)


62

3. Tax Shelter Statement for the period ended 31st March, 2008 (Annexure VII)

The Company was incorporated on 20.02.2006. Thus the requirements of five year figures are not applicable.

The Company has not declared dividends during any financial year covered in this report and hence the information regarding rates of dividend in respect of each class of shares has not been disclosed.

There are no disclosures found required relating to leases under the relevant accounting standard.

There are no extra-ordinary items, which need to be disclosed separately in the summary of financial statements as restated.

Attention is drawn to Note no. 1 of Notes to Accounts (Annexure – IV) dealing with merger of Steel Undertaking of OCL India Limited with the Company, the appointed date being 01.01.2007.

The Company’s management is responsible for the preparation of the summary financial statements. Our responsibility is to report based on the work done. We have performed such tests and procedures, which, in our opinion, were necessary for our reporting to you. These procedures include comparison of the annexed financial information with the Company’s audited financial statements. Based on such procedures carried out by us and review of the records produced to us and the information and explanations given to us by the Company’s management, and our comments in the foregoing paragraphs, we confirm that nothing has come to our attention to show non-compliance with the SEBI Guidelines.

This report should not in any way be considered as a re-issuance or re-dating of any of the previous audit reports issued by us or other firms of Chartered Accountants nor should it be construed as a new opinion on any of the financial statements referred to therein.

This report is intended solely for your information and for inclusion in the Information Memorandum in connection with the listing of the equity shares of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent.

Place: New Delhi Dated: 01.07.08

For V. Sankar Aiyar & Co. Chartered Accountants

Ajay Gupta

Partner Membership No. 90104


63

Summary of Assets and Liabilities as restated Annexure-1

(Rs. In lacs)

SL

No.

Particulars As at

31.03.2008

As at

31.03.2007

As at

31.03.2006

A. Fixed Assets

Gross Block 12,111.70 10,937.13 -

Less: Depreciation 1,056.43 222.58 -

Net Block 11,055.27 10,714.55 -

Less: Revaluation Reserve (if any) - - -

Net Block after adjustment for Revaluation Reserve

11,055.27 10,714.55 -

Capital work in Progress (at Cost) 344.61 456.53 -

11,399.88 11,171.08 -

B. Current Assets, Loans & Advances

Inventories 2,454.62 2,908.75 -

Sundry Debtors 2,497.41 1,383.65 -

Cash and Bank Balances 353.13 1,037.44 1.39

Loans and Advances 3,182.11 3,397.22 -

Other Current Assest 5.50 5.91 -

8,492.77 8,732.97 1.39

Total Assets (A+B) 19,892.65 19,904.05 1.39

C. Liabilities & Provisions

Loan Fund

Secured Loans 7,322.75 9,093.65 -

Unsecured Loans 451.46 1,804.06 -

Deferred Tax Liabilities 1,704.00 1,282.38 (0.08)

Current Liabilities & Provisions

Current Liabilities 3,417.85 1,544.99 0.10

Provisions 8.64 1.32 -


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Total Liabilities and provisions (C ) 12,904.70 13,726.41 .02

D. Net Worth (A+B+C) 6,987.95 6,177.64 1.37

Represented by

Share Capital 1,341.43 5.00 5.00

Share Capital Suspense a/c - 1336.43 -

Reserve & Surplus 5,646. 52 4,836.21 (3.63)

Less: Revaluation Reserve - - -

Reserves (Net of Revaluation Reserve) 5,646.52 4,836.21 (3.63)

Total 6,987.95 6,177.64 1.37


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Annexure – II

Summary of Profits and Losses as restated

SL

No.

Particulars As at

31.03.2008

As at

31.03.2007

As at

31.03.2006

Income

Sales

- Of Products manufactured by the Company

18,065.22 3,973.97 -

- Of products traded by the Company - - -

Total 18,065.22 3,973.97 -

Other Income 89.59 11.93 -

Increase / (decrease) in Inventories (461.48) 56.76 -

Total 17,693.33 4,042.66 -

Expenditure

Raw Material Consumed 11,374.77 2,714.53 -

Employee remuneration & benefits 241.85 17.54 -

Power & Fuel 651.86 128.27 -

Other Exp. on Operation, Admn. & Selling

2,457.57 705.39 3.71

Total 14,726.05 3,565.43 3.71

Profit before Int., Depr. And Tax 2,967.28 477.23 (3.71)

Interest (Net) 925.79 224.53 -

Profit before Depreciation & Tax 2041.49 252.70 (3.71)

Depreciation 806.57 218.10 -

Profit / (Loss) after Tax 1,234.92 34.60 (3.71)

Current Tax 140.00 4.02 -

Deferred Tax 421.61 11.53 (0.08)

Fringe Benefit Tax 3.00 0.50 -

MAT Credit (140.00) (4.00) -

Profit / (Loss) after Tax 810.31 22.55 (3.63)


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Add: Balance B/f from previous year 18.92 (3.63) -

Profit available for appropriation 829.23 18.92 (3.63)

Appropriation

Proposed Dividend - - -

Income Tax on Dividend - - -

Transfer to General Reserve - - -

Transfer to Debenture redemption reserve

218.75 - -

Balance transferred to Balance Sheet 610.48 18.92 (3.63)

Notes

1. There are no adjustments resulting from audit qualification


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Annexure – III

Summary of Cash Flow Statement as restated

S

No.

Particulars As at

31.03.2008

As at

31.03.2007

As at

31.03.2006

A Cash Flow from Operating Activities

Net Profit before taxes and extraordinary items

1,234.92 34.60 (3.71)

Adjustments for:

Depreciation for the year 833.85 222.58 -

Interest expense (Net) 925.79 224.53 -

Provision for Bad & Doubtful Debts 6.03 - -

Operating profit before working Capital changes

3,000.59 481.71 (3.71)

Adjustment for

(Increase) / Decrease in Inventories 454.13 (2,908.75) -

Increase / (decrease) in trade and other payables

1,877.18 1,546.19 0.10

Increase / (decrease) in trade and other receivables

(891.01) (4,786.78) -

Cash generated from Operating activities 4,440.89 (5,667.63) (3.61)

Income tax refund / (Paid) 13.26 (0.50) -

Net Cash from Operating activities 4,427.63 (5,668.13) (3.61)

B Cash flow from Investing activities

Additions to fixed assets (net of deductions) (1,062.65) (11,504.18) -

Sale and other credit of fixed assets - 110.51 -

Deferred tax on demerger - 1,270.95 -

Net Cash from (used) in Investment activities

(1,062.65) (10,122.72) -

C Cash flow from financing activities

Reserve & surplus arising from demerger Incl. Share Capital Suspense a/c

- 6,153.72 -


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Issue of Share Capital - - 5.00

Increase / (decrease) in secured borrowings- term loan

(1,770.90) 9,093.65 -

Increase / (decrease) in un secured borrowings

(1,352.60) 1,804.06 -

Interest paid (Net) (925.79) (224.53) -

(4,049.29) 16,826.90 5.00

Net change in cash & cash equivalents (684.31) 1,036.05 1.39

NET CHANGE IN CASH & CASH EQUIVALENT

Balance at the end of the year 353.13 1,037.44 1.39

Balance at the beginning of the year 1,037.44 1.39 -

(684.31) 1,036.05 1.39


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Annexure – IV Significant Accounting Policies and Notes to Accounts 1. Basis of Accounting These financial statements are prepared under historical cost convention on a going concern basis and in accordance with applicable accounting standards.

2. Use of Estimates The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statements and notes thereto. Differences between actual results and estimates are recognised in the period in which they materialise.

3. Fixed Assets

Fixed assets are shown at cost (net of cenvat).Borrowing costs attributable to the acquisition of qualifying assets and all significant costs incidental to the acquisition of assets are capitalized.

4. Depreciation Depreciation on plant and machinery added in Steel & Power (other than Sponge Iron Plant) is provided on straight line method and depreciation on all other assets is provided on reducing balance method. Rate of depreciation adopted are as specified in Schedule XIV to the Companies Act, 1956.Depreciation on additions is calculated pro-rata from the month of addition.

5. Inventories

Stock of Finished and Partly finished products are valued of lower of cost or net realizable value and for this purpose, cost is determined on the absorption costing method. Cost of finished goods includes excise duty. Raw Materials, other inputs, stores and spares are valued at lower of cost (net of cenvat) or net realizable value. Cost is determined on FIFO / Weighted average Basis. Stock of Iron ore fines has been valued at raw material cost or net realizable value, which ever is less.

6. Revenue Recognition & Accounting for sales

Revenue from sale of goods is recognised when significant risks and rewards are transferred to the customers. Sales are net of trade discount and sales tax but inclusive of excise duty. Interest income is recognised on time proportionate basis. Dividend income is accounted for, when the right to receive the same is established.

7. Treatment of Employee Benefits

The Company makes regular contributions to duly constituted Funds set up for Provident Fund and Family Pension, which are charged to revenue. Contribution to gratuity fund and provision for leave encashment are made on the basis of actuarial valuation.


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8. Research & development

Revenue expenses are charged off in the year in which it is incurred under the natural heads of account. Capital expenditure, when incurred is added to the cost of fixed assets.

9. Foreign Currency Transaction

Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction / realization. Current assets / liabilities are restated at rates prevailing at the year end and resultant exchange difference are recognised in the profit and loss account. In case of forward exchange contracts, the premium or discount arising at the inception of such contracts is amortised over the life of the contract as well as the exchange difference on such contracts i.e. differences between the exchange rates at the reporting / settlement date and the exchange rate on the date of inception / last reporting date, is recognised in the profit and loss account. Non monetary items denominated in foreign currency are valued as the exchange rate prevailing on the date of transaction.

10. Deferred Tax

In accordance with Accounting Standard-22 'Taxes on Income', deferred tax is recognised, subject to consideration of prudence, being the difference between accounting and taxable income that originate in one year and are capable of reversal in subsequent year.

11. Impairment of assets

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds its recoverable amount, an impairment loss is recognised in the profit and loss account to the extent the carrying amount exceeds the recoverable amount.

12. Provisions & Contingencies

The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation can not be made.


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NOTES FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

1. The Hon’ble High Court of Orissa, Cuttack, vide its Order dt. 27.11.2007,

sanctioned the scheme of arrangement for transfer of the Steel undertaking of OCL India Ltd. to the Company, the appointed date being 01.01.2007. The aforesaid Order was filed with the Registrar of Companies, Orissa on 20.12.2007, whereupon the scheme became effective. In terms of the scheme, OCL India Ltd. had carried on the business and activities of the steel undertaking on behalf of and in trust for the Company for the period 01.01.2007 to 19.12.2007. Accordingly, the assets and liabilities of the steel undertaking stand merged and vested in the Company as of 01.01.2007. However revised Balance sheet and Profit & Loss Account (post demerger) have been compiled in accordance with the provisions of Part I & II of Schedule VI of the Companies Act, 1956. Accordingly, the Profit & Loss Acoount of the previous year includes figures of the merged undertaking for a period of three months ended 31.03.2007. In view of the merger of the steel undertaking during this financial year, the figures are not comparable with that of the previous year.

2. As specified in the scheme of arrangement, the Company has issued shares to the shareholders of OCL India Ltd. in the ratio of 3 shares (of Re. 1 each) for every one share held by them (record date being 5th March,2008), resulting in increase of the paid up capital of the Company by Rs.13,36,43,160. The Company has filed applications to get the shares listed in the BSE and National Stock Exchange.

3. The Company has not accepted public deposits within the meaning and

provisions of sec 58A and 58AA of the Companies Act 1956. As per the scheme of arrangement (clause 4.7 of Part III), OCL India Ltd. transferred proportionate part of the general and multi purpose borrowings, which included “Public Deposits”, covered by the aforesaid sections. The Scheme provides inter alia that, if considered necessary for the sake of convenience and towards facilitating single point creditor discharge, the primary obligation to redeem / repay shall be of OCL India Ltd. Accordingly, the public deposits allocated to the Company is being discharged.

(Rs in Lacs)

Year ended Year Ended 31.03.2008 31.03.2007

4. Claims against the Company,

not acknowledged on debts. 204.16 86.27 5. Estimated amount of contracts remaining to be

executed on capital account and not provided for 87.98 1,293.81


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6. Followings have been included in the cost of raw materials : Payment to Contractor 24.11 2.56 Repairs to Machinery outside agency 0.20 0.33

Welfare Expenses 0.64 0.14 Transport Charges 18.58 3.06 Power 18.79 3.64 Repairs to Building 1.37 - Insurance 0.80 - General Charges 0.01 - Consumption of Stores and Spare Parts 36.52 13.25 Depreciation 27.28 4.49 Sundry Sales/ Income 386.62 -

7. Remuneration to Managing Director and Whole Time Director

Salary & Allowances 12.31 - Contribution to Provident Fund and Other Funds 1.20 - Perquisites - -

8. Computation of Commission Payable to Directors

Profit before Tax 1,234.92 - Add:- Directors’ fees 0.70 - Directors’ Commission 12.00 - Remuneration to MD & WTD 13.51 - Net profit for Calculating Directors’ Commission 1,261.13 -

9. Remuneration to Auditors and expenses

Audit Fee 2.00 0.06 Tax Audit 0.40 -

In Other Capacities For certification of statements 2.68 - Expenses 0.03 -

10. Assets hypothecated with Banks also stand security for non-fund based limits. 11. In the opinion of the Board and to the best of their knowledge and belief, the

Valuation on realization of current assets, loans and advances in the ordinary course of business would not be less than the amount at which they are stated in the Balance Sheet.

12. The Company called for information from suppliers who may be covered

under Micro, Small and Medium Enterprises (Development) Act 2006, for which very few replies have been received. Based on the information received, there are no outstanding dues to the suppliers covered by the Act and no interest has been paid / payable to such suppliers.


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13. AS 15 on Employee Benefits Prior to merger of the steel undertaking of OCL India Limited with the Company, Hari Machines Limited (HML) was managing the undertaking under an agreement for day to day operations. The Steel undertaking was merged with the Company, effective from 20.12.2007. Thereafter, the services of their employees (except a few from OCL India Limited) were transferred by HML on 27.12.2007, without break of service. HML is required to transfer their value of equitable interest in respect of the past services of the employees. The accruing liability on account of gratuity and leave encashment upto 31.12.2007, based on the report of Actuary, is estimated at Rs. 11.21 lacs and Rs. 10.48 lacs respectively, which will be accounted in the financial year 2008-09. This has no impact on the results of the year. The accruing liability on account of gratuity and leave encashment upto 31.03.2008, based on the report of Actuary, is estimated at Rs. 14.56 lacs and Rs. 15.23 lacs respectively. The Company has accounted for these liabilities in respect of three months ended 31.03.2008. The report of the Actuary is under review and reconciliation. In the opinion of the management, impact if any, is not material. Hence, the disclosure in the manner required under AS 15 has not been given.

(Rs. In Lacs)

14. Segmental Disclosure : Steel Power Total 2006-07 Segment Revenue External 19,386.80 382.85 19,769.65 - (4,498.18) (4,498.18) Inter- Segment 2,699.61 2,699.61 - (709.32) (709.32) Segment Result (From 01.01.2007 to 31.03.2008) Profit / (Loss) before Tax and Interest 2,160.71 259.13 Less : Interest (Net) 925.79 224.53 Profit / Loss) before Taxation 1,234.92 34.60 Provision for Taxation – Current 140.00 4.03 Provision for Taxation – Deferred 421.61 11.52 Provision for Taxation - Fringe Benefit Tax 3.00 0.50 MAT Credit available for Set Off (140.00) (4.00) Profit / Loss after Taxation 810.31 22.55 Other Information Segment Assets 15,130.34 4,762.31 19,892.65

(14,286.53) (5617.33) (19,903.86)

Segment Liabilities 3,184.21 141.75 3,325.96 (1,323.55 ) (120.56) (1,444.11)


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Cap.Exp.Incl. cap. WIP 1,016.78 45.87 1,062.65 (296.04) (95.88) (391.92) Depreciation 540.28 293.57 833.85 (135.68) (82.41) - (218.09) Non cash expenses other than depr.: Prov. Leave Encashment 3.91 0.84 4.75 -

(0.42) (0.42)

Note: Business segment is considered as primary segment and there is only one geographical segment. 15. Related Party Disclosures as per Accounting Standards (AS-10)

a) Related parties and their relationship : 1. Key management personnel : Shri R H Dalmia (Vice Chairman),

Shri Sabyasachi Mishra (MD) and Shri Praveen Chand (WTD- Marketing & Finance).

2. Enterprises over which key management personnel are able to

exercise significant influence : Hari Machines Limited, Satya Miners And Transporters Limited, Konark Investments Limited, Epic Mercantiles Ltd., Eik Rivers Ceramics Ltd.,Kiran Resources Ltd., OCL India Ltd., Dalmia Institute of Scientic and Industrial Research. (Rs. In Lacs)

2007-08 2006-07

3. Transaction with Parties referred in (i) above a) Remuneration 13.51 - b) Service rendered and received 8.27 - c) Receivable at the year end 0.10 - d) Payable at the year end - - 4.Transaction with parties referred in (2) above a) Purchase and Sales of goods and fixed assets 264.20 141.82 b) Services rendered and received 351.40 49.14 c) Interest expense 129.48 8.13 d) Receivable at the year end 1,083.35 29.28 e) Payable at the year end 40.10 421.35

16. Earning per share (EPS) as per Accounting Standard – 20

Profit after Tax 810.31 22.55 Weighted Average No. of Equity shares of Rs.1 each as on 3103.2008 13,41,43,160 3,39,10,790 Basic & Diluted (Annualized) 0.60 0.07


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17. Information in respect of goods manufactured : ` Sponge Iron Steel Plant Power

Licensed Capacity (Per annum) N.A N.A N.A Installed Capacity (p.a) Lacs Tonnes/MW 1.20 0.85 14.00 (as certified by management) Actual Production Lacs Tonnes/ Kwh 0.90 0.71 985.44 Opening Stock as at 01.04.2007 “ 0.07 0.04

(0.08) (0.03)

Arising out of merger Rs. 707.22 735.56 (776.81) (615.43)

Closing Stock Tonnes 0.07 0.01

(0.07) (0.04) Rs. 816.01 128.72

(707.22) (753.56) 2007-08 2006-07

18. Raw Materials Consumed i) Iron Ore 1.78 5307.93 0.45 1300.41

ii) Coal 1.68 2788.84 0.42 633.81 ii) MS Scrap 0.16 2552.23 0.04 524.47 iii) Silico Mang. 0.01 472.40 - - iv) Others 253.37 255.84

11374.77 2714.53 19. Value of Imported and Indigenous

i) Raw materials and Spare parts Consumed % % Imported - - - - Others 100 11374.77 100 2714.53

ii) Spare Parts Imported 2.59 20.07 1.85 3.73 Others 97.41 754.19 98.15 197.84

20. Imports (CIF Value) i) Raw Material - - ii) Stores and Spare parts 3.28 22.52 iii) Capital Goods - 26.83

21. Expenditure in foreign currency on account of Royalty, Professional, Consultation Fees, Interest Commission and Other matters 122.63 1.21

22.Earning in foreign exchange

i) Goods exported (F.O.B Value) 7160.46 643.34


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ii) Others - - 23.Foreign Currency Exposure

i) Hedged- Forward Contracts for export(USD) 17.00 - ii) Not Hedged - Debtors (USD) 63.97 16.87 - Creditors (USD) 0.09 -


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Annexure – V Key Accounting Ratios (Rs in Lacs)

Particulars As at 31.03.2008 As at 31.03.2007 As at 31.03.2006

Earning per Share ( in Rs) (Face value Rs 1 each) 0.60 0.07 (0.73) Cash Earning per Share (CEPS) ( in Rs.) 01.21 0.71 (0.73) Net Asset Value per Share (Rs) 5.21 4.61 0.27 Return on Net worth 11.60% 0.37% -264.96% Definition of Key Ratios: Earning per Share (Rs) Profit after tax / Number of equity Shares

Cash Earning per Share (CEPS) (Profit after Tax + Depreciation) / Number of Equity Shares

Net Asset Value per Share (Rs) Net worth / No. of Equity Shares Return on Net worth (%) Profit after Tax / Net worth Profit / (Loss) after Tax 810.31 22.55 (3.63) Depreciation 806.57 218.10 - Profit after Tax before Depreciation 1,616.88 240.65 (3.63) Weighted average no. of equity shares during the period (in Nos) (FV of Rs. 1 each) 134,143,160 33,910,790 500,000 Equity Share Capital 1,341.43 1,341.43 5.00 Net Worth 6,987.95 6,177.64 1.37


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Annexure – VI Capitalization Statement at 31st March, 2008

(Rs in Lacs) Particulars Pre Issue Post Issue * Loan Funds: Long Term Debt 5,637.50 5,637.50 Short Term Debt 2,136.71 2,136.71 Total - A 7,774.21 7,774.21 Shareholders' Funds: Share Capital 1,341.43 1,341.43 Reserves & Surplus 5,646.52 5,646.52 Total - B 6,987.95 6,987.95 Debt - Equity Ratio 0.81 0.81 (i.e. Long Term Debt / Shareholders Funds)


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Annexure – VII Statement of Tax shelter

(Rs in Lacs) Particulars As at 31.03.2008

Profit / (Loss) before Tax 1,234.92 Tax Rate Normal 30.00 Surcharge 3.00 33.00 Education Cess 0.99 33.99 Tax at Notional Rate (A) 419.75 Permanent Differences Prov for Doubtful debts 6.03 Long Term Capital Gain Excess Prov Written Back Temporary Differences Difference due to expenses allowable / disallowed u/s 35DD (2.00) Difference due to expenses allowable / disallowed on paymentbasis

(20.00)

Difference between book depreciation and tax depreciation (417.43) Total Adjustments (433.40) Tax Saving thereon (B) (147.31) Tax Liability after considering the adjustments (A+B) 272.44 Tax adjustment due to unabsorbed losses / depreciation (272.44) Tax Payable for the year - Taxes paid u/s 115JB (Book profit i.e. MAT) 140.00 Les : MAT credit available for set off 140.00 -


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FINANCIAL AND OTHER INFORMATION OF GROUP COMPANIES Group Companies There are total 60 companies forming part of the Group, comprising of 21 listed and 39 unlisted companies. None of our group companies are sick or under winding up. Top Four Listed Companies Out of 21 listed companies that we have in the Group, excepting Dalmia Cement (Bharat) Limited and OCL India Limited, shares of none of the companies are actively traded in the stock exchanges where they are listed. Therefore, excepting Dalmia Cement (Bharat) Limited, we have choose companies based on their turnover. BUSINESS OF OCL AND ITS PRODUCTS Cement Division – Its beginning and growth: The Cement manufacturing plant of the Company was set up during 1951 at Rajgangpur, in Sundargarh District of Orissa State with one wet process kiln have a capacity of 1.65 lakhs tonnes per annum (LTPA). The plant commenced production during 1952. The immediate aim of the Company then was to manufacture and supply cement for the construction of the prestigious Hirakud Dam Project which was one of the few major infrastructure development projects initiate immediately after the country gained independence. A second wet process kiln was added and commissioned in 1957, thereby increasing the production capacity to 4.01 LTPA. During 1988, consequent upon switch over from wet process to dry process technology of cement manufacture, the installed capacity of the plant increased to 5.25 LTPA the cement production capacity further increased to 6.50 LTPA during 1992-93 and to 8.00 LTPA during 1993-94. During 1997-98 it carried out a cement capacity expansion programme and added the world’s largest slag grinding Vertical Roller Mill supplied by Loesche GmbH of Germany raising its installed capacity to 1 Million Tonnes per annum with effect from 19.05.1997. The Company received its ISO 9002 certification for clinker and Cement in 1998. The capacity of the mill has been further increased to 1.275 MT in November 2002 consequent upon installation of Second Cement Vertical Roller Mill. During 2004 the capacity has been further increased to 1.425 MT consequent upon expansion and modernization raw mill and with recent expansion carried out in 2005, the capacity has been further to increased to 1.8 MT & subsequently to 2.0 MT by Installation of Third Cement Vertical Roller Mill. The Product and its positioning in the market Apart from manufacturing and supplying cement for use in special application areas like the manufacture of asbestos cement products and Railway sleepers etc., the Company manufactures ordinary Portland and Portland Slag Cement and markets them under the Brand name “KONARK”. The Konark brand cement reputed for its quality is an acknowledged market leader in Orissa. It is also marketed in the States of West Bengal, Bihar and in the North Eastern States of Assam, Meghalaya, Arunachal Pradesh, Manipur


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and Nagaland. Konark Brand Cement is also being regularly exported to Bangladesh and enjoys a distinct brand pull in the Northern region of Bangladesh. Konark brand cement has extensively been used in the construction of various prestigious dams, barrages and Port facilities etc., like Hirakund dam, Upper Kolab Dam, Rengali barrage, the Second Hooghly bridge Rabindra Sethy at Calcutta, Paradeep Port, Haldia Port, IB Thermal, RSP, NTPC, Bokaro Steel Plant, NALCO and others. Refractory Division – A Diversification into new line and its consolidation The refractory plant of the Company was set up in 1956, adjacent to the Cement Plant at Rajgangpur, Orissa. The Product range The company manufacturers a wide spectrum of sophisticated Refractories including silica Refractories for use in coke ovens, high temperature blast furnace stoves and glass industries; Fire clay and High Alumina Refractories for use in steel plants and glass industries; Basic Refractories for use in Steel, Non-ferrous, glass and cement industries; Magnesia Carbon Bricks, continuous Casting Refractories and new generation high performance Castables and pre-cast blocks for various other specialized industrial applications. The present manufacturing capacity of the Company’s refractory Plant is 80,000 tonnes per annum. Know How, Technical Collaboration & in-house R&D Collaboration Starting with initial technical know how from Dr. C. Otto and Co, Germany, OCL subsequently entered into a collaboration with General Refractories of USA for expansion of its factory and enlarging of the products range. Aimed at the integrating its operations with the global market, OCL have continued its involvement with the world leaders of refractory technology and entered into collaboration with T.Y.K CORPORATION of Japan for manufacture of magnesia carbon bricks, new generation castables, precast blocks, continuous casting refractories, alumina silicon carbide carbon and alumina magnesia carbon refractories. The company has entered in to a tie up with PILIBRICO Gmbh, Luxembourg for manufacture of gas purging refractories. In House R&D Facilities Side by side with these technical collaboration, OCL in order to stand firmly on its feet have, right from the beginning, been giving full emphasis on its own research and development activities. As a result, OCL today boasts of a full-fledged in house R&D Wing with state-of-art equipment and facilities. Besides, it has also promoted an independent R&D centre - DALMIA INSTITUTE OF SCIENTIFIC & INDUSTRIAL RESEARCH. The strong R&D base and large pool of highly experienced scientists and engineers have enable OCL not only to progressively absorb changing and advance technologies, but also to continuously improve upon the same for optimum results and ultimate satisfaction of the customers. As a measure of success of its continuous productive and in some respects fundamental R&D works, OCL today holds to its credit


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as many as patents in India and abroad for refractory products and process. A large number of high quality products successfully developed through OCL's own R&D efforts are noted for their excellent quality and performance. Quality Main focus at OCL has been on complete customer satisfaction. To achieve this, OCL has adopted TOTAL QUALITY MANAGEMENT, for which Eicher Consultancy Services Limited are the main consultants. OCL also has unique distinction of being the first manufacturer of refractories to get ISO 9001 CERTIFICATION from RWTUV, Germany in the year 1994 for its silica products. Later on, it has also got ISO 9001 certification to cover refractory bricks and monolithics of basic, silica, firebrick & high alumina quality including magnesia carbon, slide gate, castables, precast, & concast refractories . OCL has strict quality assurance system to ensure full conformity of its products to the required specification and also timely deliveries. Packing For packing of its product, OCL have a separate packing section equipped with latest facilities. Packing is designed to ensure necessary protection against adverse weather conditions and for safe transportation for delivery in intact conditions at destinations. Domestic & Overseas Customer OCL INDIA has an excellent supply performance record to its credit. It has been catering to the bulk requirements of different categories of sophisticated Refractories for integrated steel plants, mini steel plants, and also non ferrous industries like cement, copper, aluminium, glass etc. in India. On the strength of quality of its bricks and excellent record of adherence to supply schedules, OCL has also established its presence in global market to a large measure. Within a short period, OCL has carved out a good share in the international market for its silica Refractories for both Coke Oven Batteries and High Temperature Blast Furnace Stoves. OCL share in the international market is fast expanding, as the excellent quality of its products are gaining in acceptance in different advanced countries in Europe, America, Africa etc. OCL confidently looks forward to progressively higher levels of export turn-over in future years.


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Board of Directors of OCL Name of Directors Designation Shri Pradip Kumar Khaitan Chairman Shri D. N. Davar Director Shri V. D. Jhunjhunwala Director Dr. S. R. Jain Director Dr. Ramesh C. Vaish Director Shri V. P. Sood Whole Time Director Shri Puneet Dalmia Director

Particulars of High, Low and Average share prices of OCL

Shareholding pattern of OCL S. No. Category No. of shares held % of Shareholding 1. Promoters Holding 3,95,98,139 69.59% 2. Public shareholding 1,73,02,081 30.41% TOTAL 5,69,00,220 100%

Capital structure of OCL

(Amount in Rs. Lakh)

As on March 31, 2008 Authorized Share Capital 1,00,000 Shares of Rs. 100/- each 1,00.00 7,00,00,000 Ordinary Shares of Rs. 2/- each 14,00.00 Total 15,00.00 Issued Share Capital 6,36,31,805 Ordinary Shares of Rs. 2/- each 1272.64 Subscribed Share Capital 5,69,00,220 Ordinary Shares of Rs. 2/- each 1138.00 Add: Share Forfeited Account 0.50 Total 1138.50

Year BSE NSE High Low Average High Low Average

2005-06 220 110 165 151 144 147 2006-07 349 126 237 143 138 140 2007-08 384 98 241 385 88 236


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Financial Performance of OCL (Amount in Rs. Lakhs) Particulars 2003-04 2004-05 2005-06 2006-07 2007-08 Sales & Other Income 38914.62 49186.77 30804.79 82449.99 91311.00 PAT 2260.57 2816.54 3779.26 7751.93 11380.00 Equity Capital 594.09 594.11 764.17 891.45 1138.00 Reserves 13974.24 16430.19 21359.13 35523.69 54172.00 EPS (in Rs.) - Basic - Diluted

37.48 37.48

44.05 44.05

10.76 10.76

18.46 18.46

21.58 21.58

Book value per share (in Rs.) 244.72 286.79 57.94 81.74 95.20

Dalmia Cement (Bharat) Limited Dalmia Cement (Bharat) Limited (“Dalmia Cement”) was incorporated under the Companies Act, 1913, on November 1, 1951 to take over the Indian assets including the cement plant at Dalmiapuram at Tamil Nadu of Dalmia Cement Limited, which was promoted by late Mr. Jaidayal Dalmia in 1939. The present promoters of the Company are Mr. J. H. Dalmia and Mr. Y. H. Dalmia. At the time of takeover from Dalmia Cement Limited in 1951, Dalmia Cement had two kilns, one of 250 MT capacity of semi-dry single pass based process and other of 503 MT capacity on wet-dry process. A third kiln of 508 MT capacity on wet-dry process operation was thereafter commissioned. A fourth kiln, a vertical shaft kiln of 200 MT capacity was installed in the year 1981. In 1987, as part of the modernization programme, two of the kilns based on wet process of 508 TPH capacity were replaced by a dry process kiln of 1500 TPD. The crushing and grinding capacity was also augmented by installation of crushing mill of 400 TPH and raw grinding mill of 150 TPH capacity. During 1997-98, Dalmia Cement took up an expansion of the capacity by installing vertical roller mill and new grinding department. As a consequence, the total installed capacity increased to 1.034 MnTPA. The unit was awarded the ISO 9002 certification on November 16, 1999. Dalmia Cement is in the process of expanding its cement plant by undertaking a brown field project and the total cement capacity with this expansion will be 3.5 million t.p.a. To augment the captive power resources of the cement unit, Dalmia Cement set up a wind farm with a capacity of 16.525 MW at Muppandal, Kanyakumari, Tamil Nadu, in various phases since 1993. Presently, it has 53 wind electric generators. Dalmia Cement acquired the Magnesite Corporation of India Limited in 1958. In 1964, The Magnesite Corporation of India Limited was amalgamated with Dalmia Cement, bringing in its fold the manufacture of dead burnt magnesite. The plant had a capacity of 72,000 tonnes per annum. In 1998, Dalmia Cement installed a magnesia carbon bricks plant with a capacity of 7,500 tonnes per annum.


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In 1970, Dalmia Cement started its travel division under the name and style of Govan Travels. It is a fully accredited IATA approved travel agency with offices at Delhi, Bangalore, Mumbai, Chennai, Cochin and Bangalore. In 1990, Dalmia Cement set up an electronics unit in Keonics City, Bangalore to manufacture Multi Layer Ceramic Chip Capacitors with technical know how from Palomar Systems and Machines of USA. Dalmia Cement also established a Chip Resistor unit at the same site with technical know- how from Pacific InfoTech Corporation, USA. The unit has been accredited with the ISO 9002 certification on January 20, 2000. M/s Vivek Ganna Limited, which possessed a license for manufacture of sugar was amalgamated with Dalmia Cement as per the orders of the High Courts of Calcutta and Madras. In December 1994, Dalmia Cement has set up a 2500 tonnes cane crushing capacity per day at Ramgarh in Sitapur district of Uttar Pradesh under the name and style of ‘Ramgarh Chini Mills’. During FY 2000, Dalmia Cement expanded the capacity of its sugar plant to 5000 tonnes crushing capacity per day. Shareholding Pattern of Dalmia Cement S. No. Category No. of shares held % of Shareholding 1. Promoters shareholding 4,43,46,190 54.85% 2. Public shareholding 3,64,97,453 45.15% TOTAL 8,08,43,643 100.00%

Board of Directors of Dalmia Cement Name of Directors Designation Shri P.K. Khaitan Chairman Shri Jai Hari Dalmia Vice-Chairnan Shri Y. H. Dalmia Vice-Chairnan Shri Gautam Dalmia Joint Managing Director Shri Puneet Dalmia Managing Director Shri N. Gopalaswamy - Whole-time Director Shri M. H. Dalmia Director Shri N. Khaitan Director Shri M. Raghupathy Director Shri J.S. Baijal Director Shri Donald M. Peck Director Shri T Venkatesan Whole-time Director Shri G N Bajpai Whole-time Director


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CAPITAL STRUCTURE As on March 31, 2008 (in Rs) SHARE CAPITAL A. AUTHORISED CAPITAL 11,46,31,160 Equity Shares of Rs. 2 each 22,92,62,320 8,53,68,840 Unclassified Shares of Rs. 2 each 17,07,37,680 Total 40,00,00,000 B. ISSUED, SUBSCRIBED & PAID UP CAPITAL 8,08,43,643 Equity shares of Rs. 2 each 161687286 C. PRESENT ISSUE Nil D. PAID UP CAPITAL AFTER THE PRESENT ISSUE

8,08,43,643 Equity shares of Rs. 2 each 161687286 E. SHARE PREMIUM ACCOUNT Nil Total Rs. 1,99,46,93,695

Financial Summary of Dalmia Cement Rs. Million 31.3.04 31.3.05 31.3.06 31.03.07 31.03.08 Sales and Other Income 4654 5431 7316 11425.61 16452.22 Profit after tax 254 309 848 2289 3471.52 Share Capital 77 77 77 85 161.69 Earning per Share (Rs.) 6.63 8.07 22.18 53.95 69.70

Net Worth per Share (Rs.) 91.06 93.66 111.76 176.34 141.90 Stock Market Data

Year BSE NSE High Low Average High Low Average

2005-06* 819 137 478 797 149 473 2006-07* 460 190 325 451 225 338 2007-08 568 278 423 569 279 424


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Hari Machines Limited Hari Machines Limited (“Hari Machines”) was incorporated on July 13, 1948 and fresh certificate of incorporation was issued on March 19, 1987 due to change of name to Hari Machines Limited from Cement Distributors Limited. Hari Machines is into the business of manufacturing of refractory and ceramic machinery / steel plant equipments. Shareholding Pattern of Hari Machines Category Number of Equity Shares % of Total Promoters Mr. Mridu Hari Dalmia 34,500 17.25 Mr. Raghu Hari Dalmia 35,000 17.50 Sub Total [A] 69,500 34.75 Promoter Group Smt Abha Dalmia & Mr. Mridu Hari Dalmia

38,975 19.48

Smt Padma Dalmia & Mr. Raghu Hari Dalmia

38,475 19.23

Sub Total [B] 77,450 38.71 Others Oriental Insurance Co Ltd 4,140 2.07 Individual 48,910 24.46 Sub Total [C] 53,050 26.54 Total [A+B+C] 2,00,000 100

Board of Directors of Hari Machines Name of Directors Designation Mr. M.H. Dalmia Director Mr. R.H. Dalmia Director Mr. M.L. Dujari Director Mr. Mayadhar Mishra Director Mr. Sabyasachi Mishra Whole-time Director Mr. Jainarayan Tiwari Director

Financial Summary of Hari Machines (Rs. in lacs) Year 2003-04 2004-05 2005-06 2006-07 2007-08 Sales & Other Income 5421.73 13363.24 11565.55 8813.77 11007.27 PAT 418.70 891.21 639.09 415.20 437.80 Equity Capital 20.00 20.00 20.00 20.00 20.00 Reserves & Surplus 924.77 1815.99 2455.08 2870.29 3307.36 EPS (Rs.) 209.35 445.61 319.55 207.60 218.90 Net Worth 525.46 944.77 1835.99 2475.08 3327.36 Book Value per share (Rs.)

262.00 473.00 927.00 1237.50 1663.68


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Stock Market Data The company is listed on Cacutta Stock Exchange. However, the shares of Hari Machines are not actively traded on the exchange and therefore the market price data cannot be provided. Kabirdas Investments Limited Kabirdas Investments Limited (Kabirdas Investments) was incorporated on December 27, 1974. Kabirdas Investments is a non-banking finance company. The Promoters of Kabirdas Investments are Mr. M. H. Dalmia and Mr. R. H. Dalmia. Kabirdas Investments is engaged in investment and financing activities as per its main objects, which include carrying on business of an investment Company, to acquire shares and other securities, etc. Shareholding Pattern of Kabirdas Investments S. No. Category No. of shares held % of Shareholding 1. Promoters Holding 29,65,301 74.93 % 2. Public shareholding 9,91,869 25.07%

Board of Directors of Kabirdas Investments Under the Articles of Association of Kabirdas Investments, the company can not have fewer than 3 directors or more than 11 directors. The following table sets forth current details regarding the directors of Kabirdas Investments: Name of Directors Designation Mr. H.B. Belwal Director Mr. R.H. Dalmia Director Mr. R.K. Agrawal Director

Financial Summary of Kabirdas Investments

(Rs. in lacs) Year 2003-04 2004-05 2005-06 2006-07 2007-08 Sales & Other Income 41.04 41.98 47.54 65.22 82.45 PAT 27.4 15.52 28.93 40.52 55.47 Equity Capital 39.57 39.57 39.57 39.57 39.57 Reserves & Surplus 584.29 598.20 629.01 669.53 725.00 EPS (Rs.) 0.69 0.39 0.73 1.02 1.40 Net Worth 623.86 637.77 668.58 709.10 764.57 Book Value per share (Rs.)

15.76 16.12 16.90 17.92 19.32


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Stock Market Data The company is listed on Delhi and Kolkata stock exchanges. However, the shares of Kabirdas Investments are not actively traded on the exchange and therefore the market price data cannot be provided.


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MANAGEMENT DISCUSSION & ANALYSIS OF THE FINANCIAL CONDITION AND RESULT OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS The Company was incorporated under the name and style of OCL Iron and Steel Limited on 20th February 2006. The Certificate for Commencement of Business was obtained on 20th March 2006. The Company had meagre operation prior to the Scheme. Pursuant to a Scheme of Arrangement between the Transferor Company and the Transferee Company, the entire Steel Undertaking of the Transferor Company as a going concern together with all the assets and liabilities relating to the Steel Undertaking is transferred to and vested in the Transferee Company with effect from 20th December 2007. Therefore the main source of Company’s income will be from the operations of the Steel Undertaking. For details of Steel Undertaking with all the assets and liabilities, which was transferred to and vested in the Company please see sections titled– “SCHEME OF ARRANGEMENT”


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OUTSTANDING LITIGATION, DEFAULTS AND MATERIAL DEVELOPMENTS. Except as described below, there are no outstanding or pending litigation, suit, criminal or civil prosecution, proceeding or tax liabilities against our Company, our Directors, our Promoter or our Promoter Group Companies that would have a material adverse effect on our business and there are no defaults, non payment or overdue of statutory dues, institutional/ bank dues or dues payable to holders of debentures, bonds and fixed deposits and arrears of preference shares (irrespective of whether they are specified under Part I of Schedule XIII of the Act), that would have a material adverse effect on our business: LITIGATION INVOLVING OUR COMPANY There are no cases filed by and against the Company. However there one case filed against OCL in relation to the Steel Undertaking, which pursuant to the Scheme will be continued and enforced against the Company. CASE PENDING IN THE HIGH COURT FILED BY THE COMPANY W.P. (C) No.4/2008 (OCL India Limited, Sponge Iron Division Vs. Pareswar Ganda & Another)

Filed by the Company against Pareswar Ganda and another challenging the order dated 7th November 2007 of the learned Civil Judge (Senior Division), Sundargarh accepting the report of the Amin Commissioner. DETAILS OF LITIGATIONS AGAINST GROUP COMPANY I. OCL INDIA LIMITED A. CASES PENDING IN THE SUPREME COURT SLP (CIVIL) NO.5113/2003 (OCL Vs State of Orissa & others) Filed by the Company challenging the final order passed by Hon’ble High Court of Orissa dismissing the writ petition bearing OJC No. 14424 / 1999 (8747/2000 - OCL Vs. State of Orissa and others) declaring that the State legislature has power and authority to extend operation of the Orissa Entry Tax Act, 1999 through out the state including an industrial township. The case is pending. SLP (CIVIL) NO.5264/2006 (State of Orissa Vs OCL and others) Filed by the State Orissa Challenging the final order passed by the Hon’ble High Court of Orissa striking down the validity of “Orissa Rural infrastructure and Socio Economic


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development Act,2004 and Rules made there under and notification dated 25.05.2005 issued under the provisions of Section 3 (2) . B. CASES PENDING IN THE HIGH COURT FILED BY THE COMPANY OJC NO. 2480/1989 (OCL India Limited Vs. State of Orissa and Others) Filed by the Company against State of Orissa & Ors. Challenging the order dated 18th/19th October 1983 of the Tahasildar, Rajgangpur charging water rates under the provisions of Orissa Irrigation Act, 1959 by notice dated 12th February, 1988 for Rs.2,39,538/- for the years 1980-81 to 1987-88. The contention of the Company is that the Tahasildar is not vested with the power under the Irrigation Act, to levy water rate as the water drawn by the company was from a natural source and not from any irrigated source and the company sought for the interim injunction to restrain the effect of the aforesaid order and notice. The Orissa High Court passed an interim order to the effect that no coercive measures be taken for realization of water charges until further orders and the said order was made absolute on 16.10.1989. The case is pending for further proceedings. A P NO.1878/1991 (OCL India Limited Vs. State of West Bengal and others) Filed by the Company in Calcutta High Court against State of West Bengal and others, challenging the order of the Competent Authority, rejecting the Company’s application for exemption under Section 20 of the Urban Land (Ceiling and Regulation) Act, 1976 and final statement under Section 9 of the said Act in respect of Agarpara land. The Company sought for a direction to the Competent Authority to withdraw/ revoke/ recall/cancel the purported final settlement under Section 9 of the Urban Land (Ceiling and Regulation) Act, 1976 and also to grant injunction to restrain the Competent Authority from giving effect to / taking steps in terms of its final settlement for vesting of land. As both the parties were absent when the case abruptly came up for hearing, the case was dismissed. The Company filed a petition for restoration of the case. The cost of the land involved in the matter is Rs.3.58 lakhs. The case is pending. OJC NO. 4696/1993 (OCL India Limited Vs. Union of India and others) The Company challenged the notification dated 17.03.1993 prohibiting the employment of contract labour in limestone and dolomite mines in the activities covering raising of and transportation of limestone including loading and unloading from mine site to factory. The Hon’ble High Court of Orissa by its order dated 02.08.1993 granted stay until further orders. The case is pending. The Company does not foresee any liability in this case.


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OJC NO. 8106/1995 (OCL India Limited Vs. Union of India & Others) Filed by the Company against Union of India and Others challenging the validity of Bonus (Amendment Act) 1995 which gave retrospective effect from 01.04.1993 to amendment relating to eligibility criteria for earning bonus i.e raising of limit of monthly salary from Rs. 2,500/- per month to Rs. 3,500/- per month. Also challenged the salary limit for computation of bonus, which was enhanced from Rs 1600/ per month to Rs 2500/- per month. The Company has obtained stay. The maximum liability on this account may be Rs.21.92 lakhs. The Case is pending. OJC NO. 9371/1995 (OCL India Limited Vs. Union of India & Others) The Company’s consignments were sent from O C Siding, Rajgangpur to Dimapur, New Bongaigaon, Silchar, New Guwahati via longer route without the instruction of the Company. In the process Railways collected excess freight. The Company filed a writ against Union of India and Others for refund of Rs.1,33,85,384/- being the excess freight collected by Railways on the basis of longer route used for delivery of the consignment instead of the shortest route to destination.. The Company’s contention is that Railway Board is not authorised to issue General Order No. 1 of 1990 for rationalisation of longer route as such power is vested with Central Government only. The case is pending. OJC NO. 8767/ 1996 (OCL India Limited Vs. Union of India & Others) The Company challenged the notification dated 04.07.1996 prohibiting the employment of contract labour in limestone and dolomite mines in the activities covering raising and transportation of limestone including loading and unloading within mine site. The Hon’ble High Court of Orissa by its order dated 09.09.1996 granted stay until further orders. The Company does not foresee any liability in this case. OJC NO. 12894/1997 (OCL India Limited Vs. State of Orissa & Others) The Company executed a lease deed with State Government of Orissa for grant of mining lease for Limestone and Dolomite. The Company paid under protest Rs.15.55 lakhs towards stamp duty and registration fee of Rs.7.41 lakhs. The said stamp duty was collected on the basis of estimated royalty on limestone and dolomite expected to be raised by the Company. The Company contends that the stamp duty should have been calculated on the basis of annual dead rent in terms on Section 9(A)(2) of Indian Stamp Act read with IIIrd schedule to Mines and Minerals (Regulation & Development) Act, 1957 and not on the basis of estimated royalty. As such the Company filed this case against State of Orissa & Ors. Claiming refund of excess stamp duty of Rs.15.50 lakhs and registration charges of Rs. 7.38 lakhs total amounting to Rs.22.88 lakhs paid on execution of mining lease for Lanjiberna Lime Stone area. The case is pending.


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OJC NO.10599/1998 (OCL India Limited Vs. State of Orissa& Others) Filed by the Company against State of Orissa and others seeking stay of demand raised by Regional Transport Officer for payment of Rs 16,36,240 as road tax on 11 dumpers having capacity of 35 tonne. The Company relied upon the Supreme Court judgment, which clearly states that the dumpers are not “Motor Vehicles” within the meaning of Section 2 (28) of The Motor Vehicles Act, 1988 and Section 22 (b) of the Orissa Motor Vehicles Taxation Act, 1975. The Hon’ble High Court of Orissa granted stay subject to payment of 50% of the tax demanded. The Company paid Rs.23 lakhs till 31st March 2001 being 50% of the tax demanded. Subsequently on demand from the Regional Transport Officer, Sundargarh, the balance 50% was also paid under protest. As the Company has been paying for each quarter the full amount of tax under protest, the Company has no liability. On the contrary refund may arise, if the case is decided in favour of the Company. The Case is pending. OJC No. 2863/1999 (OCL India Limited Vs. Union of India & Others) Filed by the Company against Union of India and Others challenging the notification No. S.O. 1255(E) dated 30.12.1988 issued by Govt. of India increasing the coal prices and a premium of 10% on coal supplies by some of the collieries of Coal India Limited. Collieries are supplying different grades of coal. On the basis of quality, coal is graded and prices are accordingly fixed. However SECL has been charging 10% premium on it’s different grades of coal in comparison to same grades of coal supplied by other collieries. The Company contended that the premium of 10% charged by selected coal fields like ECL on the basis of A,B,C and D grade coal is ultra vires the Constitution and hit by Article 14 of the Constitution. The Company demanded refund of Rs.36 lakhs premium collected for the period from 01.01.1989 to 31.03.1993. The case is pending WP (C) NO. 4273/2002 (OCL India Limited Vs. Union of India & Others) Shri Rabi Narayan Behera, Sr. Clerk, Share and Law Department raised an industrial dispute challenging the termination of his service on the ground of disobedience. The said case was registered as ID Case No. 6/2001 in the Labour Court, Sambalpur. State Govt. on request of Shri Behera transferred the said case to Labour Court, Bhubaneswar without giving an opportunity of hearing to the Company. The Company filed writ in Orissa High Court challenging the order of Government of Orissa transferring the ID Case from Labour Court, Sambalpur to Labour Court, Bhubaneswar. Stay is granted by Orissa High court. During the pendency of the said writ Shri Behera entered into a settlement with the Company in Form–K and received Rs. 1,50,000/- towards full and final settlement of his claim. In view of this development the Company filed withdrawal petition in the High Court for withdrawal of the writ. The ID case in the Labour Court will accordingly be disposed off in terms of the settlement. The case is pending


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WP (W) NO.14732/2002 (OCL India Limited Vs. Jute Commissioner, Kolkata) As per the Jute Packaging Materials (Compulsory use in packaging commodities) Act, 1997 Cement manufacturers are required to use jute packaging materials for supply or distribution up to 50% of their total production. Show cause notice dated 20.08.2002 was issued by the Jute Commissioner, Calcutta alleging violation of two orders dated March15, 1995 and June 30, 1997. By the said notice, the Company was required to show cause as to why penal action should not be taken against it for violation of the said orders. The Company filed a writ Petition in Calcutta High Court challenging the said show cause notice and stay was granted by the Court against the show cause notice. The Union of India through Jute Commissioner filed petition for transfer of all writ petitions along with other proceedings pending before various High Courts for hearing and disposal on merit by the Supreme Court. While the Company may be liable for non-compliance up to an amount equal to double the cost of the jute packaging material, which ought to have been used, liability, if any, in this regard is not ascertainable. The case is pending in Calcutta High Court. WP (C) NO.521/2003 (OCL India Limited Vs. Presiding officer, IT, Rourkela & Others) Utkal Shramik Sangh a registered union raised an Industrial Dispute for regularisation of Abdul Sabur Khan and 18 others. The said case was registered as ID Case No. 27/2001 in the Industrial Tribunal, Rourkela. The Hon’ble Tribunal passed an award ignoring the additional documents filed by the Company as evidence. When the award was pending for publication, the Company filed a writ for staying the publication of the award. The High Court stayed the publication of the award till disposal of the case. Subsequently the Company entered into amicable settlement in Form –K with the workmen and paid the agreed compensation amount. The Company filed withdrawal petition enclosing Form-K on 23.06.2006. The disposal order is awaited. RSA NO. 530/2003 (OCL India Limited Vs. Laxmidhar Roul) Shri Laxmi Dhar Roul, a former employee of the Company un-authorisedly constructed a house on the land acquired by the Company for clay extraction. The Company filed a civil suit in the Court of Civil Judge, Senior Division, Sundargarh for declaration of right, title, interest and for recovery of possession 0.02 acres of the Company land encroached by Shri Roul. The learned Civil Judge, Sr. Division passed the order in favour of the Company. The said order was challenged by Shri Roul by filing a Title Appeal No.10/1997 in the Court of District Judge, Sundargarh which set aside the order of lower court by judgment dated 07.08.2003. The Company challenged the said judgment by this Second Appeal. The case is pending.


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WP(C) NO. 1131/2004 (OCL India Limited Vs. State of Orissa & Others) Shri Gayadhar Sahoo, Mason was dismissed from services on the grounds of disobedience, misbehavior and absence from duty. He raised an industrial dispute and was registered with the Labour Court, Sambalpur as Industrial Dispute Case No. 1/2003. Vide order dated 01.01.2004 the said case has been transferred from the registry of Labour Court, Sambalpur to the Registry of Industrial Tribunal, Rourkela for adjudication. Being aggrieved by the said order, the Company filed the writ Application under Article 226 and 227 of the Constitution of India in the Hon’ble High Court of Orissa. The Hon’ble Court vide order dated 09.02.2004 stayed the proceedings of the ID case No.1/2003. The case is pending for further proceedings. RSA NO. 85/2004 (OCL India Limited Vs. Duryodhan Behera) Shri Duryodhan Behera, a former employee of the Company un-authorisedly constructed a small hut on the land acquired by the Company for clay extraction. The Company filed a civil suit in the Court of Civil Judge, Senior Division, Sundargarh for declaration of right, title, interest and for recovery of possession of area admeasuring 17’.6” X 12’.6” of the Company’s land encroached by Shri Behera. The learned Civil Judge, Sr. Division passed the order in favour of the Company. The said order was challenged by Shri Behera by filing a Title Appeal No.4/1994 in the Court of District Judge, Sundargarh which set aside the order of lower court by judgment dated 18.12.2003. The Company challenged the said judgment. The case is pending. WP (C) NO. 9168/2004 (OCL India Limited Vs. The Cess Appellate Committee & Another) The Assessing Authority of State Pollution Control Board, Orissa by it’s order dated 12.09.2000 assessed the water cess for the period from September -1999 till July-2000 as Rs.1,81,349/- which includes Rs.1,78,764/- towards cess on water merely pumped out from the bottom of the mines pit to the surface area. The Company has preferred an appeal before the Cess Appellate Committee against the assessment order cum demand notice dated 12.09.2000, which was out rightly rejected by the Appellate Authority on the ground that the appeal was time barred. Against this order Company filed the writ petition in the High Court of Orissa challenging the assessment –cum- demand notice dated 12.09.2000 for Rs.1,81,349/- passed by Orissa Pollution Control Board and order dated 15.04.2004 passed by the Cess Appellate Committee of State Pollution Control Board, Orissa. The main’ contention of the company is that mine drainage water pumped out by the Company from mines pit to mines surface does not amount to consumption / pollution and hence not liable for Cess. The matter came up for hearing on 02.11.2006 and the Hon’ble court stayed the order of Cess Appellate committee till next date. The case is pending for further proceedings.


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FAO NO. 53/2005 (OCL India Limited Vs The Regional Director ESI Corpn. & Anr) The Company disputed payment of contribution on overtime wages, cycle allowance, LTA etc. The Company received demand notice dated 27.06.1995 to pay a sum of Rs.2,06,883/- on account of non-payment of contribution on account of “overtime” allowance for the period 01.02.1993 to 31.01.1994. Company filed Misc. case under section 75 of the Employees State insurance Act, 1948 in the Court of District Judge, Puri. Ld. District Judge was pleased to stay the demand notice vide its order dated 27.01.2000. Subsequently the case was transferred to the Ld. District Judge, Khurda, Bhubaneswar and renumbered as Misc. Case No. 267 of 2001. Pursuant to interim order of the Dist. Judge, Khurda the Company deposited the ESI contribution on overtime time wages leaving contribution on cycle allowance and LTA. On 24.12.2004 the Ld. District Judge, Khurda, Bhubaneswar was pleased to dispose the matter by directing the Company to deposit the ESI contribution on Cycle allowance along with interest on the contribution from due date. Aggrieved by this order the Company filed this Appeal and Hon’ble High Court by its order dated 11.02.2005 stayed the order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further order. The case is pending for further orders. The Company may be liable to pay interest @ 12% PA on Rs.2,06,883/- from 28.02.1990 being the date of demand till date of payment of ESI contribution. FAO NO. 54/2005 (OCL India Limited Vs The Regional Director ESI Corpn.& Anr) Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge –Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No. 241/2001 directing payment of interest from the date of demand of ESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further orders. The Company may be liable to pay interest @ 12% PA on Rs.72,185/- from 28.02.1990 being the date of demand till date of payment of ESI contribution. FAO NO. 55/2005 (OCL India Limited Vs The Regional Director ESI Corpn.& Anr) Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge –Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No. 242/2001 directing payment of interest from the date of demand of ESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further orders. The Company may be liable to pay interest @ 12% PA on Rs.60,728/- from 28.02.1990 being the date of demand till date of payment of ESI contribution.


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FAO NO. 56/2005 (OCL India Limited Vs The Regional Director ESI Corpn.& Anr) Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge –Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No. 243/2001, directing payment of interest from the date of demand of ESI contribution on overtime wages. High Court by it’s order dated. 11.02.2005 has stayed the order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further orders. The Company may be liable to pay interest @ 12% PA on Rs.2,11,631/- from 25.09.1991 being the date of demand till date of payment of ESI contribution. FAO NO. 57/2005 (OCL India Limited Vs The Regional Director ESI Corpn.& Anr) Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge –Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No. 246/2001 directing payment of interest from the date of demand of ESI contribution on overtime wages. High Court by its order dated 11.02.2005 has stayed the order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further order. The Company may be liable to pay interest @ 12% PA on Rs.1,60,734/- from 10.06.1991 being the date of demand till date of payment of ESI contribution. FAO NO. 58/2005 (OCL India Limited Vs The Regional Director ESI Corpn.& Anr) Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge –Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No. 252/2001directing payment of interest from the date of demand of ESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further orders. The Company may be liable to pay interest @ 12% PA on Rs.1,21,495/- from 26.06.1992 being the date of demand till date of payment of ESI contribution. FAO NO. 59/2005 (OCL India Limited Vs The Regional Director ESI Corpn.& Anr) Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge –Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No.261/2001 directing payment of interest from the date of demand of ESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further orders. The Company may be liable to pay interest @ 12% PA on Rs.1,79,962/- from 21.03.1994 being the date of demand till date of payment of ESI contribution.


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FAO NO. 60/2005 (OCL India Limited Vs The Regional Director ESI Corpn.& Anr) Filed by the Company challenging the judgment dated 24.12.2004passed by the District Judge –Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No. 266/2001directing payment of interest from the date of demand of ESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further order The Company may be liable to pay interest @ 12% PA on Rs.4,63,166/- from 18.07.1995 being the date of demand till date of payment of ESI contribution. FAO NO. 61/2005 (OCL India Limited Vs The Regional Director ESI Corpn.& Anr) Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge –Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No. 251/2001directing payment of interest from the date of demand of ESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further orders. The Company may be liable to pay interest @ 12% PA on Rs.2,07,911/- from 26.07.1992 being the date of demand till date of payment of ESI contribution. FAO NO. 62/2005 (OCL India Limited Vs The Regional Director ESI Corpn.& Anr) Filed by the Company challenging the judgment dated 24.12.2004 passed by the District Judge– Cum- ESI Court, Khurda at Bhubaneswar in ESI Misc. Case No. 262/2001directing payment of interest from the date of demand of ESI contribution on overtime wages. High Court by it’s order dated 11.02.2005 has stayed the order of the lower Court till 29.04.2005. On 17.11.2006 the Hon’ble High court extended the stay till further orders. The Company may be liable to pay interest @ 12% PA on Rs.3,77,261/- from 02.11.1993 being the date of demand till date of payment of ESI contribution. WP (C) N0.4778/2005 (OCL India Limited Vs State of Orissa &Ors) Filed by the Company challenging the demand notice No.434 dated 23.03.2005 for Rs.4,17,172/- and demand notice No. 435 dated 24.03.2005 for Rs.5,95,100/- both issued by the Regional Transport Officer(RTO), Sundargarh demanding payment of road tax and penalty in respect of seven pay loaders and one pick and carry Hydraulic crane operated in the factory premises of the Company. The Company in it’s reply to the RTO contended that the said pay loaders and pick and carry Hydraulic crane are not motor vehicles within the meaning of under Section 2(28) of The Motor Vehicles Act, 1988. Hon’ble Orissa High Court by its order dated 10.05.2005 restrained the RTO, Sundargarh for giving any further effect to the demand notice till further orders.


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WP(C) NO 7529/2005 (OCL India Limited Vs Union of India &Others) Filed by the Company challenging the letter dated 25.04.2005 issued by the Chief Sales Manager, MCL directing the Company to lift coal for it’s Refractory unit by E-auction or to pay the average E-auction price of particular grade of coal in violation of the terms and conditions of the agreement dated 07.01.2004 entered into between the Company and Mahanadi Coalfields Limited. By interim order dated 21.06.2005 Hon’ble Orissa High Court directed MCL to supply coal as per agreement but at enhanced price. The differential amount shall be kept in a separate interest bearing account till disposal of the case. The case is pending. WP (C) NO. 3266/2006 (OCL Vs. Union of India and others) The Chief Goods Supervisor, OC Siding, Rajgangpur, S E Railway, levied overloading punitive charges for Rs.7,25,070/- alleging overloading of iron ore loaded from Barsuan and Nuamundi station and consigned to OC Siding, Rajgangpur (S E Railway). The action of the Company was based on the Special rate circular bearing Sl. No. 79(G)2005 dated 11.05.2005 which revised the permissible capacity of BOXN wagos, with effect from 15.05.2005. This circular permits carrying capacity of CC+8 tonnes in place of CC+4 tonnes in respect of specified materials like iron ore in designated routes. The Railways action is based on the withdrawal of the said circular with retrospective effect i.e. with effect from 15.05.2005. The Company challenged the levy on the ground that withdrawal of the previous circular dated 11.05.2005 with retrospective effect is illegal. The Hon’ble Orissa High Court by it’s order dated 08.03.2006 stayed the said demand till the next date. WP (C) NO. 4214/2006 (OCL Vs. Union of India and others) The Chief Goods Supervisor, OC Siding, Rajgangpur, S E Railway, levied overloading punitive charges for Rs.9,67,613/- alleging overloading of coal despatched from Akaltara and consigned to OC Siding, Rajgangpur. The Company filed writ petition challenging the levy on the ground that weigment of the wagons is incorrect due to faulty weighbridge of the Railways. The Hon’ble Orissa High Court by it’s order dated 31.03.2006 stayed the said demand till the next date. WP (C) NO.6628/2006 (OCL Vs. Union of India and others) The Company was allotted a coal block for captive mining of coal jointly with M/s Rungta Mines (leader) and M/s Ocean Ispat Ltd. The Ministry of coal and mines indicated three options. The leader of the joint allottees opted for Option III. It is clarified by the Ministry of Coal that the draft agreement proposed under Option III is only model form and the same can be altered/modified by mutual agreement. The Company intimated it's preference to work the coal mine through a joint venture company to ensure equal representation to the joint allot tees in activities of the venture and sharing of the coal


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raised in proportion of their coal entitlement stands inter se. In the event the Ministry directs to adopt Option III, a draft has been suggested with modification to Option III. However the Government refused to accept the proposal and directed the parties that Radhikapur coal block shall be worked only by the leader M/s Rungta Mines and joint allottees shall surrender their right to the leader. The Company filed a writ challenging the said letter dated 25.04.2006 which ignored the proposal of the joint allottees. Orissa High Court by its' order dated 18.05.2006 directed the Ministry of Coal not to take any decision prejudicial to the interest of the Company in respect of the coal block in question unless all of them agree to sign the draft agreement as proposed by the Government. WP NO.2632/2006 (OCL Vs. State of Chhatishgarh and others) Filed by the Company challenging legality and validity of Chhatishgarh (Adhosanrachna Vikas Avam Paryavaran) Upkar Adhiniyam, 2005 and Rules made thereunder. The aforesaid Act provides for levy of cess ion land for raising funds to implement infrastructure development projects and environment projects. The Hon'ble Chhatisgarh High Court by it's order dated 07.06.2006 held that the cess that may be recovered under the impugned enactment shall be subject to the final result of the writ petition and directed listing of the case for final hearing in second week of July. WP NO.2633/2006 (OCL Vs. State of Chhatishgarh and other) South Eastern Coal Fields Limited supplied 11093 MT of coal from the mines of SECL, Corba Raigarh during the period 04.04.2006 to 05.05.2006.and demanded cess under Chhatishgarh (Adhosanrachna Vikas avam Paryavaran) Upkar Adhiniyam,2005 and Rules made thereunder. The Company filed writ petition for staying the said demand. The Hon’ble Chhatisgarh High Court by it’s order dated 07.06.2006 held that the cess that may be recovered under the impugned enactment shall be subject to the final result of the writ petition and directed listing of the case for final hearing in second week of July. WP (C) NO. 8683/2006 (OCL Vs. State of Orissa and others) An industrial dispute arose between the workmen and it’s contractor M/s Rattan Enterprises with regard to entitlement of wages at higher rate. The State Government while referring the dispute wrongly impleaded the Company as a party to the dispute and the said reference was registered as Industrial Dispute case No. 16 of 2005 in Industrial Tribunal, Rourkela. The Company challenged the said illegal reference dated 26.11.2005 of Government of Orissa, Labour and Employment Department on the ground that the dispute is between the workmen and the Contractor and is contrary to the Section 12(5) read with Section 10(1)(d) of the Industrial Disputes Act, 1947.


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W P (C) NO. 15805/2006 (OCL Vs. The Cess Appellate Committee and another) Filed by the company challenging the authority of Cess Appellate Committee and the State Pollution Control Board in levying consolidated demand of Rs.11,81,840/- towards cess on mine drainage water. The consolidated demand was raised on the basis of dismissal of our appeal before the Cess Appellate Committee. The initial demand of Rs.1,81,349 was stayed by the Hon’ble High court of Orissa in WP(C) No.9168/2004.The case is pending. W P (C) NO. 7701/2007 (OCL Vs. State of Orissa and Shri Gokul Das) Filed by the Company challenging the award dated 04.04.2007 passed by the Presiding Officer, Labour Court, Sambalpur in I D Case No. 72/2002 reinstating Shri Gokul Das with back wages. Misc. Case No. 7272/2007 also filed praying for a stay of the award and exempting from paying wages U/s 17-B of the ID Act,1947 to Shri Das. In the meantime the workman approached for an out of Court settlement and accordingly settlement in Form –K has been filed in the Court with a prayer to dispose off the case in terms of settlement. C. CASES PENDING IN HIGH COURT FILED AGAINST THE COMPANY OJC NO. 7381/1994 (Pravash Chandra Chakra Vs Labour Commissioner Orissa &Ors) Shri Pravash Chandra Chakra (ex- Mechanist, Refractory Works) was superannuated with effect from 10.11.1994 on attaining the age of 55 years in terms of the standing orders of the Company. As per tripartite settlement dated 21.11.1990 the retirement age of employees was increased to 58 years. However this benefit was not given to him, as the standing order was not amended. He challenged the order of superannuation by filing this case. The case is pending. The maximum liability in this case may be Rs.1,56,254/-. OJC NO.2215/1996 (Sundargarh Industrial Mazdoor Union Vs Union of India & others) Filed by Sundargarh Industrial Mazdoor Union (SIMU) against Union of India and Others for quashing "The Employees Provident Funds and Miscellaneous Provisions (Amendment Ordinance) 1995 making the Company as one of the Opposite Parties. The Union contends that the Family Pension scheme framed through the ordinance is not only arbitrary and unconstitutional but is highly detrimental to the employees. The case is pending.


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OJC NO. 7741/1997 (Workmen of OCL Vs Union of India) Jute Packaging Materials (Compulsory use in packing commodities) Act,1987 requires the Cement manufacturers to use jute packaging materials for supply and distribution up to 50% of their production. Sundargarh Industrial Mazdoor Union (SIMU) challenged the notification dated 15.03.1995 regarding compulsory use of 50% of jute bags as use of jute bags is hazardous to the health of workmen. The Company has been made one of the Opposite Parties. Stay has been granted by the Hon'ble court of Orissa. The case is pending. OJC NO. 12034/1998 (Purna Chandra Das Vs Union of India & others) Demanding reinstatement in service after acquittal from the criminal case, Shri Purna Chandra Das raised an industrial dispute, which was referred by the Government to the Presiding Officer, Industrial Tribunal, Rourkela for adjudication. The said case was registered as Industrial Dispute Case No. 12/1997. As Shri Das was not satisfied with the reference of the case, filed this case in Orissa High Court for changing the reference and obtained stay of the proceedings in Tribunal. The case is pending. As the reference cannot be changed the Company does not foresee any liability in this case. OJC NO. 12170/1999 (Utkal Shramik Sangh Vs Union of India & others) Filed by Utkal Shramik Sangh (USS) seeking direction from the Hon'ble High Court of Orissa to State Government of Orissa to issue notification U/s 10(1) of " The Contract Labour (R&A) Act,1970 pursuant to the recommendations made by the State Advisory Board. The notification dated 28.04.2000 has already been published, hence the writ becomes infructous. The case is pending OJC NO. 10854/2000 (Sundargarh Industrial Mazdoor Union Vs State of Orissa & Others) Filed by Sundargarh Industrial Mazdoor Union (SIMU) challenging the notification dated 28.04.2000 issued by the State Government of Orissa for not abolishing contract labour system in all the jobs recommended by the State Labour Advisory Board. The case is pending OJC N0.4797/2000 (Jagdish Chandra Das Vs Orissa Cement Limited) The Company appointed Shri Jagdish Chandra Das as Apprentice Electrician on 12.05.1987 and he was given extension from time to time as an Apprentice Trainee. On 02.04.1990, he was given appointment on temporary basis for a period of one year only subject to the condition that he has to obtain B- Class Lineman’s License within six months. He failed to obtain the License within the time period, therefore Company terminated his services. He raised an Industrial Dispute before the Presiding Officer,


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Labour Court, Sambalpur vide No. 50/1993, challenging his termination. On 30.12.1999 the Presiding Officer, Labour Court, Sambalpur passed the award, stating that the termination of Shri Jagdish Chandra Das was legal and justified and he is not entitled to get any relief. Aggrieved by the said order, Shri Jagdish Chandra Das filed an Application under Article 226 of the Constitution of India vide No. OJC 4797/2000 in the High Court of Orissa, challenging the award of the Presiding Officer, Labour Court, Sambalpur. The case is pending. The company does not foresee any liability in this case. OJC NO. 4473/2002 (Ms. Beronica Bilung & Ors Vs. OCL India Limited) Smt. Beronica Bilung and eight others of Lanjiberna Quarry, employees of Contractor M/s Bhagawati Miners, filed the writ Application under Article 226 & 227 of the Constitution of India in the High Court of Orissa, praying the Hon'ble High Court for a direction to the Company to settle their statutory dues and eligible amount as per VR Scheme. The contractor paid them as per VR scheme but they are disputing the basis adopted for payment The writ is not maintainable since the Company and the Contractor are not a State within the meaning of Article 12 of Constitution of India. The case is pending for further proceedings. The Company does not foresee any liability in this case. OJC NO. 4474/2002 (Ms. Jamini Kujur & Ors Vs. OCL India Limited) Smt. Jamini Kujur and five others of Lanjiberna Quarry, employees of Contractor M/s Vaishnoo Minerals, filed the writ Application under Article 226 & 227 of the Constitution of India vide OJC No. 4474 of 2002 in the High Court of Orissa, praying the Hon'ble High Court for a direction to the Company to settle their statutory dues and eligible amount as per VR Scheme. The contractor paid them as per VR scheme but they are disputing the basis adopted for payment. The writ is not maintainable since the Company and the Contractor are not a State within the meaning of Article 12 of Constitution of India. The case is pending for further proceedings. The Company does not foresee any liability in this case. OJC N0.4475/2002 (Ms. Norm Minz & Ors Vs. OCL India Limited) Smt. Norm Minz and three others of Lanjiberna Quarry employees of Contractor M/s Swastic Traders filed the writ Application under Article 226 & 227 of the Constitution of India vide OJC No. 4475 of 2002 in the High Court of Orissa, praying the Hon'ble High Court for a direction to the Company to settle their statutory dues and eligible amount as per VR Scheme. The contractor paid them as per VR scheme but they are disputing the basis adopted for payment The writ is not maintainable since the Company and the Contractor are not a State within the meaning of Article 12 of Constitution of India. The case is pending for further proceedings. The Company does not foresee any liability in this case.


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OJC N0.4476/2002 (Ms.Agnesh Ekka & Anr. Vs. OCL India Limited) Smt. Agnesh Ekka and another of Lanjiberna Quarry employees of Contractor M/s Pashupati Enterprises filed the writ Application under Article 226 & 227 of the Constitution of India vide OJC No. 4476 of 2002 in the High Court of Orissa, praying the Hon'ble High Court for a direction to the Company to settle their statutory dues and eligible amount as per VR Scheme. The contractor paid them as per VR scheme but they are disputing the basis adopted for payment The writ is not maintainable since the Company and the Contractor are not a State within the meaning of Article 12 of Constitution of India. The case is pending for further proceedings. The Company does not foresee any liability in this case. MISC. APPEAL NO.330/2000 (United India Insurance Co. Ltd. Vs Magal Ekka & Others) Shri Mangal Ekka driver of Contractor M/s Sadique Ahamed met with an accident and sustained injuries. He filed a claim for Rs. 1,00,000/- under the Workman's Compensation Act bearing No. WC Case - 6/1997 impleading the Contractor, the Company and the United India Insurance Company Limited. The WC Commissioner by his order dated 29.03.2000 decided that the compensation payable was Rs.57,696/- and not Rs.1,00,000/- as claimed by the workman. He directed the Insurance Company to deposit compensation amount of Rs 57,696/-. Aggrieved with the order United India Insurance Company file this appeal in Orissa High Court. The case is pending. The maximum liability in this case may be Rs 57,696/-. OJC NO.15583/2001 (Jairam Sahoo Vs Presiding officer, Labour Court, Sambalpur & Ors) Sri Jairam Sahoo raised an Industrial dispute, which was registered as I D Case No. 48/1996, challenging his dismissal order and the Labour Court awarded lump sum amount of Rs 1,50,000/- to Shri Jairam Sahoo ex-Pipe Fitter (Refractory Works) towards final settlement instead of ordering re-instatement. The Company paid the said awarded sum to the workman. However he filed a writ petition even after receiving the awarded sum from the Company for quashing the award passed by the Presiding Officer, Labour Court, Sambalpur. The case is pending. F A O NO.84/2005 (Union of India represented through G M (Claims), NF Railway Vs. OCL and Others) North Frontier Railway filed the appeal against the order dated 28.05.2004 of Railway Claims Tribunal, Bhubaneswar in OA No.66/1994 and 67/1994 directing refund of Rs. 66,230/- along with 6% interest from the date of filing of the claim to the Company. The claims were filed by the Company for claiming refund of excess freight charges collected at the destination station on the basis of circular dated 14.06.1991, which was not in existence at the time of booking of the consignment.


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WP (C) NO.80/2006 (M/s Shiva Cement Limited Vs. State of Orissa and others) Filed by M/s Shiva Cement Limited challenging the action of the DRDA, Balasore in terminating the agreement for supply of cement @Rs.141/- per bag and awarding the same contract to the Company @ Rs.158.50 per bag. WP (C) No.488/2007 Utkal Shramik Sangh Vs Labour Commissioner of Orissa & others Utkal Sharmik Sangh, the recognised union filed writ for injuncting Sundargarh Mazdoor Sangh, another union, to operate as a union in the establishment of OCL India Limited and for cancellation of its registration, if sufficient number of workmen of the Company are not its members. The Hon’ble High court of Orissa by its order dated 18.01.2007 directed Opposite Party No.3 (OCL) to protect the interest of the Petitioners and directed for listing on 28.02.2007 for final disposal at the stage of admission. WP (C) No. 13251/2007 (Girija Shankar Sunani and another Vs. State of Orissa and five others) Filed by Shri Girija Shankar Sunani and Smt. Menaka Sunani legal heirs of Late Mukund Sunani against State of Orissa and five others for payment of adequate compensation to the them for 1.320 acres of land acquired by the Collector, Sundargarh for SE Railway for constructing railway siding for OCL India Limited. The parties alleged that they have not received the compensation. The case is pending. D. CASES IN LOWER COURT FILED BY THE COMPANY ATA NO. 390 (8)2002 (OCL Vs Regional PF Commissioner, Rourkela) Filed by the Company challenging the order dated 31st July 2002 of Assistant Provident Fund Commissioner, Sub Regional Office, Rourkela demanding PF contribution on Special Allowance and Additional Special Allowance paid to all workmen amounting to Rs.89,03,046/- for the wage period from 01.01.2000 to 31.12.2001 and interest of Rs.16,33,441/-The contention of the Company is that Section 2(b) of the Provident Fund Act specifically excludes certain allowances like house rent allowance, overtime allowance, any other similar allowance from the purview of the basic wages. The element of special allowance falls within the exclusion clause. The Hon'ble Tribunal by it's order dated 27.07.2005 directed the Company to deposit 25% of the determined amount within two weeks for admission of the case for hearing. Accordingly the Company deposited Rs.14,05,944/-. The case is pending.


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ARBITRATION PROCEEDINGS BETWEEN (OCL And Neelachal Ispat Nigam Limited) Company has entered into an agreement on 12.05.1998 with Neelachal Ispat Nigam Limited (formerly Konark Met Coke Limited which merged into the present Respondent by virtue of the order of the Hon’ble High Court of Orissa under section 394(2) of the Companies Act, 1956) for supply of 14081 MTs of different types of silica refractory bricks and 1250 MTs of mortar for a total price of Rs.31.26 Crores. As per the agreement the Claimant was required to manufacture the goods in accordance with the specification of the order and offer the same for inspection to the Respondent. After satisfying, with the quality of goods Respondent Company issued a certificate and dispatch clearance to the Claimant Company. Thereafter, The Claimant Company delivered the goods to the Respondent Company. The Claimant Company manufactured the goods in accordance with the specification of the order of the Respondent and the same was offered to the Respondent for inspection and test and issuance of dispatch clearance but the Respondent did not issue the dispatch clearance with in a reasonable period and thus prevented the Claimant from dispatching the goods by adhering to the time schedule. Being aggrieved with the act of the Respondent Company, The Claimant Company has filed the claim before the Arbitral Tribunal and claimed damages of Rs.12,87,41,119/- on account of loss sustained by them for such delay in dispatch of goods manufactured and consequent delay in payment of the price thereof. The Respondent Company has also raised three counter claims totaling Rs.9,81,29,843/- against the Claimant Company. The hearing has already been concluded. Award is awaited. CONSUMER DISPUTE CASE NO.91/ 2007 (OCL Vs. The New India Assurance Company Limited) The company filed a consumer case alleging deficiency of service against the Insurance company, which illegally withheld the settled claim amount of Rs.2,96798 for adjustment against short premium demanded in respect of certain cattle insurance policies expired long back. The company’s stand is that no short premium can be collected after expiry of the policy period and as per IRDA Regulations 2002, Insurance company is under obligation to make the payment within 7 days from the date of acceptance of the offer from Insurance Company for settlement of claim.


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ESI MISC. NO. 179/2004

(OCL VS Employees’ State Insurance Corporation)

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views of various High Courts on the issue. The Company contended that the decision of Hon'ble Orissa High Court in the case of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtime wages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of District Judge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Court finally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Ltd. Vs. Employees State Insurance Corporation Ltd. (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’ State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1281-43-9-5258 issued on 09.11.2003 imposing damages totaling to Rs.10,52,468/- under Section 85(B) of the ESI Act, 1948 for delayed payment of ESI contribution on over time wages for periods from 16.02.1994 to 15.05.1996. The Company challenged the said order and the Hon'ble District Judge, Bhubaneswar granted stay vide order dated 15.04.2004. ESI MISC. NO. 260/2004

(OCL VS Employees’ State Insurance Corporation)

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views of various High Courts on the issue. The Company contended that the decision of Hon'ble Orissa High Court in the case of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtime wages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of District Judge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Court finally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Ltd. Vs. Employees State Insurance Corporation Ltd. (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’ State Insurance Corporation, Bhubaneswar started a certificate case bearing No. 44/Y/11/15/44-1281-RR dated 29.04.2004 for realisation of interest totaling to Rs. 8,33,901/- under Section 45 of the ESI Act, 1948 for delayed payment of ESI contribution on over time wages for periods from 16.02.1994 to 15.05.1996. The Company challenged the said certificate proceeding and the Hon'ble District Judge, Bhubaneswar granted stay vide order dated 10.06.2004.

ESI MISC. NO. 416/2004

(OCL VS Employees’ State Insurance Corporation) The Company disputed the demand of ESI contribution on overtime wages as there were divergent views of various High Courts on the issue. The Company contended that the


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decision of Hon'ble Orissa High Court in the case of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtime wages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of District Judge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Court finally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Ltd. Vs. Employees State Insurance Corporation Ltd. (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’ State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1281-43-1-18674 issued on 09.08.2004 imposing damages totaling to Rs.1,95,579/- under Section 85(B) of the ESI Act, 1948 for delayed payment of ESI contribution on over time wages for periods from 16.12.1989 to 15.01.1991. The Company challenged the said demand notice and the Hon'ble District Judge, Bhubaneswar granted stay vide order dated 06.10.2004. ESI MISC. NO. 417/2004 (OCL VS Employees’ State Insurance Corporation)

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views of various High Courts on the issue. The Company contended that the decision of Hon'ble Orissa High Court in the case of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtime wages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of District Judge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Court finally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Ltd. Vs. Employees State Insurance Corporation Ltd. (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’ State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1281-43-3-18668 issued on 09.08.2004 imposing damages totaling to Rs.72,182/- under Section 85(B) of the ESI Act, 1948 for delayed payment of ESI contribution on over time wages for periods from 16.01.1989 to 15.12.1989. The Company challenged the said demand notice and the Hon'ble District Judge, Bhubaneswar granted stay vide order dated 06.10.2004. ESI MISC. NO. 418/2004 (OCL VS Employees’ State Insurance Corporation) The Company disputed the demand of ESI contribution on overtime wages as there were divergent views of various High Courts on the issue. The Company contended that the decision of Hon'ble Orissa High Court in the case of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtime wages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of District Judge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Court finally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Ltd. Vs. Employees State Insurance Corporation Ltd. (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’ State


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Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1281-43-2-18671 issued on 09.08.2004 imposing damages totaling to Rs.32,333/- under Section 85(B) of the ESI Act, 1948 for delayed payment of ESI contribution on over time wages for periods from 16.01.1991 to 15.12.1992. The Company challenged the said demand notice and the Hon'ble District Judge, Bhubaneswar granted stay vide order dated 06.10.2004. ESI MISC. NO. 342/2004 (OCL VS Employees’ State Insurance Corporation),

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views of various High Courts on the issue. The Company contended that the decision of Hon'ble Orissa High Court in the case of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtime wages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of District Judge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Court finally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Ltd. Vs. Employees State Insurance Corporation Ltd. (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’ State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1167-46-19-11893 issued on 24/26.05.2005 imposing damages totaling to Rs.1,59,969/- under Section 85(B) of the ESI Act, 1948 for delayed payment of ESI contribution on over time wages for periods from 01.01.1990 to 31.01.1991. The Company challenged the said demand notice and the Hon'ble District Judge, Bhubaneswar granted stay vide order dated 21.07.2005. ESI MISC. NO. 343/2004 (OCL VS Employees’ State Insurance Corporation)

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views of various High Courts on the issue. The Company contended that the decision of Hon'ble Orissa High Court in the case of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtime wages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of District Judge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Court finally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Ltd. Vs. Employees State Insurance Corporation Ltd. (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’ State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1167-46-20-11896 issued on 24/26.05.2005 imposing damages totaling to Rs.1,51,035/- under Section 85(B) of the ESI Act, 1948 for delayed payment of ESI contribution on over time wages for periods from 01.02.1991 to 31.01.1993.


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The Company challenged the said demand notice and the Hon'ble District Judge, Bhubaneswar granted stay vide order dated 21.07.2005. ESI Misc. No. 344/2004 (OCL VS Employees’ State Insurance Corporation)

The Company disputed the demand of ESI contribution on overtime wages as there were divergent views of various High Courts on the issue. The Company contended that the decision of Hon'ble Orissa High Court in the case of The Regional Director, ESI Corporation Vs. P B Gupta reported in 76(1993) CLT-893 which held overtime wages do not form part of wages was binding on the ESI. The Company obtained stay from the Court of District Judge, Puri. However the Company paid the contribution during the pendency of the case as the Supreme Court finally held that overtime wages form part of the wages in the case of Indian Drug & Chemicals Ltd. Vs. Employees State Insurance Corporation Ltd. (ESIC) reported in 1997 (II) LLJ-700. Regional Director, Employees’ State Insurance Corporation, Bhubaneswar passed an order bearing No. OR/REV/44-1167-46-18-11890 issued on 24/26.05.2005 imposing damages totaling to Rs.60,728/- under Section 85(B) of the ESI Act, 1948 for delayed payment of ESI contribution on over time wages for periods from 01.02.1989 to 31.12.1989. The Company challenged the said demand notice and the Hon'ble District Judge, Bhubaneswar granted stay vide order dated 21.07.2005. E. CASES IN LOWER COURT FILED AGINST THE COMPANY INDUSTRIAL DISPUTE CASE NO. 12/1997 (Shri P C Das Vs. OCL) Demanding reinstatement in service after acquittal from the criminal case Shri Purna Chandra Das raised an industrial dispute, which was referred by the Government to the Presiding Officer, Industrial Tribunal, Rourkela for adjudication. The said case was registered as Industrial Dispute Case No. 12/1997. Shri Das was not satisfied with the reference of the case and filed a writ bearing OJC No.12034/1998 in Orissa High Court for changing the reference and further proceedings in Tribunal are stayed. The Company does not foresee any liability in this case. INDUSTRIAL DISPUTE CASE NO. 21/1997 (Shri P K Mohapatra Vs. OCL) Challenged the order of dismissal. He was dismissed for disobeying the order of his superiors. Subsequently on the petition of Shri Mohapatra Govt. transfer this case from Sambalpur to Bhubaneswar and the said transfer was challenged by the Company and proceedings are stayed. Subsequently on the request of Shri Mohapatra, the matter was settled out of court by entering into an agreement in Form-K. In view of the settlement, the writ filed by the Company was withdrawn and Labour Court, Bhubaneswar was approached for passing a no dispute award. The case is pending.


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INDUSTRIAL DISPUTE CASE NO. 6/2001 (Shri R N Behera Vs. OCL) Shri Rabi Narayan Behera, Sr. Clerk, Share and Law Department raised an industrial dispute challenging the termination of his service on the ground of disobedience. He raised an industrial dispute and the same was registered as ID Case No. 6/2001 in the Labour Court, Sambalpur. State Govt. on request of Shri Behera transferred the said case to Labour Court, Bhubaneswar without giving an opportunity of hearing to the Company. The Company filed writ in Orissa High Court challenging the order of Government of Orissa transferring the ID Case from Labour Court, Sambalpur to Labour Court, Bhubaneswar. Stay is granted by Orissa High court. During the pendency of the said writ Shri Behera entered into a settlement with the Company in Form -K and received Rs.1,50,000/- towards full and final settlement of his claim. In view of this development the Company filed withdrawal petition in the High Court for withdrawal of the writ. The ID case in the Labour Court will accordingly be disposed off in terms of the settlement. The case is pending INDUSTRIAL DISPUTE CASE NO. 1/2003 (Shri Gayadhar Sahoo Vs. OCL) Shri Gayadhar Sahoo, Mason was dismissed from services on the grounds of disobedience, misbehavior and absence from duty. He raised a dispute, which was registered with the Labour Court, Sambalpur as Industrial Dispute Case No. 1/2003. Vide order dated 01.01.2004 the said case has been transferred from the registry of Labour Court, Sambalpur to the Registry of Industrial Tribunal, Rourkela for adjudication. Being aggrieved by the said order dated 01.01.2004, the Company filed the writ Application under Article 226 and 227 of the Constitution of India in the Hon’ble High Court of Orissa. The Hon’ble Court vide order dated 09.02.2004 stayed further proceedings in the case pending before the Industrial Tribunal, Rourkela. The case is pending The maximum liability may be Rs. 3,00,827/- in this case. INDUSTRIAL DISPUTE CASE NO. 16/2005 (Bidyananda Rai and ors. Vs. M/s Rattan Enterprises and OCL) An industrial dispute arose between the workmen Shri Bidyananda Rai and others and it’s contractor M/s Rattan Enterprises with regard to entitlement of wages at higher rate. The State Government while referring the dispute wrongly impleaded the Company as a party to the dispute and the said reference was registered as Industrial Dispute case No. 16 of 2005 in Industrial Tribunal, Rourkela. By filing the writ petition, te Company challenged the said illegal reference dated 26.11.2005 of Government of Orissa, Labour and Employment Department on the ground that the dispute is between the workmen and the Contractor and is contrary to the Section 12(5) read with Section 10(1)(d) of the Industrial Disputes Act, 1947. The case is pending in the Tribunal.


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MOTOR ACCIDENT CLAIM CASE NO. 27/2004 & 28/2004 (Lubhabati Choudhury and three Ors. Vs. Awtar Singh & Others) The Company's tanker OR-16A-9825 met with an accident on 03.12.2003 in which Shri

Purna Chandra Choudhury resident of Sundargarh died. His legal heirs lodged a claim for payment of Rs 5,00,000/- and Rs 50,000/- under Section 166 and 140 of the Motor Vehicles Act in the Court of Motor Accident Claims Tribunal-1, Sundargarh. The vehicle is insured with The Oriental Insurance Company, as such the liability will be on the insurance company. The case is pending.

MOTOR ACCIDENT CLAIM CASE NO. 353/2006 &354/2006

(Anjlus Dung Dung Vs OCL & another)

The Company’s vehicle bearing No.OR-16-7168 met with an accident in which one person sustained injuries and died. His legal heirs lodged a claim for payment of Rs. 2,00,000 as compensation under Section 166 and 140 of the Motor vehicles Act, in the court of Motor Accident Tribunal, Rourkela. The vehicle is insured with The Oriental Insurance Company, as such the liability will be on the insurance company. The case is pending. II. DALMIA CEMENT (BHARAT) LIMITED Based on the certificates given by the dealing Advocates, the summary of the outstanding litigations are reproduced herein below. Next date of hearing and the amount involved in some of the cases is not provided by the advocates in their certificates. CRIMINAL LITIGATION: a) There are 20 cases filed by Company against debtors under section 138 of the

Negotiable Instruments Act, 1881 (regarding dishonour of cheques) for an aggregate amount of about Rs. 340 lakhs.

b) There are 5 criminal cases filed under various provisions of the Indian Penal Code,

1860 against employees/ex-employees. c) There are 4 cases filed by the Company against others relating to encroachment of its

premises at Salem, pending before the Munsif Court at Salem. CIVIL LITIGATION: a) Recovery suit filed against M/s. Indian Seamless Steels & Alloys Limited, Pune,

involving an amount of Rs. 116.01 lacs. This amount is due to the Company on account of value of goods supplied and interest @ 20% p.a, has been decreed in favour of the Company. However, the Bombay High Court has stayed the execution proceedings and directed the judgement debtor to deposit the amount of the decree in court amounting to Rs.1.47 crore which was withdrawn by us after furnishing a Bank Guarantee as per the liberty given by the Hon’ble High Court. Appeal is still pending.


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b) Winding up petition dated March 12, 2000, filed against M/s. Bellary Steels & Alloys Limited, Bellary before the High Court of Karnataka at Bangalore involving an amount of Rs. 34.97 lacs on account of unpaid value of goods plus interest thereon. This petition has been admitted and the High Court has ordered the advertisement of the petition in newspapers before passing appropriate orders for winding up. The Company has also filed a Civil Suit for recovery of the same which is pending before the City Civil Judge, Bangalore. Company in BIFR therefore all proceedings have been stayed.

c) The Company has filed a Civil Suit against M/s Marmagoa Steels Limited, in Goa for

recovery of Rs. 9.12. Lacs together with interest @ 20% per annum in respect of sales and supplies made to them between the period October, 1998 to June, 2000. The matter is pending as on date.

d) The Company was using 9.41 acres of land as a road from its Salem factory leading to

the National Highway. This road was also used by the general public for transportation of men and materials. The State Government initially proposed to give the said area on lease to the Company and demanded rental of about Rs. 26 lakhs for the period from 1977 onwards. Being aggrieved by this demand the Company has filed a Writ Petition before the Madras High Court, which is pending. Against interim orders of the High Court the Company has furnished a bank guarantee to the State Government for like amount.

e) Suits filed before the Railway Tribunal, etc. for claiming variance in distance of

Western Coal fields and train wagon load in respect of Eastern Coals fields involving an amount of Rs. 1.39 lacs.

f) Suit No. 996 of 1986 filed on March 31, 1986 before the Delhi High Court against M/s.

Max Crona Consolidated for non-completion of repair work of the Ballabgarh factory roofs, for an amount of Rs. 6.16 lacs. M/s. Max Crona Consolidated has filed a counter claim in the said suit on April 10, 1987 with the Delhi High Court for an amount of Rs. 2.42 lacs. The case is now transferred to the District Court where it is presently pending.

g) Suits filed before the High Court, Kolkatta for claiming variance in distance of Western

Coal fields and train wagon load in respect of Eastern Coals fields involving an amount of Rs. 0.55 lacs.

h) There are 4 separate legal cases filed against Hansalaya Properties before the Delhi

High Court (i) Suit for damages of Rs. 9, 26, 378/- and and late delivery of 11th and 12th floor (ii) suit filed for claiming title of premises in respect of 11th & 12th floors and the basement area of Hansalaya Building; (iii) demanding formation of Society and execution and Deed of Apartment under Apartment Ownership Act, 1986 and and (iv) suit filed for declarartion and seeking right to install its own cooling tower . All these cases have now been transferred to the District Court.


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i) 28 writ petitions filed before the Madras High Court against the orders of land acquisition issued by the State of Tamil Nadu in respect of lands in and around Vallajanagaram and other villages in the State of Tamil Nadu. These lands are mineral bearing and are required for mining operations by the Company. These petitions were dismissed and the Company has preferred a Writ Appeal before the Madras High Court. The amounts are not ascertainable and the Company is yet to receive the awards for land acquisition proceedings. The High Court was pleased to dismiss the Writ Appeals and a SLP was filed by the Company before the Supreme Court. Supreme Court has issued notice and stayed dispossession of land. Matter pending in Supreme Court.

j) Two writ petitions filed on April 30, 1992, before the High Court of Madras one

against rejection of the Company’s Mining Lease application for the Valajanagaram area (an area of 714.14 acres), and against the order of the State Government dated August 25, 1986 and the other Writ Petition in respect of order for reservation of area in and around Valajanagaram Village in Tamil Nadu. This matter is pending in Madras High Court and the Company is not mining in this area.

Note: Mining leases under litigation relate to areas where mining lease applications of

the Company have been rejected on the ground that these areas have been reserved by the State Government for State exploitation under Rule 58 of the Mineral Concession Rules, 1960. Based on legal opinion obtained by the Company, the reservations made are no more valid after the deletion of Rule 58 of the Mineral Concessions Rules, 1960, without any savings clause.

k) Mining lease for the Perianagalur area (an area of 172.99 acres) is under litigation and

pending before Madras High Court. The Company is, however, mining in this area under High Court Order of stay dated July 21, 1998. The State Government has issued GO granting first renewal from 1985 to 2005 and Company has filed application for grant of second renewal fro 2005 till 2025 which is pending before the State Government. The High Court vide order dated 13th June 2007 has directed the State Government to consider the application for second renewal of the Company within six weeks.

Note: Mining leases under litigation relate to areas where mining lease applications of

the Company have been rejected on the ground that these areas have been reserved by the State Government for State exploitation under Rule 58 of the Mineral Concession Rules, 1960. Based on legal opinion obtained by the Company, the reservations made are no more valid after the deletion of Rule 58 of the Mineral Concessions Rules, 1960, without any savings clause.

l) Arbitration proceeding for damages before the International Chamber of Commerce

between the Company and the claimants – South India Corporation, Chennai and Rich Group International and/or Arko Trading Limited, Hongkong – the respondents, for non-supply of steam coal of Indonesian origin against the Company’s contract dated October 28, 1999 with them has been completed in favour of the Company. As the respondents have gone into liquidation, the Company has filed necessary claims with


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the Official Liquidator. The liquidators summary of receipts and payments indicate that there are no assets of the Respondents to realize our dues.

m) The Tamil Nadu Government has raised demands aggregating to Rs. 18.51 crores

towards short payment of royalty on the basis of quantity of cement produced. Writ Petition has been filed before the Madras High Court, which is pending.

n) The Tamil Nadu Government has raised demand for enhanced charges for drawal of

water from the Coleroon River. The Company has filed a Writ Petition before the Madras High Court. he Court vide judgement dated 28/02/2006 has upheld levy of Rs. 500/- of Rs. 500/- per cubic meters retrospectively from the year 1991. On the issue of whether it had to be levied on contracted demand or actual water drawn, the court has refused to pass any orders due to pendency of Writ Appeal pending before Division Bench. Amount of Rs.35.8 lakhs paid under protest.

o) The Government of Tamil Nadu levied lease rental amounting to about Rs. 8 crores for

lease of peramboke lands in respect of renewal of mining lease of Ameenabad and Kairulabad mines used by the Company for mining limestone. The Government raised the demand for the said amount be paid for execution of the mining lease deed. The Company filed Writ Petition in the High Court at Chennai against the said demand which was stayed by the High Court. The matter is pending.

LITIGATION AGAINST GOVERNMENT: a) Tamil Nadu Electricity Board has levied an electricity generation tax on self-generated

electricity by using Furnace Oil. The Company had filed Writ Petitions in the Madras High Court challenging the levy of such tax, on the basis of notifications issued in respect of certain industries using other Petroleum products, which has been decided against the Company. The Company has filed Writ Appeals against the said order of the learned Single Judge. The demands had been made at 15% of the unit charges applicable from time to time. In the interim orders on the Writ Appeal filed by the Company, the Madras High Court has directed the Company to pay the said tax at the admitted rate of 5.5% of the unit charges together with 50% of the disputed amount of the demand of the unit charges. The aggregate liability for such disputed demand is Rs. 289.90 lacs, which has not been provided for in the accounts. The Company has also challenged the levy and validity of the Tamil Nadu Electricity Act, 2003 before the Madras High Court, which was dismissed. Against this order, the Company has preferred a Writ Appeal before the Madras High Court. The High Court vide order and judgment dated 13th July 2006 upheld the validity of the Act 2003 and dismissed the Writ Appeal against which the Company filed SLP before the Supreme Court. The Supreme Court vide judgment and order dated 15/05/2007 has held that the benefit of the exemption notifications issued by the State Government under the old act shall continue under the new Act also. In terms of the judgment Company is entitled to refund of tax paid as per the exemption notifications.

b) Claim for refund of excise duty on equalised freight for sale of cement pending before

the Delhi High Court as a Reference Petition amounting to Rs. 2.64 crores. Meanwhile


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the amount has been refunded to the Company. Reference answered by the High Court in favour of the Company and Dept filed SLP before the Supreme Court which has been admitted and pending before the Supreme Court.

c) Appeals pending before the STAT, Madurai, for use of Form XVII for purchase of

lubricants and furnace oil and explosives at concessional rates for FY 1996 amounting to Rs. 14.46 lacs, for FY 1997 amounting to Rs. 40.55 lacs and for FY 1998 amounting to Rs. 3.64 lacs.

d) Case pending before the Deputy Commissioner Tax Officer, Lalgudi filed by the Sales

Tax Department, Tamil Nadu, regarding determination of sales tax on packaging charges in the sale of cement for FY 1978 amounting to Rs. 13 lacs, for FY 1975-76 and 1976-77 amounting to Rs. 28.5 lacs and for FY 1983-84 amounting to Rs. 18.24 lacs.

e) 6 Show Cause Notice issued by Jt Comm/ Asst Comm Excise pending, along with an

appeal to CESTAT Delhi against order of Comm Appeals demanding payment of excise duty on Bagasse amounting to Rs. 1.01 crores.

f) Appeals filed by the Sales Tax Department, Tamil Nadu is pending with the Sales Tax

Appellate Tribunal/TNTST, against the order of AAC/STAT granting exemption of Purchase Tax on purchases of Explosives and Fire Bricks amounting to Rs. 4.22 lacs.

g) Certain matters relating to excise pending adjudication before the Excise Authorities,

disallowing Cenvat credit and/or demanding payment of duty amount to Rs. 2.28 lacs.

h) Appeal has been filed before the Sales tax Tribunal in respect of demand for entry tax

on raw sugar aggregating to Rs. 11.22 lakhs and the matter is presently pending. i) Writ Petition has been filed in respect of demand for entry tax on goods amounting to

Rs. 4.70 lakhs and the matter is presently pending. j) Under the Jute Packaging Materials (Compulsory use of Packaging Commodities) Act,

1987, 50% of the cement produced should be supplied in jute bags. Failure to do so attracts a maximum fine equal to twice the cost of jute bags not used as required by the Act. The Company has not been using the jute bags. The Supreme Court has upheld the constitutional validity of the above Act. As per the order, the percentages of using jute bags for packing the various commodities will be prescribed by the Government of India. The Madras High Court has stayed the use of jute bags by the cement industry, in the writ petitions filed by the trade unions. Vide Notification dated December 15, 1998, the Governments’ order prescribing percentages for use of jute bags in packing various commodities, cement has been excluded. The amount that may become payable by the Company as penalty in case it is ultimately held that penalty is leviable for non-compliance of the Act is presently is not quantifiable.

k) Appeal pending with CESTAT, Chennai, regarding refund of service tax of Rs. 15.88

lacs on services availed from goods transport operators.


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l) Special Leave Petition filed with the Supreme Court of India contesting payment of

100% royalty on new leases of Patta Lands. The amount involved is Rs. 27.74 lacs. m) Disallowance of Cenvat credit on steel and cement amounting to Rs. 346.92 lacs taken

towards brownfield expansion pending before the Commissioner Excise Trichy. n) Disallowance of Cenvat credit of Rs.705.04 lacs on power plant leased to Keshav

Power Plant. Appeal allowed by CESTAT, Chennai. Application filed for re-credit of the allowed amount.

o) Special Leave Petition before the Supreme Court of India is pending with regard to the

Company’s claim for Modvat credit on Furnace Oil. The amount involved is Rs. 11.21 lacs.

p) The Company has filed a petition challenging the orders of the ESI Department

demanding payment of contribution besides interest and damages in respect of certain contract workmen. The matter is still pending.

q) The Company has contested a claim from the Provident Fund Department relating to

provident fund contribution on the lump sum amounts paid under the Wage Board settlement. Amount involved is Rs. 96.21 lckhs.

CIVIL LITIGATION AGAINST THE COMPANY: a) Labour disputes pending before the High Court of Madras, involving an amount of Rs.

41.63 lacs with respect to claim for permanent employment by 4 contract workmen and also a dispute regarding retirement age of an employee.

b) The State of Tamil Nadu while renewing Mining Leases of the Company directed

payment of compensation for the surface rights on the Government Lands on which the Mining Leases were to be renewed or granted in favour of the Company. Although the Company has succeeded in its Revision Petition before the Central Government, the State Government of Tamil Nadu has filed Writ Petitions before the Madras High Court challenging the said orders of the Central Government.

c) Haryana Government vide order dated December 14, 1989 proposed to acquire vacant

factory land admeasuring 15.32 acres of Dalmia Electronics Corporation unit of the Company at Ballabhgarh. The Company has obtained a Stay order from the Punjab and Haryana High Court restraining the State Government from dispossessing the land. In the meanwhile the Company has filed appropriate proceedings before the District Judge, Faridabad, for enhancement of the quantum of the award, which is still pending.

d) DCB had entered into a contract with M/s Bulk Trading for sale of 36,000 metric tons

of South African steam coal delivery at Chennai port. The contract provided that Bulk trading to secure vessel to effect delivery. Bulk trading was also to furnish complete


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particulars of the vessel nominated by Bulk Trading which would be within the restrictions prevailing at the discharge port i.e. Chennai.. Demurrage was to be DCB account. Vessel reached port however berthing could not as no berth was designed to handle the vessel which exceeded 633 ft as the vessel was 699ft. Delay resulted in demurrage of 7 days and Bulk Trading initiated Arbitrations proceedings under ICC Rules at London. Sole Arbitrator conducted the proceedings and passed an award for USD 36, 584.74 plus simple interest on the sum from 1.11.1999. DCB was also asked to pay costs amounting to GBP 14,484.70 plus USD 220,000 along with simple interest of 4 % from the sate of Award till payment (Approx 45 lacs plus 4% interest). DCB challenged the Award under section 34 of Arbitration and Conciliation Act, 1996 before the District Court Trichy which is pending.

e) The Company has contested a demand made by the ESI Department claiming

contribution and interest thereon aggregating to Rs. 2.13 lakhs. The Court has stayed 50% of the demand and the matter is presently pending.

f) DCB had entered into an agreement for Access and Services Agreement with Ariba

India Pvt Ltd to provide sourcing of various commodities/ items through e-sourcing using internet. Ariba to be paid Fixed Fee and Variable performance Fee. 2 year contract wef December 2003 to December 2005. Ariba to be paid Fixed fee of Rs. 3 lacs for 1st month and Rs. 2 lac each for entire remaining contract period. Ariba provided certain services. DCBL paid 19lacs however, services not satisfactory further paments stopped. Ariba filed a Summary Suit for balance fixed fee including variable performance fee amounting to Rs. 67 lacs with interest. DCBL has contested the same in arbitration and the matter has been decided against the company.

g) Certain contract workmen have filed a suit against the contractor and the Company

claiming an amount of Rs. 50 lakhs towards the injuries caused during the period they were engaged in the construction site. The claim is presently pending before the District Court at Tiruchirapalli.

III. HARI MACHINES LIMITED As per the information provided by the company there is a diputed demand of Central & Sales Tax to the extent of Rs. 35.22 Lakhs and other disputed liabilities to the extent of Rs 10.85 Lakhs towards ESIC and SECL. Dalmia Agencies Private Limited: As per the information provided by the company there is a disputed demand of interest on Central Excise to the extent of Rs. 7.03 Lakhs and there is one Income Tax Reference is pending in High Court involving a sum of Rs. 1.71 Lakhs for the assessment years 1974-75 & 1982-83. Further an appeal has been filed by the Department against the Company against cancellation of penalty of Rs.12.63 lakhs for the Assessment year 2001-02 U/s 271 (1) (c) of the Income Tax Act.


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GOVERNMENT APPROVALS

The Company has all the necessary permissions and approvals from the Government and various Government agencies for the existing activities. As per the Scheme of Arrangement the Demerged Undertaking of the transferor Company with all its approvals, permissions, benefits, rights, registrations, consents etc. is being transferred to the transferee Company which would be carried on by the transferee Company on a going concern basis. No further approvals from any Government authority/ Reserve Bank of India (RBI) are required by the Company to undertake the existing activities, save and except those approvals, which may be required to be taken in the normal course of business from time to time. The Central Government/ RBI accept no responsibility for the financial soundness or correctness of the statements made in this Information Memorandum. The major approvals/ permissions/ consents/ NOCs from Government and other agencies for conducting its present manufacturing activities at its plants are as under:


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REGULATORY AND STATUTORY DISCLOSURES Authority for the Scheme The Hon’ble Gauhati High Court on October 15, 2007 and Hon’ble High Court of Orissa, Cuttack on November 27, 2007 and approved the Scheme. Prohibition by SEBI The Company, its directors, its promoters, other companies promoted by the promoters and companies with which the Company’s directors are associated as directors have not been prohibited from accessing the capital markets under any order or direction passed by SEBI. Caution The Company accepts no responsibility for statements made otherwise than in the Information Memorandum or in the advertisements to be published in terms of Clause 8.3.5.4 of SEBI (DIP) Guidelines, 2000 or any other material issued by or at the instance of the Company and anyone placing reliance on any other source of information would be doing so at his or her own risk. All information shall be made available by the Company to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner. Disclaimer Clause of the BSE As required, a copy of this Information Memorandum has been submitted to BSE. The BSE has vide its letter dated July 5, 2007 conveyed its ‘No Objection’ to the Scheme under Clause 24 (f) of the Listing Agreement. The BSE does not in any manner: • Warrant, certify or endorse the correctness or completeness of any of the contents

of this Information Memorandum; or

• Warrant that this Company’s securities will be listed or will continue to be listed on the BSE; or

• Take any responsibility for the financial or other soundness of this Company, its

promoters, its management or any scheme or project of this Company; And it should not for any reason be deemed or construed to mean that this Information Memorandum has been cleared or approved by the BSE. Every person who desires to apply for or otherwise acquire any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the BSE whatsoever by reason of any loss which may be suffered by such person consequent


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to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever. Disclaimer Clause of the NSE As required, a copy of this Information Memorandum has been submitted to NSE. NSE has given vide its letter dated July 2, 2007 conveyed its ‘No Objection’ to the Scheme under Clause 24(f) of the Listing Agreement, and granted permission to the Company to use the NSE’s name in this Information Memorandum as one of the stock exchanges on which this Company’s securities are proposed to be listed. It is to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed to mean that this Information Memorandum has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum; nor does it warrant that this Company’s securities will be listed or will continue to be listed on the NSE; nor does it take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company. Every person who desires to apply for or otherwise acquires any securities of the Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the NSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever. Filing Copies of this Information Memorandum have been filed with BSE and NSE on 24th April, 2008 and 29th April, 2008 respectively. Listing Application will be made to BSE and NSE for permission to deal in and for an official quotation of the Equity Shares of the Company. The Company has nominated BSE as the Designated Stock Exchange for the aforesaid listing of the shares. The Company shall ensure that all steps for the completion of necessary formalities for listing and commencement of trading at all the Stock Exchanges mentioned above within such period as approved by SEBI. Demat Credit The Company has executed Agreements with NSDL and CDSL for admitting its securities in demat form. The ISIN allotted to the Company’s Equity Shares is INE196J01019. Shares have been allotted to those shareholders who have provided necessary details to the Company and/or who were holding their shares in OCL in demat form as well as physical shares as on the Record Date. Shares had been credited to the Demat accounts of


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Shareholders on April 9, 2008 and April 11, 2008 in respect of NSDL and CDSL accounts respectively. The Company had dispatched share certificates to those shareholders who held shares in OCL in physical form, as on the Record Date. Expert Opinions Save as stated elsewhere in this Information Memorandum, we have not obtained any expert opinions. Previous rights and public issues if any The Company has not made any previous public or rights issue since incorporation. Commission and brokerage on previous issues Since the Company has not issued shares to the public in the past, no sum has been paid or has been payable as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of the Equity Shares since its inception. Companies under the Same Management There are no companies under the same management within the meaning of erstwhile Section 370 (1B) of the Companies Act, other than included in this Information Memorandum. Promise vis-à-vis performance This is the first time the Company is getting listed on the Stock Exchange. Outstanding debentures or bonds and redeemable preference shares and other instruments issued by the issuer Company. The Company does not have any outstanding Debentures or bonds or redeemable preference shares. Stock Market Data for Equity shares of the Company Equity shares of the Company are not listed on any stock exchanges. The Company is seeking approval for listing of its shares through this Information Memorandum. Disposal of Investor Grievances CB Management Services Private Limited (CBMSL) is the Registrars and Transfer Agents of the Company. CBMSL has set up Investor Relation Centers (IRCs) at Kolkata to accept the documents/requests/complaints from the investors/shareholders of the Company. In addition to the above it has a network of collection centers across the country.


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With respect to the companies, which currently constitute the clientele of the RTA, the complaints received from the investors are as a first step segregated into different categories on the basis of the nature of the complaints received. This is followed by assignment of the task of redressing the complaints to the various departments, which have been created by the RTA on a similar pattern. Copies of the complaint letters and the replies or wherever the need be the draft replies are sent to the client companies for information/approval. Subsequent to the receipt of the acknowledgement/ approval from the client company, the replies are sent to the investors. The endeavor is to redress the complaints / meet the investor demands / requests, as early as possible after the date of receipt of the relevant letters as possible and in all circumstances, with in the periods stipulated under the applicable statutes, or by various statutory authorities (if any). It will be Company’s and RTA’s endeavour to redress the investor complaints within 15 days of the receipt. The Company has appointed Mr. Sambit Kumar Sarangi, Company Secretary as the Compliance Officer and he may be contacted in case of any queries/ complaints at the following address: Compliance Officer and Company Secretary Mr. Sambit Kumar Sarangi Address: Rajgangpur, Dist. Sundargarh, Orissa – 770 017 Telephone: +91 661 2451320 Fax: +91 6624 222564 Email: [email protected]


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MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF OISL

The important provisions of the Articles of Association are reproduced below: Article 3 Subject to the provisions of these Articles and of Section 80 of the Act, the Company shall have power to issue preference shares; which are; or at the option of the Company are to be liable to be redeemed on such terms and in such manner as the Company may determine. Article 4(a) provides that “The authorised share capital of the Company shall be as mentioned in Clause No. V of the Memorandum of Association. Article 4A provides that, subject to the provisions of these Articles the shares shall be under the control of the Directors who may allot or otherwise dispose of the same to such persons, on such terms and conditions, and at such time, as the Directors think fit and with power to issue any shares as fully paid up in consideration of services rendered to the Company in its formation or otherwise. Provided that where the Directors decide to increase the issued capital of the Company by the issue of further shares, the provisions of Section 81 of the Act will be complied with. The Directors with the sanction of the Company in General Meeting shall have full power to give to any person the right to call for the allotment or any shares either at par or at a premium, and for such period; and for such consideration as the Directors think fit. Article 5 provides that, Subject to the provisions of the Act it shall be lawful for the company to issue at a discount shares of a class already issued. Article 6 provides that “The Company may, subject to compliance with the provisions of Section 76 of the Act, exercise the powers of paying commission on the issue of shares and debentures. The commission may be paid or satisfied in cash or in shares, debentures or debentures stock of the Company. Article7 provides that “The Company may pay a reasonable sum for brokerage.” Article 16 provides that “If by the terms of issue of any share or otherwise, the whole or part of the amount or issue price thereof is made payable at any fixed time or by instalments at fixed time, every such amount or issue-price or instalment shall be payable as if it were a call duly made by the Directors and of which due notice had been given, and all the provisions, herein contained in respect of calls shall apply to such amount, or issue-price or instalment accordingly.” Article 12 (b) provides that, the joint-holders of a share shall be liable severally as well as jointly in respect of all payments, which ought to be made in respect of such share. Article 12 (a) provides that, The Company shall not be bound to register more than four persons as the joint-holders of any share.


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FURTHER ISSUE OF SHARES Article 4(b) provides that, 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 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.

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) thereof 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.

c) After expiry of the time specified in the aforesaid notice or in 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 may think, in their sole discretion, fit.

Article 50 provides that, whenever the capital by reason of the issue of preference shares or otherwise) is divided into different classes of shares, all or any of the rights and privileges attached to each class may be varied in the manner provided in Section 106 of the Act and all the provisions hereinafter contained as to General Meetings shall, mutadis mutandis, apply as regard class meetings. Provided that the rights conferred upon the holders of the shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to be varied under this Article by the creation or issue of further shares and such new shares may be issued with such preferential rights as may be decided at the time of issue thereof. Article 53 provides that, any debentures, debentures-stock, bonds and other securities may be issued at a discount, premium or otherwise and with any special privileges as to redemption, surrender, drawings, allotment of shares, or conversion, appointment of Directors and otherwise. Debentures, debenture-stock, bonds and other securities may be made assignable free from any equity between the Company and the person to whom the


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same may be issued. Provided that debentures, debenture-stock or bonds, with the right of allotment of or conversion into shares shall not be issued except with the sanction of the company in general meeting. ALTERATION OF SHARE CAPITAL Article 47 provides that “The Company may by ordinary resolution from time to time alter the conditions of the Memorandum of Association as follows:- (a) Increase the Share Capital by such amount to be divided into shares of such amount

as may be specified in the resolution; (b) Consolidate and divide all or any of its share capital into shares of larger amount

than its existing shares; (c) Subdivide its existing shares or any of them into shares of smaller amount than is

fixed by the Memorandum, so however, that in the subdivision 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; and

(d) Cancel any shares which, at the date of the passing of the resolution, 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 share so cancelled.

SHARE CERTIFICATES Article 9 provides that, the certificates of title to shares shall be issued under the Seal of the Company. Article 10 provides that, every member shall be entitled free of charge to one or more certificates for all the shares of each class registered in his name in marketable lots, or if the Board so approves to several certificates each for one or more of such shares, but in respect of each additional certificate, the Company, if the Board so determines; shall be entitled to charge a fee of not exceeding Re.1. Article 11 provides that, if any certificate be worn out or defaced, then, upon production thereof to the Company, the Board may order the same to be cancelled, and may issue a new certificate lieu one thereof, and if any certificate be lost or destroyed, then, upon proof thereof to the satisfaction of the Board and on such indemnity as the Board deems adequate being given, a new certificate in lieu thereof may be given. For every such new certificate and for every new certificate issued on the consideration or sub-division of certificates; there be paid to the Company, if the Board so determines, a sum not exceeding Re.1. In case of destruction or loss the member to whom such new certificate is given shall also bear and pay to the Company all legal costs and other expenses of the Company incidental to the investigation by the Company of the evidence of such destruction or loss and to the preparation of such indemnity.


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CALLS Article 13 provides that “Subject to the provisions of the Act the Directors may from time to time, subject to the terms on which any shares may have been issued, make such calls as they think fit upon the members in respect of all moneys unpaid on the shares held by them respectively, and not by the conditions of allotment thereof made payable at fixed times, and each member shall pay the amount of every call so made on him to the persons and at the time and places appointed by the Directors. A call may be made payable by instalments. A call may be revoked or postponed at the discretion of the Directors. FORFEITURE OF SHARES Article 20 provides that “If any member fails to pay any call or instalment made on or before the day appointed for the payment of the same, at any time thereafter during such time as the call or instalment remains unpaid, serve a notice on such member requiring him to pay the same, together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment.” Article 21 provides that “The notice shall name a day (not being less than 21 days from the date of the notice) and a place or places on and at which such call or instalment and such interest and expenses as aforesaid are to be paid. The notice shall also state that in the event of non-payment at or before the time, and at the place or places appointed, the share in respect of which such call was made or instalment is payable will be liable to be forfeited.” Article 22 provides that “If the requisition of any such notice as aforesaid be not complied with, any shares in respect of which such notice shares has been given may, at any time thereafter before payment of all calls or instalments, interest and expenses due to respect thereof, be forfeited by a resolution of the Directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture. Neither the receipt by the Company of a portion of any money which shall from time to time be due from any member of the Company in respect of his shares, either byway of principal or interest nor any indulgence granted by the Company in respect of the Payment of any such money shall preclude the Company from thereafter proceeding to enforce a forfeiture of such shares as herein provided.” Article 23 provides that “When any share shall have been so forfeited, notice of the forfeiture shall be given to the member in whose name it stood immediately prior to the forfeiture and an entry of the forfeiture with the date thereof, shall forthwith be made in the Register but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or to make such entry as aforesaid.” Article 24 provides that “Any share so forfeited shall be deemed to be the property of the Company and the Directors may sell, re-allot or otherwise dispose of the same in such manner as they think fit. “


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Article 25 provides that “The Directors may at any time before any shares so forfeited shall have been sold, re-allotted or otherwise disposed or, annul the forfeiture thereof upon such conditions as they think fit.” Article 27 provides that “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 to the shares except only such of those rights as by these Articles are expressly saved. ” Article 28 provides that “A duly verified declaration in writing that the declarant is a Director of the Company and that certain shares in the Company have been duly forfeited on a date stated in the declaration shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the shares and such declaration and the receipt of the Company for the consideration, if any, given for the shares on the sale or disposition thereof shall constitute a good title to such shares. “ COMPANY'S LIEN ON SHARES Article 29 provides that “The Company shall have a first and paramount lien upon all the shares (not fully paid up) registered in the name of each member (whether solely or jointly with others), and upon the proceeds of sale thereof for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares, and no equitable interest in any share shall be created except upon the footing and condition that Article 8 hereof is to have full effect and the said lien shall extend to all dividends from time to time declared in respect of such shares. Unless otherwise agreed, the registration of a transfer of shares shall operate as a waiver of the Company's lien, if any, on such shares.” Article 30 provides that “For the purpose of enforcing such lien, the Directors may sell the shares subject thereto in such manner as they think fit, but no sale shall be made until such period as aforesaid shall have elapsed and until notice in writing of the intention to sell shall have been served on such member, his executors or administrators, or his committee, curator Application bonis or other person recognised by the Company as entitled to represent such member and default shall have been made by him or them in the payment of the sum payable as aforesaid for seven days after such notice. The net proceeds of any such sale shall be applied in or towards satisfaction of such part of the amount in respect of which the lien exists as is presently payable by such member, and the residue (if any) paid to such member, his executors, administrators, or other representatives or persons so recognised as aforesaid.” Article 31 provides that “Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers by these presents given, the Directors 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, nor to the application of the purchase money and after his name has been entered in the Register in respect of such shares his title to such shares shall not be affected by any irregularity or invalidity in the proceedings in


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reference to such forfeiture, sale or disposition, nor impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.” TRANSFER AND TRANSMISSION Article 33 provides that “Subject to the provisions of the Act, no transfer of shares shall be registered unless a proper instrument of transfer duly stamped and executed by the transferor and transferee has been delivered to the Company together with the certificate or certificates of the shares, or if no such certificate is in existence, along with the letter of allotment of shares. The instrument of transfer of any shares shall be signed both by the transferor and the transferee and shall contain the name, and other particulars both of the transferor and the transferee, and the transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the Register in respect thereof. Article 34 provides that “Application for the registration of the transfer of a share may be made either by the transferor or the transferee provided that, where such application is made by the transferor, no registration shall in the case of partly paid shares be effected unless the Company gives notice of the application to the transferee in the manner prescribed by the act, and, subject to the provisions of Article 8 and 37(a) hereof, the Company may, unless objection is made by the transferees within two weeks from the date of receipt of the notice, enter in the Register the name of the transferee in the same manner and subject to the conditions as if the application for registration was made by the transferee.” Article 35 provides that “Before registering any transfer tendered for registration the Company may, if it so thinks fit, give notice by letter posted in the ordinary course to the registered holder that such transfer deed has been lodged and that, unless objection is taken, the transfer will be registered if such registered holder fails to lodge an objection in writing at the office of the Company within ten days from the posting of such notice to him, he shall be deemed to have admitted the validity of the said transfer. Where no notice is received by the registered holder, the Company shall be deemed to have decided not to give notice and in any event the non-receipt by the registered holder of any notice shall not entitle him to make any claim of any kind against the Company in respect of such non-receipt.” Article 36 provides that “Neither the Company nor its Directors shall incur any liability for registering or acting upon a transfer of shares wrongful apparently made by sufficient parties, although the same may, by reason of any fraud or other cause not known to the Company or its Directors be legally inoperative or insufficient to pass the property in the shares proposed or professed to be transferred, and although the transfer may, as between the transferor and the transferee, be liable to be set aside, and notwithstanding that the Company may have notice that such instrument of transfer was signed or executed and delivered by the transferor in blank as to the name of the transferee or the particulars of the shares transferred, or otherwise in defective manner. And in every such case the person registered as transferee, his executors, administrators and assigns alone shall be entitled to be recognised as the holder of such share and the previous holder


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shall so far as the Company is concerned be deemed to have transferred his whole title thereto. BORROWING POWERS Article 51 provides that “The Board may from time to time at its discretion, subject to the provisions of the Act, raise or borrow from the Directors or from elsewhere and secure payment of any sum or sums of money for the purpose of the Company. “ Article 51 provides that “The Board may raise or secure the re-payment of such sum or sums in such manner and upon such terms and conditions in all respects as it thinks fit and in particular by the issue of bonds, notes, convertible redeemable or otherwise, perpetual or redeemable debentures or debenture-stock or any mortgage or other security on the undertaking of the whole or any part of the property of the Company (both present and future) including its uncalled capital for the time being. MEETING OF MEMBERS Article 56 provides that “The Board may, whenever it thinks fit, call an extra-ordinary general meeting provided however if at any time there are not in India Directors capable of acting who are sufficient in number to form a quorum, any Director may call an extra-ordinary general meeting in the same manner, as nearly as possible, as that in which such a meeting may be called by the Board. Article 57 provides that “The quorum for a General Meeting shall be five members present in person. Article 58 provides that “At every General Meeting, the Chair shall be taken by the Chairman of the Board of Directors. If at any meeting the Chairman of the Board of Directors be not present within fifteen minutes after the time appointed for holding the meeting or, though present, be unwilling to act as Chairman, the members present shall choose one of the Directors present to be Chairman, or if no Director shall be present and willing to take the Chair, then the members present shall choose one of their member, being a member entitled to vote, to be Chairman. DIRECTORS Article 73 provides that “Until otherwise determined by the Company in General Meeting, the number of Directors shall neither be less than three nor more than twelve.” Article 75 provides that “A Director need not hold any shares in the Capital of the Company to qualify him to act as a Director of the Company.” Article 76 provides that “Each Director other than a working Director shall be entitled to be paid out of the funds of the Company by way of remuneration for his services such sum as may be fixed by the Directors for every meeting of the Board of Directors or


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Committee thereof attended by him. Subject to the provision of the Act the Directors shall be paid further remuneration by way of commission at the rate of 3% (or 1% if the Company has a managing or whole time director or manager) of the net profits of the Company calculated in accordance with the provisions of the Companies Act and such remuneration shall be divided amongst Directors in such proportion and manner as the Board may, from time to time, determine and in default of such determination shall be divided amongst the Directors equally. The Directors may allow and pay to any Director, who for the time being is resident out of place at which any meeting of the Directors may be held and who shall come to that place for the purpose of attending such meeting, such sum as the Directors may consider fair and reasonable for his expenses in connection with his attending at the meeting in addition to his remuneration as above specified. If any Director being willing shall be called upon to perform extra services or to make any special exertions for any of the purposes of the Company the Directors subject to approval of shareholders in a General Meeting shall be entitled to remunerate such Director either by a fixed sum or percentage of profits or in any other manner as may be determined by the Directors in addition to the remuneration above provided.” Article 79 provides that “The Company in General Meeting, may, subject to the provisions of these Articles and the Act, at any time elect any person to be a Director and may from time to time increase or reduce the number of Directors and may also determine in what rotation such increased or reduced number is to go out of office.” Article 80 provides that “The Directors shall have power at any time and from time to time, to appoint any person other than a person who has been removed from the office of a Director of the Company to be a Director of the Company as an addition to the Board but so that the total number of Directors shall not at any time exceed the maximum number fixed. Any Director so appointed shall hold office only until the conclusion of the next following Annual General Meeting of the Company when he shall be eligible for re-appointment. “ Article 82 provides that “Whenever the Directors enter into a contract with any person or persons for borrowing any money or for providing any guarantee or security or for technical collaboration or assistance or enter into any other arrangement, the Directors shall have, subject to the provisions of Section 255 of the Act, the power to agree that such person or persons shall have the right to appoint or nominate by a notice in writing addressed to the Company one or more Directors on the Board for such period and upon such conditions as may be mentioned in the Agreement and that such Director or Directors may not be liable to retire by rotation nor be require to hold any qualification shares. The Directors may also agree that any such Director or Directors may be removed, from time to time, by the person or persons aforesaid who may appoint another or other in his or their place and also fill in any vacancy, which may occur as a result of any such Director or Directors ceasing to hold that office for any reason whatsoever. The Directors appointed or nominated under this Article, shall be entitled to exercise and enjoy all or any of the rights and privileges exercised and enjoyed by the Directors of the Company including the payment of remuneration and travelling expenses to such Director or Directors as may be agreed by the Company with such person or persons aforesaid.


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Article 83 provides that “The Board may appoint any person to act as an alternate director for a director during the latter's absence for a period of not less than three months from the State in which meetings of the Board are ordinarily held and such appointment shall have effect and such appointee, whilst he holds office as an alternate director, shall be entitled to notice of meeting of the Board and to attend and vote there as accordingly; but he shall ipso-facto vacate office if any when the absent Director returns to the State in which meetings of the Board are ordinarily held or the absent Director vacate office as a Director.” Article 84 provides that “At the Annual General Meeting of the Company in every year, one third of the Directors for the time being liable to retire by rotation and if their number is not three or a multiple of three then the number nearest thereto shall retire from office. The Directors to retire at such Annual General Meeting shall be the Directors (other than Managing Director and or any other Director or Directors who by virtue of the provisions of any agreement referred to in Article 82 are not liable to retire) who shall have been longest in office since their last election. As between Directors who became Directors on the same day those to retire shall (in default of agreement between them) be determined by lot. For the purpose of this Article a Director appointed to fill a vacancy under the provisions of Article 81, shall be deemed to have been in office since the date on which the Director, in whose place he was appointed, was last elected as a Director. POWERS OF THE BOARD Article 97 provides that “The business of the Company shall be managed by the Directors who in addition to the powers and authorities by these presents or otherwise expressly conferred upon them may exercise all such powers and do all such acts and things as may be exercised or done by the Company and are not hereby or by law expressly directed or required to be exercised or done by the Company in General Meeting but subject nevertheless to the provisions of any law and of these presents and to any regulations, not being inconsistent with these presents, from time to time, made by the Company in General Meeting: Provided that no regulation so made shall invalidate any prior act of the Directors which would have been valid if such regulation had not been made.” MANAGING / WHOLE TIME DIRECTORS Article 100 provides that “The Board of Directors may appoint Managing or whole-time Director/Directors or Manager to manage the affairs of the Company and/or a Secretary or other officers for such period and on such remuneration and on such terms and conditions with the sanction, when so required by the Act, of the shareholders in a General Meeting and/or approved by the Central Government. Managing or whole time Directors, if any, shall not be liable to retire by rotations.” RESERVES Article 55 provides that “The Board may, before recommending any dividend, set aside out of the profits of the Company such sums as it thinks proper as a reserve or reserves which shall, at the discretion of the Board, be applicable for any purpose to which the


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profits of the Company may be properly applied and pending such application may at the like discretion, either employed in the business of the Company or be invested in such investments (other than shares of the Company) as the Board may from time to time think fit. The Board may also carry forward any profits, which it may think prudent not to divide without setting them aside as a reserve.” CAPITALISATION OF PROFITS / RESERVES Article 115 provides that “Any General Meeting may, upon the recommendation of the Directors, resolve that any moneys, investments or other assets forming part of the undivided profits of the Company standing to the credit of any reserve fund or special account or in the hands of the Company and available for dividend and including any profits arising from the sale of the assets of the Company or any part thereof or by reason of any other accretion to capital assets or representing premium received on the issue of shares and stand to the credit of the share premium account, be capitalised and distributed (in the manner and to the extent permissible under the provisions of the Act) amongst such of the shareholders as would be entitled to receive the same if distributed by the way of dividend and in the same proportions on the footing that they become entitled thereto as capital and that all or any part of such capitalised fund be applied on behalf of such shareholders in paying up in full either at par or at such premium as the resolution may provide any un-issued shares, debentures or debenture-stock (in the manner and to the extent aforesaid) of the Company which shall be distributed accordingly or in or towards payment of the uncalled liability on any issued shares, or debentures or debenture-stock, and that such distribution or payment shall be accepted by such shareholder in full satisfaction of their interest in the said capitalised sum.” DIVIDENDS Article 105 provides that “The net profits of the Company (after making provision if any, for sinking, depreciation and reserve funds and for carrying forward balances for the next year) shall subject to the rights of holders of preference shares and to any resolution of the Company attaching any special privileges to other shares and to the provisions of these Articles, be divisible among the Equity shareholders subject as provided in Article 19 in proportion to the amounts paid upon the Equity shares held by them respectively.” Article 106 provides that “When capital is paid up in advance of calls upon the footing that the same shall carry interest, such capital shall not, whilst carrying interest, confer a right to participate in profits. Article 107 provides that “The Company in General Meeting may declare a dividend to be paid to the members according to their rights and interest in the profits and may fix the time for payment subject to the provision of Section 207 of the Act. Article 108 provides that “No larger dividend shall be declared than is recommended by the Directors, but the Company in General Meeting may declare a smaller dividend.


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Article 109 provides that “No dividend shall be payable except out of the profits, of the Company of the year or any other undistributed profits, and no dividend shall carry interest as against the Company. Article 111 provides that “The Directors may, from time to time, pay to the members such interim dividends as in their judgement the position of the Company justifies. Article 115 provides that “Any General Meeting may, upon the recommendation of the Directors, resolve that any moneys, investments or other assets forming part of the undivided profits of the Company standing to the credit of any reserve fund or special account or in the hands of the Company and available for dividend and including any profits arising from the sale of the assets of the Company or any part thereof or by reason of any other accretion to capital assets or representing premium received on the issue of shares and stand to the credit of the share premium account, be capitalised and distributed (in the manner and to the extent permissible under the provisions of the Act) amongst such of the shareholders as would be entitled to receive the same if distributed by the way of dividend and in the same proportions on the footing that they become entitled thereto as capital and that all or any part of such capitalised fund be applied on behalf of such shareholders in paying up in full either at par or at such premium as the resolution may provide any un-issued shares, debentures or debenture-stock (in the manner and to the extent aforesaid) of the Company which shall be distributed accordingly or in or towards payment of the uncalled liability on any issued shares, or debentures or debenture-stock, and that such distribution or payment shall be accepted by such shareholder in full satisfaction of their interest in the said capitalised sum. Article 119A provides that “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 30 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 30 days, open a special account in that behalf in any scheduled bank called "Unpaid Dividend of 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 seven years from the date of such transfer, shall be transferred by the Company to the Investor Education and protection Fund established the Central Government.” WINDING UP Article 121 provides that “Upon the winding up of the Company, the holders of Preference Shares, if any, shall be entitled to be paid all arrears of Preferential dividend to the commencement of winding up and also to be repaid the amount of capital paid up or credited as paid up on such Preference shares held by them respectively, in priority to the Equity Shares, but shall not be entitled to any other further rights to participate in profits or assets; subject as aforesaid and to the rights of any other holders of shares entitled to


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receive preferential payment over the Equity Share, in the event of the winding up of the Company, the holders of the Equity Shares shall be entitled to be repaid the amount of capital paid up or credited as paid up on such shares and all surplus assets thereafter shall belong to the holders of the Equity Shares in proportion to the amount paid up or credited as paid up on such Equity Shares respectively, at the commencement of the winding up. If the assets shall be insufficient to repay the whole of the paid up Equity Capital such assets shall be distributed so that as nearly as may be the losses shall be borne by the members holding Equity shares in Proportion to the capital paid up or which ought to have been paid up on the Equity Shares held by them respectively at the commencement of the winding up, other than the amounts paid by them in advance of calls. Article 122 provides that “If the Company shall be wound up, whether voluntarily or otherwise, the Liquidators may, with the sanction of a special Resolution of the Company and any other sanction required by the Act, divide among the contributories in specie or kind, any part of the assets of the Company and may, with the like sanction, vest any part of the assets of the Company in trustees upon such trusts for the benefit of the contributories, or any of them, as the Liquidators, with the like sanction shall think fit. INDEMNITY Article 123 provides that “Subject to the provisions of Section 201 of the Act, every Director, Manager, Secretary and other officer or employees of the Company shall be indemnified against and it shall be the duty of the Directors to pay out the funds of the Company all costs, losses and expenses (including travelling expenses) which any such Directors, Manager or Secretary or other officer or employee may incur or become liable to by reason of any contract entered into or any way in the discharge of his or their duties and in particular, and so as not to limit the generality of the foregoing provisions, against all liabilities incurred by him or them as such Director, Manager, Secretary, Officer or employee in defending any proceedings whether civil or criminal, in which judgement is given in his or their favour or he or they is are acquitted, or in connection with any application under Section 633 of the Act in which relief is granted by the Court and the amount for which such indemnity is provided shall immediately attach as a lien on the property of the Company and have priority as between the members over all other claims.”


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OTHER INFORMATION

Material Contracts and Documents for Inspection The following contracts (not being contracts entered into in the ordinary course of business carried on by our Company or entered into more than two years before the date of this Information Memorandum) which are or may be deemed material have been entered or to be entered into by our Company. The material documents and also the documents for inspection referred to hereunder, may be inspected at the registered office of our Company from 10.00 am to 4.00 pm on working days from the date of this Information Memorandum until listing. Documents for Inspection: 1. Memorandum and Articles of Association, as amended till date;

2. Certification of incorporation dated February 20, 2006; 3. Report of the Statutory Auditors of the Company on statement of possible tax

benefits dated July 1, 2008 and mentioned in this Information Memorandum; 4. Report of the Statutory Auditors of the Company on restated accounts dated

July 1, 2008 and mentioned in this Information Memorandum; 5. Sanctioned Scheme of Arrangement and Order of the Hon’ble Gauhati High Court

dated October 15, 2007 and Hon’ble High Court of Orissa dated November 27, 2007.

6. Filing proof of Form 21 along with the Scheme with ROC on December 20, 2007;

7. Letters of approval from BSE and NSE dated 5 July, 2007 and 2 July, 2007

respectively, conveying their ‘No Objection’ to the Scheme under Clause 24(f) of the Listing Agreement;

8. Tripartite Agreement between the Company, the RTA and NSDL dated March 4,

2008.

9. Tripartite Agreement between the Company, the RTA and CDSL dated April 1, 2008.

10. Copy of ISIN obtained from NSDL and CDSL for the equity shares of the

Company. 11. Copy of in-principle approval letters from BSE numbering

DCS/AMAL/AKS/IP/215/2008-09 dated May 22, 2008 and from NSE numbering NSE/LIST/74941 dated June 5, 2008 for listing of equity shares of OISL.


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12. SEBI’s letter no. CFD/DIL/19(2)(b)/PB/EHM/131459/2008 dated July 10, 2008 granting relaxation from the strict enforcement of the requirement of Rule 19(2)(b) of the Securities Contract Regulation (Rules), 1957 (SCRR) for the purpose of listing of equity shares of OISL;


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DECLARATION

All statements made in this Information Memorandum are true and correct. SIGNED BY ALL THE DIRECTORS FOR OCL IRON AND STEEL LIMITED Sd/- Sd/- Sd/- (Dr. Sheoraj Jain) (Raghu Hari Dalmia) (K M Poddar) Sd/- Sd/- Sd/- (Surendra Kumar Dalmia) (Badalchand Parakh) (Sabyasachi Mishra) Sd/- (Praveen Chand) Date: July 19, 2008 Place: New Delhi