exide industries limited - Sebi

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Dec 4, 2007 - Indian Companies Act, 1913 with registration number 14919 of 1947. The name of the Company was changed to. Chloride India Limited w.e.f. 2nd August, 1972, then to Chloride Industries ...... Technology/Technical Support.

Letter of Offer Dated: December 4, 2007 For Equity Shareholders of the Company only

EXIDE INDUSTRIES LIMITED The Company was incorporated on 31st January, 1947 as Associated Battery Makers (Eastern) Limited under the Indian Companies Act, 1913 with registration number 14919 of 1947. The name of the Company was changed to Chloride India Limited w.e.f. 2nd August, 1972, then to Chloride Industries Limited w.e.f 12th October, 1988, and to its existing name w.e.f. 25th August, 1995. The Company Identification Number is U31402WB1970PLC014919. For further details, please refer to Chapter on History & Corporate Matters on page no.72. Registered and Head Office Exide House, 59E Chowringhee Road, Kolkata – 700 020 Tel. No.: (033) 2283 2636 Fax No. : (033) 2283 2637 email: [email protected]; website : www.exideindustries.com Contact Person

Mr. Barun Das, Divisional Head – Legal & Company Secretary and Compliance Officer For private circulation to the Equity Shareholders of the Company only

ISSUE OF 5,00,00,000 FULLY PAID EQUITY SHARES WITH A FACE VALUE OF Re. 1/- EACH AT A PREMIUM OF Rs 29/ - PER EQUITY SHARE FOR AN AMOUNT AGGREGATING Rs.15000 LAKHS ON RIGHTS BASIS TO THE EXISTING SHAREHOLDERS OF THE COMPANY IN THE RATIO OF ONE FULLY PAID EQUITY SHARE FOR EVERY FIFTEEN FULLY PAID EQUITY SHARES HELD BY THE EXISTING SHAREHOLDERS ON THE RECORD DATE, I.E., ON 17th DECEMBER, 2007 (“ISSUE”) THE ISSUE PRICE IS THIRTY TIMES THE FACE VALUE OF THE EQUITY SHARES OF THE COMPANY.

GENERAL RISKS Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Issuer and the Issue including the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Investors are advised to refer to the section titled “Risk Factors” beginning on page vii of the Letter of Offer before making an investment in this Issue.

ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that the Letter of Offer contains all information with regard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in the Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes the Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING The existing Equity Shares of the Company are listed on the Calcutta Stock Exchange Association Limited (CSE), the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE). The Company has received in-principle approvals for listing the securities arising from this Issue from the CSE by Letter No. CSEA/LD/577/2007 dated 16th October 2007, the BSE by Letter No.DCS/PREF/JA/IP-RT/1866/07-08 dated 16th October 2007 and the NSE by Letter No. NSE/LIST/58443-C dated 17th October 2007. For the purpose of this Issue, the Designated Stock Exchange is Bombay Stock Exchange Limited.

LEAD MANAGER TO THE ISSUE SBI Capital Markets Limited 202 Maker Tower, “E”, Cuffe Parade Mumbai 400 005 Tel :+ 91 22 2218 9166 Fax :+ 91 22 2218 8332 E mail : [email protected] Website: www.sbicaps.com

REGISTRAR TO THE ISSUE C B Management Services (P) Ltd P-22 Bondel Road, Kolkata – 700 019 Tel : + 91 33 2280 6692 / 93 / 94 Fax : + 91 33 2287 0263 Email : [email protected]

ISSUE PROGRAMME ISSUE OPENS ON

LAST DATE FOR REQUEST FOR SPLIT APPLICATION FORMS

ISSUE CLOSES ON

Friday, December 28, 2007

Saturday, January 12, 2008

Monday, January 28, 2008

TABLE OF CONTENTS

PAGE NO

DEFINITIONS AND ABBREVIATIONS

ii

PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA

v

FORWARD LOOKING STATEMENTS

vi

RISK FACTORS

vii

SUMMARY OF THE INDUSTRY & BUSINESS OF THE ISSUER COMPANY

1

THE ISSUE

5

BASIC TERMS OF THE ISSUE

6

SUMMARY OF FINANCIAL STATEMENTS

8

GENERAL INFORMATION

10

CAPITAL STRUCTURE

17

OBJECTS OF THE ISSUE

25

BASIS FOR ISSUE PRICE

29

STATEMENT OF TAX BENEFITS

31

INDUSTRY OVERVIEW

37

BUSINESS OVERVIEW

41

REGULATIONS AND POLICIES

66

HISTORY AND OTHER CORPORATE MATTERS

72

SUBSIDIARIES & OTHER INFORMATION

77

THE MANAGEMENT

85

ORGANISATION CHART

107

KEY MANAGEMENT PERSONNEL

108

THE PROMOTER

110

DIVIDEND POLICY

113

FINANCIAL STATEMENTS

114

MANAGEMENT DISCUSSION AND ANALYSIS

186

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS

196

GOVERNMENT APPROVALS

209

OTHER REGULATORY AND STATUTORY DISCLOSURES

236

ISSUE RELATED INFORMATION

247

MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF THE COMPANY

268

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION & DECLARATION

285

DEFINITIONS AND ABBREVIATIONS TERM ‘The Company’ ‘’ and ‘The Issuer’ ‘Subsidiaries’, ‘the Company’s subsidiaries’ Promoter

DESCRIPTION Unless the context otherwise requires, refers to Exide Industries Limited, a public limited company incorporated under the Companies Act, 1956 Unless the context otherwise requires, refers to Chloride International Limited, Caldyne Automatics Limited, Chloride Batteries S E Asia Pte Limited, Espex Batteries Limited, Associated Battery Manufacturers (Ceylon) Limited and Tandon Metals Pvt. Ltd. Chloride Eastern Limited, U.K.

General / Conventional Terms TERM AGM Articles / Articles of Association / AoA Auditors Board of Directors / Board BSE CAGR CDSL Companies Act or the Act CSE Director(s) DP Designated Stock Exchange EPS Equity Share(s) of Share(s) Equity Shareholder(s) FDI FEMA FII(s) Financial Year / Fiscal / FY GoI Indian GAAP IT Act IVL Lead Manager Letter of Offer / Offer Document Memorandum or MoA or Memorandum of Association NAV

DESCRIPTION Annual General Meeting The Articles of Association of the Company The Statutory Auditors of the Company, being S R Batliboi & Co., Chartered Accountants The Board of Directors of the Company or a Committee thereof. Bombay Stock Exchange Limited Compounded Annual Growth Rate Central Depository Services (India) Limited The Companies Act, 1956, and any amendments thereto The Calcutta Stock Exchange Association Limited Director(s) of the Company, unless otherwise specified Depository Participant Bombay Stock Exchange Limited Earning Per Share Equity shares of face value of Re 1/- each of the Company unless otherwise specified in the context thereof. Means a holder of Equity Shares as on the Record Date. Foreign Direct Investment Foreign Exchange Management Act, 1999 and the amendments from time to time and the regulations framed thereunder for the time being in force Foreign Institutional Investors registered with SEBI under applicable laws Financial Year ending March 31 Government of India Generally Accepted Accounting Principles in India The Income Tax Act, 1961 and any amendments thereto ING Vysya Life Insurance Company Limited SBI Capital Markets Limited The Letter of Offer dated December 4, 2007 Memorandum of Association of the Company

Net Asset Value

ii

NRI/ Non –Resident Indian Non-Resident NSE NSDL OCB PoA RBI RoNW Renouncees RoC Rights Entitlement Rights Issue Re / Rs/ Rupees / INR SEBI SEBI Act, 1992 SEBI Guidelines / SEBI DIP Guidelines SGD Takeover Code Exide Industries Limited or the Company or the Issuer

A person resident outside India, as defined under FEMA and who is a citizen of India or a person of Indian origin, each such term as defined under the FEMA (Deposit) Regulations 2000, as amended. A person who is not resident in India except NRIs and FIIs. National Stock Exchange of India Limited National Securities Depository Limited Overseas Corporate Bodies Power of Attorney Reserve Bank of India Return on Net Worth The persons who have acquired Rights Entitlements from Equity Shareholders Registrar of Companies The number of securities that a shareholder is entitled to in proportion to his/her existing shareholding in the Company. The issue of Equity Shares on rights basis based on terms of this Letter of Offer Indian Rupees, the legal currency of the Republic of India Securities and Exchange Board of India Securities and Exchange Board of India Act, 1992 and amendments thereto The SEBI (Disclosure and Investor Protection) Guidelines, 2000 as amended, including instructions and clarifications issued by SEBI from time to time. Singapore Dollar The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as amended to date. Exide Industries Limited, a company incorporated on 31st January, 1947 under the Indian Companies Act, 1913.

Issue related Terms and Abbreviations TERM Applicant Bankers to the Issue Allottee CAF Letter of Offer Issue / Rights Issue

Issue Opening Date Issue Closing Date Issue Price Record Date Registrar to the Issue

DESCRIPTION Any Equity Shareholder and/or Renouncee who makes an application pursuant to the terms of the Letter of Offer and the CAF State Bank of India & HDFC Bank Limited The successful applicant to whom the Equity Shares are being / or have been issued Composite Application Form Letter of Offer as filed with SEBI for its comments Issue of 5,00,00,000 fully Paid Equity Shares with a face value of Re 1/- each at a premium of Rs 29/- per Equity Share for an amount aggregating to Rs 15,000 lakhs on Rights basis to the existing shareholders of the Company in the ratio of one fully paid Equity Share for every fifteen Equity Shares held by the existing shareholders on the record date, i.e., on 17th December, 2007. December 28, 2007 January 28, 2007 Rs 30/- per equity share of face value of Re 1/-. 17th December 2007 C B Management Services (P) Ltd

iii

Company/ Industry related terms and abbreviations TERM Ah CII CMWSSB HRD MPCB OEM PPM SMF TQM VRLA

DESCRIPTION Ampere hour Confederation of Indian Industries Chennai Metropolitan Water Supply & Sewage Board Human Resource Development Maharashtra Pollution Control Board Original Equipment Manufacturer Parts per million Sealed Maintenance Free Total Quality Mangement Valve Regulated Lead Acid

iv

PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA Unless stated otherwise, the financial data in this Letter of Offer is derived from the audited financial statements of the Company for the Financial years ended March 31, 2007, 2006, 2005, 2004 and 2003 and three months ended June 30, 2007 prepared in accordance with the Indian GAAP and the Companies Act. The financial data for the foreign subsidiaries in this Letter of Offer is derived from the audited financial statements of the respective subsidiaries for the Financial years ended March 31, 2007, 2006, 2005, 2004 and 2003 and three months ended June 30, 2007 prepared in accordance with the GAAP of the respective country of incorporation of subsidiaries. The annual financial statements of the Company have been restated in accordance with the applicable SEBI Guidelines as stated in the report of the Company’s statutory auditors, M/s S R Batliboi & Co., included in the Letter of Offer. The Company’s fiscal year commences on 1 April and ends on 31 March of the year. Unless stated otherwise, reference herein to a fiscal year (eg, fiscal 2007) is to the fiscal year ended 31 March of a particular year. The fiscal year of the Company’s subsidiaries commences on 1 April and ends on 31 March of the year. Unless stated otherwise, reference to a fiscal year (eg, fiscal 2007) is to the fiscal year ended 31 March of a particular year. The degree to which the Indian GAAP financial statements (consolidated or unconsolidated) included in this Letter of Offer will provide meaningful information is entirely dependant on the readers’ level of familiarity with Indian accounting practices, Indian GAAP, the Companies Act and the SEBI Guidelines. Any reliance by persons not familiar with Indian accounting practices, Indian GAAP, the Companies Act and the SEBI Guidelines on the financial disclosures presented in this Letter of Offer should accordingly be limited. In the Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off. All references to “Re” “Rs” or “INR” refer to Rupees, the lawful currency of India. Unless stated otherwise, throughout the Letter of Offer, all figures have been expressed in Lakhs, except in the section titled “Capital Structure” on page 17 of the Letter of Offer where certain figures have been expressed in absolute numbers. Market data used in the Letter of Offer has been obtained from business publications and internal Company reports. Business publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although, the Company believes market data used in the Letter of Offer is reliable, it has not been independently verified. Similarly, internal Company reports, while believed to be reliable, have not been verified by an independent source.

v

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

General economic and business conditions in the markets in which the Company operate and in the local, regional, national and international economies; Changes in laws and regulations relating to the sectors/areas in which the Company operate; Increased competition in the sectors/areas in which the Company operate; The Company’s ability to successfully implement its growth strategy and expansion plans, and to successfully launch and implement various projects and business plans for which funds are being raised through this Issue; The Company’s ability to meet its capital expenditure requirements; Fluctuations in operating costs; The Company’s ability to attract and retain qualified personnel; Changes in technology; Changes in political and social conditions in India or in countries that the Company may enter, the monetary and interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; The performance of the financial markets in India and globally; and Any adverse outcome in the legal proceedings in which the Company is involved.

For a further discussion of factors that could cause the Company’s actual results to differ, see the sections title “Risk Factors” “Business Overview” and “Management Discussion and Analysis” beginning on pages vii, 41 and 186 of the Letter of Offer respectively. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Neither the Company nor the Lead Manager nor any of the respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirement, the Company and the Lead Manager will ensure that investors in India are informed of material developments until the time of the grant of listing and trading permission by the Stock Exchanges.

vi

RISK FACTORS An investment in Equity Shares involves a high degree of risk. Shareholders should carefully consider all the information in the Letter of Offer, including the risk factors described below, before making an investment in the Company’s Equity Shares. If any of the following risks actually occur, the Company’s business, results of operations and financial condition could suffer, the price of its Equity Shares could decline, and you may lose all or part of your investment. The financial and other implications of material impact of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below. However there are a few risk factors where the impact is not quantifiable and hence the same has not been disclosed in such risk factors. Unless otherwise stated in the relevant risk factors set forth below, the Company is not in a position to specify or quantify the financial or other implication of any risks mentioned herein. Materiality The Risk Factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality: 1. 2. 3.

Some events may not be material individually but may be found material collectively; Some events may have material impact qualitatively instead of quantitatively; Some events may not be material at present but may have material impact in future.

INTERNAL RISK FACTORS

RISKS IN RELATION TO THE COMPANY’S BUSINESS AND RESULTS OF OPERATIONS:

1. The Company and its Director(s) are parties to certain legal proceedings. There are outstanding litigations filed by and against the Company and its Director(s). The Company is defendant in legal proceedings incidental to its business and operations and hence do not represent legal proceedings against any of the Directors in their individual capacity. These legal proceedings are pending at different levels of adjudication before various courts and tribunals. In such legal proceedings, if any significant claims are determined against the Company and it is required to pay any portion of the disputed amounts, it could have an effect on the Company’s business and profitability. A summary of the legal proceedings in which the Company is involved as on 03.12.2007 is as follows:

Sr

1.

Type of Cases

Criminal Cases

Description

Number of Cases

Criminal Complaints filed against the Company

vii

By

Against

-

8

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

Not Quantifiable

(In all these cases, the Company has filed Quashing Applications/Special Leave Petitions/Writ Applications/Article 227 Applications, as the case may be) Criminal Complaints filed by the Company Disputed Claims (Appealed by the Company) Disputed Claims (Appealed by the Company) Disputed Claims (Appealed by the Company) Civil Cases filed against the Company by erstwhile dealers

68

-

Not Quantifiable

66

683.63

31

828.47

5

42.97

5

1261.07 (This amount may vary depending on the final adjudication / Judgment of the relevant forums/ Courts) 640.29 (This amount may vary depending on the final adjudication / Judgment of the relevant forums/ Courts) 32.36 (This amount may vary depending on the final adjudication / Judgment of the relevant forums/ Courts) 1224.95 (This amount may vary depending on the final adjudication / Judgment of the relevant forums/ Courts) 26.09

2.

Sales Tax

3.

Central Excise

4.

Income Tax

5.

Civil Cases

6.

Civil Cases

Civil Cases filed against the Company before the Monopolies and Restrictive Trade Practices Commission

2

7.

Civil Cases

Other Civil Cases against the Company

6

8.

Civil Cases

Civil Cases filed by the Company

54

-

9.

Consumer Forum

Consumer Forum Cases filed against the Company Consumer Forum Cases filed by the Company Labour/Employee Cases filed against the Company Labour/Employee Cases filed by the Company Case against the Company

-

95

1

-

-

12

1

-

6.85

1

Not Quantifiable

10.

11

Labour Cases

Employees Provident Fund

filed

viii

1.26 Not Quantifiable

12

Environment

Public Interest Litigation

1

Not Quantifiable

The above have been summarized as follows: Total number of Cases filed AGAINST the Company Total number of Cases filed BY the Company

:

231

Total Amount Involved : Rs. 3514.88 lakhs (This amount may vary depending on the final adjudication / Judgment of the relevant forums/ Courts)

:

125

Total Amount Involved: Rs. 1233.06 lakhs (This amount may vary depending on the final adjudication / Judgment of the relevant forums/ Courts)

A summary of the ongoing legal proceedings against Mr. T.V. Ramanathan, by virtue of his being the Managing Director of the Company is as follows: Number of Cases 2

Nature of Case

Short Description of Case

Criminal

Amount Involved Not Quantifiable

These are criminal matters which have been filed against the Company in which the Managing Director is one of the co-accused. The criminal matters consist of 1 case filed by the Maharashtra Pollution Control Board and the other filed by one Em Kay Enterprises relating to claim for refund of their security deposit with Standard Batteries Limited. For further details on the outstanding litigations of the Company and its Director(s) please refer to section titled “Outstanding Litigations and Material Developments” beginning on page 196 on this Letter of Offer.

Except as disclosed in the section titled “Outstanding Litigations and Material Developments” beginning on page 196 of this Letter of Offer, there are no other litigations pending as on the date of filing of this Letter of Offer. 2. The Company has contingent liabilities as shown in the balance sheet, as restated, as at March 31, 2007, 2006, 2005, 2004, 2003 and for the three months period as on 30 June 2007. The financial statements for March 31, 2007, 2006, 2005, 2004 and 2003 and for the three months ended 30 June 2007 state that there are no contingent liabilities not provided for except otherwise as below: (Rs in lakhs) Particulars 30.06.07 31.03.07 31.03.06 31.03.05 31.03.04 31.03.03 Bills discounted with 298 3189 696 731 644 297 scheduled banks Outstanding bank guarantees 660 581 642 132 372 436 / indemnity bonds Sales tax, Excise claims etc 167 274 311 416 1117 233 (net of sales tax declaration forms since collected) Claims against the company 25 25 25 35 137 365 not acknowledged as debts Guarantees given on behalf ---707 1325 509 of a subsidiary company / employees TOTAL 1150 4069 1674 2021 3595 1840

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In the event any of the abovementioned obligations materialize, the Company will face additional financial burden to the extent, thereby affecting the Company’s profitability. 3. Potential risk of the dislocation of some of the plants of the Company which are situated in the municipal limits of the cities One of the plants of the Company in Mumbai at Kanjurmarg is situated within the municipal limits of the city and therefore could be relocated outside the city limits on account of an order if passed by the municipal authorities for the environmental protection issues. Such relocation would not only require cost to be incurred but would also hamper the production and the revenue. The contribution of revenue of this plant is about 1.5% of the total revenue of the Company. Potential cost of relocation at this point of time is not quantifiable. 4. Risk relating to competition A few of the domestic competitors have entered into technical collaborations with the global players for both auto and industrial batteries giving them access to effective technologies and hence they may be able to wrest some part of the existing market share. Based on the latest audited accounts available of the competitors, the competitors who have entered into technical collaboration have a market share of approximately 15%.. 5. Risk relating to technology The industry in which the Company operates has experienced the development of alternative technology for manufacturing power storage batteries like lithium based batteries and sophistication in production processes. Modernisation and technology development is essential to increase the working life of the battery to reduce the dependence on Lead for manufacturing batteries. Although we strive to keep our technology, plant and machinery in line with the latest technological standards, we may be required to implement new technology or upgrade or retro fit the machineries employed by us. Further, the costs in upgrading our technology and modernizing the plant and machineries could involve substantial costs . 6. Risk on account of failure of new products launched or proposed to be launched The Company has an in-house Research and Development centre for the advancement of technology and development of new products for various applications such as automotive, motor cycle and industrial (railway, motive power, UPS, telecom, defence, etc.). In addition, R & D Centre is engaged in Projects on process technology aimed at improving product quality and consistency. During the year 2006-07, the Company has incurred an amount of Rs. 712 lakhs on its R & D activities. The amount incurred on R & D activities would not result in any benefit to the Company, in case, the new products launched after the extensive R & D do not become commercially successful or the R & D Centre fails to roll out new products to cater to the demand of the market or fails to improve the existing products. 7. Risk arising out of the unorganized market for automotive and industrial batteries The total domestic market for the automotive and industrial batteries is estimated by the Company to be Rs 70 billion as on 31 March 2007. Out of the total, the share of unorganized market is estimated to be 40%. The Company runs the risk of losing business due to substantial difference in the price of the product being sold by the unorganized sector and the price of the similar products of the Company.

x

8. Potential threat to the image of the Company due to unauthorized use of the Company’s trademark/ brand and counterfeit products There are products in the market not manufactured by the Company which are being sold under the brand of EXIDE. Though the Company owns the trade mark of EXIDE, but the unauthorized use of the Company’s trade mark/ brand could cause damage to its reputation. Also, the Company runs the risk of losing reputation on account of counterfeit products. 9. Some of the lands on which the Company’s plants / office are located are not owned by it. The lands on which the Company’s plants at (i) Haldia, West Bengal (ii) part of Shamnagar, West Bengal (iii) Taloja, Maharashtra (iv) Chinchwad, Maharashtra, (v) Ahmednagar, Maharashtra and (vi) Kanjurmarg , Maharashtra and the project office at Salt Lake, Kolkata are located, are held on lease. The office at Entally, Kolkata is also held on lease. The Company holds such leases for tenures mentioned in the Deeds pertaining to the respective properties and details of the unexpired portions thereof are mentioned in the Chapter ‘Business Overview’ under the heading ‘Properties’ and sub heading ‘Details of Leasehold Properties’ in page no. 52 of this Letter of Offer. Since the Company does not have freehold interest in the said leased properties, termination of any of the above leases may affect the operations of the Company which may ultimately affect its profitability. Moreover, for the Company’s plant at Bawal, Haryana, a Letter of Intent from the Haryana State Industrial Development Corporation and Conveyance Deed for the same are still pending execution. 10. Risk on account of heavy reliance on imports for the procurement of raw material. Lead is the most important raw material in the manufacture of storage batteries. Since the availability of Lead in India is limited, the Company procures almost 80% of Lead through imports. Restrictions, if any, on the production/ supply/ usage of Lead through change in policy/ law may directly affect the production of the Company. 11. Risk on account of potential fluctuations in future operating results on account of increase in raw material costs, transportation costs etc. The factors for potential fluctuations in future operating results are : (i) Cost of Raw Materials: Lead and Lead alloys are the major raw materials used in the manufacturing of storage batteries. A major portion of the requirements of Lead and Lead alloys consumed by the Company is imported. The cost of such materials to the Company depends upon the prices ruling in the international commodity markets at the time of imports, over which the Company do not have any control. Any increase in the price of the Lead and Lead alloys would directly affect the profitability of the Company. (ii)

Labour Union:

The Company employs a large number of workforce at its manufacturing plants located at different locations (for details please refer page 45 of the Letter of Offer). The factory workers in a number of cases are affiliated to particular Trade Union(s). Any concerted industrial action could always disrupt the production volume and consequently the sales growth of the Company.

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(iii)

Tranportation:

The Company engages a large number of heavy and light commercial trucks for movement of both raw materials to its manufacturing plants and finished products to its distribution centers and thereafter to its end customers. Any serious strikes, stoppage of work, etc by the fleet owners could disrupt the production and sales volume of the Company. 12. Dependence on distributors and customers In overall terms, 50% of the Company’s sales volume is directly to the end customers. The Company is dependent upon its distribution network to deliver its products to the end customers for the balance 50% of the sales volume. In the case of automotive batteries, sales to top ten end customers constitutes 28% and sales to top ten dealers in the distribution network constitute 6% of the total sales volume. In the case of industrial batteries, sales to top ten end customers constitutes 11% and sales to top ten dealers in the distribution network constitute 8% of the total sales volume. There could be occasions in the future that some of the intermediaries in the Company’s distribution network may switch over to competitors. Such switching over of the Company’s distributors would affect the distribution and the sales growth. 13. Investment in ING Vysya Life Insurance Company Limited The Company has acquired 50% stake in ING Vysya Life Insurance Company Limited (IVL), with a belief that long term potential of value maximization from this investment will inure to the benefit of all the shareholders of the Company. ING of Netherlands, one of the other stakeholders in this venture happens to be one of the largest units in life insurance business globally. The ability of the Company to benefit from its fifty percent stake in IVL would depend upon the performance of the insurance company to secure a market share which is reasonable in relation to other private entities in the industry. Further, the investment of the Company in IVL is under a lock-in till October 2010. As a result, the Company run the risk that the valuation of its investment may end on lower side if IVL fails to perform upto the expectations. Due to the said lock-in, the funds are blocked till October 2010. 14. Ability to renew, maintain or obtain statutory and regulatory permits and licenses as required to operate the Company’s business, since any delay or inability to obtain the same may have an adverse impact on its business Being in the manufacturing business, the Company requires several statutory and regulatory permits, licenses and approvals to operate the business. Many of these approvals are granted for fixed periods of time and need renewal from time to time. The Company is required to renew such permits, licenses and approvals. There can be no assurance that the relevant authorities will issue any of such permits or approvals in time or at all. Further, these permits, licenses and approvals are subject to several conditions, and the Company cannot assure that it shall be able to continuously meet such conditions or be able to prove compliance with such conditions to statutory authorities, and this may lead to cancellation, revocation or suspension of relevant permits/ licenses/ approvals. Failure by the Company to renew, maintain or obtain the required permits, licenses or approvals, or cancellation, suspension or revocation of any of the permits, licenses or approvals which may result in the interruption of the Company’s operations and may have a material adverse effect on the business. For details please refer to section titled Government Approvals on page no. 209.

xii

15. The Company has applied for renewal of certain licenses and approvals for its business operations which have expired. . 1.

Licence / Approvals which have expired and have been applied for renewal: 1.

GUINDY UNIT •

Consent granted under Section 21 of The Air (Prevention & Control of Pollution) Act, 1981 for the Company’s Unit situated at 21/22, Alandur Road (Old Ham Division) R.S. No.120/2, Guindy, authorizing to operate industrial plant in the Air Pollution Control area issued by Tamil Nadu Pollution Control Board bearing Renewal Consent Order No – 4470 Boards Proceeding No. TN PCB D/HUM/T-14/F-133/CHN/2006 which was valid till 31.03.07 had been applied for renewal.



Consent granted under Sec 25 of The Water (Prevention & Control of Pollution) Act, 1974 for the Company’s Unit situated at 21/22, Alandur Road (Old Ham Division) R.S. No.120/2, Guindy authorizing discharge of sewage and trade effluents issued by Tamil Nadu Pollution Control Board bearing Renewal Consent Order No – 6899 Boards Proceeding No. TN PCB D/HUM/T-14/F-133/CHN/2006 was issued on 04.04.2006 was valid till 31.03.2007 and had been applied for renewal.

2.

TALOJA UNIT •

3.

The Chief Fire Officer & Fire Advisor has granted a Provisional No Objection Certificate for the Company’s Unit at T-17, MIDC, Panvel, Taloja, Dist : Raigad. The final No Objection Certificate will be issued at a later date upon compliance of certain recommendations made in the Provisional No Objection Certificate and satisfactory inspection thereof. The said Provisional No Objection Certificate is valid for one year from its date of issue being 3/10/2007. HALDIA UNIT



4.

Consent to Operate under Section 25 and 26 of the Water (Prevention & Control of Pollution) Act, 1974 and under Section 21 of the Air (Prevention & Control of Pollution) Act, 1981 to continue operation of the industrial unit and to discharge liquid effluents and to emit gaseous effluents has expired on 30.11.2007 and has been applied for renewal. BANGALORE BRANCH OFFICE



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



Certificate of Registration under the State Tax on Profession, Trade, Callings & Employment Act has expired and had been applied for renewal.

5.

CHANDIGARH BRANCH OFFICE •

6.

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



Renewal application made under Factories Act, 1948.

xiii

16. The Company is dependant on the management team for success whose loss could adversely impact the profitability The success of the company largely depends on the continued services and performance of the management and other key employees. The need for capable senior management in the industry is intense, and the Company may not be able to retain its senior management or attract and retain new senior management in the future. The loss of service of the senior management could seriously impair the ability to continue to manage and expand the business efficiently. Further, the loss of any of the senior management or other key personnel may adversely affect the operations, finances and profitability of the company. Any failure or inability of the Company to efficiently manage its human resources would adversely affect its ability to implement new projects and expand the business. 17. Shortfall in performance vis-à-vis promise made in previous Issue. The last three issues made by the company in the years 1978, 1995 and 1998 were the Rights Issues. There was no promise made by the Company in the Rights Issue of 1978. While the Objects of the Issue for all these three Rights Issues were achieved by the Company, there was a deviation in the actual vis-à-vis the projected profitability in case of the Rights issue of 1995 .For details please refer to the section titled “Promise versus Performance ” on page no. 241 18. Employee health, safety and regulatory measures are very important in the industry, any negligence can affect the operations The Company is subject to safety and health laws and regulations such as the Environment (Protection) Act, 1986, the Water (Prevention and Control of Pollution) Act, 1974, the Air (Prevention and Control of Pollution) Act, 1981, Hazardous Wastes (Management & Handling) Rules, 1989, the Batteries (Management & Handling), Rules, 2001, the Indian Explosives Act, Fire Service Laws and the Indian Boilers Act, 1923. These laws and regulations impose controls on the Company’s safety standards, and other aspects of its operations. The Company has incurred and expect to continue to incur, operating costs to comply with such laws and regulations. In addition, the Company has made and expect to continue to make capital expenditures on an on-going basis to comply with the safety and health laws and regulations. ,The Company may be liable to the Government of India or the State Governments or Union Territories with respect to its failures to comply with applicable laws and regulations. Further, the adoption of new safety and health laws and regulations, new interpretations of existing laws, increased governmental enforcement of laws or other developments in the future may require that the Company make additional capital expenditures or incur additional operating expenses in order to maintain its current operations or take other actions that could have a material adverse effect on its financial condition, results of operations and cash flow. Safety, health and environmental laws and regulations in India, in particular, have been increasing in stringency and it is possible that they will become significantly more stringent in the future. The costs of complying with these requirements could be significant. The company has Employees State Insurance cover for all its employees at the Workmen level, both at the plants and at the branches. Management staff are covered under a Group Personal Accident Insurance. The Company also has Product Liability Insurance Policy and a Public Liability Insurance (both under the Act and Industrial), as well as a Group Term Life Insurance cover. There may be occasions in future when the insurance coverage under these various policies, may be found to be inadequate.

xiv

19. Any failure in the SAP based ERP systems could adversely impact the business of the company Any disruption of the functioning of its existing ERP systems, which are based on SAP, could disrupt its ability to track, record and analyse the work in progress, cause loss of data and disruption in operations including, among others an ability to assess the progress of the projects, process financial information or manage creditors/debtors or engage in normal business activities. This may have an adverse effect on its operations. 20. Investment in overseas subsidiaries The Company has invested in its overseas subsidiaries, viz., 100% stake in Chloride Batteries S E Asia Pte Limited, Singapore, 61.5% stake in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka and 51% stake in Espex Batteries Limited, UK with a view to produce/ market its products globally. For further details on overseas subsidiaries please refer to page no. 77 of this Letter of Offer. Any negative change in the import and tariff policies of the government in the respective countries may affect the intake of Company’s products by the overseas subsidiaries. In addition, invariably the overseas markets are driven by technology advanced products and good cosmetics including product packaging. The success of the Company’s investment in the overseas subsidiaries depends upon the ability of the company to maintain its excellence in technology and creating customer value perception in the overseas markets. 21. Increased competition may result in lower prices of or a decreased market share for the Company’s products. The Company’s failure to effectively compete may reduce its profitability The Company experience competition across markets for its products from domestic and international players. The Company compete with other battery manufacturers on the basis of availability of technology, product and product range, product traits, quality and other factors as well as based on price, reputation, customer service and customer convenience. The Company’s failure to compete effectively may decrease or prevent the Company from increasing its market share and reduce its profitability. 22. Any loss of or breakdown of machineries at any of the manufacturing facilities may have an adverse affect on business, financial condition and results of operations The Company’s manufacturing facilities are subject to operating risks, such as the breakdown or failure of equipment, power supply or processes, performance below expected levels of output or efficiency, obsolescence, labour disputes, industrial accidents and the need to comply with the directives of relevant government authorities. The occurrence of any of these risks could significantly affect its operating results. Our business and operations may be adversely affected by any disruption of operations at manufacturing facilities. 23. Any disruption in supply of power at any of the manufacturing facilities may have an adverse affect on the production The power requirements of the Company are presently met by purchase of electricity from the State Electricity Boards of respective states and from Calcutta Electric Supply Corporation, Kolkata and other private power supply bodies, wherever applicable. Any disruption in supply of power at the Company’s plants may have an adverse effect on its production.

xv

24. Indebtness of the Company could adversely affect the financial condition and results of operations As on June 30, 2007, the Company had a total debt of Rs. 32, 593 lakhs (secured and unsecured). Please refer to page no.135 of this Letter of Offer for detail break-up of the secured and unsecured loan and the principal terms of borrowing. Besides, the Company may incur additional indebtness in the future. The indebtness could have several important consequences, including but not limited to the following: ) A portion of the cash flow may be used toward repayment of the existing debt, which will reduce the availability of the cash flow to fund working capital, capital expenditures and other general purpose corporate requirements; ) The ability to obtain additional financing in the future at reasonable terms may be restricted. ) Fluctuations in market interest rates may affect the cost of our borrowings. There could be a material adverse effect on the business financial condition and result of operations if the Company is unable to service the indebtness. The Company may be more vulnerable to economic downturns, may have limited ability to withstand competitive pressures and may have reduced flexibility in responding to changing business, regulatory and economic conditions.

RISKS ARISING OUT OF THE OBJECTS OF THE ISSUE 25. Requirement of the funds for the working capital has not been appraised by any Bank or financial institution. The use of proceeds of the Issue will be in accordance with the chapter titled “Objects of the Issue beginning on page 25 of the Letter of Offer. These estimates related to the Objects of the Issue, are based on its internal estimates. No bank or financial institution has appraised the objects of the Issue for which proceeds are proposed to be raised through the Issue, and their utilization will be based on the management's internal estimates. Any downward deviation in the estimated working capital requirements may result in inability to utilise funds efficiently. The deployment of the proceeds of the issue will be internally monitored. RISKS ARISING OUT OF SHAREHOLDING / EQUITY SHARES 26. Renunciation by any shareholder in favour of a non-resident or FII will require prior approval of the RBI and/or FIPB subject to certain terms and conditions Renunciation of rights entitlement in the Company by any shareholder in favour of a non-resident or a FII will require prior approval of RBI and/or FIPB subject to certain terms and conditions. There can be no certainty as to the conditions subject to which the approval will be granted or if the approval will be granted at all. For more details on the restrictions applicable to non residents or FIIs please refer to the section titled “ Basic Terms of the Issue” beginning on page 6 of the Letter of Offer. 27. Future sale of Equity Shares by some of the current shareholders could affect the price of the Company’s Equity Shares in the secondary market Any future issuance of Equity Shares by the Company could dilute earnings per share and adversely affect trading price of the Company’s Equity Shares and could impact the Company’s ability to raise capital through an offering of the securities. Also the sale of the Company’s Equity Shares by any major shareholders could adversely affect trading price of the Company’s Equity

xvi

Shares and could impact the Company’s ability to raise capital through an offering of the securities. In addition, any perceptions by investors that such an issuance or sale might occur, could also affect the trading price of the Company’s Equity Shares. 28. Over the last three years, the trading of the Equity Shares of the Company on the CSE has been negligible The trading of the Equity Shares of the Company on CSE, in the last three years, has been negligible. Investors dealing on this exchange may face certain difficulties in trading the Equity Shares held by them. 29. Risk on account of Industry Globally Original Equipment (OE) segment provides a low margin which is counter-balanced by higher margin in the replacement market segment. A disproportionate high growth in OE segment without a corresponding growth in the replacement market segment would pull down the overall margin in percentage terms. EXTERNAL RISK FACTORS 1. There are a number of factors outside the control, which may prejudicially affect the Company and may make the price of its Equity Shares volatile, There are several factors outside the control that may cause fluctuations to the Company’s revenues and operating results and the market price of its equity and/or prejudicially affect the business, financial condition and results of operations. These include: •

Various sectors of the economy like agriculture, automobiles (both passenger and commercial vehicles), telecom, power, railways, UPS, distribution warehouses of retailing, mining are customers for Company’s products. The GDP growth of the Indian Economy is directly proportional to the growth of these sectors. Hence, the Company’s overall sales volume growth could in the future be affected if there is a significant de-growth in the GDP of the Indian Economy.



Natural disasters, accidents, terrorists’ attacks at the Company’s manufacturing plants, civil unrest and other acts of violence could disrupt its operations and result in loss of revenues and/or increased costs.



Any significant changes in the safety, health and environmental laws and regulations may adversely affect the Company’s operations and revenue streams.



The trading price of the Company’s Equity Shares may fluctuate after the Issue due to a variety of factors, including but not limited to : a) results of the company’s operations and the performance of its business, b) perceptions about the Company’s future performance or the performance of companies operating in the same sector(s) as the Company do; c) Change in the estimates of the Company’s performance or recommendations by financial analysts; d) performance of the Company’s competitors and market perception of investments in the Indian securities market in general; e) adverse media reports on the Company or on the Indian plastic-pipe industry f) general economic, political and social factors, in the country and across the globe g) volatility in the Indian and global securities markets,

xvii

h) trends in general business and industry, i) significant developments in India’s fiscal regime. 2. A slowdown in economic growth in India could cause the business to suffer. The Indian economy has shown sustained growth over the last few years with Gross Domestic Product (“GDP”) showing sustained growth. However, any slowdown in the Indian economy could lead to a slowdown in the industries the Company operate in and adversely affect the financial performance. Notes to Risk Factors : This is an Issue of 5,00,00,000 fully paid Equity Shares with a face value of Re.1/- each at a premium of Rs. 29 per Equity Share for an amount aggregating to Rs.15,000 lakhs on Rights basis to the existing shareholders of the Company in the ratio of 1 fully paid Equity Share for every 15 Equity Shares held by the existing shareholders on the Record Date, i.e. On 17th December 2007. 1.

The net worth of the Company as per its restated financials as at March 31, 2007 is Rs 62635 lakhs and for June 2007 is Rs 69916 lakhs

2.

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

Promoter Chloride Eastern Limited, U.K.

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

Source: RBI website- www.rbi.org.in

3.

Net Asset Value of the Equity Shares of the Company, as per its restated financials as at March 31, 2007 is Rs. 8.35 per Equity Share and for June 2007 is Rs 9.32 per Equity Share.

4.

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

5.

Investors are advised to refer the paragraph on “Basis of Issue Price” on page 29 of the Letter of Offer before making an investment in the Issue.

6.

Please refer to the section on "Basis of Allotment" on page 262 of this Letter of Offer for details of the basis of allotment.

7.

Other than as stated in the section titled “The Management”, “The Promoter” and “Financial Statements” beginning on page nos. 85, 110 and 114 of the Letter of Offer, the Promoters/ Directors/ Key Management Personnel have no interest other than reimbursement of expenses incurred or normal remuneration or benefits.

8.

There have been no transactions in the shares of the Company on the Stock Exchanges by the Promoter /Directors of the Company during the past 6 months.

9.

Other than as stated in the Letter of Offer, the other ventures of promoters have no business Interests /other interests in the issuer company.

xviii

10. For details regarding loans and advances made to any person(s)/ companies in which directors are interested refer to section titled “The Management”and “The Promoters” beginning on page nos. 85 and 110 of the Letter of Offer. 11. The Manager to the Issue and the Company shall make any clarification or any information relating to the Issue available to the investors at large and no selective or additional information would be available in any manner whatsoever. 12. The lead manager and the Company shall update this Letter of Offer and keep the shareholders/public informed of any material changes till the listing and trading commencement and the company shall continue to make all material disclosures as per the terms of the listing agreement. 13. The Related Party Transactions for the previous three years is as follows: 31.03.07 I

II

III

IV V

VI VII VIII IX

X XI

XII

Sales and services to and other recoveries from related parties Subsidiaries Associate Companies Companies / firms / in which Directors / Key Management Personnel are interested Purchase /other services from related parties Subsidiaries Associate Companies Royalty / Technical Assistance Fees Paid / Payable Companies / firms / in which Directors / Key Management Personnel are interested Dividend Paid/Payable Holding Company Dividend Received Subsidiaries Associate Companies Purchase of Fixed Assets Subsidiary Sale of Fixed Assets Subsidiaries Loans Received Subsidiaries Expenses incurred by the Company on behalf of the Group / Subsidiaries Subsidiaries Companies / firms / in which Directors / Key Management Personnel are interested Interest Costs Subsidiaries Payment of Rent & Maintenance Charges Subsidiaries Companies / firms / in which Directors / Key Management Personnel are interested Royalty/Technical Assistance Fees Received / Receivable Subsidiaries

xix

31.03.06

(Rs. In lakhs) 31.03.05

6348 4 --

4882 5 3

4247 ---

983 --

523 --

135 --

7

7

7

--

--

1466

103 56

64 10

29 --

--

--

--

216

--

--

--

13

325

---

---

---

--

18

7

16 --

4 --

4 22

44

38

42

XIII

XIV XV XVI

XVII XVIII XIX XIX (i)

XIX(ii)

XIX (iii) XIX (iv)

Associates Information & Technology Costs Companies / firms / in which Directors Management Personnel are interested Interest Income Subsidiaries Remuneration Key Management Personnel Publicity Expenses Companies / firms / in which Directors Management Personnel are interested Loans / Advances Granted Subsidiaries Rendering of Services Subsidiaries Outstanding Balance Payable Purchase of Goods Subsidiaries Associate Companies Companies / firms / in which Directors Management Personnel are interested Loan Accepted Subsidiaries Companies / firms / in which Directors Management Personnel are interested Remuneration Key Management Personnel Technical Assistance Expenses

/ Key

/ Key

/ Key

XIX (vi)

XX (i)

XX (ii)

XX (iii) XX (iv) XX (v)

Information & Technology Companies / firms / in which Directors / Key Management Personnel are interested Rent & Maintenance Charges Subsidiaries Companies / firms / in which Directors / Key Management Personnel are interested Outstanding Balance Receivable – Sales & Services Subsidiaries Associate Companies Dividend Received Subsidiaries Associates Technical Assistance Income Subsidiaries Loan Given Subsidiaries Interest Income Subsidiaries

xx

--

--

--

--

5

1

--

1

442

505

315

--

--

--

--

--

--

2

2

2

----

----

103 ---

--

200

325

184

208

88

4

3

3

--

--

--

---

---

---

1060 --

1046 5

654 --

14 --

38 --

9 --

11

10

10

9

8

8

1

1

--

/ Key

Companies / firms / in which Directors / Key Management Personnel are interested XIX (v)

--

Sales and services to related parties constitute: •

Sale of batteries manufactured by the company to Chloride Batteries S E Asia Pte Limited, Singapore and Espex Batteries Limited, UK.



Sale of batteries manufactured by the company to its subsidiary, Caldyne Automatics Limited and Chloride International Limited



Sale of batteries and solar panels to its subsidiary, Chloride International Limited.

All the above transactions are complementary and do not constitute any conflict of interest. Therefore, there is no risk on account of conflict of interest. For further details refer to section titled “Financial Statements” beginning on page 114 of the Letter of Offer

xxi

SUMMARY OF THE INDUSTRY AND BUSINESS OF THE ISSUER COMPANY (The information presented in this section has been extracted from the Company’s Annual Reports, Business Magazines and the discussions held with Company officials, which have not been independently verified by the Company, the Lead Manager or any of their respective affiliates or advisors.) Industry Overview The domestic lead storage battery industry is estimated at around Rs. 70 billion and comprises two main segments: Automotive and Industrial batteries. Storage batteries are basically used as a secondary source of power in vehicles and industrial applications. Automotive batteries account for 60% of the total market while industrial batteries contribute the rest. The unorganized sector in overall terms has a market share of 40% out of Rs 70 billion market. The Automobile industry can be subdivided into the OEM and Retail or Replacement markets. The Industrial batteries market can be broken up into the infrastructure market (railways, telecom and power), submarine batteries and fast-moving industrial batteries (UPS and inverters). Business Overview The Company manufactures the widest range of storage batteries in the world from 2.5 Ah to 15000 Ah capacity, covering the broadest spectrum of applications. The Company has eight factories located across the country – 3 in Maharashtra, 2 in West Bengal, 2 in Tamil Nadu and 1 in Haryana. The Company powers most of the industrial and automotive segments in the country and its products are used in the applications in infrastructure and defence sectors. The Company’s predecessor began its operations in 1916 as an import house called Chloride Electrical Storage Company before its incorporation as a Limited Company in 1947 registered under The Companies Act, 1913. The Company has since grown to become one of the largest manufacturer and exporter of batteries in the sub-continent today. The Company was rechristened as Exide Industries Limited in 1995. The Company has grown steadily, modernized its manufacturing processes and took initiatives on the service front. Constant innovations have helped the Company to produce the range of industrial batteries with various technology configurations. Company’s Segment-wise break-up of Revenue The Company broadly serves two Segments viz. Automotive Batteries and Industrial Batteries (including Submarine sub-segment). The contribution of each segment as on 30.11.2007 towards the business of the Company appears as under: SEGMENTS & BREAK-UP

% Share

Automotive Batteries OEM, Retail, Exports and Defence

60%

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

1

38% 2%

40%

Automotive Batteries In the domestic market, the Company sell its products under EXIDE, SF, SONIC and Standard Furukawa Brands. In the international market the products are sold mainly under DYNEX, INDEX & SONIC brands. The Company supply batteries to almost all the car and two-wheeler manufacturers in the country. The Company has a distribution network comprising over 4000 dealer outlets. These outlets are supported by 4 regional offices and 28 branch offices. The Company also export batteries to the Middle East, Japan and CIS countries. Replacement Market In the replacement segment, a large part is dominated by the smaller unorganized players especially in the commercial vehicles and tractor market. The Company has 73% share of the replacement retail market. The Company’s “Operation Kissan” has helped to move a large part of the unorganized tractor replacement market into the organized space. Industrial Batteries In domestic market, the Company sell its products mainly under EXIDE, INDEX, SF, CEIL & POWER SAFE brands and in the international markets mainly under CEIL, CHLORIDE and INDEX brands. Industrial batteries are of three types, Conventional lead acid batteries, VRLA (Valve Regulated Lead Acid batteries) batteries and Nickel-Cadmium batteries. Both organized and unorganized players compete in the OEM and retail industrial battery markets. Industrial batteries cater mostly to the infrastructure sector such as railways, telecom, power plants, solar cells and other industrial segments such as uninterrupted power supply, inverters and traction batteries. Exide’s Inva tubular batteries for Inverter applications and Tele tubular for Telecom Sector introduced in the year 2000 has created volume growth. The Company also manufacture industrial batteries for niche segments such as miners’ cap lamp batteries and submarine batteries. Segment-wise contribution to the sales revenue (as on 30.11.2007) Segment

% of Company’s Sales Revenue

Infrastructure - Railways, Power, Telecom Fast-Moving Industrial Batteries - UPS, Inverters, Traction Batteries Export - Cap Lamps etc.

15% 19% 4%

Total Industrial Batteries

38%

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

2

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

Process Control and Quality Assurance

2.

Performance Improvement of existing products and Product Development with New Designs and New Products

3.

Innovation and Technology Upgradation.

Above departments are having distinct roles and the functional accountability with clearly identified resource allocation. Company’s Market Share in Different Segments as on 30.11.2007 Market Shares

% of the total segment

Telecom Railways Auto (OEM) – Passenger Vehicles Auto (OEM) – Overall Auto (Replacement) – overall including unorganized Branded (Replacement) Two-wheelers Power Projects UPS/Inverters Traction Cap Lamps Source: Company estimates

3

30% 30% 80% 72% 35% 80% 55% 70% 40% 80% 90%

Utility-wise Break-up of Industrial Batteries Utility Motive Power

Standby

Railways

Sector Electric Vehicles Mining Locomotives, Miners’ Caps Lamps Power, Telecom, UPS, Inverter

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

4

Customer/ Client Indian Railways, Macneill & Magor, Godrej, Voltas, Josts, Maini, BHEL, Escorts, Indian Navy Fujitsu, Alcatel, Siemens, Tata Lucent, BSNL, MTNL, Birla A&T, Crompton Greaves, Tata Telecom, Reliance Telecom. Railways

THE ISSUE

Equity Shares proposed to be issued by the Company Rights Entitlement

5,00,00,000 One Equity Share for every Fifteen Equity Shares held on the Record Date 17th December, 2007 Rs 30 per Equity Share. 75,00,00,000 Equity Shares of Re 1/- each 80,00,00,000 Equity Shares of Re 1/- each

Record Date Issue Price per Equity Share Equity Shares outstanding prior to the Issue Equity Shares outstanding after the Rights Issue of Equity Shares Terms of the Issue

For more information see ‘Issue Related Information on page 247 of this Letter of Offer.

Terms of Payment Due Date On Rights Issue application

Amount Entire Issue Price i.e., an amount of Rs 30/- per equity share including the share premium is to be paid at the time of application

Objects of the Issue For further details on the Objects of the Issue, please refer to page no. 25 of the Letter of Offer.

5

BASIC TERMS OF THE ISSUE The Equity Shares proposed to be issued on rights basis are subject to the terms and conditions contained in this Letter of Offer, the enclosed Composite Application Form (“CAF”), the Memorandum and Articles of Association of the Company, the provisions of the Companies Act, approvals from RBI, guidelines issued by SEBI, approvals from the stock exchanges where equity shares of the Company are listed, FEMA guidelines, notifications and regulations for issue of capital and for listing of securities and/ or other statutory authorities and bodies from time to time, the terms and conditions as stipulated in the allotment advice or letter of allotment or security certificate, the provisions of the Depositories Act, to the extent applicable, and any other legislative enactments and rules as may be applicable and introduced from time to time. Basis for the Issue The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders of the Company whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held in dematerialized form and on the Register of Members of the Company in respect of the Equity Shares held in physical form at the close of business hours on the Record Date, 17th December 2007 fixed in consultation with the Designated Stock Exchange. The Equity Shares are being offered for subscription in the ratio of one Equity Share for every fifteen Equity Shares held by the Equity Shareholders on the Record Date.

Rights Entitlement As your name appears as beneficial owner in respect of the shares held in electronic form or appears in the Register of Members as an equity shareholder of the Company as on 17th December, 2007 (Record Date), you are entitled to the number of shares as disclosed in Block I of Part A of the enclosed CAF. Rights Entitlement Ratio 1.

The eligible shareholders shall be entitled to one Equity Share for every fifteen Equity Shares held on the Record Date.

2.

Rights entitlement on shares held in the pool account of the clearing members on the Record Date shall be considered, and such claimants are requested to : (a) Approach the concerned depository through the clearing member of the Stock Exchange with requisite details; and (b) Depository in turn should furnish details of the transaction to the Registrar. Only upon receipt of the aforesaid details, rights entitlement of the claimants shall be determined.

Principal Terms of the Issue Face Value Each Equity Share shall have a face value of Re 1. Issue Price Each Equity Share is being offered at a price of Rs 30/- for cash.

6

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

7

SUMMARY OF FINANCIAL STATEMENTS Summary Statement of Restated Assets and Liabilities of the Company 30.06.07

31.03.07

A

31.03.06

31.03.05

31.03.04

(Rs in lakhs) 31.03.03

Fixed Assets Gross Block 96535 94713 88400 85899 80787 75265 Less : Depreciation 50013 48465 43495 37953 33160 27754 Net Block 46522 46248 44905 47946 47627 47511 Less : Revaluation 4048 4248 4978 5597 6164 6724 Reserve Net Block after 42474 42000 39927 42349 41463 40787 adjustment for Revaluation Reserves Capital Work-in2894 3101 621 379 151 396 progress Sub Total 45368 45101 40548 42728 41614 41183 B Investments 41551 37801 27853 11162 1987 1902 C Current Assets, Loans and Advances Inventories 42418 39661 24172 22758 21233 18040 Sundry Debtors 23564 14794 15125 16087 12916 13532 Cash & Bank Balances 166 142 1737 3619 126 265 Loans and Advances 2524 2579 2856 3027 2110 2988 Sub Total 68672 57176 43890 45491 36385 34825 D Total Assets (A+B+C) 155591 140078 112291 99381 79986 77910 Liabilities and Provisions E Loan Funds Secured Loans 26589 27787 15627 11672 8444 25484 Unsecured Loans 6004 4683 13358 17347 11453 2682 Sub Total 32593 32470 28985 29019 19897 28166 F Deferred Tax 4350 4370 4260 4940 4690 4820 Liabilities – Net G Current Liabilities & Provisions Current Liabilities 37641 32324 21847 16980 17594 12663 Provisions 11091 8279 7012 6082 6221 5481 Sub Total 48732 40603 28859 23062 23815 18144 H Total Liabilities and 85675 77443 62104 57021 48402 51130 Provisions I Net Worth (D-H) 69916 62635 50187 42360 31584 26780 Represented by Shareholders Funds Share Capital 7500 7500 7500 7500 7122 3561 Reserves & Surplus 66464 59383 47665 40457 30626 29943 Less : Revaluation 4048 4248 4978 5597 6164 6724 Reserve Reserves & Surplus (Net 62416 55135 42687 34860 24462 23219 of Revaluation Reserve) Net Worth 69916 62635 50187 42360 31584 26780 Notes : (1) The above figures should be read along with the Statement of Notes to the Restated Financial Information and Statement of Significant Accounting Policies as appearing in Annexures IV & V.

8

(2)

Necessary adjustments have been made to the Audited Financial Statements in accordance with the requirements of Paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

Summary Statement of Restated Profits & Losses of the Company

Income Sales Of products manufactured by the Company Of products traded by the Company Sub Total Less : Excise Duty, Sales Tax & VAT and Octroi Net Sales Other Income Total Income Expenditure Materials Consumed Staff Costs Other Expenses Interest & Finance Costs Depreciation Total Expenditure Profit before Tax & Exceptional Items Exceptional Items Profit before tax Less : Provision for Taxation Profit after Tax

Rs in lakhs 31.03.04 31.03.03

30.06.07

31.03.07

31.03.06

31.03.05

84258

235715

176024

147319

119533

107333

618

2542

103

75

-

-

84876 18459

238257 51236

176127 38178

147394 29867

119533 24156

107333 21233

66417 55 66472

187021 949 187970

137949 670 138619

117527 205 117732

95377 246 95623

86100 145 86245

40917 3950 8380 533

113688 12396 30067 2771

82095 9784 23505 2244

70429 8738 20477 1146

49106 8682 19376 847

44191 8591 17477 2917

1492 55272 11200

5555 164477 23493

5603 123231 15388

5522 106312 11420

5209 83220 12403

4699 77875 8370

-11200 3919

-23493 8007

-15388 4995

170 11250 3930

-12403 4180

-8370 3060

7281

15486

10393

7320

8223

5310

Notes : (1) The above figures should be read along with the Statement of Notes to the Restated Financial Information and Statement of Significant Accounting Policies as appearing in Annexures IV & V. (2) Necessary adjustments have been made to the Audited Financial Statements in accordance with the requirements of Paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000. Please refer the section tiltled Management Discussion and Analysis at page no. 186 of this Letter of Offer for the schedule of fixed assets for financial years ended March 31, 2007, 2006, 2005, 2004 and 2003 and three months ended June 30, 2007. Further under the section Management Discussion and Analysis, please refer the heading titled “Reasons for the difference in the figures of the gross block between the balance sheet and cash flow statement” for the difference in figures of the gross block in the balance sheet and cash flow statement and title “Reasons for increase/ decrease in unsecured loans and investments in cash flow statements” for unsecured loans and investments. For the consolidated financial statements of the Company please refer page no. 148 of the Letter of Offer.

9

GENERAL INFORMATION Dear Shareholder(s), Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on 28th August 2007, it has been decided to make the following offer to the Equity Shareholders of the Company with a right to renounce. Issue of 5,00,00,000 fully paid equity shares with a face value of re 1/- each at a premium of Rs 29/- per equity share for an amount aggregating Rs. 15000 lakhs on rights basis to the existing shareholders of the company in the ratio of one fully paid equity share for every fifteen equity shares held by the existing shareholders on the record date, i.e., on 17th december, 2007. The issue price is 30 times the face value of the equity shares of the Company. IMPORTANT •

This offer is applicable only to those Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the Depositories in respect of the Equity Shares held in the electronic form and in the Register of Members of the Company in respect of the shares held in physical form as on 17th December, 2007 i.e., Record Date.



Your attention is drawn to the section titled “Risk Factors” beginning on Page vii of the Letter of Offer.



Please ensure that you have received the CAF with the Letter of Offer.



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



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



All enquiries in connection with the Letter of Offer or CAF should be addressed to the Registrars to the Issue, C B Management Services (P) Ltd., quoting the Registered Folio Number /Depository Participant (DP) Number and Client ID Number and the CAF Numbers as mentioned in the CAF.



The offer will be kept open for a minimum period of thirty days.



The Issue Program is as follows : Issue Opens on : December 28, 2007 Last date for request for split application forms : January 12, 2008 Issue closes on : January 28, 2008



The funds received against the Issue will be kept in a separate bank account(s) and the Company will not have any access to such funds unless the Company satisfies the Designated Stock Exchange with

10

suitable documentary evidence that the minimum subscription of 90% of the Issue has been received by the Company. If the Company does not receive the minimum subscription of 90% of the Issue, the entire subscription shall be refunded to the applicants within 42 days from the date of closure of the Issue. Chloride Eastern Limited, U.K., , the Promoter has undertaken to subscribe to such undersubscribed portion, after considering the allotment, to ensure that the Issue is 100% subscribed. This acquisition of additional Equity Shares, if allotted to Chloride Eastern Limited, the Promoter, shall be in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of Regulations 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition will not result in change of control of management of the Company. •

All the legal requirements as applicable till the filing of the Letter of Offer with the Designated Stock Exchange have been complied with.

Name and Registered Office: Exide Industries Limited Exide House 59E Chowringhee Road Kolkata – 700 020 Tel : (033) 2283 2636 Fax : (033) 2283 2637 Email : [email protected] Website : www.exideindustries.com Details of Registration The Company was incorporated on 31st day of January, 1947 bearing Registration No. 14919 of 1947-48. Company Identification Number (CIN) is U31402WB1970PLC014919. The Company is registered with the Office of the Registrar of Companies, West Bengal, Nizam Place, 2nd M.S.O. Building, 2nd Floor, 234/4, A.J.C. Bose Road, Kolkata – 700 020.

Board of Directors The Board of Directors of the Company comprises: Article 98 of AoA of the Company adopted at General Meeting held on 30th January, 1979 limits a maximum of 16 directors. Name of the Director

Designation

Mr R G Kapadia Mr R B Raheja

Non Executive Chairman Vice Chairman & Non Executive Director Managing Director & Chief Executive Officer Director - Industrial Director - Automotive Director – R & D Director – Finance & Chief Financial Officer Non Executive Director

Mr T V Ramanathan Mr G Chatterjee Mr P K Kataky Dr S K Mittal Mr A K Mukherjee Mr W Wong

11

Dependent/ NonIndependent Independent NonIndependent Non-Independent

Directors’ Identification Number 00003272 00037480 00012249

Non-Independent Non-Independent Non-Independent Non-Independent

00012306 00012343 00012322 00131626

Non-Independent

00510908

Mr H M Kothari Mr Bhaskar Mitter Mr S N Mookherjee Mr Vijay Aggarwal Mr A H Parpia Mr S B Raheja Mr D S Parekh (Alternate Director to Mr S B Raheja)

Non Executive Independent Director Non Executive Independent Director Non Executive Independent Director Non Executive Independent Director Non Executive Independent Director Non Executive Director Non Executive Independent Director

and

Independent

00009873

and

Independent

00103707

and

Independent

01355486

and

Independent

00515412

and

Independent

00003289

and

Non-Independent Independent

00552176 00009078

Brief details of the Company’s Chairman, Vice Chairman, Managing Director and Executive Directors: Mr R G Kapadia - Chairman & Independent Non-Executive Director, aged 51 years, is a practicing Chartered Accountant and Senior Partner of G M Kapadia & Company, an Audit firm of many years standing, located at Mumbai. Mr Kapadia is also a Director of Asianet Satellite Communications Limited, Bhoruka Power Corporation Limited, Goldiam International Limited, H & R Johnson (I) Limited, Nilkamal Limited, Prism Cement Limited and ING Vysya Life Insurance Company Limited, among other companies in India. He is also a Director of Chloride Eastern Limited, UK, Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka, Chloride Eastern Industries Pte. Ltd., Singapore and Chloride Batteries South East Asia Pte. Limited, Singapore. He was also appointed a Director of Fidelity Trustee Company Pvt. Ltd. He served as the President of the prestigious Indian Merchants Chamber for 2005-06 and is considered an expert on Taxation matters. Mr R B Raheja, Vice-Chairman and Non-Executive Director, aged 53 years. Has a wide range of experience in Industry and Business. A Director of EIH Limited, the prominent hotel chain, he is also on the Board of EIH Associated Hotels, which run the Trident Hilton Chain as well as Juhu Beach Resorts Limited. He is also on the Board of Asianet Satellite Communications Limited, H & R Johnson (I) Limited, the largest Tile company in India, Futura Polyesters Limited, Supreme Petrochem Limited, Prism Cement Limited, Sonata Software Limited, Innovasynth Technologies (I) Limited and ING Vysya Life Insurance Company Limited. Besides these, he is a Director in a number of Private Limited companies, besides having interests in a lot of other businesses. Mr T V Ramanathan, Managing Director & Chief Executive Officer, aged 62 years is a Chartered Accountant and a qualified Company Secretary. He has had decades of experience in companies within India and abroad. Before joining his present assignment in 1995, he was with the UB Group and has a wealth of experience in dealing with Financial and Accounting matters. He is a Director of Chloride International Limited and on the Board of ESPEX Batteries Limited, UK and Chloride Batteries South East Asia Pte. Ltd. Singapore. He is also on the Board of Tandon Metals Pvt. Ltd. Mr G Chatterjee, Director-Industrial, aged 57 years, has a wide range of experience in Production and Marketing. An Engineer and an MBA from IIM, he has spent over two decades in the company where he is acknowledged to have spearheaded the growth of Exide in the battery range for Industrial Applications. He has also led the move for Exide to enter into joint ventures for marketing of industrial batteries in UK and Australia.

12

He is a Director on the Board of Caldyne Automatics Limited, Haldia Integrated Development Agency Limited, ESPEX Batteries Limited, UK, Chloride Batteries South East Asia Pte. Limited, Singapore. Mr P K Kataky, Director-Automotive, aged 59 years, has a wide range of experience in Marketing. He has been associated with the battery industry for two decades and as an Engineer has brought to bear his innovative solutions for expanding the reach of the company in automotive batteries after market. He is also a Director of Chloride International Limited, Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka andTandon Metals Pvt. Ltd. Dr S K Mittal, Director - Research & Development, aged 59 years, has a wide range of experience in Research & Development, with him having spent more than three decades in this profession. He has been with Exide since its early days when the Research & Development wing was at a nascent stage and is credited with having a number of international Patents, which have been registered by Exide in the recent years. He is on the Board of Tandon Metals Pvt. Ltd. Mr A K Mukherjee, Director-Finance & Chief Financial Officer, aged 46 years, has a wide range of experience in financial and accounting matters, being a Chartered & Cost Accountant. He joined Exide from his previous stint with Phillips India Limited. He is also a Director on the Board of Caldyne Automatics Limited , Espex Batteries Ltd., UK and Tandon Metals Pvt. Ltd. . Company Secretary and Compliance Officer Mr Barun Das Exide House 59E Chowringhee Road Kolkata – 700 020 Tel : (033) 2283 2636 Fax : (033) 2283 2637 Email : [email protected] Legal Advisors to the Company and the Issue Khaitan & Co. Advocates, Notaries, Patent & Trademark Attorneys Emerald House, 1B, Old Post Office Street Kolkata – 700 001 Tel: (033) 2248 7000 Fax: (033) 2230 7857 E-mail: [email protected] Bankers to the Company State Bank of India Commercial Branch 24 Park Street, Kolkata – 700 016 Tel No: [033] – 2229 4335 Fax no.: [033] – 2229 3555 E-mail: [email protected] Standard Chartered Bank 19 N S Road Kolkata – 700 001 Tel No. [033] – 2222 0126 Fax no.: [033] – 2223 1196 E-mail: [email protected] .com

13

Citibank N.A 41 Chowringhee Road Kolkata – 700 071 Tel No. [033] – 4400 3570 Fax no.: [033] 2288 2002 E-mail: [email protected] The Hongkong and Shanghai Banking Corporation Limited 31 B B D Bag Kolkata – 700 001 Tel No. [033] – 2254 2070 Fax no.: [033] – 2213 1394 E-mail: [email protected] BNP Paribas 4A B B D Bag East Kolkata – 700 001 Tel No. [033] – 2248 2166 Fax no.: [033] – 2243 6290 E-mail: [email protected] HDFC Bank Ltd Uniworth House 3A Gurusaday Dutta Road Kolkata – 700 019 Tel No. [033] 2281 6843 Fax no.: [033] 22814333 E-mail: [email protected] Deutsche Bank AG 9 Shakespeare Sarani Kolkata – 700 071 Tel No. [033] 6600 9527 Fax no.: [033] 2282 3158 E-mail: [email protected] ICICI Bank Limited 2B Gorky Terrace Kolkata – 700 071 Tel No. [033] 2283 2209 Fax no.:[033] 2283 2308 E-mail: [email protected] ABN AMRO Bank N.V. Azimganj House 7 Camac Street Kolkata – 700 017 Tel No. [033] – 3982 8020 Fax no.: [033] – 2282 3158 E-mail: [email protected]

14

Lead Manager to the Issue SBI Capital Markets Limited 202 Maker Tower “E”, Cuffe Parade Mumbai – 400 005 Tel : +91 22 2218 9166 Fax :+91 22 2218 8332 Email : [email protected] Website :www.sbicaps.com Contact person: Mr Gitesh Vargantwar Registrar to the Issue and Registrar and Transfer Agents for the Company M/s C B Management Services (P) Ltd P-22 Bondel Road Kolkata – 700 019 Tel : (033) 2280 2486 Fax: (033) 2247 0263 Email : [email protected] Contact person: Mr. Shankar Ghosh and Mr. P Basu Bankers to the Issue State Bank of India Commercial Branch 24 Park Street, Kolkata – 700 016 Tel No : [033] – 2229 4335 Fax No. : [033] – 2217 - 2904 Email : [email protected] Contact person: Mr B. Bandyopadhyay HDFC Bank Limited HDFC Bank House 3A, Gurusaday Road Kolkata – 700 019 Tel : (033) 2281 6843 Fax : (033) 2281-4333 Email :[email protected] Contact person: Mr P Dinkar Auditors of the Company M/s S R Batliboi & Co., Chartered Accountants 22 Camac Street Block C, 3rd Floor Kolkata – 700 017 Tel: [033] – 2281 1224 Fax:[033] – 2281 7750 E-mail: [email protected] Note : Investors are advised to contact the Registrars to the Issue / Compliance Officer in case of any preissue / post – issue related problems such as non-receipt of Abridged Letter of Offer/ Letter of Offer / Letter of Allotment / Share Certificate(s) / Refund Orders / Demat Credit.

15

Inter-se Allocation of Responsibilities Not Applicable Credit Rating This being a Rights Issue of Equity Shares, no credit rating is required. Trustees This being a Rights Issue of Equity Shares, appointment of Trustees is not required. Monitoring Agency Not Applicable Appraising Entity Not Applicable Underwriting / Standby arrangements The present Issue is not underwritten and the Company has not made any standby arrangements for the Issue. Minimum Subscription Clause a.

If the Company does not receive the minimum subscription of 90% of the issued amount the entire subscription shall be refunded to the applicants within 42 days from the date of closure of the issue.

b.

If there is a delay in the refund of subscription by more than 8 days after the Company becomes liable to repay the subscription amount (i.e., 42 days after closure of the issue), the Company shall pay interest for the delayed period at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

c.

All monies received out of this Rights Issue through this Letter of Offer shall be transferred to a separate bank account.

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

16

CAPITAL STRUCTURE The Share Capital of the Company as on the date of filing of the Letter of Offer with SEBI and Stock Exchanges is as setforth: Aggregate nominal value (Rs Lakhs)

Aggregate value at Issue Price (Rs Lakhs)

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

10000

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

7500

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

500

15000

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

8000

Securities Premium Account Existing Securities Premium Account

6958

On Allotment of Proposed Rights Issue

14500

Total After the Proposed Rights Issue

21458

The Capital structure statement is prepared on the assumption that the proposed rights issue of 5 crore Equity Shares @ Rs 30/- will be subscribed fully.

Notes to Capital Structure: Details of increase / reclassification in the Company’s Authorised Share Capital, since inception Sl no. 1.

2.

3.

Details of increase / reclassification in Authorised Share Capital Increase of authorized capital from Rs 1,00,00,000 to Rs 2,00,00,000 consisting of 20,00,000 Equity Shares of Rs 10/- each Increase of authorized capital from Rs 2,00,00,000 to Rs 3,50,00,000 consisting of 35,00,000 Equity Shares of Rs 10/- each. Increase of authorized capital from Rs 3,50,00,000 to Rs 6,00,00,000 consisting of 60,00,000 Equity Shares of Rs 10/- each.

17

Date when increased 4th January, 1960 23rd December, 1968 19th December, 1973

4.

Increase of authorized capital from Rs 6,00,00,000 to Rs 10,00,00,000 consisting of 1,00,00,000 Equity Shares of Rs 10/- each. Increase of authorized capital from Rs 10,00,00,000 to Rs 15,00,00,000 consisting of 1,50,00,000 Equity Shares of Rs 10/- each. Increase of authorized capital from Rs 15,00,00,000 to Rs 25,00,00,000 consisting of 2,50,00,000 Equity Shares of Rs 10/- each. Increase of authorized capital from Rs 25,00,00,000 to Rs 75,00,00,000 consisting of 7,50,00,000 Equity Shares of Rs 10/- each. The Authorised capital of the Company of Rs 75,00,00,000 was divided into 5,00,00,000 Equity Shares of Rs 10/- each and 2,50,00,000 Preference Shares of Rs 10/- each. The Authorised capital of the Company of Rs 75,00,00,000 was restructured to 7,50,00,000 Equity Shares of Rs 10/- each. Increase of authorized capital from Rs 75,00,00,000 to Rs 1,00,00,00,000 consisting of 10,00,00,000 Equity Shares of Rs 10/- each. The face value of the Equity Share of the Company of Rs 10/- each was sub-divided into shares of Re 1/- each. Authorized capital therefore, consists of 100,00,00,000 Equity Shares of Re.1/- each.

5.

6.

7.

8.

9.

10.

11.

i. Sl No.

18th January, 1977 4th July, 1983 19th August, 1986 17th July, 1995 3rd September, 1998

11th July, 2003 29th July, 2005 21st July, 2006

Build up of Equity Share Capital

500000

2.

Subcribers to MOA and other issue prior to 1960 19.05.1960

Face Value of Shares (Rs) 10/-

680000

10/-

15/-

118,00,000

34,00,000

3.

06.12.1965

236000

10/-

--

141,60,000

10,40,000

4.

06.02.1967

354000

10/-

--

177,00,000

Nil

1

Date of Allotment

No. of Shares issued

Issue Price

10/-

Cumulative subscribed and paid up capital (Rs) 50,00,000

(Rs)

18

Cumulative Share Premium account (Rs) -

Nature of Allotment

Cumulative Equity Shares (Nos.)

Various allottees

500000

Public Issue with a premium of Rs 5 per share Bonus Issue in the ratio of 1:5 from the share premium account Bonus Issue in the ratio of 1:4 from the

1180000

1416000

1770000

5.

23.12.1968

3,54,000

10/-

--

212,40,000

Nil

6.

30.08.1974

1888000

10/-

--

401,20,000

Nil

7.

27.07.1977

1504500

10/-

--

551,65,000

Nil

8.

30.10.1978

938100

10/-

20/-

645,46,000

93,81,000

9.

30.08.1980

1613650

10/-

--

806,82,500

Nil

10.

26.10.1983

4840950

10/-

--

1290,92,000

Nil

11.

17.02.1987

7745520

10/-

--

2065,47,200

Nil

12.

05.01.1996

4130944

10/-

50/-

2478,56,640

1652,37,760

13.

17.03.1997

4048152

10/-

60/-

2883,38,160

3676,45,360

14.

27.06.1998

7167454

10/-

100/-

3600,12,700

10026,08,198*

19

share premium account and the reserve & surplus Bonus Issue in the ratio of 1:5 Bonus Issue in the ratio of 8:9 Bonus Issue in the ratio of 3:8 Rights Issue in the ratio of 1:3 with a premium of Rs 10 per share Bonus Issue in the ratio of 1:4 from the share premium account and the reserve & surplus Bonus Issue in the ratio of 3:5 Bonus Issue in the ratio of 3:5 Rights Issue in the ratio of 1:5 with a premium of Rs 40 per share Conversion of Warrants issued at a premium of Rs 50 per share Rights Issue in the ratio of 1:4

2124000

4012000

5516500

6454600

8068250

12909200

20654720

24785664

28833816

36001270

15.

2001-02

323209

10/-

10/-

See Note See Note --

16.

2002-03

67723

10/-

17.

11.07.2003

35610338

18.

10.01.2005

3779324

19.

16.09.2006

750000000

3567,80,610

3625,77,282**

3561,03,380

2963,26,120***

7122,06,760

1735,42,799****

10/-

153/-

7500,00,000

6957,79,663*****

1/-

--

7500,00,000

with a premium of Rs 90 per share Buy back of shares Buy back of shares Bonus Issue in the ratio of 1:1 Preferential Allotment of Shares# Sub division of shares from Rs 10/- each to Re 1/each.

35678061 35610338 71220676

75000000

750000000

Note : The Board of Directors had fixed Rs 70/- per share as the maximum price at which the shares would be bought back by the Company. The Company from time to time had bought back shares at the price prevailing at the exchange on the transaction day, within the maximum limit of Rs 70/- fixed by the Board. * **

Share premium account is net of issue expenses of Rs.101,08,022 Share premium account is net of adjustment towards premium on debentures of Rs.30,00,000, deferred tax liability of Rs. 6218,36,000 and premium on shares bought back Rs. 151,94,916 *** Share premium account is net of adjustment towards premium on debentures of Rs.17,50,000, premium on shares bought back Rs. 68,53,423 and miscellaneous expenditure of Rs.576,47,739 **** Share premium account is net of bonus issued during the year of Rs.1021,94,060 and miscellaneous expenditure of Rs.205,89,261 ***** Share premium account is net of expenses on SAP upgradation of Rs. 88,82,203 and issue expenses of Rs.93,24,265 (Miscellaneous expenditure and SAP upgradation expenses were adjusted from the Share premium account pursuant to the Hon’ble Calcutta High Court Order dated 17th March, 2003) # S.R. Batliboi & Co., Chartered Accountants and Statutory Auditors of the Company have vide their certificate dated December 17, 2004 in respect of preferential allotment made to Aranda Investments (Mauritius) Pte Ltd certified that the calculation of preferential issue price for the allotment is as per the the guidelines of para 13.1.1 of Chaptet XIII of the SEBI (Disclosure and Investor Protection) Guidelines, 2000. ii. Details of the shareholding of the Promoters and Promoters Group in the Company as the date of filing of this Letter of Offer with SEBI is as follows : Sl no.

1.

Name of the Promoter / Promoter Group Entities Chloride Eastern Limited, Promoter

No. of shares held

366,520,000

20

% of Shareholding 48.87

iii. Details of purchase and sale of securities of the Company by the Promoter and its Directors in the last six months The Promoter and /or its Directors have not purchased and/or sold any equity shares , directly or indirectly, during a period of six months preceding the date on which this Letter of Offer is filed with SEBI. iv. Shareholding Pattern of the Company prior to the Issue and Post Issue as on 30th November, 2007 Shareholders’ Category A. Promoters Holding 1. Promoters Indian Promoters Foreign Promoters Bodies Corporate

Pre-Issue No. of Shares %age

Post – Issue No. of Shares %age

---

--

--

--

3665,20,000

48.87

3909,54,667

48.87

--

--

2. Promoter Group -Sub – Total (A)

--

3665,20,000

48.87

390,954,667

48.87

746,84,107 922,38,095

9.96 12.30

796,63,047 983,87,301

9.96 12.30

706,00,554

9.41

753,07,258

9.41

2375,22,756

31.67

2533,57,606

31.67

C. Other Investors 1. Employees 2. Bodies Corporate 3. Indian Public 4. NRIs 5. Any Others (specify) Sub – Total (C)

72,320 535,96,648 887,16,934 31,33,663 4,37,679 1459,57,244

0.01 7.15 11.83 0.42 0.05 19.46

77,141 571,69,758 946,31,396 33,42,574 4,66,858 1556,87,727

0.01 7.14 11.84 0.41 0.06 19.46

Grand Total (A+B+C)

750,000,000

100.00

800,000,000

100.00

B. Non-Promoter Holding 1. Mutual Funds / UTI 2. Banks, Financial Institutions, Insurance Companies (Central / State Govt. Institutions / Non-Govt Institutions) 3.FIIs Sub – Total (B)

Since the current issue is a Rights Issue, the shareholding pattern Post Issue will remain unchanged, assuming that all the applicants exercise their Rights in full. (a) Equity Shares held by the top 10 shareholders as on the date of filing the Letter of Offer with the Stock Exchanges: Sl no

Name of the Shareholder

1. 2.

Chloride Eastern Limited Life Insurance Corporation of India

Number of Equity Shares 366,520,000 42,417,694

21

% of Shareholding 48.87 5.66

3. 4.

Hathway Investments Pvt Ltd T ROWE Price International INC A/c T ROWE Price New Asia Fund The New India Assurance Company Limited HDFC Trustee Company Limited – HDFC Prudence Fund HDFC Trustee Company Limited A/ C HDFC Long Term Equity Fund HDFC Standard Life Insurance Co. Ltd Franklin India Smaller Companies Fund JP Morgan Asset Management (Europe) SARL A/c Flagship IND

5. 6. 7. 8. 9. 10.

34,132,660 25,037,080

4.55 3.34

21,313,040 13,581,874

2.97 1.81

13,054,210

1.74

11,635,406 10,323,253 96,00,000

1.55 1.38 1.28

(b) Equity Shares held by the top 10 shareholders, 10 days prior to filing the Letter of Offer with Stock Exchanges:

Sl no

Name of the Shareholder

1. 2. 3. 4.

Chloride Eastern Limited Life Insurance Corporation of India Hathway Investments Pvt Ltd T ROWE Price International INC A/c T ROWE Price New Asia Fund The New India Assurance Company Limited HDFC Trustee Company Limited – HDFC Prudence Fund HDFC Trustee Company Limited A/c HDFC Long Term Equity Fund HDFC Standard Life Insurance Co. Ltd Franklin India Smaller Companies Fund JP Morgan Asset Management (Europe) SARL A/c Flagship IND

5. 6. 7. 8. 9. 10.

Number of Equity Shares 366,520,000 42,417,694 34,132,660 25,037,080

% of Shareholding 48.87 5.66 4.55 3.34

21,313,040 13,581,874

2.84 1.81

13,054,210

1.74

11,239,642 10,323,253 96,00,000

1.50 1.38 1.28

(c) Equity Shares held by the top 10 shareholders, two years prior to filing the Letter of Offer with Stock Exchanges (30.11.2005 – Face Value of Rs 10/- per share) : Sl no

Name of the Shareholder

1. 2. 3. 4. 5. 6.

Chloride Eastern Limited Aranda Investments (Mauritius) Pte Ltd Life Insurance Corporation of India Hathway Investments Ltd The New India Assurance Co. Ltd HDFC Trustee Company Limited – HDFC Prudence Fund UTI – Unit Linked Insurance Plan UTI-Dividend Yield Fund UTI Master Value Fund General Insurance Corporation of India

7. 8. 9. 10. v.

Number of Equity Shares 36,652,000 3,822,503 3,736,486 3,413,266 2,501,304 1,360,000 1,249,031 1,070,510 1,051,871 1,033,802

% of Shareholding 48.87 5.10 4.98 4.55 3.34 1.81 1.67 1.43 1.40 1.37

The present Issue being a Rights Issue, as per extant SEBI DIP Guidelines, the requirements of promoters’ contribution and lock-in periond are not applicable.

22

Neither the Company, the Promoters, Directors of the Company nor the Lead Manager to the Issue have entered into any buy-back, standby or similar arrangements for any of the securities being issued through this Letter of Offer. vi. The Company has not availed of “bridge loans” to be repaid from the proceeds of the Issue incurring expenditure on the Objects of the Issue. vii. The equity shares of the Company are fully paid up and there are no partly paid up shares as on date. viii. The Company undertakes that at any given time, there shall be only one denomination for the equity shares of the company and the company shall comply with such disclosure and accounting norms as specified by SEBI from time to time. ix. The Company has 40927 shareholders as on the date of filing the Letter of Offer with SEBI. x.

The Company has not issued any equity shares or granted any options under any scheme of employee’s stock option or employees stock purchase.

xi. The equity shareholders of the Company do not hold any warrants, options or convertible loans or debentures, which would entitle them to acquire further shares in the Company. There are no outstanding options, warrants, debentures, convertible instruments held by anybody that will entitle such persons to acquire further equity shares in the Company. xii. There would be no further issue of capital, whether by way of issue of bonus shares, preferential allotment, and rights issue or in any other manner during the period commencing from submission of the Letter of Offer with SEBI until the Equity Shares offered through the Letter of Offer have been listed or application moneys are refunded on account of failure of the Issue.. xiii. The Company presently does not have any intention or proposal to alter its capital structure within a period of six months from the date of opening the issue, by way of split / consolidation of the denominations of shares or further issue of shares whether preferential or otherwise. xiv. The Company has not issued any equity shares out of revaluation reserves. xv. The Company has capitalized its reserves since inception. The details for the same are as follows : Sl no 1.

Financial Year

Particulars of Capitalization of Reserves or Profit

1965

2.

1967

3.

1968

4.

1974

5.

1977

6.

1980

7.

1983

Rs 23.60 lakhs from the Share Premium Account for issue of 236,000 Equity Shares as bonus shares in the ratio of 1:5 Rs 35.40 lakhs from the Share Premium Account, Capital & Revenue Reserves for issue of 354,000 Equity Shares as bonus shares in the ratio of 1:4 Rs 35.40 lakhs from the General Reserve for issue of 354,000 Equity Shares as bonus shares in the ratio of 1:5 Rs 188.80 lakhs from the General Reserve for issue of 1,888,000 Equity Shares as bonus shares in the ratio of 8:9 Rs 150.45 lakhs from the General Reserve for issue of 1,504,500 Equity Shares as bonus shares in the ratio of 3 :8 Rs 161.36 lakhs from Share Premium Account and General Reserve for issue of 1,613,650 Equity Shares as bonus shares in the ratio of 1:5 Rs 484.10 lakhs from General Reserve for issue of 48,40,950 Equity Shares as bonus shares in the ratio of 3:5

23

8.

1987

9.

2003-04

Rs 774.55 lakhs from General Reserve for issue of 7,745,520 Equity Shares as bonus shares in the ratio of 3:5 Rs 3561.03 lakhs from the Share Premium Account for issue of 35,610,338 Equity Shares as bonus shares in the ratio of 1:1

xvi. The Company has not made a public offering of its equity shares in the immediately preceding two years from the date of filing of this Letter of Offer. xvii. The Issue will remain open for a minimum of 32 days. However, the Board of Directors of the Company will have the right to extend the Issue period for another 28 days. xviii. If the Company does not receive the minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants within forty two days from the date of closure of the issue. If there is delay in the refund of subscription by more than 8 days after the company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), the company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956. xix. The issue will become undersubscribed after considering the number of equity shares applied as per entitlement/ renouncement and additional equity shares, the undersubscribed portion can be applied for only after the close of the Issue. Chloride Eastern Limited, U.K., the Promoter has undertaken to subscribe to such under-subscribed portion, after considering the allotment, to ensure that the Issue is 100% subscribed. This acquisition of additional Equity Shares, if allotted to Chloride Eastern Limited, the Promoter, shall be in terms of proviso to Regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of Regulations 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition will not result in change of control of management of the Company. xx. For Equity Shares being offered on rights basis under this Issue, shareholders are entitled to the allotment of one equity share for every fifteen shares held. In the case of any share holding other than in multiples of fifteen, fractional entitlement will be ignored. Equity shareholders whose fractional entitlement is being ignored would be given preferential allotment of one additional Equity Share each, if they apply for additional Equity Share. xxi. The terms of issue to Non-Resident Equity Shareholders/Applicants have been presented under the section “Issue Related Information” on page 247 of this Letter of Offer.

24

OBJECTS OF THE ISSUE The objects of the present issue of equity shares on rights basis are : 1.

To meet the Long Term Working Capital requirements of the Company.

2.

To meet the expenses of the issue

FUNDS REQUIREMENT (Rs.in Lacs) 14900.00 100.00 15000.00

Long term working capital Issue Expenses Total

FUNDING PLAN (Rs.in Lacs) 15000.00 15000.00

Rights Issue Total

CAPACITY UTILISATION VIS-A-VIS BUSINESS GROWTH The capacity utilisation of the Company for the last two financial years ended on 31 March, 2006 and 31 March, 2007 are as under :-

Financial Year

Capacity Utilisation

2005-06 2006-07

94% 93%

The current trend of growth in volume and revenue of the Company had been : Financial Year

Volume Growth

Revenue Growth

14% 20% 19%

19% 35% 51%

2005-06 2006-07 Quarter ended June 2007

DETAIL BREAK-UP OF FUNDS REQUIREMENT

1.

LONG TERM WORKING CAPITAL REQUIREMENT

Assessment of Working capital requirement vis-a-vis maximum permissible bank finance. The projected increase in working capital requirements of the Company over a period of next two years as given below is based on the following assumptions :Estimated revenue growth of the Company - in 2007-08 34% - in 2008-09 22%

25

Annual capital expenditure plan to support the above revenue growth will be funded through internal generations. Statement of Working Capital requirement :Sr. No.

Particulars

31/03/2007 (Audited)

(Rs. in Lacs) 31/03/2009 (Estimated)

A

Total Current Assets

57221

89050

B

Current liabilities other than bank borrowings

40724

44150

C

Working Capital Gap (A-B)

16497

44900

D

Maximum permissible bank finance (MPBF)

30000

E

Fund requirement after bank finance

14900

The Company’s present current ratio 1.40 : 1, is below the desired level of 2 : 1. Hence, there is a need to infuse fresh funds in the business to have comfortable liquidity for enhanced capacity. Fresh infusion of funds will improve the current ratio. The working capital requirements of the Company over a period of two years ended on 31 March 2009 works out to Rs. 44900 lacs which is proposed to be met by regular working capital limits from banks of Rs. 30000 lacs and proceeds of the current Rights Issue. The current assets of the Company mainly consist of Raw Materials (imported and indigenous), semifinished goods, finished goods for outside sales, consumable stores and receivables, whereas the current liabilities mainly consist of creditors. Inventory & Receivable Holding Levels : The following table depicts the Company’s inventory and holding levels: Particulars

Raw Materials - Imported - Indigenous Semi Finished Goods Finished Goods for outside sales Consumable stores Receivables - Export - Domestic Other Current Assets Total Current Assets Creditors Other Current Liabilities Total Current Liabilities (other than Bank Borrowings)

Audited Holding Level 31/03/2007 (Months) (Rs. in Lacs)

Estimated Holding Level 31/03/2009 (Months) (Rs. in Lacs)

0.92 1.56 0.63 1.23 -

5928 10094 7825 14602 1212

0.90 1.56 0.55 1.16 -

9275 16195 11030 23000 1500

1.80 0.71 2.20 -

1234 13605 2721 57221 22546 18178 40724

1.97 0.73 1.25 -

2300 22700 3050 89050 20000 24150 44150

26

Justification for holding levels: Inventory

:

Inventory holding levels of Raw Materials, Semi-finished goods, Finished goods, etc. are expected to remain at similar levels as in March 2007.

Receivables

:

Receivables on account of domestic sale, which constitutes more than 95% of total sale will be marginally higher than March 2007 level in view of growing competition. Receivables on account of export sale is expected to be higher in next two years compared to March 2007 level due to penetration in the new markets.

Creditors

:

Level of creditors is expected to be much lower in future compared to March 2007 level because of :1.

Demand for Lead exceeds supply internationally.

2.

To achieve price adjustment, credit period from vendors will have to be reduced.

Bank Limits The existing fund based limits Rs. 30000 lacs and non-fund based limits Rs. 40000 lacs are shared amongst banks as follows:

S.No.

1 2 3 4 5 6 7 8 9 10

Name of Bank

Total Fund Based Limits Amount Rs. Lacs 4000 4000 4000 4000 4000 2500 2500 2500 2000 500 30000

State Bank of India Hongkong & Shanghai Banking Corpn. Citibank Standard Chartered Bank HDFC Bank ABN AMRO Bank BNP Paribas ICICI Bank Deutsche Bank Bank of America

%

Non-Fund Based Limits Amount Rs. lacs

%

13.33 13.33 13.33 13.33 13.33 8.34 8.34 8.34 6.67 1.66 100.00

2000 6000 6000 6000 5000 3500 3500 4000 2000 2000 40000

5.00 15.00 15.00 15.00 12.50 8.75 8.75 10.00 5.00 5.00 100.00

2. ISSUE EXPENSES: A portion of the Rights Issue proceeds will be used to meet Issue expenses estimated at Rs. 100 Lakhs. The detailed break-up of the Issue Expenses is as under: Particulars Lead Management Fees Registrar to the Issue Fees Legal Advisors’ Fees Stamp Duty, Auditors, Listing, Filing and Misc. Expenses TOTAL

Amount in Lacs 50.00 2.50 7.50

% of Total Issue Expenses (%) 50.00 2.50 7.50

40.00 100

40.00 100.00

27

% of Total Issue Size 0.33 0.02 0.05 0.27 0.67

SOURCES & DEPLOYMENT OF FUNDS The proceeds of the issue shall be deployed towards the long term working capital requirements after meeting the issue related expenses. INTERIM USE OF FUNDS The deployment of funds raised through the Rights Issue would be for the purpose of funding long term working capital requirements. The interim use of funds is not involved as funds will be available on completion of issue and would be deployed for stated objects.

28

BASIS FOR ISSUE PRICE Investors should also refer to the section “Risk Factors” and “Auditors’ Report” to get a more informed view before making the investment decision. The price per share has been provided for Re. 1/- share face value. Quantitative Factors Information presented in this section is derived from the audited restated financial statements prepared in accordance with Indian GAAP. 1. Earnings Per Share (EPS)* for the last three years Year ended on EPS (Rs) 31.03.2005 1.02 31.03.2006 1.39 31.03.2007 2.06 Weighted Average EPS 1.66 *At face value Re 1/- per share

Weights 1 2 3

2. P/E Multiple in relation to Offer Price of Rs. 30/- per equity share: PE Ratio in terms of Weighted Average EPS of 1.66: 18.07 PE Ratio in terms of EPS as on March 2007 of 2.06: 14.56 3. Industry P/E

Highest 39.5 ( Autolite (India)) Lowest 4.1 (Bharat Gears) Average 19.2 (Source: Capital Market - Vol. XXII/ 20 dated Dec 03 – 16, 2007, Sector:Auto Ancillaries)

4. Return on Net Worth (RoNW) for the last three years Year Ended 31.03.2005 31.03.2006 31.03.2007

% 17.28 20.71 24.72

Weights 1 2 3

Based on the above the weighted average RoNW works out to 22.14% 5. Minimum Return on Increased Net Worth required to maintain Pre Issue EPS (for FY 2007) of Rs 2.06 is 21.23% 6. Net Asset Value Net Asset Value per Equity Share as on March 31, 2007 is Rs 8.35 Net Asset Value per Equity Share after the Issue Rs. 9.70

29

7.

Peerset Analysis

Name of the Company

Equity Capital (Rs.in Crs.)

EPS (Rs.)

P/E

RONW (%)

BV (Rs.)

TudorIndia Amara Raja Batteries* HBL Power System** Exide Industries Limited

24.62 11.39 24.28 75.00

3.6 8.1 12.9 2.0

14.7 16.3 24.5 27.0

---21.1 14.9 27.4

6.0 42.8 98.8 8.4

Face value per share (Rs.) 10.0 2.0 10.0 1.0

(Source: Capital Market - Vol. XXII/20_ dated Dec. 03 – 16 , 2007, Sector: Auto Ancillaries )

* Amara Raja Batteries compete with Exide in the Automotive and Industrial segment, but are classified under ‘Electric Equipment Sector’ in Capital Market Vol. XXII/20 dated Dec. 03 –16, 2007 ** HBL Power System compete with Exide in the Industrial segment, but are classified under ‘Dry Cells Sector’ Capital Market Vol. XXII/20 dated Dec.03 – 16, 2007 The Lead Manager believes that the issue price of Rs. 30/- per share is justified in view of the above quantitative parameters. The investors may also want to peruse the risk factors and financials of the Company including important profitability and return ratios, as set out in the Auditors Report in the Letter of Offer to have a more informed view about the investment proposition.

30

STATEMENT OF TAX BENEFITS To The Board of Directors Exide Industries Limited Exide House 59E Chowringhee Road Kolkata – 700 020

We hereby report that the enclosed statement ( hereinafter referred to as the “Annexure”), prepared by Exide Industries Limited (hereinafter referred to as the “Company”), states the possible tax benefits available to the Company and its shareholders under the provisions of the Income-tax Act, 1961 and the other direct tax laws, presently in force in India. Several of these benefits are dependant on the Company or its shareholders fulfilling the conditions prescribed under the relevant provisions of the respective tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependant upon fulfilling such conditions, which based on the business imperatives, the Company may or may not choose to fulfill. The benefits discussed in the Annexure are not exhaustive and the preparation of the contents stated is the responsibility of the Company’s management. We are informed that this statement is only intended to provide general information to the investors and hence is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is advised to consult his or her or their own tax consultant with respect to the specific tax implications arising out of their investment in the issue. We do not express any opinion or provide any assurance as to whether : • •

The Company or its shareholders will continue to obtain these benefits in future; or The conditions prescribed for availing the benefits, where applicable have been / would be met.

The contents of the Annexure are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company and the interpretation of the current tax laws in force in India. This report is intended solely for your information and the contents of the Annexure in entirety are also intended for the inclusion in the Offer Document in connection with the proposed Rights Issue of the Company. This report is not to be used, referred to or distributed for any other purpose without our prior written consent. For and on behalf of Price Waterhouse Chartered Accountants Sd/P Law Partner Membership No. 51790 Place : Kolkata Dated : 30th August, 2007

31

STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS UNDER THE INCOME -TAX ACT, 1961 AND OTHER DIRECT TAX LAWS PRESENTLY IN FORCE IN INDIA TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS •

This Statement sets out below the possible tax benefits available to the Company and to the shareholders under the current tax laws presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on the business imperatives, the Company may or may not choose to fulfill.



This Statement sets out below the provisions of law in a summary manner only and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and disposal of equity shares. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for a professional tax advice. In view of the individual nature of tax consequences and the changing tax laws, each investor is advised to consult his or her or their own tax consultant with respect to the specific tax implications arising out of their participation in the issue;



In respect of non-residents, the tax rates and the consequent taxation, mentioned above shall be further subject to any benefits available under the Double Taxation Avoidance Agreement, if any, between India and the country in which the non-resident has fiscal domicile; and



The stated benefits will be available only to the sole / first named holder in case the shares are held by joint shareholders.

I. Tax Benefits available to the Company under the Income-tax Act, 1961 (“IT Act”) The Company will be entitled to deduction under the sections mentioned hereunder from its total income chargeable to Income Tax. 1.

By virtue of Section 10(34) and 10(35) of the IT Act, dividend income from domestic company and units of specified mutual fund are exempt from tax in the hands of the Company.

2.

Subject to fulfillment of conditions, the Company will be eligible, inter alia, for the following specified deductions in computing its business income :(a) Section 35(1)(i) and (iv) of the IT Act, in respect of any revenue or capital expenditure incurred, other than expenditure on the acquisition of any land, on scientific research related to the business of the Company. (b) Subject to compliance with certain conditions laid down in Section 32 to the IT Act, the Company will be entitled to deduction for depreciation : (i) In respect of intangible assets in the nature of know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature acquired on or after 1st day of April, 1998 at the rates prescribed under the Income Tax Rules; (ii)

In respect of new machinery or plant which has been acquired and installed after 31st March, 2005 for manufacturing facilities a further sum of 20% of the actual cost of such machinery or plant as additional depreciation in the year in which the new plant and machinery is first put to use.

32

3.

As per the provisions of Section 35DDA of the IT Act, any expenditure incurred in any previous year by way of payment of any sum to an employee in connection with his voluntary retirement, in accordance with any scheme or schemes of voluntary retirement, 1/5th of the amount so paid shall be deducted in computing the profits and gains of the business for that previous year, and the balance shall be deducted in equal installments for each of the four immediately succeeding previous year.

4.

Subject to fulfillment of certain conditions laid down in Section 80JJAA of the IT Act, 1961 the company will be entitled to deduction for 30% of the additional wages paid to the new regular workmen employed during the previous year. This deduction will be allowed for 3 assessment years, including the assessment year relevant to the previous year in which such employment is provided.

II.

Tax Benefits available to shareholders of the Company under the Income-tax Act, 1961 (“IT Act”)

A. Resident shareholders 1.

Under section 10(32) of the IT Act, any income of minor children clubbed in the total income of the parent under section 64(IA) of the IT Act, will be exempt from tax to the extent of Rs.1,500 per minor child whose income is so included.

2.

Under Section 10(34) of the IT Act, income by way of dividend referred to in Section 115-O received on the shares of the Company is exempt from income tax in the hands of shareholders. However it is pertinent to note that section 14A of the IT Act restricts claim for deduction of expenses incurred in relation to exempt income.

3.

The characterization of the gains/ losses, arising from sale of shares, as capital gains or business income would depend on the nature of holding in the hands of the member and various other factors.

4.

(a) The long-term Capital Gains accruing to the members of the Company on sale of the Company’s shares in a transaction entered into in a recognized stock exchange in India, and where such transaction is chargeable to Securities Transaction Tax, shall be exempt from tax as per provisions of Section 10(38). (b) The short-term Capital Gains accruing to the members of the Company on sale of the Company’s shares in a transaction entered into a recognized stock exchange in India, and where such transaction is chargeable to Securities Transaction Tax, tax will be chargeable @ 10% [plus applicable surcharge and education cess] as per provisions of Section 111A. In other case, i.e. where the transaction is not subjected to STT, the short term capital gains would be chargeable as a part of the total income and the tax rates would depend on the income slab. Further no deduction under Chapter VI-A would be allowed in computing such short term capital gains subjected to tax under section 111A. (c) As per the provisions of Section 112 of the Act, long term gains accruing to the members of the Company from the transfer of shares of the Company being listed in recognized stock exchanges, otherwise than as mentioned in point 4(a) above, shall be charged to tax @ 10% [plus applicable surcharge and education cess] after deducting from the sale proceeds the cost of acquisition without indexation. However, the members claiming the benefit of indexation would be subjected to tax @ 20% plus applicable surcharge and education cess on the long term gains. Further no deduction under Chapter VI-A would be allowed in computing such long term capital gains subjected to tax under section 112. (d) The members are entitled to claim exemption in respect of tax on long term capital gains [other than those exempt under section 10(38) of the IT Act] under section 54EC of the IT Act, if the amount of capital gains is invested in certain specified bonds / securities subject to the fulfillment of the conditions specified therein. The maximum investment permissible for the

33

purposes of claiming the exemption in the above bonds by any person in a financial year is Rs. 5 million. However, if the Member transfers or converts the notified bonds into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which such bonds are transferred or otherwise converted into money. (e) Individuals or HUF members can avail exemption under section 54F by utilization of the sales consideration arising from the sale of company’s share held for a period more than 12 months [which is not exempt under section 10(38)], for purchase / construction of a residential house within the specified time period and subject to the fulfillment of the conditions specified therein. 5.

Section 88E provides that 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 an equity share in a company entered into in a recognized stock exchange, i.e., from taxable securities transactions, he shall get rebate equal to the securities transaction tax paid by him in the course of his business. Such rebate is to be allowed from the amount of income tax in respect of such transactions calculated by applying average rate of income tax.

6.

As per the provisions of section 10(23D) of the Act, all mutual funds set up by the public sector banks, private financial institutions or mutual funds registered under the Securities Exchange Board of India (SEBI) or authorized by the Reserve Bank of India are eligible for exemption from income-tax, subjected to the conditions specified therein, on their entire income including income from investment in the shares of the company

B. 1 Non-resident shareholders – other than Foreign Institutional Investors

1.

Under section 10(32) of the IT Act, any income of minor children clubbed in the total income of the parent under section 64(IA) of the IT Act, will be exempt from tax to the extent of Rs.1,500 per minor child whose income is so included.

2.

Dividend (whether interim or final) declared, distributed or paid, under Section 115-O of the IT Act, by the Company are exempt in the hands of shareholders as per the provisions of Section 10(34) of the Act. However it is pertinent to note that section 14A of the IT Act restricts claim for deduction of expenses incurred in relation to exempt income.

3.

The characterization of the gains/ losses, arising from sale of shares, as capital gains or business income would depend on the nature of holding in the hands of the member and various other factors.

4.

The long-term Capital Gains accruing to the members of the Company, being a non-resident, on sale of the Company’s shares in a transaction entered into in a recognized stock exchange in India, and where such transaction is chargeable to Securities Transaction Tax, shall be exempt from tax as per provisions of Section 10(38).

5.

The short-term Capital Gains accruing to the members of the Company on sale of the Company’s shares in a transaction entered into a recognized stock exchange in India, and where such transaction is chargeable to Securities Transaction Tax, tax will be chargeable @ 10% [plus applicable surcharge and education cess] as per provisions of Section 111A. In other case, i.e. where the transaction is not subjected to STT, the short term capital gains would be chargeable as a part of the total income and the tax rate would depend on the income slab. Further no deduction under Chapter VI-A would be allowed in computing such short term capital gains subjected to tax under section 111A.

34

6.

As per the provisions of Section 112 of the Act, long term gains accruing to the members of the Company, being non-residents, from the transfer of shares of the Company being listed in recognized stock exchanges, otherwise than as mentioned in point 4 above, shall be charged to tax @ 20% [plus applicable surcharge and education cess] after deducting from the sale proceeds the cost of acquisition. Such non resident Members are allowed to adjust the cost of acquisition by the amount of foreign exchange rate fluctuations in computing long term capital gains. Further no deduction under Chapter VI-A would be allowed in computing such long term capital gains subjected to tax under section 112.

7.

Under the provisions of Section 90(2) of the IT Act, if the provisions of the Double Taxation Avoidance Agreement (DTAA) between India and the country of residence of the non-resident are more beneficial, then the provisions of the DTAA shall be applicable.

8.

The members are entitled to claim exemption in respect of tax on long term capital gains [other than those exempt under section 10(38) of the IT Act] under section 54EC of the IT Act, if the amount of capital gains is invested in certain specified bonds / securities subject to the fulfillment of the conditions specified therein. The maximum investment permissible for the purposes of claiming the exemption in the above bonds by any person in a financial year is Rs. 5 million. However, if the Member transfers or converts the notified bonds into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which such bonds are transferred or otherwise converted into money.

9.

Individuals or HUF members can avail exemption under section 54F by utilization of the sales consideration arising from the sale of company’s share held for a period more than 12 months [which is not exempt under section 10(38)], for purchase / construction of a residential house within the specified time period and subject to the fulfillment of the conditions specified therein.

10.

Non Resident Indians (as defined in Section 115C (e) of the IT Act) being shareholders of an Indian Company, 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 in respect of income from shares of an Indian Company acquired, purchased or subscribed to in convertible foreign exchange. ¾

As per the provisions of Section 115E of the IT Act, and subject to the conditions specified therein, long term capital gains arising on the transfer of company’s shares will be charged to income tax @ 10% (plus applicable surcharge and education cess) [in case it is not covered under section 10(38)]. In computing the above gains the benefit of indexation is not allowed, however the non residents have been provided with a protection against foreign exchange fluctuation under the first proviso to section 48 of the Act.

¾

As per the provisions of Section 115F of the IT Act and subject to the fulfillment of the conditions specified therein, the Long Term Capital Gains [not covered under section 10(38)] arising on the transfer of Company’s shares shall be exempted from income tax entirely / proportionately if all or a portion of the net consideration is invested within 6 months of the date of transfer in specified asset as defined in section 115C(f) or any savings certificates referred to in section 10(4B) of the IT Act. The amount so exempted shall, however, be chargeable to tax as long term capital gains under the provisions of section 115F(2) if the specified assets are transferred or converted in to money within 3 years from the date of acquisition as specified in the said section.

¾

As per the provisions of Section 115-I of the Act, a Non-Resident Indian may elect not to be governed by the provisions of Chapter XII-A for any assessment year by furnishing his return of income for that assessment year under Section 139 of the Act, declaring therein that the provisions of Chapter XII-A shall not apply to him for that assessment year and accordingly his

35

total income for that assessment year will be computed in accordance with the other provisions of the Act. B. 2 Non-resident shareholders –Foreign Institutional Investors 1.

Under Section 10(34) of the IT Act, income by way of dividend referred to in Section 115-O received on the shares of the Company is exempt from income tax in the hands of shareholders. However it is pertinent to note that section 14A of the IT Act restricts claim for deduction of expenses incurred in relation to exempt income.

2.

The characterization of the gains/ losses, arising from sale of shares, as capital gains or business income would depend on the nature of holding in the hands of the member and various other factors.

3.

(a) The long-term Capital Gains accruing to the members of the Company on sale of the Company’s shares in a transaction entered into in a recognized stock exchange in India, and where such transaction is chargeable to Securities Transaction Tax, shall be exempt from tax as per provisions of Section 10(38). (b) The short-term Capital Gains accruing to the members of the Company on sale of the Company’s shares in a transaction entered into a recognized stock exchange in India, and where such transaction is chargeable to Securities Transaction Tax, tax will be chargeable @ 10% [plus applicable surcharge and education cess] as per provisions of Section 111A. In other case, i.e. where the transaction is not subjected to STT, the short term capital gains would be chargeable to tax @ 30% [plus applicable surcharge and education cess] (c) As per the provisions of Section 115AD of the Act, long term gains accruing to the members of the Company from the transfer of shares of the Company being listed in recognized stock exchanges, otherwise than as mentioned in point 3(a) above, shall be charged to tax @ 10% [plus applicable surcharge and education cess]. The benefit of indexation and the adjustment with respect to fluctuation in foreign exchange rate would not be allowed to such Members. (d) The members are entitled to claim exemption in respect of tax on long term capital gains under section 54EC of the IT Act, if the amount of capital gains is invested in certain specified bonds / securities subject to the fulfillment of the conditions specified therein. The maximum investment permissible for the purposes of claiming the exemption in the above bonds by any person in a financial year is Rs. 5 million. However, if the Member transfers or converts the notified bonds into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which such bonds are transferred or otherwise converted into money.

4.

Under the provisions of Section 90(2) of the IT Act, if the provisions of the Double Taxation Avoidance Agreement (DTAA) between India and the country of residence of the non-resident are more beneficial, then the provisions of the DTAA shall be applicable.

III. Tax Benefits available to the shareholders under the Wealth-Tax Act, 1957 Shares of company held by the shareholder will not be treated as an asset within the meaning of section 2(ea) of Wealth Tax Act, 1957. Hence no Wealth Tax will be payable on the market value of shares of the Company held by the shareholder of the Company. IV. Tax Benefits available to the shareholders under the Gift Tax Act, 1958 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.

36

INDUSTRY OVERVIEW (The information presented in this section has been extracted from the Company’s Annual Reports, Business Magazines and the discussions held with Company officials, which have not been independently verified by the Company, the Lead Manager or any of their respective affiliates or advisors.) OVERVIEW The domestic lead storage battery industry is estimated at around Rs. 70 billion and comprises two main segments: Automotive and Industrial batteries. Storage batteries are basically used as a secondary source of power in vehicles and industrial applications.

LEAD STORAGE BATTERY INDUSTRY

INDUSTRIAL BATTERIES

AUTOMOTIVE BATTERIES

ORIGINAL EQUIPMENT

REPLACEMENT

INFRASTRUCTURE

FAST MOVING

SUBMARINES

INDUSTRIAL

Automotive batteries account for 60% of the total market while industrial batteries contribute the rest. The Automobile storage battery industry can be broadly subdivided into two sub-segments: the Original Equipment (OEM) and Retail or Replacement markets. The OEM market is dominated largely by brands such as Exide, Amaron, Prestolite (Tudor), AMCO. The growth in the OE segment has been buoyant in the recent years due to strong demand pull from the automotive segment. However, the segment provides a low margin which is a cause of concern. The problem of low margins is further being compounded by increase in global lead prices. Most of the players work on an annual fixed price contracts, whereas some players have a periodical Lead escalation clause built in the contracts. In the replacement segment, a large part is dominated by the smaller unorganized players especially in the Commercial Vehicles (CV) and tractor market. While the Industry is fairly concentrated in the organized sector, a large portion of the Industry is in the hands of the unorganized players. The unorganized players cater to the lower end replacement markets and are more prominent in commercial vehicles and tractors segments. However, over the last few years, the share of the unorganized players has been declining mainly due to a rising disposable incomes, increasing quality consciousness, environmental restrictions and advancement of technology in the automotive industry. Unlike the automotive batteries, industrial batteries have a wide range of usage. The Industrial batteries market can be broken up into the infrastructure market (railways, telecom and power), submarine batteries

37

and fast-moving industrial batteries (UPS and inverters). Valve Regulated Lead Acid (VRLA) batteries are the most important kind of battery used in the industrial segment. These batteries are completely sealed and maintenance free and are used in remote power and unmanned applications such as telecom installations and in UPS systems. Storage batteries are also used by the Navy for submarines. These batteries are high technology batteries and are even exported from India. While the operating margins are fairly high in the segment, demand is very erratic. PLAYERS IN THE GLOBAL BATTERY INDUSTRY The following tables depict the players in the global battery manufacturing industry and summarize their positions vis-à-vis the Company in terms of Sales, Operating Profit (in amount) and Operating Profit (in %) for the Financial Year 2006/2007 : TABLE 1: SALES PARAMETER: Sl No. 1. 2. 3. 4. 5. 6. 7. 8.

Company Johnson Controls, USA Exide Technologies, USA GS Yuasa Corporation, Korea and Japan Enersys, USA Exide Industries Limited, India C & D Technologies, USA Global & Yuasa, Korea Oerlikon Batteries, Switzerland

Sales (Million $) 2928 2820 2081 1283 533 497 276 51

(Source: provided by the Company)

TABLE 2: PROFIT MARGIN PARAMETER: Sl No. 1. 2. 3. 4. 5. 6. 7. 8.

Company Johnson Controls, USA Exide Technologies, USA GS Yuasa Corporation, Korea and Japan Enersys, USA Exide Industries Limited, India C & D Technologies, USA Global & Yuasa, Korea Oerlikon Batteries, Switzerland

Operating Profit (Million $) 350 (81) 12 68 97 (38) 3 (2)

(Source: provided by the Company)

TABLE 3: PROFITABILITY PARAMETER: Sl No. 1. 2. 3. 4. 5. 6. 7. 8.

Company Johnson Controls, USA Exide Technologies, USA GS Yuasa Corporation, Korea and Japan Enersys, USA Exide Industries Limited, India C & D Technologies, USA Global & Yuasa, Korea Oerlikon Batteries, Switzerland

(Source: provided by the Company)

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Operating Profit (%) 11.95 (2.88) 0.56 5.33 18.20 (7.59) 1.16 (4.14)

Some of the major players in the Indian battery industry Other than the Company, the other major players in the Indian Battery Business are : (a) Amara Raja Batteries Limited, Andhra Pradesh (b) HBL Power Systems Ltd, Andhra Pradesh (c) Amco Batteries Limited, Tamil Nadu (d) Tudor India Limited, Gujarat (e) Tata AutoComp GY Batteries Pvt Limited, Maharashtra (f) Tractors And Farm Equipment Limited, Tamil Nadu Lead, increasing cost pressures: Lead is the key raw material used in the manufacture of batteries and accounts for approximately 70-75% of the overall raw material costs. Almost all the Lead required by the domestic industry is imported and hence exposes the companies to the risk of global price fluctuations. While the Rupee appreciation against the US $ has helped the domestic players by lowering the landed cost, the global prices of Lead continue to be on an uptrend. From September, 2006 to September, 2007, Lead prices have increased by 148% on the London Metal Exchange (LME), 74% in China and 139% in India. However, there has been a significant upward trend in Lead Prices from April 2007 onwards on LME, in India and China. The following graphs succinctly elucidate the above facts:

Over the past few years, the companies in India have been making efforts to reduce their dependence on imported lead by steadily increasing the usage of recycled lead in accordance with Batteries (Management and Handling) Rules, 2001. According to the said rules enacted by the Central Government, every manufacturer, importer, dealer, assembler and re-conditioner is responsible for collecting the old and expired batteries from the customers in exchange of the new battery sold. These rules were introduced keeping in mind the disposal of used batteries in an eco friendly manner. Earlier, all the Lead batteries were sold by the dealers to the unorganized smelters who recycled the Lead and sold the used batteries in the after markets but exposed the environment to a great risk in the process. Now the Act makes it mandatory for the dealer to maintain record, file half yearly returns and ensure recycling only from registered recyclers. While the rules have been prevalent for quite some time now, the ground level implementation has been an issue. Though the top players offer attractive price for the scrap, the implementation at the dealers’ level leaves a lot to be desired. Most of the dealers are ready to let the consumer retain the old battery rather than take it back to enable safer recycling.

39

Globally, almost 80% of Lead is recycled and India is quite some time away to reach the global standards. However, post the enactment of law more and more companies are now increasing their focus on using the recycled Lead. Recycled Lead will have a two fold benefit for the industry: a. b.

reduced dependence on imported Lead, thus lower the exposure to the volaility in international Lead prices, and reduce the availability of old batteries to the unorganized sector and thus ensure that lead is not recycled in a manner detrimental to the environment.

Industry Outlook The Industry outlook appears to be positive with the demand of the storage batteries to accelerate on the back of : a) continued buoyancy in the automotive replacement segment, b) continued demand pull from the Telecom sector, fueling demand from industrial batteries and c) power shortage to fuel demand for UPS systems and invertors. With the increasing consumer disposable income and raising technology gap between unbranded and branded products, there would continue to be a steady consumer shift away from the cheaper unbranded batteries. However, the following are the key concerns: Competitiveness: The competition in the industry appears to intensify over the medium term. New manufacturers are entering in the market with the state of the art technology in collaboration with global majors. This led to the existing domestic players to scale up the Research & Development efforts. There, however, continues to be a threat of low cost imports from China and ASEAN countries as discussions are currently on to include more products under free trade agreements signed with Thailand. Cost pressures: The spiraling Lead prices in the international markets continue to be a cause of concern for the industry. The increasing Lead prices put a substantial pressure on margins resulting in lower profits. Imports: The other concern that continues to plague the Industry has been that of cheap imports from China. While these Chinese batteries have been flooding the Indian after markets for quite some time, the price differential has now come down significantly as compared to the Indian batteries. China in September 2006 cancelled the VAT export refund for all the lead battery manufacturers in a bid to control the high energy consuming and high polluting products. Consequently, now the price differential has shrunk to just 5-10% and given the concern on quality of Chinese batteries, they are not likely to be a major threat over the longer term.

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BUSINESS OVERVIEW Background The Company’s predecessor began its operations in 1916 as an import house called Chloride electrical Storage Company. Since then, over the years, the Company has been steadily progressing by taking necessary initiatives to modernize its manufacturing processes and by constantly improving its customer services. In the year 1994, the Company had entered into a technical collaboration with Shin Kobe Electric Machinery Co. Ltd. of Japan, a subsidiary of the Hitachi Group. The main objective of entering into this colloboartion was accessing technology for the new automotive vehicles entering the Indian market. Further in the year 1998, with an objective of increasing capacity without the timelag in setting-up greenfield project the company acquired the Industrial Undertakings of Standard Batteries Limited as a going concern. This acquisition strengthened its production base as well as giving the Company access to technology from The Furukawa Battery Company of Japan. On the marketing front, with an objective to get a global platform to expand its business the Company acquired a 100% stake in Caldyne Automatics Ltd in July 2007 and 100% stake in Chloride Batteries S E Asia Pte Ltd., Singapore and 49% stake in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka in the year 2001. The stake in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka was increased to 61.5% by acquiring additional 12.5% stake in 2004. The company has also acquired a 51% stake in ESPEX Batteries Limited, U.K.and a 26% shareholding in Ceil Motive Power Pty Limited, Australia. The Company has also acquired a 100% stake in Tandon Metals Pvt. Ltd. in October 2007. Through these continuous innovations and collaborations the Company has gradually risen to become one of the largest manufacturers and exporters of batteries in the sub-continent today. The Company manufactures the widest range of storage batteries in the world from 2.5 Ah to 15000 Ah capacity, covering the broadest spectrum of applications. As on today, the Company has a domestic market share of 45% in Industrial, 72% in Auto OE and 73% in replacement auto . The Company being the domestic storage major, is also one of the largest power storage solution company in South-East Asia. On the domestic front, the Company has eight factories located across India – 3 in the states of Maharashtra, 2 in the state of West Bengal, 2 in state of Tamil Nadu and 1 in the state of Haryana. The Company power most of the industrial and automotive segments in the country and the products are used in critical applications in infrastructure and defence sectors. Plant Location The Company has eight plants in India, which manufacture batteries. The location of the Plants with details of the products manufactured appears as under: State West Bengal

Address 91 New Chord Road, Athpur, Shamnagar, 24 Parganas (N) – 743 128

Major Products manufactured DTU00 – TP35 JEFO-ATB-38B20R DEMO-6EM13L JEMO – 38B20RD DEMO-6EM25R JE00-T-13 SE00-IT500 UC00-YAP9

41

Application Automotive Vehicles Do Do Do Do Mining Cap Lamp Inverter Power Plants

Durgachak, Haldia, Dist Midnapore, West Bengal – 721 602

Haryana

Plot No. 179, Sector 3, HSIDC Growth Centre, Bawal123 501

Maharashtra

D2, MIDC Industrial Estate, Chinchwad East, Pune 411 019

Plot No. T-17 MIDC Taloja Industrial Area, Taloja – 410 208

JE00-IT500 UE02-3LMX120[PP] JEI0-IN1500PLUS JEF0-MF88T JEI0-IN1350PLUS JEX1-MHD1500 JEX0-MHD800 UE00-IT500 SE00-INVAQUEEN500 UE01-INVAQUEEN500+ UE00-INVAQUEEN500+ UE00-IT550 DEX1-12MX2.5L-C DEX0-12MX5L-B DEX0-12MX2.5L-C DEX1-12MXL-B DEX2-12MX5L-B DSF0-SF2.5L DSF0-SF5L-B DEXO-12MX2.5L-2C DSF1-SF2.5L-C DEX1-12MX2.5L-C-5

Do Do Do Do Inverter Do Do Do Do Motorcycle Do Do Do Do Do Do Do Do Do

DEFO-12MF9-B DEFO-12MF5L-B DEXO-12MX2.5L-C DEX2-12MX2.5L-C DEXO-12MX9-B JEF1-38B20L(MF)

Motorcycle Do Do Do Do Automotive Vehicles

JEKO-EK60L JEMO-EM32R(MF) JEF1-MF50Z JEMO-EM75R(MF) DCCO-MFS40

Do Do Do Do Automotive Vehicles

JCCO-SFN88LTR JSFO-PBX1500 JSFO-PBX1350 JSFO-38B20RD JEF1-DIN65(LH) JSFO-65D26R(MF) JSFO-PBX700 JSFO-AR260 JSF1-N70Z

Do Do Do Do Do Do Do Do Do

Kanjur Village Road*, Kanjurmarg (East), Mumbai – 400 042 Tamil Nadu

Inverter Railways Automotive Vehicles

21/22 Alandur Road, Guindy, Chennai, - 600 032**

42

Chichurakanapalli, Sevaganapalli Panchayat, Hosur Taluk, Dist Dharmapuri – 635 103

JEIO-IN1500PLUS JEF1-MF70Z JEF1-MF40SV JEF2-38B20L(MF) JEMO-EM35R(MF) FC00-CS7-12 FE00-EP1234W FE00-EP17-12 FE00-EP7-12 FE00-EP26-12W

Automotive Vehicles Do Do Do Do UPS Do Do Do Do

*Plant at Kanjurmarg (Mumbai) manufactures submarine batteries. ** In view of the lack of scale of economies, the Company has closed down its operations at Guindy Plant and shifted the same to Shamnagar Plant from 1st October, 2006. Technology Used The Company has Technical collaboration with Shin-Kobe Electric Machinery Company Limited, Japan (part of Hitachi Group) for automotive batteries and also for valve regulated lead acid storage batteries. The Company also has a technical collaboration with The Furukawa Battery Company Limited, Japan for automotive batteries, for two-wheelers and four-wheelers. In addition the Company has a stand alone Research and Development Centre recognised by the Department of Science and Technology, Government of India, which is carrying out research on various facets of lead acid technology including development of new products in various applications, primarily to make the product range internationally competitive. In addition, R&D is also engaged in projects embracing process technology, aimed at improving the product quality, consistency, production efficiency and material utilisation. Manufacturing process: The following flow diagram depicts a general process of battery manufacturing:

43

LEAD LEAD + OTHER METALS & MASTER ALLOY

OXIDE MILL

GRIDS ALLOY LEAD ALLOY GRID BLENDING CASTING

STACKING FINISHED PLATE CUTTING & (MANUAL/ LUG BRUSHING PLAT AUTOMATIC) GROUPS GROUP BURNING (MANUAL WITH JIGS) / CAST-ON-STRAP

LEAD OXIDE

PASTE MIXING

LEAD PASTE GRID AGING AGED GRIDS PASTING & PLATES (OPEN FLASH DRYING AIR/OVEN)

DRYING (POS) / DRY CHARGE (NEG)

BOXING (MANUAL)

SHORT CIRCUIT TESTING

HOLE PUNCHING

BURNING STICK

SEPARATOR

WASHING

INTERCELL WELDING

HEAT SEALING

POLE BURNING

PACKING & DESPATCH

SHEAR TESTING

CURING OVEN

DRYING OVEN

FORMING

HIGH VOLTAGE TESTING

LID FIXING (MANUAL)

LID

MANUAL FIXING OF VENT PLUG & TERMINAL PROTECTOR

LEAK TESTING

SCREEN PRINTING CONTAINER

DM WATER ADDITIVES

FOIL SEALING OF VENT PLUGS (OPTIONAL)

TESTING

Collaborations The Company has technical Collaborations with : (a) Shin Kobe Electric Machinery Co., Limited, Japan (Part of Hitachi Group, Japan) for its Automotive and Valve Regulated Lead Acid (VRLA) batteries (except for Taloja Plant); and (b) The Furukawa Battery Company Limited, Japan for its Automotive batteries at Taloja Plant. Details in terms of clause 6.9.2.1 (c) of DIP guidelines are as follows: Name of the Registered Year of Paid up Date of Collaborator office Incorporation capital Agreement

Shin Kobe Electric Machinery Co., Limited

The Furukawa Battery Company Limited

No.8-7, 2Chome, NihombashiHoncho, Chuo- Ku, Tokyo 103 – 0023, Japan 2-4-1 , Hoshikawa 2 – Chome, Hodogayaku, Yokohama City, Kanagawa Prefecture 240-0006, Japan

1948

1950

Validity

2546 Million Yen

(i) 29.03.04

5 years

(ii)22.06.05

5 years

1640 Million Yen

(i) 01.12.05

5 years

(ii) 09.3.07

5 years

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Total turnover as on 31st March 2007 65344 Million Yen

32107 Million Yen

In addition the Company has a stand alone Research and Development Centre at Kolkata recognised by the Department of Science and Technology, Government of India, which is carrying out research on various facets of lead acid technology including development of new products in various applications, primarily to make the product range internationally competitive. In addition, R&D is also engaged in projects embracing process technology, aimed at improving the product quality, consistency, production efficiency and material utilisation. Raw materials The main raw materials used by the Company are Lead and Lead Alloys, Polypropylene Copolymers, Antimony, Separators and Other raw materials like PVC resin, Vaniperse etc. The above raw materials are sourced partly from local manufacturers and partly through imports. Currently, the Company’s total Lead and Lead Alloys requirement works out to 140,000 - 150,000 M/T per annum. Of this, 90,000 – 96,000 M/Ts in the form of pure Lead and balance 50,000 – 54,000 in the form of Lead Alloys. The requirements of Lead Alloys are ;Lead Alloys Red Lead Calcium negative Alloys Calcium positive Alloys Antimonial Lead TOTAL

M/T 3,000 12,000 8,000 30,000 53,000

Details of the utilities at the Plants appear as under: Location of the plant Bawal

Power (sanctioned load) 4500KVA

Chinchwad

3650KVA

Haldia

6500KVA

Hosur Kanjurmarg

7000KVA 750KVA

Shamnagar Taloja

2953KW 3500KVA

Guindy Total

425KVA

Water Source

Purchase from Haryana State Industrial Development Corporation Purchase from Maharashtra Industrial Development Corporation and own borewell Purchase from Haldia Development Authority and own borewell Purchase from outside vendor and own borewell Purchase from Municipal Corporation of Greater Mumbai Own borewell Purchase from Maharashtra Industrial Development Corporation Purchase from CMWSSB and own borewell

Manpower as on 31st March, 2007 (Nos) 506 849 1129 980 113 806 781 129 5293*

*Manpower includes 3863 permanent employees and 1430 manpower on contracts and casual

Effluents The Company believes that environmental control is an area of high priority as it uses Lead in the process of manufacturing its products. Each of the Company’s Plants has been set up with intricate and intensive Pollution Control Equipments to ensure that the Effluents (eg. Sludge) prejudicial to the environment are not discharged without being treated at the concerned Plant.

45

ERP Systems The Company had earlier installed SAPR3 of ERP software with different modules such as sales, finance, accounting and inventory. These yielded positive results in the form of Management Information Reports which could be used to facilitate the decision-making with knowledge and certainty. In the year 2002-03, this was upgraded with the Company adopting the more advanced version 4.6, which not only gives data on a real time basis but has much greater flexibility and ability to undertake web-based Customer Relationship Management (CRM) alongwith Supply Chain Management (SCM) . Company’s Segment-wise break-up of Revenue The Company broadly serves two Segments viz. Automotive Batteries and Industrial Batteries (including Submarine sub-segment). The contribution of each segment towards the business of the Company appear as under: SEGMENTS & BREAK-UP

% Share

Automotive Batteries OEM, Retail, Exports and Defence

60%

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

38% 2%

40%

Automotive Batteries In the domestic market, the Company sells its products under EXIDE, SF, SONIC and Standard Furukawa Brands.’EXIDE’ and ‘SF” are its flagship brands. In the international market the products are sold mainly under DYNEX, INDEX & SONIC brands. The Company supplies batteries to almost all the car and twowheeler manufacturers in the country. The Company has a distribution network comprising over 4000 dealer outlets. These outlets are supported by 4 regional offices and 28 branch offices. The Company also exports batteries to the Middle East, Japan and CIS countries. The Company has a market share of 72% in case of Automotive OEM and 70% in case of Organized Retail. The Company also manufactures submarine batteries. Replacement Market In the replacement segment, a large part is dominated by the smaller unorganized players especially in the commercial vehicles and tractor market. The Company is estimated to have 70% share of the replacement retail market. The Company’s “Operation Kissan” has helped to move a large part of the unorganized tractor replacement market into the organized space. Industrial Batteries The Company designs and manufacture its industrial batteries in a wide range from 2.5 Ah to 20,600 Ah in conventional flooded and Valve Regulated Lead Acid (VRLA) design. In domestic market, the Company sell its products mainly under EXIDE, INDEX, SF, CEIL & POWER SAFE brands and in the international markets mainly under CEIL, CHLORIDE and INDEX brands. Industrial batteries are of three types, Conventional lead acid batteries, VRLA (Valve regulated lead acid batteries) batteries and Nickel-Cadmium batteries.

46

Both organized and unorganized players compete in the OEM and retail industrial battery markets. Industrial batteries cater mostly to the infrastructure sector such as railways, telecom, power plants, solar cells and other industrial segments such as uninterrupted power supply, inverters and traction batteries. Exide’s Inva tubular batteries for Inverter applications were introduced in 2000 and Tele tubular for Telecom Sector introduced in the year 2007 has created volume growth.. The Company also manufacture industrial batteries for niche segments such as miners’ cap lamp batteries and submarine batteries. Segment-wise contribution to the sales revenue as on 30.11.2007 Segment

% of Company’s Sales Revenue

Infrastructure - Railways, Power, Telecom Fast-Moving Industrial Batteries - UPS, Inverters, Traction Batteries Export - Cap Lamps etc.

15% 19% 4%

Total Industrial Batteries

38%

Infrastructure Segment In the infrastructure sector, batteries are sold in the railways, power and telecom segments. The Company faces competition from both organized and unorganized players. The infrastructure segment contributes 13-15% to the total revenue. Fast-Moving Industrial Batteries Segment Fast-moving industrial batteries include UPS, Inverters, Traction batteries and the like.The key growth drivers for fast moving industrial batteries are: increasing computersisation and power shortages. Submarine Batteries The Company also manufactures high-end submarine batteries (Type 1, 2 & 3). The Company manufactures two to three submarine batteries a year to meet the country’s defence requirements. The Company is one of the five companies in the World which has the capability to make submarine batteries for both Russian and German types. With the government’s permission, in recent years, the Company has exported to Algeria. Product Quality and After Sales Service Product Quality and After Sales Service are the key factors for retaining the existing market share and customer base. In addition, new products underpinned by innovation and continuous technology upgradation are equally important for not only market share retention, but also to secure profitable growth in niche market segments. To ensure the concerted focus in the above mentioned key success factors, the Research and Development Division of the Company have been recently reorganized to have three distinct and separate departments as under :1.

Process Control and Quality Assurance

2.

Performance Improvement of existing products and Product Development with New Designs and New Products

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3.

Innovation and Technology Upgradation.

Above departments are having distinct roles and the functional accountability with clearly identified resource allocation. Training The Company consider all its employees as vital resources. The Company believe that their skills need to be continuously updated and hence the Company regularly provide both on-the-job and off-the-job training. For effective and efficient performance of the Company’s sales and factory personnel, it is necessary for them to be aware of the technology aspects. Hence, the Company provide training for all new joinees on Battery Technology utilizing its internal faculty. The Company also provide training to its sales and service personnel on customer care for effective customer relations. Apart from these, the Company regularly send personnel to different programmes organized by various training institutions. Company’s Market Share in Different Segments Market Shares

% of the total segment

Telecom Railways Auto (OEM) – Passenger Vehicles Auto (OEM) – Overall Auto (Replacement) – overall including unorganized Branded (Replacement) Two-wheelers Power Projects UPS/Inverters Traction Cap Lamps

30% 30% 80% 72% 35% 80% 55% 70% 40% 80% 90%

Source: Company estimates

Service offered by the Company: The Company had launched the battery mobile service namely “Batmobile” service in the year 2000 to provide services to all the consumers of automotive batteries. Initially the service was launched in 9 cities. As on 30 November 2007, the Batmobile services are available in 32 cities with an average response time of 28 minutes. Competition Business segment wise Competitors of the Company Business segment Automotive

Name of the Competitor (a) Amara Raja Batteries Limited (b) Amco Batteries Limited (c) Tudor India Limited (d) Tata AutoComp GY Batteries Pvt Limited (e) Tractors And Farm Equipment Limited

Industrial

(a) Amara Raja Batteries Limited (b) HBL Power Systems Limited (c) Amco Batteries Limited

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Exports The Company export traction batteries to Europe through the Joint venture company ESPEX Batteries Limited, while exports to Australia, Japan, Korea, etc. is done through its 100% subsidiary in Singapore. The share of export turnover of the Company during the last three financial years are as follows:

FY ending on 31 March 2007 2006 2005

Total turnover (net)

Export turnover

187021 137949 117527

(Rs. In Lakhs) % of turnover

8239 6940 5633

export

4.41 5.03 4.79

Installed capacity and actual production The installed capacity and utilized capacity for the last three years are as follows : Unit Installed Capacity Actual Production 2006 – 07 2005-06 2004-05 2006-07 2005-06 2004-05 StorageBatteries Nos 18,307,585 15,508,772 14,859,772 17,044,903 14,508,489 14,129,347 Nature of the products and Utility-wise Break-up of Industrial Batteries Utility Motive Power

Standby

Railways

Sector Electric Vehicles Mining Locomotives, Miners’ Caps Lamps Power, Telecom, UPS, Inverter

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

Customer/ Client Indian Railways, Macneill & Magor, Godrej, Voltas, Josts, Maini, BHEL, Escorts, Indian Navy Fujitsu, Alcatel, Siemens, Tata Lucent, BSNL, MTNL, Birla A&T, Crompton Greaves, Tata Telecom, Reliance Telecom. Railways

Approach to Marketing and proposed marketing set-up: Distribution Network: (A) For Automotive Batteries The Company operates through authorized distributors and dealers who in addition to selling to consumers also sell to a tertiary distribution network which comprises of garages and is called the “Humsafar partner” network. In addition, the Company also has separate distribution network called C Dealer Network for heavy commercial vehicle owners and Kisan Dealer Network for Tractor Owners. As on 30th November, 2007, the Company has approximately 8000 authorised dealers and approximately 13000 Humsafar partners with them. In addition, the Company has marketing staff of 340 employees of the Company. The concept of Exide Care shops was launched to establish a common look and feel and a standardized positive brand experience for the consumer. At present, there are 100 Exide Care shops across India.

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SF Sonic Distribution SF Sonic has approximately 255 (approx) ‘A’ dealers with a network of approximately 7000 retailers with them. It also has approximately 1500 ‘B’ dealers. A total number of 75 employees are employed for this purpose. Network of Depots and Service Stations The Company presently has a network of Depot-cum-Service Stations which counts to 33 at present and are spread across the Country. With this, the Company aims at providing World Class After Sales Service & Delivery Systems to its Customers & Channel Partners. The following figure succinctly depicts the working of the Delaer and Service Network of the Company:

Customer

OEM Customer

Dealer / Retailer

Main Dealer Service Staff / Stns. EIL Branches

Factories Factories

(B) For Industrial Batteries Our Company has approximately 1000 authorised dealers including a total marketing staff of 270.. The concept of Exide Power Centre shops was launched to establish a common look and feel and a standardized positive brand experience for the consumer. At present, there are 26 Exide Power Centre shops across India.

Business Strategy: (A) For Automotive Batteries The Company is one of the leading players in the Lead acid storage components and its business strategy is adopted towards consolidating its position by commanding a high brand equity and recall. The acquisition of business of Standard Furukawa had made Exide much stronger since it enabled it to service more customers and grow bigger as well as protect the Exide flagship brand. Exide offers one of the

50

widest range of batteries to fit every consumer segment which makes it tough for competitors to increase sales. The Company’s stronghold is one of the largest dealer network spread across the length and breadth of India. Exide has also realized the importance of investment in technology that has resulted in it becoming one of the most cost and quality competitive battery brands in the world. This has also led to the creation of an online-interactive CRM (Customer Relationship Management) portal www.exidereachout.com to empower its dealer network stay in touch with Exide and the consumer. Exide aims to be a dominant supplier for all the new Cars launching in India in the next three years. Exide’s passion for Cars is reflected in Exide Bat Mobile which is a free emergency service offering from Exide to help stranded motorists. (B) For Industrial Batteries Batteries for industrial applications have grown significantly during 2006-07. Not only has the Company been able to increase its market share, but also managed to keep both imports and domestic competitors at bay. Telecom has grown at a sedate pace and new products have been planned for the current year, when the growth rate is expected to accelerate. Railways continue to place a significant share of business to the Company and new products are planned for this segment in order to increase the growth potential. Solar batteries too had an encouraging growth of over 70%. Power and Projects continue to project a steady growth and new initiatives have been planned for this segment, especially with tubular batteries gaining ground. Traction batteries represent a significant growth area, after a long period of small incremental increases. Batteries for UPS and digital inverters recorded a steady growth. Export of traction batteries has recorded impressive gains and continued to be a profitable business. Australia, UK, South Africa, South Korea and the European markets continue to be focus areas for exports. Employees The number of permanent employees on Company’s payroll as at 30th September, 2007 was 3918 which comprises of: Sl no 1. 2. 3. 4.

Category of employees Management Staff Graded Staff Supervisor Workmen TOTAL

Numbers 1170 292 212 2244 3918

Company’s Recruitment Strategy: The Company has an annual manpower planning exercise wherein the manpower requirements of the Company are finalized.

The Company follows the following methodology for recruitment: a) b) c) d) e) f) g)

Sourcing of CVs (Job Portals / Placement Consultants / Data Bank) Preliminary screening of CVs Preliminary Interview Psychometric test of short-listed candidates (done for all positions from Manager level) Final Interview of shortlist candidates Medical Check-up is done for all candidates Candidate offered employment

51

Retention Policy: The Company recognizes employees as its assets. The Company has in its place the following retention policy for the employees: i)

Reward and Recognition: Every employee based on his performance in the given year is given a monetary reward. ii) Promotions: Based on the performance and potential of employees, the candidates are considered for promotion in the organisation iii) Compensation: A compensation commensurate with the education and experience is offered to the employees. iv) Group Medical Insurance for all the employees v) Group Life Insurance policy for the employees who have completed 5 years of service vi) Personal accident Insurance Scheme for its employees vii) Employees who have completed 5 years of service and are Managers & above, are offered Interest Subsidy on their home loans. viii) Wedding Day Gift - Employee is entitled to a gift for Rs.2000/ix) Training and Development is a routine activity of the Company where training is provided for enhancement of their skills. x) Periodic review of compensation to ensure that the Company’s employee compensation is at par with the industry. Insurance The Company avails of insurance for its assets and employees based on management perception of risks and possible loss. Currently, the insurance policies the Compnay has availed of include the following: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m)

Fire; Marine Insurance; Stock; Vehicle Insurance; Electronic Equipment; Product Liability; Burglary; Public Liability and Industrial Risks; Money Insurance; Group Personal Accident ; Group Term Life Insurance Group Medical Insurance Directors’ & Officers’ Liability

Properties Details of Freehold Properties

Sl

Date of Agreement

Nature Agreement

1.

30.01.1993

Sale Deed

of

Parties

Varma Industrials Limited

52

Area & Property

Use for

Tower B1, 1st half, 5th Floor with one parking space measuring approximately 3115 sq ft in the building known as Golden

Office

Enclave situate at Airport Road, Bangalore

2.

25.02.1995

Sale Deed

SNS Arcade Private Limited

3.

15.03.2001

Sale Deed

Exide Products Limited

4.

04.08.2003

Sale Deed

Dr Prashanta Kumar Basu and others

5.

23.09.2003

Sale Deed

Dr Prashanta Kumar Basu and others

6.

11.03.1998

Sale Deed

Biswajit Naskar Satyajit Naskar

7.

11.03.1998

Sale Deed

Biswajit Naskar Satyajit Naskar

53

Tower B1, 2nd half, 5th Floor with two parking space measuring approximately 3115 sq ft in the building known as Golden Enclave situate at Airport Road, Bangalore Flat measuring approximately 201.525 sq ft in the building situate at Konena Agrahara, Varathur, Hobli, Bangalore South Flat B, Ground floor, Shahnshah Apartment measuring approximately 1420 sq ft situate at 13 Jopling Road, Lucknow Flat No. 4D measuring 950 sq ft approximately with one car parking space in the premises being no: 74K Bondel Road, Kolkata Flat No. 1B measuring 1150 sq ft approximately with one car parking space in the premises being no: 74K Bondel Road, Kolkata 1 cottah of Danga Land equivalent to 720 sq ft comprised in Mouza Raghunathpur, JL No. 8, Touzi No. 10, RS No. 134, Rajarhat, District 24 Parganas (North), PS: Rajarhat, Rajarhat Gopalpur Municipaliry – Plot A 1 cottah of Danga Land equivalent to 720 sq ft comprised

Office

Residential property

Residential property

Residential property

R&D Centre

R&D Centre

8.

20.04.1998

Sale Deed

Biswajit Naskar Satyajit Naskar

9.

20.04.1998

Sale Deed

Biswajit Naskar Satyajit Naskar

10.

07.11.2006

Sale Deed

Kamla Sharma

11.

07.11.2006

Sale Deed

Baijyanti Devi

12.

20.01.1983

Sale Deed

Dilip Kumar Sanyal

13.

20.01.1983

Sale Deed

Dipak Kumar Chakraborty

54

Shankar

in Mouza Raghunathpur, JL No. 8, Touzi No. 10, RS No. 134, Rajarhat, District 24 Parganas (North) PS: Rajarhat, Rajarhat Gopalpur Municipaliry – Plot B 1 cottah of Danga Land equivalent to 720 sq ft comprised in Mouza Raghunathpur, JL No. 8, Touzi No. 10, RS No. 134, Rajarhat, District 24 Parganas (North) PS: Rajarhat, Rajarhat Gopalpur Municipaliry – Plot C 1 cottah of Danga Land equivalent to 720 sq ft comprised in Mouza Raghunathpur, JL No. 8, Touzi No. 10, RS No. 134, Rajarhat, District 24 Parganas (North) PS: Rajarhat, Rajarhat Gopalpur Municipaliry – Plot D Land measuring 2 cottahs 8 sq ft, Mouza Raghunathopur, JL No. 8, Touzi No. 3027, RS No. 134, Rajarhat, District 24 Parganas (North), LR Khatian No. 231/1 Land measuring 2 cottahs 15 sq ft, Mouza Raghunathpur, JL No. 8, Touzi No. 3027, RS No. 134, Rajarhat, District 24 Parganas (North), LR Khatian No. 984/1 4 cottahs 4 chittaks JL No. 8, Mouza Raghunathpur, Touzi No. 3027, RS No. 134, Rajarhat, District 24 Parganas (North) 3 cottahs JL No. 8, Mouza

R&D Centre

R&D Centre

R&D Centre

R&D Centre

R&D Centre

R&D Centre

14.

02.07.197

Indenture

Lalita Biswas

15.

13.02.1974

Indenture

Lalita Biswas

16.

18.06.1975

Indenture

Annapurna Saha

17.

27.08.1974

Indenture

Ananta Sinha

18.

17.08.1996

Sale Deed

Swapna Roy as mother and natural guardian of Saibyasis Roy

19.

17.08.1996

Sale Deed

Swapna Roy as mother and natural guardian of Saumasis Roy

20.

17.08.1996

Sale Deed

Swapna Roy

21.

21.12.1994

Sale Deed

C Peddarama Reddy & 7 Others

22.

21.12.1994

Sale Deed

V Srinivasa Reddy & 5 others

55

Kumar

Raghunathpur, Touzi No. 3027, RS No. 134, Rajarhat, District 24 Parganas (North) 11 cottahs 14 chittaks 13 sq ft of land at PS Rajarhat, Rajarhat Gopalpur Municipality 11 cottahs 2 chittaks 7 sq ft of land at PS Rajarhat, Rajarhat Gopalpur Municipality 6 cottahs 12 chittaks 6 sq ft of land at PS Rajarhat, Rajarhat Gopalpur Municipality 11 cottahs 5 chittaks of land at PS Rajarhat, Rajarhat Gopalpur Municipality 1/21st share in the piece or parcel of land together with the messuage building and tenements standing thereon at 59E Chowringhee Road, Kolkata 1/21st share in the piece or parcel of land together with the messuage building and tenements standing thereon at 59E Chowringhee Road, Kolkata 1/21st share in the piece or parcel of land together with the messuage building and tenements standing thereon at 59E Chowringhee Road, Kolkata Land in Sevaganapalli Village, Hosur Taluk, S No. 241/2 measuring 5.50 acres Land in Sevaganapalli

R&D Centre

R&D Centre

R&D Centre

R&D Centre

Registered Office

Registered Office

Registered Office

Hosur Factory

Hosur Factory

23.

21.12.1994

Sale Deed

C Gopal & 3 others

24.

21.12.1994

Sale Deed

Y Shamanna Reddy & 14 others

25.

21.12.1994

Sale Deed

J Govindaswamy & 8 others

27.

28.12.1994

Sale Deed

M M Venkata Reddy & 27 others

28.

22.12.1994

Sale Deed

J Ansar & 2 others

29.

27.09.1995

Sale Deed

Mrs Jayamma & 3 others

30.

26.04.1995

Sale Deed

C P Kesava Reddy

31.

21.12.1994

Sale Deed

P Kempiah

32.

08.08.2000

Sale Deed

Suraj Devi

33.

08.08.2000

Sale Deed

Usha Devi

56

Village, Hosur Taluk, S No. 243/2 measuring 3.50 acres Land in Sevaganapalli Village, Hosur Taluk, S No. 243/1 measuring 2.10 acres Land in Sevaganapalli Village, Hosur Taluk, S No. 240/2 measuring 3.15 acres Land in Sevaganapalli Village, Hosur Taluk, S No. 243/3 measuring 4.26 acres Land in Sevaganapalli Village, Hosur Taluk, S No. 244/1, 241/3, 246/2, 245/1, 245/2, 245/3, 245/4 measuring 25.72 acres Land in Sevaganapalli Village, Hosur Taluk, S No. 244/2 measuring 3.42 acres Land in Sevaganapalli Village, Hosur Taluk, S No. 241/1 measuring 0.82 acres Land in Sevaganapalli Village, Hosur Taluk, S No. 225/2 measuring 2.47 acres Land in Sevaganapalli Village, Hosur Taluk, S No. 240/1, 246/3 measuring 5.99 acres Land in Sevaganapalli Village, Hosur Taluk, S No. 7/3, Plot No. C21 measuring 243 sq mts Land in Sevaganapalli Village, Hosur Taluk,

Hosur Factory

Hosur Factory

Hosur Factory

Hosur Factory

Hosur Factory

Hosur Factory

Hosur Factory

Hosur Factory

Hosur Factory

Hosur Factory

34.

31.03.1993

Sale Deed

Gautham Jain

35.

21.03.2001

Sale Deed

M Balaji

36.

08.05.2002

Sale Deed

R Sudeendra

37.

11.06.1999

Sale Deed

Babulal Porwal

38.

Letter of Intent dated 24.09.1997

Conveyance Deed is pending

Haryana State Industrial Development Corporation

39.

13.10.2006

Registered Agreement Sale

M/s Kruti Constructions

40.

29.03.1997

Sale Deed

for

John Fowler India Limited

57

S No. 7/3, Plot No. C22 measuring 243 sq mts Land in Sevaganapalli Village, Hosur Taluk, S No. 17, Plot No. E160 measuring 1295 sq ft Land in Sevaganapalli Village, Hosur Taluk, S No. 7/3 and 17/1 Plot No. E177 measuring 120 sq mts (1291 sq ft) Land in Sevaganapalli Village, Hosur Taluk, S No. 7/3, Plot No. D 33 measuring 112 sq mts (1205.12 sq ft) Land in Sevaganapalli Village, Hosur Taluk, S No. 7/3, Plot No. C16 – C20, D27 D33 measuring 1807.02 sq mts (19450.76 sq ft) Plot No. 179, Sector 3, HSIDC Growth Centre, Bawal, District Rewari measuring 72000 sq mts Proposed flat No. 201 in Building No. 1 in the 2nd floor admeasuring 1690 sq fts with one car parking space in the Project known as Kumar Presidency situated at Ghorpadi TPS Sangamwadi, Pune Apartment No. 609 on the 6th Floor in Block C of the building known as Maple measuring 990 sq fts with one car parking space in the building known as

Hosur Factory

Hosur Factory

Hosur Factory

Hosur Factory

Bawal Factory

Residential Property

Residential Property

41.

09.12.1997

Sale Deed

John Fowler India Limited

42.

29.03.1997

Sale Deed

John Fowler India Limited

43.

29.03.1997

Sale Deed

John Fowler India Limited

44.

29.03.1997

Sale Deed

John Fowler India Limited

45.

09.12.1997

Sale Deed

John Fowler India Limited

[

58

Raheja Residency, Koramangala, Bangalore South Taluk Apartment No. 513 on the 5th Floor in Block C of the building known as Maple measuring 1415 sq fts with one car parking space in the building known as Raheja Residency, Koramangala, Bangalore South Taluk. Apartment No. 710 on the 7th Floor in Block C of the building known as Maple measuring 1055 sq fts with one car parking space in the building known as Raheja Residency, Koramangala, Bangalore South Taluk Apartment No. 711 on the 7th Floor in Block C of the building Maple measuring 1055 sq fts with one car parking space in the building known as Raheja Residency, Koramangala, Bangalore South Taluk Apartment No. 712 on the 7th Floor in Block C of the building known as Maple measuring 1080 sq fts with one car parking space in the building known as Raheja Residency, Koramangala, Bangalore South Taluk Apartment No. 110 on the 1st Floor in Block D of the

Residential Property

Residential Property

Residential Property

Residential Property

Residential Property

46.

08.04.1987

Sale Deed

Ramanlal Phumra

47.

22.08.1986

Sale Deed

Nivanani Nandi

48.

22.08.1986

Sale Deed

Anjali Choudhury

49.

16.02.1998

Deed Conveyance

of

The Standard Batteries Limited

50.

16.02.1998

Deed Conveyance

of

The Standard Batteries Limited

51.

20.02.1945

Memorandum Agreement

of

Government India

52.

19.07.1951

Memorandum Agreement

of

Government of the State of West Bengal

59

of

building known as Olive measuring 1585 sq fts with one car parking space in the building known as Raheja Residency, Koramangala, Bangalore South Taluk Flat No. 6 of the 6th Floor of the building known as Akash Deep at 5 Lower Rowdon Street, Kolkata Residential flat on the ground floor at 1/186 Gariahat Road (South), Kolkata measuring 1305 sq fts Residential flat on the second floor at 1/186 Gariahat Road (South), Kolkata measuring 2223 sq fts Land measuring 1155 sq mts, Plot No. W12, Block No. 138, Mouje Bileshwarpura, Taluka Kalol, Registration District Mehsana, District Kalol, Gujarat Land measuring 12783.5 sq mts in TS No. 2, Block No. 2, Adyar Village together with the factory and other structures thereon at Guindy, Chennai Land at Plot No. 91 New Chord Road, PO: Athpur, District North 24 Parganas, PIN 743 128, West Bengal (Shamnagar) Land acres at Plot No. 91 New Chord Road, PO: Athpur, District North 24 Parganas, PIN 743 128, West Bengal (Shamnagar)

Residential Property

Residential Property

Residential Property

Plot in Gujarat

Guindy Factory

Shamnagar Factory

Shamangar Factory

53.

6.10.1961

Agreement

Please refer to Note 1

54.

6.10.1961

Agreement

Please refer to Note 1

55.

25.11.1961

Agreement

Please refer to Note 2

56.

25.11.1961

Agreement

Please refer to Note 2

57.

25.11.1961

Agreement

Please refer to Note 2

58.

25.11.1961

Agreement

Please refer to Note 2

59.

25.11.1961

Agreement

Please refer to Note 2

60.

25.11.1961

Agreement

Please refer to Note 2

61.

28.07.1998

Sale Deed

Gokul Construction Company Pvt Ltd

62.

28.07.1998

Sale Deed

Gokul Construction Company Pvt Ltd

63.

16.02.1998

Sale Deed

The Standard Batteries Ltd

64.

16.02.1998

Sale Deed

The

Standard

60

Flat No. 9 Woodlands Syndicate, 8/7 Alipore Road, Kolkata 700 027 Flat No. 31 Woodlands Syndicate, 8/7 Alipore Road, Kolkata 700 027 Flat No. 11B Minto Park, 13 D L Khan Road, Kolkata 700027, Kolkata 700 027 Flat No. 15A Minto Park, 13 D L Khan Road, Kolkata 700027, Kolkata 700 027 Flat No. 5B Minto Park, 13 D L Khan Road, Kolkata 700027, Kolkata 700 027 Flat No. 18A Minto Park, 13 D L Khan Road, Kolkata 700027, Kolkata 700 027 Flat No. 15B Minto Park, 13 D L Khan Road, Kolkata 700027, Kolkata 700 027 Flat No. 7A Minto Park, 13 D L Khan Road, Kolkata 700027, Kolkata 700 027 Flat at Eden Rock, 6th Floor, 3 Union Park, Pali Hill, Bandra (W), Mumbai 400 050 Flat at Eden Rock, 3rd Floor, 3 Union Park, Pali Hill, Bandra (W), Mumbai 400 050 Flat No. 1805/06, Premium Towers, Lokhandwala Complex, Andheri (W), Mumbai 400 053 Flat No. 1505/06,

Residential Property

Residential Property

Residential Property

Residential Property

Residential Property

Residential Property

Residential Property

Residential Property

Residential Property

Residential Property

Residential Property

Residential

Batteries Ltd

65.

16.02.1998

Sale Deed

The Standard Batteries Ltd

66.

16.02.1998

Sale Deed

The Standard Batteries Ltd

67.

16.02.1998

Sale Deed

The Standard Batteries Ltd

68.

16.02.1998

Sale Deed

The Standard Batteries Ltd

69.

16.02.1998

Sale Deed

The Standard Batteries Ltd

Premium Towers, Lokhandwala Complex, Andheri (W), Mumbai 400 053 Flat No. 1905/06, Premium Towers, Lokhandwala Complex, Andheri (W), Mumbai 400 053 Flat No. 1911/12, Magnum Towers, Lokhandwala Complex, Andheri (W), Mumbai 400 058 Flat No. 1909/10, Magnum Towers, Lokhandwala Complex, Andheri (W), Mumbai 400 058 Flat No. 1711/12, Magnum Towers, Lokhandwala Complex, Andheri (W), Mumbai 400 058 Flat No. 4B, Ruia Park, Juhu, Mumbai 400 049

Property

Residential Property

Residential Property

Residential Property

Residential Property

Residential Property

Note 1: The flats in Premises No. 8/7, Alipore Road are held by the Company through a Syndicate of which the Company is a member along with other Companies by the name of ‘Woodlands Syndicate’. One Alipore Estates Pvt. Ltd and one Belvedere Estates Ltd. purchased the land in 8/7, Alipore Road and nominated one Dalhousie Holdings Limited in whose favour the conveyance for the said land was executed. Thereafter, all the Companies of the Woodland Syndicate provided the consideration money for the said purchase by the said Dalhousie Holdings Limited in proportion to their respective holding in the said land and desired that the said Dalhousie Holdings Limited should hold the said land and the buildings to be constructed thereon as Trustee for the members of the Woodlands Syndicate. Accordingly, an Agreement was entered into among the members of the Woodlands Syndicate October 6, 1961 which was subsequently modified by Supplemental Deeds to record the terms of holding and managing the properties allocated to the members of the Woodland Syndicate. The Company has been allocated the above flats in the said premises No. 8/7, Alipore Road by virtue of the said Agreement and Supplemental Agreements. Note 2: The flats in Premises No. 13, D.L. Khan Road are held by the Company through a Syndicate of which the Company is a member along with other Companies (‘Several Companies’). One Andrew Yule & Company Ltd. had on behalf of the Syndicate Members purchased the messuages, buildings, lands, hereditaments on premises nos. 7 and 8, Minto Park (now renamed as 13, D.L. Khan Road). The Syndicate Members intended that one Dalhousie Holdings Limited as a Trustee shall inter alia, complete the purchase of the above from the owners and make constructions thereon. The Several Companies formed a Syndicate

61

called the Minto Park Syndicate, inter alia, to regulate their respective rights etc. in the building. Accordingly, an Agreement was entered into between the said Dalhousie Holdings Limited and the Several Companies dated November 25, 1961 which was subsequently modified by Supplemental Deeds to record the terms of holding and managing the properties allocated to the Several Companies. The Compnay has been allocated the above flats in the said premises No. 13, D.L. Khan Road by virtue of the said Agreement and Supplemental Agreements. Details of Leasehold Properties Sl

Name of Lessor

Name of Lessee

Property & Area

Agreement Details

Date Expiry

1.

Salil Kumar Mittra Moloy Kumar Mitter Manoj Kumar Pal West Bengal Industrial Infrastructure Development Corporation

Exide Industries Limited

Land measuring 5 bighas at 6A Hatibagan Road, Entally, Kolkata

Lease Deed dated 17.11.2003 (30 years from 01.06.2003)

01.06.2033

Exide Industries Limited

Piece or parcel of land situated in Mouja Bijoyramchak, JL No. 137, PS. Sutahata, District Midnapore comprising of 5.69 acres of land

Lease for a period of 77 years from 11.05.1998.

2.

3.

Port of Calcutta

Exide Industries Limited

4.

Port of Calcutta

Exide Industries Limited

5.

West Bengal Industrial

Exide Industries

Piece or parcel of land situated in Mouja Karerchak, JL No. 199, PS. Sutahata, District Midnapore comprising of 2833.00 sq metres of land Piece or parcel of land situated in Mouja Karerchak, JL No. 199 and Mahaprabhuchak JL No. 201, PS. Sutahata, District Midnapore comprising of 2104.36 metres of land Piece or parcel of land situated in

of

Remaining Lease Period from 01.12.2007 25 years and six months

Location

11.05.2075

67 years 5 months and 10 days

Haldia Factory

19.09.2011

3 years 9 months and 18 days

Haldia Factory

Lease Deed dated 09.04.1991 (30 years from 17.12.1984)

17.12.2014

7 years and 16 days

Haldia Factory

Lease Deed dated 09.07.1980 (97 years

01.01.2075

67 years and 1 months

Haldia Factory

Entally, Kolkata

Agreement of Leave and License executed on 04.09.1998 Agreement of Lease to be executed and registered after Traction Factory project is declared operational. Lease Deed dated 12.03.1992 (20 years from 19.09.1991)

62

Sl

Name of Lessor

Name of Lessee

Property & Area

Agreement Details

Infrastructure Development Corporation

Limited

from 01.01.1978)

6.

West Bengal Industrial Infrastructure Development Corporation

Exide Industries Limited

7.

Port of Calcutta

Exide Industries Limited

8.

West Bengal Electronics Industry Development Corporation Limited The Standard Batteries Limited

Exide Industries Limited

Cosepa Fiscal Industries Limited

Exide Industries Limited

Mouja Durgachak, JL No. 135 and Uttar Sishuramchak, JL No. 136, and Bijoyramchak, JL No. 137 PS. Sutahata, District Midnapore comprising of 11.023 acres of land Piece or parcel of land situated in Mouja Durgachak, JL No. 135 and Uttar Sishuramchak, JL No. 136 PS. Sutahata, District Midnapore comprising of 13.10 acres of land Land measuring 2.62 acres in the Industrial Zone of Haldia Dock Complex, Mouza Durgachak, District Midnapore, JL 135, PS Sutahata Land measuring 0.4926 acres in Block EP and GP, Sector V, Salt Lake City, Kolkata Land measuring 82845 sq mts, being Plot No. T17 of Taloja Industrial Area of Maharashtra Industrial Development Corporation Land measuring 39728 sq mts in Plot No. E5, of Ahmednagar

9.

10.

Exide Industries Limited

Date Expiry

of

Remaining Lease Period from 01.12.2007

Location

Lease Deed dated 29.06.1979 (97 years from 29.06.1979)

29.06.2076

68 years 6 months and 28 days

Haldia Factory

Lease Deed is pending Lease period - 30 years from 22.05.2007

22.05.2037

29 years 5 months and 21 days

Haldia Factory

Sub Lease 25.08.1998 years)

dated (90

25.08.2088

80 years 8 months and 24 days

Project Office, Kolkata

Deed of Assignment of Lease dated 16.02.1998 (95 years from 01.07.1993)

01.07.2088

80 years and 7 months

Taloja Factory

Deed of Assignment of Lease dated 16.02.1998 (95 years from 29.09.1993)

29.09.2088

80 years 9 months and 28 days

Ahmedna gar Factory

63

Sl

Name of Lessor

Name of Lessee

11.

The Standard Batteries Limited

Exide Industries Limited

12.

Sibdas Ghose, Sambhudas Ghose, Netai Chandra Ghose

Exide Industries Limited

13.

Maharashtra Industrial Development Corporation

Exide Industries Limited

Property & Area

Industrial Area of Maharashtra Industrial Development Industry, Sub District Nagar, Registration District and District Ahmednagar Land measuring 11500.6 sq mts, CTS No. 1015 and 1015/1 to 3 of Village Kanjur, Taluka Kurla together with buildings and structures thereon, Mumbai, Maharashtra Land measuring 18.54 acres at Plot No. 91 New Chord Road, PO: Athpur, District North 24 Parganas, PIN 743 128, West Bengal (Shamnagar) Land measuring 76738 sq yards (64163 sq mts) at Plot Nos: 46, 46 and 53 in D2 Block, MIDC Industrial Estate, Chinchwad East, Pune 411 019, Maharashtra

Agreement Details

Date Expiry

Deed of Assignment of Sub-Lease (perpetual) dated 16.02.1998

of

Remaining Lease Period from 01.12.2007

Location

Perpetual

Perpetual

Kanjur Factory

Lease in perpetuity dated 07.02.1945

Perpetual

Perpetual

Shamnaga r Factory

Lease Deed dated 10.12.1979 (95 years from 01.04.1967)

01.04.2062

54 years and 4 months

Chinchwa d Factory

Brands The Company has the following sub brands under Exide category for Automotive Batteries : 1. 4.

Express ATB

2. 5.

Kissan Zoom

The other brands for Automotive batteries are:

64

3.

Matrix

1. 4. 7.

Exide Index Black Gold

2. 5. 8.

Dagenite Tudor Jupiter

3. 6. 9.

Chloride Dynex Conrex

The brands under the SF category for Automotive Batteries are : 1. 4.

Sonic Sonic Jumbo

2. 5.

Sonic Z Power Box

3. 6.

Sonic Turbo Super Sonic

2. 5. 8.

SF Invaqueen Powersafe

3. 6.

Invatubular Invaking

The brands for Industrial batteries are : 1. 4. 7.

Exide Invared EL Tubular

Intellectual Property The Company has, as on 30th November 2007, 128 trade marks registered in India under various classes of the Trademarks Act, 1999 and 43 trade marks registered in various other countries. Company’s competitive advantages: ¾

Technology Standard

¾

Distribution and marketing network

¾

Brand franchise and diversified product range

¾

After Sale Services

65

REGULATIONS AND POLICIES The Company is involved in the production of batteries and the Company has to comply with certain laws which are applicable to its business which have been briefly discussed herein below. However, the regulations set out below are not exhaustive and is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional legal advice. The following discussion details the important laws and regulations, which govern business: A.

the Company’s

Commercial Laws The Company has to comply with various commercial laws, some of which are given below. Municipal Laws: The Municipal Laws of various states are applicable to the Company in so far as certificate of enlistment (Trade Licence) of name is concerned. Shops and Establishments Act: The Company is governed by various Shops and Establishments Act as applicable in the states where it has offices. These Acts regulate the conditions of work and employment in shops and commercial establishments and generally prescribe obligations in respect of, inter alia, registration, opening and closing hours, daily and weekly working hours, holidays, leave, health and safety measures and wages for overtime work. The Electricity Act, 2003: The Electricity Act, 2003 (hereinafter referred to as the “Act”) was enacted with effect from June 10, 2003 repealing and replacing all the three Acts i.e., Indian Electricity Act, 1910, Electricity (Supply) Act and Electricity Regulatory Commissions Act, 1998. The Act seeks to provide for demarcation of the roles of generation, transmission and distribution to provide for individual accountability of each. Some of the major provisions of the Act include inter alia the following : 1. 2. 3. 4.

de-licenses generation, makes captive generation freely permissible; provides open access for transmission, distribution and trading; specifies technical standards, grid standards and safety requirements; and introduces power trading as a distinct activity from power generation, transmission and distribution.

Monopolies and Restrictive Trade Practices Act, 1969: This Act to provide that the operation of the economic system does not result in the concentration of economic power to the common detriment, for the control of monopolies, for the prohibition of monopolistic and restrictive trade practices and for matters connected therewith or incidental thereto. Negotiable Instruments Act, 1881: This law defines and governs the laws relating to bills of exchange, promissory notes and cheques. The Micro, Small and Medium Enterprises Development Act, 2006 This is an Act to provide for facilitating the promotion and development and enhancing the competitiveness of micro, small and medium enterprises and for matters connected therewith or incidental thereto.

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B.

Laws relating to Employment and Labour The Company has to comply with the labour laws prevailing in the country, which are relevant to the employees and also to contract labours who are engaged by the contractors employed by the Company. A brief synopsis of the labour laws that are applicable to the Company are as follows: The Factories Act, 1948: The Factories Act, 1948 (“Factories Act”) defines a factory to cover any premises which employs ten (10) or more workers and in which the manufacturing process is carried on with the aid of power and any premises where there are at least twenty (20) workers even though there is no electricity aided manufacturing process being carried on. The Factories Act which is a social legislation provides that an occupier of a factory i.e., the person who has ultimate control over the affairs of the factory and in case of a company, any of the directors, must ensure the health, safety, welfare, working hours, leave and other benefits for workers employed in factories. It was enacted primarily with the object of protecting workers from industrial and occupational hazards. In case of contravention of any provision of the Factories Act or rules framed thereunder, the occupier and the manager of the factory may be punished with the imprisonment for a term of up to two (2) years or with a fine of up to Rs 100,000 or with both, and in case of a contravention continuing after conviction, with a fine of up to one thousand rupees per day of the contravention. The Contract Labour (Regulation and Abolition) Act, 1970: The Contract Labour (Regulation and Abolition) Act, 1970 applies to those establishments where twenty (20) or more workmen are employed or were employed on any day of the preceding twelve (12) months as contract labour and to every contractor or sub contractor who employs or who employed twenty (20) or more workmen on any day of the preceding twelve (12) months, provided they were not employed in the core activities as notified. The legislation seeks to regulate the working conditions of the contract labour and to provide for its abolition in certain cases. This statute provides that any employer seeking to employ contract labour must register his establishment to the appropriate authority, which is the Joint Labour Commissioner of that particular state. The Trade Unions Act, 1926: The Trade Unions Act, 1926 was enacted to provide for the registration of trade unions and for defining the law in relation to trade unions. This legislation sets out the procedure for registration of trade unions and also provides the rights and liabilities of registered trade unions. The statute also provides immunity to registered trade unions from civil suits in certain cases. This legislation is of great significance for those organizations whose workers have organized and formed registered unions. The Employee’s State Insurance Act, 1948: The Employees State Insurance Act, 1948 is applicable to all factories and to such establishments as the Central Government may notify, unless a specific exemption has been granted. The employers in such factories and establishments are required to pay contributions to the Employees State Insurance Corporation in respect of each employee at the rate prescribed by the Central Government. Companies which are controlled by the Government are exempt from the aforesaid requirement if the employees are receiving benefits which are similar or superior to the benefits prescribed under the Employees State Insurance Act, 1948. Employee Provident Funds and Miscellaneous Provisions Act, 1952: Under the Employees Provident Funds and Miscellaneous Provisions Act, 1952, compulsory provident fund, family pension fund and deposit linked insurance is payable to employees in factories and other establishments for their benefit. The legislation provides that an establishment employing more than twenty (20) persons, either directly or indirectly, in any capacity whatsoever, is either required to constitute its own provident fund or subscribe to the statutory employee’s

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provident fund. The employer of such establishment is required to make a monthly contribution to the provident fund, subject to a minimum contribution of 12% of the basic wages, dearness allowance and retaining allowance, if any payable to each of the employees.

Payment of Bonus Act, 1965: An employee in a factory who has worked for at least thirty (30) days in a year is eligible to be paid bonus. ‘Allocable Surplus’ is defined as 67% of the available surplus in the financial year, before making arrangements for the payment of dividend out of profit. The minimum bonus fixed by the statute must be paid irrespective of the existence of any allocable surplus. If allocable surplus exceeds minimum bonus payable, then the employer must pay bonus proportionate to the salary or wage. Contravention of the provision of the legislation is punishable by imprisonment up to six (6) months or a fine up to one thousand rupees or both. Payment of Gratuity Act, 1972: Under the Payment of Gratuity Act, 1972 an employee in a factory is deemed to be in ‘continuous service’ for a period notwithstanding that his service has been interrupted during that period by sickness, accident, leave, absence without leave, lay-off , strike, lock out or cessation of work not due to the fault of the employee, or the employee has worked at least two hundred and forty (240) days in a period of twelve (12) months or one hundred and twenty (120) days in a period of six (6) months immediately preceding the date of reckoning. An employee, who after having completed at least five (5) continuous years of service in an establishment resigns, retires, or is disabled due to an accident or disease, is eligible to receive gratuity. To meet this liability, employers of all establishments to which the legislation applies are liable to contribute towards gratuity. The Indian Boilers Act, 1923: The Indian Boilers Act, 1923 and the rules made thereunder are meant to regulate and ensure proper design, manufacture, operation and maintenance of boilers, in order to prevent safety hazards. This legislation requires that any boiler in use, in India, must be certified or registered and that no boiler may function without the same. Indian Explosives Act, 1884: This is an act to regulate the manufacture, possession, use, sale, transport and import and export of explosives. Industrial Disputes Act, 1947: This is an Act to make provision for the investigation and settlement of certain industrial disputes and for certain other purposes. Minimum Wages Act, 1948: This is an Act to regulate the payment of wages to certain classes of employed persons. Public Liability Insurance Act, 1991: This is an Act to provide for public liability insurance for the purpose of providing immediate relief to the persons affected by accident occurring while handling hazardous substance and for matters connected therewith or incidental thereto. Workmen’s Compensation Act, 1923: This is an Act to provide for the payment by certain classes of employers to their workmen of compensation for injury by accident. Apart from the aforesaid, the following other regulations are also applicable: Apprentices Act, 1961 Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959

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Equal Remuneration Act, 1976 Industrial Employment (Standing Orders) Act, 1946 Fatal Accidents Acts, 1855 C.

Laws relating to Environment As the Company is engaged in the manufacturing of batteries, environment laws are applicable to its manufacturing units, which would broadly include the following: The Environment (Protection) Act, 1986: The Environment (Protection) Act, 1986 and the rules made thereunder provides for ambient standards in respect of noise for difference categories of areas (residential, commercial and industrial) and silence zones have been notified. Noise limits have been prescribed for automobiles, domestic appliances and construction equipment at the manufacturing stage. The Noise Pollution (Regulation and Control) Rules 2000 (as amended in 2002) provides that the owner of any diesel generator set with upto 1000 KVA requires an acoustic chamber and must have a conformance certificate. Batteries (Management and Handling) Rules, 2001: This Rule has been made under the provisions of Sections 6, 8 and 25 of The Environment (Protection) Act, 1986. This Rule applies to every manufacturer, importer, re-conditioner, assembler, dealer, recycler, auctioneer, consumer involved in manufacture, processing, sale, purchase and use of batteries or components thereof. The Water (Prevention and Control of Pollution) Act, 1974: The Water (Prevention and Control of Pollution) Act, 1974 (“Water Act”) prohibits the use of any stream or well for disposal of polluting matter, in violation of standards set down by the State Pollution Control Board (“SPCB”). This statute provides that prior permission from the relevant SPCB is required for the setting up of any industry, which is likely to discharge effluents. In addition, the Water (Prevention and Control of Pollution) Cess Act, 1977 requires a person carrying on any industry to pay cess in this regard. The Air (Prevention and Control of Pollution) Act, 1981: This statute seeks to prevent and abate the level of air pollution and grants certain powers to the SPCB to ensure the same. Under the provisions of this legislation, every facility has to obtain a consent order from the relevant SPCB in order to carry on its industrial operations. The SPCB is required to grant consent within four (4) months of receipt of the application. The consent may contain conditions relating to specifications of pollution control equipments to be installed. Hazardous Wastes (Management and Handling) Rules, 1989: The Hazardous Wastes (Management and Handling) Rules 1989 fix the responsibility of the occupier and the operator of the facility that treats hazardous wastes to properly collect, treat, store or dispose the hazardous waster without adverse effects on the environment. It must also be ensured that the persons working on the site are given adequate training and equipment for performing their tasks.

D.

Laws relating to Taxation: The Company operates in the manufacture of lead acid storage industry. Laws relating to excise, customs, sales tax, are applicable to the Company, as they are applicable to all manufacturers. Service Tax Chapter V of the Finance Act 1994 (as amended) and Chapter V-A of the Finance Act 2003 requires that where provision of certain listed services, whole taxable service exceeds Rs 800,000 a service tax with respect to the same must be paid. Every person who is liable to pay service tax must register himself for the same.

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Central Excise Excise duty imposes a liability on a manufacturer to pay excise duty on production or manufacture of goods in India. The Central Excise Act, 1944 is the principal legislation in this respect, which provides for the levy and collection of excise and also prescribes procedures for clearances from factory once the goods have been manufactured etc. Additionally, the Central Excise Tariff Act, 1985 prescribes the rates of excise duties for various goods. Value Added Tax VAT is a system of multi-point levy on each of the entities in the supply chain with the facility of set-off input tax whereby tax is paid at the stage of purchase of goods by a trader and on purchase of raw materials by a manufacturer. Only the value addition in the hands of each of the entities is subject to tax. VAT is based on the value addition of goods, and the related VAT liability of the dealer is calculated by deducting input tax credit for tax collected on the sales during a particular period. VAT, is essentially a consumption tax applicable to all commercial activities involving the production and distribution of goods and the provisions of services, and each State that has introduced VAT has its own VAT Act, under which, persons liable to pay VAT must register themselves and obtain a registration number from the Excise Tax Officer of that respective State. Sales Tax The tax on sale of movable assets within India is governed by the provisions of the CST Act, or the state legislations depending upon the movement of goods pursuant to such sale. If the goods move inter-state pursuant to a sale arrangement, then the taxability of such sale is determined by the CST Act. On the other hand, when the taxability of an arrangement of sale of movable assets which does not contemplate movement of goods outside the state where the sale is taking place is determined as per the local sales tax / VAT legislations in place within the states. The Income Tax Act, 1961 The Income Tax Act provides that any company deducting tax must apply to the assessing officer for the allotment of a tax deduction account number. Furthermore, the legislation requires every tax payer to apply to the assessing officer for a personal account number. Research & Development Cess Act, 1986 Under this Act, cess is levied by the Central Government on import of technology into India. Such cess is required to be paid by the importer on or before remittance of any money towards payment of such imports. E.

Laws relating to Intellectual Property: The presence of the Company’s brand ‘EXIDE’ has grown over a period of time. The Company has created several brand names and logos which are required to be registered under the Trade Marks Act, 1999. The designs of the batteries manufactured by the Company are required to be registered under the Designs Act, 2000. The Intellectual Property laws which are applicable to the Company have been discussed in brief hereinbelow: Trade Marks Act, 1999 and the Trade Marks Rules, 2002 This is an Act to amend and consolidate the law relating to trade marks, to provide for registration and better protection of trade marks for goods and services and for the prevention of the use of fraudulent marks. The Trade Marks Rules, inter alia, provides for the procedure for registration of the Trade Marks application, its renewal, restoration, assignment and transmission. The Schedules to the said Rules

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provide for fees and forms for the said purposes and also lays down the classification of goods and services in which the goods the services are to be registered. The Designs Act, 2000 and the Designs Rules, 2001 The Designs Act prescribes for registration of design. The said Act specifically lays down the essentials of a design to be registered and inter alia, provides for application for registration of designs, copyright in registered designs etc. The Design Rules, 2002, inter alia, lays down the procedure and prescribes Forms and fees for application for registration if design, marking of articles, inspections and searches, etc. F.

Laws relating to Consumer Protection and Competition The Company is engaged in the manufacture and sale of batteries and by virtue of the same, it is exposed to consumer protection and competition laws prevailing in the country. A brief discussion of the said laws are as follows: Consumer Protection Act, 1986. The Consumer Protection Act, 1986 is an Act to provide for the better protection of the interests of the consumers and for that purpose has made provisions for the establishment of consumer councils and other authorities for the settlement of consumer disputes and matter connected therewith. The Consumer Protection Rules, 1987, inter alia, provides for constitution of the Central Consumer Protection Council, its procedures, additional powers of the National Commission, State Commission and District Forums etc. Some of the States have their own Consumer Protection Rules which are framed under the Consumer Protection Act.

H.

Laws relating to Foreign Direct Investment (‘FDI’) in retail business: As per item no.21 of Annexure 2 of Master Circular no.02/2007-08 and Press Note No.4 of 2006, FDI is allowed upto 100%, in the business of manufacture and sale of batteries.

I.

Other Regulations In addition to the above, the Company is required to comply with the provisions of the Companies Act, 1956, the Foreign Exchange Management Act, 1999, various sales tax related legislations and other applicable statues.

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HISTORY AND OTHER CORPORATE MATTERS Incorporation, History and major events of the Company The Company was incorporated as Associated Battery Makers (Eastern) Ltd., on 31st January, 1947 under the Companies Act, 1913 to purchase all or any of the assets of the business of manufacturers, buyers and sellers of and dealers in and repairers of electrical and chemical appliances and goods carried on by the Chloride Electric Storage Company (India) Ltd, in India , since 1916 with a view thereto to enter into and carry into effect (either with or without modification) an agreement which had already been prepared and was expressed to be made between the Chloride Electric Storage Co (India) Ltd on the one part and the Company of the other part. The name of the Company was changed to Chloride India Ltd on 2nd August, 1972. The name of the Company was again changed to Chloride Industries Ltd. vide fresh Certificate of Incorporation dated 12th October, 1988. The name of the Company was further changed to Exide Industries Ltd. on 25th August, 1995. The Company manufactures the widest range of storage batteries in the world from 2.5 Ah to 15000 Ah capacity, covering the broadest spectrum of applications. The Company has eight factories strategically located across the country – three in Maharashtra, two in West Bengal, two in Tamil Nadu and one in Haryana. The Company’s predecessor carried on their operations as import house from 1916 under the name Chloride Electrical Storage Company. Thereafter, the Company started manufacturing storage batteries in the country and have grown to become one of the largest manufacturer and exporter of batteries in the sub-continent today. Exide separated from its UK-based parent, Chloride Group Plc., in 1989, after the latter divested its ownership in favour of a group of Indian shareholders. The Company has grown steadily, modernized its manufacturing processes and taken initiatives on the service front. Constant innovations have helped the Company to produce the world’s largest range of industrial batteries extending from 2.5 Ah to 15000 Ah and covering various technology configurations. Awards/ Certificates and Recognitions: The following table depicts the ISO certifications of the Company’s various Plants: Factories Shamnagar

ISO 9001:2000 9

ISO 14001 1996 9 9

Chinchwad Haldia

9

Hosur

9

TS16949:2002

9

9 9

9

Taloja

9

9

Bawal

9

9

Kanjur Marg

*

9

* For Industrial Plant only

(A) Company’s Plant at Shamnagar, West Bengal is an ISO-9001 & ISO-14001 Certified by TUV-NORD, Germany. It has secured the following awards and recognitions: • Certificate of Appreciation for Commendable Effort in Total Quality – by CII – 2003 • Certificate of Appreciation for Commendable Effort in Energy Conservation – by CII – 2003 • Certificate of Merit for Most Significant Achievement in Total Quality Management– by CII-2004 & 2005

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• Certificate of Appreciation for Best Practice in Industrial Relations – by CII –2005-06 • 1st Position for Sustaining a High level of Productivity Award Contest – by CII – 2006-07 • Most Significant Improvement in TQM Quality Award Contest – by CII – 2006-2007 (B) Company’s Plant at Haldia, West Bengal is an ISO-9001 and ISO 14001 certified by TUV-NORD, Germany. It has secured the following awards and recognitions: • • • • • • • •

Quality Award by CII-2003 & 2006 Productivity Award from CII ‘Category A’-2003 Safety Award from CII- 2003 Award for Best Practices in Industrial Relations – by CII -2004 Indal Trophy for HRD- by CII- 2005 & 2007 Productivity Award- by CII-2005 Certificate of Appreciation for Energy Conservation- by CII- 2005 Environment Excellence Award- by West Bengal Pollution Control Board & Indian Chamber of Commerce - 2005 • ITC Trophy for Safety, Health & Environment - by CII – 2007 (C) Company’s Plant at Hosur, Tamilnadu is an ISO-9001, ISO / TS-16949 and ISO-14001 certified by TUV-NORD of Germany. It has secured the following awards and recognitions: • 100 PPM award from OEM customer American Power Corporation –January ’03 • Quality award from OEM customer Toyota - April ’03 & April ‘04 • Safety award from Government of Tamilnadu - April’03 • 100 PPM award from OEM customer Hyundai - June’03 • Zero PPM Award from OEM customer Toyota – April’04 • Green award from OEM customer Toyota - April’04 • Best Quality supplier award from OEM customer Toyota – April’05 • Zero PPM award from OEM customer Toyota- April’05 • Quality Delivery Award from OEM customer Toyota - April’05 • First Prize in Best Garden Competition (Industrial Category) awarded by Mysore Horticulture Society – 2005 • Leadership and Excellence Award in Safety , Health & Environment by CII –2006 • Indian Manufacturing Excellence – “Gold” Award –for Automotive Ancilliary Category from Frost & Sullivan in 2006 • CII-EXIM Bank Award for Strong Commitment to Excel by CII in 2006 • 6th TERI Corporate Environmental Award- May’ 07 (D) Company’s Plant at Taloja, Maharashtra is an ISO / TS-16949 & ISO 14001 Certified. It has secured the following awards and recognitions: • • •

Supplier Award – Certificate of Appreciation- by Honda Siel Cars India Limited in 2002. 1st Company to be put on MPCB Website for using secured landfill in 2003. Quality Silver Award by Bajaj in 2006.

(E) Company’s Plants at Chinchwad, Maharashtra and Bawal, Haryana are ISO / TS – 16949 and ISO – 14001 certified by TUV – NORD and the one at Kanjurmarg, Maharashtra is an ISO – 9001 certified by TUV – NORD. (F) The Company also secured Best SMF Battery Award for three consecutive years –2005-2006-2007

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Brief History 1920 1946 1947 1947 1969 1972 1976 1981 1988 1994 1995 1997 1998

1999 2000 2003 2003 2004 2005 2007 2007 2007

Chloride Electric Storage Co. (CESCO) UK sets up trading operations in India as an import house. First factory set up in Shamnagar, West Bengal. Incorporated as Associated Battery Makers (Eastern) Limited on 31 January 1947 under the Companies Act. Incorporated Chloride International Limited (previously Exide Products Limited) Second factory at Chinchwad, Pune The name of the Company was changed to Chloride India Limited R&D Centre established at Kolkata Third factory at Haldia, West Bengal The name of the Company was changed to Chloride Industries Limited Technical collaboration with Shin Kobe Electric Machinery Co. Ltd. of Japan, a subsidiary of the Hitachi Group. Chloride Industries Limited renamed Exide Industries Limited Fourth factory at Hosur, Tamil Nadu Acquisition of industrial/ manufacturing units of Standard Batteries Ltd located at Taloja & Kanjurmarg (Maharashtra), Guindy (Tamilnadu) and plant at Ahmednagar (Maharashtra) from Cosepa Fiscal Industries Limited as a going concern. Acquired 51% Shareholding in Caldyne Automatics Ltd Acquisition of 100% stake in Chloride Batteries S E Asia Pte Ltd., Singapore and 49% stake in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka. Commissioned plant at Bawal, Haryana New joint venture in UK, ESPEX, with 51% holding. Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka became a subsidiary consequent to acquiring further 12.50% Equity holding. Investment in 50% shareholding of ING Vysya Life Insurance Company Limited Caldyne Automatics Ltd becomes 100% subsidiary consequent to acquiring the balance 49% shareholding. Investment with 26% shareholding.in CEIL Motive Power Pty Ltd. A Joint Venture in Australia. Acquired 100% stake in Tandon Metals Pvt. Ltd.

Main objects of the Company The main objects of the Company as set out in the Memorandum and Articles of Association of the Company, inter alia, include the following : 1.

To purchase all or any of the assets of the business of manufacturers, buyers and sellers of and dealers in and repairers of electrical and chemical appliances and goods carried on by the Chloride Electrical Storage Co. (India) Ltd., in India and with a view thereto to enter into and carry into effect (either with or without modification) an Agreement which has already been prepared and is expressed to be made between the Chloride Electrical Storage Co. (India) Ltd., of the one part and the Company of the other part a copy whereof has for the purpose of identification been endorsed with signature of Harry Arthur Fowler, Solicitor.

2.

To carry on all or any of the following businesses in all or any of their branches, viz., makers of buyers and sellers of and dealers in and repairers of electrical and/or chemical batteries, appliances and goods of all kinds; of store –keepers dealing with all kinds of goods and articles whether electrical or chemical in connection with the above mentioned business, exploiters of inventions of all kinds; engineers, makers, manufacturers and dealers of and in motor cars and/or flying machines and the accessories thereof; makers of and dealers in clocks and fancy articles of all types.

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Changes in the Memorandum of Association (MoA) Sl no Brief detail of changes in Memorandum of Association 1. Change of name from Associated Battery Makers (Eastern) Limited to Chloride India Limited 2. Change of name from Chloride India Limited to Chloride Industries Limited 3. Change of name from Chloride Industries Limited to Exide Industries Limited 4. Following addition to the objects of the Company

12th October, 1988 25th August, 1995 Inclusion done by the Company based on approval of the Company Law Board, Eastern Region Bench vide Order dated 13th January, 1989.

Clause 2(i) of MoA

5.

To carry on the business of smelters, moulders, manufacturers, processors, buyers, sellers, importers, exporters and stockists of and dealers in and with various petro-chemical products, petroleum fractions, lubricants, coolants and other synthetic chemicals and preparations thereof for both industrial and non-industrial use and for their further processing as also the business of manufacturing and dealing in cement, synthetic rubber, resins, alcohol and ketones Clause To carry on the business of manufacturers, processors, 2(ii) of refiners, formulators, blenders, buyers, sellers, importers, MoA exporters, stockists of and dealers in heavy industrial chemicals and fine chemicals, and preparations of all kinds of drugs, antibiotics, pharmaceuticals, medicinal and chemical preparations and formulations. Clause To manufacture, produce, process, refine, preserve, can, 2(iii) of bottle, pack, buy, sell, export and deal in and with all MoA kinds of food products, leather and leather products and all types of garments and all items of wearing apparel, goods and things made of linen, cotton, silk, wool, leather, polyster, rayon, nylon or combination of any one or more of them and fabric and fabrics of all kinds and nature. Clause To carry on the business of architects, interior decorators, 2 (iv) town planners, surveyors, valuers, designers, of MoA constructional and structural engineers, property developers and builders and contractors of all kinds and description. Clause To buy, sell or deal in all substances, goods, wares and 2(v) of merchandise used or capable of being used in any of the MoA company’s operations and to make, buy sell and deal in all or any articles and things in the production of which any of the manufactured or other products of the Company are used or are capable of being used, and in all or any articles and things which are commonly or can conveniently be supplied or dealt with in conjunction therewith respectively. Increase of authorized capital from Rs 1,00,00,000 to Rs 2,00,00,000 consisting of 20,00,000 Equity Shares of Rs 10/- each

Date of Change 2nd August,1972

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4th January, 1960

6. 7. 8.

9.

10.

11.

12.

13. 14.

15.

Increase of authorized capital from Rs 2,00,00,000 to Rs 3,50,00,000 consisting of 35,00,000 Equity Shares of Rs 10/- each. Increase of authorized capital from Rs 3,50,00,000 to Rs 6,00,00,000 consisting of 60,00,000 Equity Shares of Rs 10/- each. Increase of authorized capital from Rs 6,00,00,000 toRs 10,00,00,000 consisting of 1,00,00,000 Equity Shares of Rs 10/each. Increase of authorized capital from Rs 10,00,00,000 toRs 15,00,00,000 consisting of 1,50,00,000 Equity Shares of Rs 10/each. Increase of authorized capital from Rs 15,00,00,000 to Rs 25,00,00,000 consisting of 2,50,00,000 Equity Shares of Rs 10/each. Increase of authorized capital from Rs 25,00,00,000 to Rs 75,00,00,000 consisting of 7,50,00,000 Equity Shares ofRs 10/each. The Authorised capital of the Company of Rs 75,00,00,000 was divided into 5,00,00,000 Equity Shares of Rs 10/- each and 2,50,00,000 Preference Shares of Rs 10/- each. The Authorised capital of the Company of Rs 75,00,00,000 was restructured to 7,50,00,000 Equity Shares of Rs 10/- each. Increase of authorized capital from Rs 75,00,00,000 to Rs 1,00,00,00,000 consisting of 10,00,00,000 Equity Shares of Rs 10/each. The face value of the Equity Share of the Company of Rs 10/- each was sub-divided into shares of Re 1/- each.

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23rd December, 1968 19th December, 1973 18th January, 1977 4th July, 1983 19th August, 1986

17th July, 1995 3rd September, 1998 11th July, 2003 29th July, 2005 21st July, 2006

SUBSIDIARIES AND OTHER INFORMATION The following are the details of Company’s subsidiaries as on the date of filing the Letter of Offer: 1.

Chloride International Limited (“CIL”) CIL was incorporated on 31st January, 1947 under the name Exide Batteries (Eastern) Limited which was subsequently changed to ‘Chloride & Exide Batteries (Eastern) Limited on 11th February, 1948. It was later changed to Exide Products Limited on 2nd April, 1981 and lastly changed to Chloride International Limited on 14th November, 2003. The CIN of CIL is L31402WB1947PLC014918. The Registered Office of CIL is situated at Exide House, 59E Chowringhee Road, Kolkata – 700 020. CIL is a 100 per cent subsidiary of Exide Industries Limited. It is engaged in non conventional energy business. Main Objects The objects of CIL are to (i) purchase all or any of the assets of and the goodwill and the business of manufacturers, buyers and sellers of and dealers in and repairers of electrical and chemical appliances and goods, carried on by The Chloride Electrical Storage Co. (India) Ltd., in India and with a view thereto to enter into and carry into effect (either with or without modification) an Agreement which has already been prepared and is expressed to be made between The Chloride Electrical Storage Co. (India) Ltd., of the one part and the Company of the other part ; and (ii) to carry on the business of selling agents, representatives, brokers, factors, distributors, marketers and dealers of or in relation to any kind of movable property and in particular, all kinds of electrical, chemical, engineering and industrial goods, materials, products, merchandise, apparatus, appliances, chattels, effects and things. Board of Directors The Board of Directors of CIL as on 30.11.2007 comprises the following Directors Sl no 1. 2. 3. 4.

Name of the Director Mr T V Ramanathan Mr P K Kataky Mr Barun Das Mr Bhaskar Gupta

Designation Chairman Director Director Director

Shareholding Pattern The Shareholding Pattern of CIL as on 30.11.2007 is as follows : Name of the Shareholder Exide Industries Nominees

Limited

&

its

Number of Shares held 450,000

%age of shareholding 100

Brief Audited Financials in the last three years Particulars Total Income Profit After Tax Equity Share Capital Reserves and Surplus Earning Per Share (EPS) (Rs) Face Value Per Share (Rs)

2006-07 1002 23 45 505 5.04 10.00

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(Rs in lakhs except per share data) 2005-06 2004-05 1131 405 44 13 45 45 498 497 9.87 2.88 10.00 10.00

The company is not listed on any stock exchange.The company has not made any public or rights issue in the last three years. The company has not changed its capital structure in the last six months. The company is not in liquidation.

2.

Caldyne Automatics Limited (“Caldyne”) Caldyne was incorporated on 16th day of June, 1980 and it is engaged in the business of high end chargers for industrial use. The CIN of Caldyne is U29221WB1980PLC032796. Caldyne is a 100 per cent subsidiary of Exide Industries Limited. The Registered Office Caldyne is situated at Plot No. Y-21, Block EP, Sector V, Salt Lake Electronics Complex, Bidhannagar, Kolkata – 700 091. Main Objects The main objects of Caldyne is to design, develop, manufacture, assemble, supply, install, maintain, modify, repair, buy, sell, hire, export, import, to do the business of agents, stockists, distributors, brokers and to generally deal in India and abroad in all types of automatic sensing, drive, operation, control, monitoring, indicating and recording equipment, systems, components, parts, devices, apparatus, instruments, accessories, tools, gauges and other appliances.

Board of Directors The Board of Directors of Caldyne as on 30.11.2007 comprises of the following Directors Sl no 1. 2. 3. 4. 5.

Name of the Director Mr G Chatterjee Mr Udayan Mukherjee Mr A K Mukherjee Mr Barun Das Mr Subir Chakraborty

Designation Director Whole-time Director Director Director Director

Shareholding Pattern The Shareholding Pattern of Caldyne as on 30.11.2007 is as follows : Name of the Shareholder Exide Industries Limited & its nominees

Number of Shares held 180,000

%age of shareholding 100

Brief Audited Financials in the last three years Particulars Total Income Profit After Tax Equity Share Capital Reserves and Surplus Earning Per Share (EPS) (Rs) Face Value Per Share (Rs)

2006-07 2311 38 18 205 21.06 10.00

(Rs in lakhs except per share data) 2005-06 2004-05 2098 1580 32 9 18 18 176 150 17.71 4.97 10.00 10.00

The company is not listed on any stock exchange.The company has not made any public or rights issue in the last three years. The company has not changed its capital structure in the last six months. The company is not in liquidation.

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3.

Chloride Batteries S E Asia Pte Limited (“CBSEA”) CBSEA was incorporated on 4th September, 1958 under the laws of Singapore under the name “The Chloride Electrical Storage Company Far East Limited” on 4th September, 1958 which was subsequently changed to ‘Chloride Batteries S E Asia Pte Limited on 4th December, 1969. CBSEA is a 100 per cent subsidiary of Exide Industries Limited. The registered office of CBSEA is located at 106 Neythal Road, Jurong Town, Singapore 628 594. The principal activities of CBSEA comprise production and distribution of industrial battery chargers, rectifiers and parts thereof and the distribution of industrial and automotive batteries. Main Objects The object of CBSEA is to carry on all or any of the following businesses in all or any of their branches, viz., makers of, buyers and sellers of , and dealers in and repairers of, electrical and/or chemical appliances and goods of all kinds; of storekeepers and shopkeepers dealing with all kinds of goods and articles whether electrical or chemical in connection with the above mentioned businesses; exploiters of inventions of all kinds, engineers, makers, manufacturers and dealers of and in motor cars and/or flying machines and the accessories thereof, makers and dealers in clocks and fancy articles of all types.

Board of Directors The Board of Directors of CBSEA as on 30.11.2007 comprises of the following Directors Sl no 1. 2. 3. 4. 5.

Name of the Director Mr R. G. Kapadia Mr T V Ramanathan Mr G Chatterjee Mr W Wong Mr Chng Hee Teck

Designation Director Director Director Director Director

Shareholding Pattern The Shareholding Pattern of CBSEA as on 30.11.2007 is as follows : Name of the Shareholder Exide Industries Limited

Number of Shares held 7,000,000

%age of shareholding 100

Brief Audited Financials in the last three years

Particulars Total Income Profit After Tax Equity Share Capital Reserves and Surplus Earning Per Share (EPS) (Rs) Face Value Per Share (Rs)

2006-07 9289 350 2792 (867) 5.00 39.89

(In Indian Rupees) Rs in lakhs except per share data) 2005-06 2004-05 6589 6923 131 194 2687 1860 (1172) (528) 1.87 2.77 38.39 26.57

Note: The Company acquired 100% shareholding of CBSEA in February 2001. At end March 2001, the accumulated loss was Rs. 2183 lacs (equivalent to SGD 7813143). Since April 01 CBSEA has made profits continously every year. As a result of this accumulated losses came down to Rs. 867 lacs (equivalent to SGD 3022253) as at March 31, 2007. In March 06, negative balance in Reserves and Surplus had increased since

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the positive balance in Share Premium Account, which was part of the Reserves and Surplus as at March 2005, of Rs. 785 lacs (equivalent to SGD 2736500) was translated to Share Capital in line with the amendment in relevant regulation in Singapore. However, at March 2007, negative balance in Reserves and Surplus have agin come down due to profit made during the year 2006-07

The company is not listed on any stock exchange.The company has not made any public or rights issue in the last three years. The company has not changed its capital structure in the last six months. The company is not in liquidation. 4.

Espex Batteries Limited (“ESPEX”) ESPEX was incorporated on 8th January, 2003 under the Companies Act, 1985 of UK. The Registered Office of ESPEX is situated at Clipper Road, Roath Dock, Cardiff CF10 4EW, UK. ESPEX is engaged in supply of industrial batteries in UK and its neighboring areas. Main Objects The objects of ESPEX are (i) to carry on business as a general commercial company; and (ii) any other trade or business which may seem to the company and its directors to advantageous and to directly or indirectly to enhance all or any of the business of the company. Board of Directors The Board of Directors of ESPEX as on 30.11.2007 comprises of the following Directors Sl no 1. 2. 3. 4. 5. 6.

Name of the Director Mr T V Ramanathan Mr G Chatterjee Mr T W Atkins Mr G J Schoenmann Mrs A J Hall Mr. A.K. Mukherjee

Designation Chairman Director Director Director Director Director

Shareholding Pattern The Shareholding Pattern of ESPEX as on 30.11.2007 is as follows : Name of the Shareholder Exide Industries Limited Mr. T W Atkins Mr. G.J. Schoemann Mr. A.J. Hall

Number of Shares held 102,000 18,000 40,000 40,000

%age of shareholding 51 9 20 20

Brief Audited Financials in the last three years

Particulars Total Income Profit After Tax Equity Share Capital Reserves and Surplus Earning Per Share (EPS) ( Rs ) Face Value Per Share ( Rs )

(In Indian Rupees) (Rs in lakhs except per share data) 2006-07 2005-06 2004-05 1695 1280 1127 45 21 (55) 171 147 155 11 (34) (55) 22.50 11.17 85.41 77.95 82.42

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The company is not listed on any stock exchange.The company has not made any public or rights issue in the last three years. The company has not changed its capital structure in the last six months. The company is not in liquidation. 5.

Associated Battery Manufacturers (Ceylon) Limited (“ABML”) ABML was incorporated on 6th May, 1960 under the laws of Sri Lanka. The registered office of ABML is situated at 481 T B Jayah Mawatha, Colombo 10, Sri Lanka. ABML is engaged in the manufacture of Lead acid automotive and motorcycle batteries. Main Objects The objects of ABML is to carry on the business of electricians, electrical and mechanical engineers and contractors, suppliers of electricity for the purposes of light, heat, motive power or for any other purpose, and to manufacture, buy, sell, exchange, let on hire and deal in primary and secondary electric batteries and all kinds of apparatus and things required for or capable of being used in connection with the generation, distribution, supply, accumulation and employment of electricity. Board of Directors The Board of Directors of ABML as on 30.11.2007 comprises of the following Directors Sl no 1. 2. 3. 4. 5. 6. 7. 8.

Name of the Director Mr S B Ganguly Mr R G Kapadia Mr W. Wong Mr P K Kataky Mr S V Somasunderam Mr I C Nanayakkara Mr N M Prakash Mr Ranabir Chakraborty

Designation Chairman Director Director Director Director Director Director Alternate Director to Mr R G Kapadia

Shareholding Pattern The Shareholding Pattern of ABML as on 30.11.2007 is as follows : Name of the Shareholder Exide Industries Limited Standard Finance Limited

Number of Shares held 3,896,640 2,439,360

%age of shareholding 61.50 38.50

Brief Audited Financials in the last three years

Particulars Total Income Profit After Tax Equity Share Capital Reserves and Surplus Earning Per Share (EPS) (Rs) Face Value Per Share (Rs)

2006-07 4234 112 253 841 1.77 4.00

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(In Indian Rupees) (Rs in lakhs except per share data) 2005-06 2004-05 3792 3113 166 87 282 280 760 732 2.62 1.37 4.44 4.42

The company is not listed on any stock exchange.The company has not made any public or rights issue in the last three years. The company has not changed its capital structure in the last six months. The company is not in liquidation.

6.

Tandon Metals Pvt. Ltd. (“TMPL”) The Company acquired 100 % stake of TMPL making it a wholly owned subsidiary w.e.f. 1st November 2007. Valuation of the acquired company was done by an independent valuer M/s Natverlal Vepari & Co., Chartered Accountants, Mumbai. TMPL was incorporated on 14th December, 1998 under the Indian Companies Act, 1956. The Registered Office of TMPL is situated at Gat No. 1241-1242 Markal, Taluka Khed, Pune – 412105. TMPL is engaged in the manufacture and supply of recycled Lead. Main Objects The main objects of TMPL is to carry on business as a manufactures, buyers, sellers, importers, exporters, stockist, dealers in all kinds of non-ferrous metals. Board of Directors The Board of Directors of TMPL as on 30.11.2007 comprises of the following Directors Sl no 1. 2. 3. 4. 5.

Name of the Director Mr T V Ramanathan Mr P K Kataky Dr. S K Mittal Mr. A.K. Mukherjee Mr. Barun Das

Designation Chairman Director Director Director Director

Shareholding Pattern The Shareholding Pattern of TMPL as on 30.11.2007 is as follows : Name of the Shareholder Exide Industries Limited and is nominees

Number of Shares held 24,01,100

%age of shareholding 100

TMPL became the wholly owned subsidiary w.e.f. 1st November 2007 and hence brief audited financials are not disclosed. The company is not listed on any stock exchange.The company is not in liquidation.

OTHER INFORMATION Shareholders Agreement There is no Shareholders Agreement among the Company’s shareholders in relation to the Company. Other Agreements Except for the agreements mentioned hereunder, the Company is not a party to, or has entered into, any other material contracts not being a contract:

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(i) entered into in the ordinary course of the business carried on, or intended to be carried on by the Company; or (ii) entered into more than two years before the date of filing the Letter of Offer with SEBI. (I) License Agreement entered into by the Company The Company has entered into Royalty Agreement with its Subsidiary, Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka on 31st December, 1991 whereby the Company has agreed to provide technical information and assistance in relation to automotive and motor-cycle batteries manufactured by Associated Battery Manufacturers (Ceylon) (hereinafter referred to as “Licensed Products”) including exclusive license to use the licensed trademarks, as defined in the said Agreement in Sri Lanka in relation to the Licensed Products of at a royalty as mentioned in the said Agreement. . (II) Technical Collaboration Agreement into by the Company The Company has Technical Know-how Assistance Agreement with its foreign collaborators as detailed below: (a)

Agreement dated 29th March, 2004 with Shin-Kobe Electric Machinery Co. Limited, Japan for a period of five years whereby the Licensor has granted to the Company technical information to manufacture Storage Battery (that is, automotive type lead-acid batteries and components thereof used for starting, lighting and ignition of automobiles and motorcycles, including emerging technologies such as 36/42 volt systems) in India with right to sell the same in any country in the world.

(b)

Agreement dated 22nd June, 2005 with Shin Kobe Electric Machinery Co., Limited, Japan for a period of five years whereby the Licensor has granted to the Company technical information to manufacture Storage Battery (that is, all varieties of valve regulated lead acid batteries for industrial application and components thereof used for delivering back up power in UPS, Telecom, Power Station, Railway Coach Power Supply in Indian application conditions as well as in cyclic power supply duty conditions in emergency lights, golf cart, electric wheel chairs etc.) in India with right to sell the same in any country in the world.

(c)

Agreement dated 1st December, 2005 with The Furukawa Battery Co. Ltd, Japan for a period of five years for manufacture of lead acid storage batteries for use in four wheelers and lead antimonial alloy plates, lead calcium plates, covers and containers made up of PP or other alternative plastic materials and made into complete assembled batteries by sealing method with heat sealing systems at Taloja plant and for sale of such products in India.

(d)

Agreement dated 9th March, 2007 with The Furukawa Battery Co. Ltd, Japan for a period of five years for grant of technical know-how and information for manufacture of valve regulated lead acid battery with necessary alloy / alloy plates in containers made of PP and made into complete assembled batteries by hear sealing systems for use in two wheelers and for sale of such products in India.

(III) Agreement for sale / transfer of Industrial Undertaking dated 21 November, 1997 between Standard Batteries Limited (“SBL”) and the Company: The Company has purchased industrial / manufacturing units of SBL located at Taloja (Maharashtra), Kanjurmarg (Greater Mumbai) and Guindy (Tamil Nadu) as a going concern on slump sale basis on the terms and conditions mentioned in the Agreement for Sale. Subsequently, on 28 November, 2000, a Deed of Indemnity was executed among Eveready Industries Limited and Bishnauth Tea Company Limited (“the Guarantors”), SBL and the Company whereby the Guarantors, at the request of SBI and the Company, agreed to indemnify the Company against all

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claims, demands, actions, suits and/or proceedings that may be made or taken by any person for current liability taken over by the Company exceeding a sum of Rs.336,608,658/-. Agreement for sale / transfer of Industrial / manufacturing set up at MIDC in Ahmednagar in the state of Maharashtra between Cosepa Fiscal Industries Limited (“CFIL”) and the Company. The Company has purchased manufacturing unit at Plot no.E-5, MIDC Area engaged in manufacture of lead acid and storage batteries, including leasehold land and factory and buildings thereon at Ahmednagar in the State of Maharashtra on slump sale basis as a going concern on the terms and conditions mentioned in the Agreement for Sale. (IV)

Joint Venture Agreement dated July 24, 2007 between the Company, Mr. Colm Neasy, Mr. Chris Connell and CEIL Motive Power Pty Limited (“CMP”): The Company entered into joint venture agreement with Mr. Colm Neasy, Mr. Chris Connell and CEIL Motive Power Pty Limited (CMP), currently carrying out their business through CMP whereby the Company shall invest in CMP and operate CMP as a joint venture company and also undertake marketing and distributing Lead Acid Storage Batteries and chargers under the brand name CEIL etc in Australia and allied territories.

(V)

Purchase of additional 49% holding in the subsidiary, Caldyne Automatics Limited Share Purchase Agreement dated July 25, 2007 between S K M Group, a group of shareholders (“Vendors”) holding 88,198 equity shares of Rs. 10/- each in Caldyne Automatics Limited (“CAL”) and the Company. The Vendors were holding 88,198 shares in CAL and the Company was already holding 91,802 equity shares in CAL. By the said Agreement, the Vendors agreed to sell and the Company agreed to purchase the 88,198 shares in CAL on the terms contained in the Agreement.

(V)

MOU dated 10th August, 2007 between Atraverda Limited, U.K (“Atraverda”) and the Company: Atraverda has facility for manufacture of bipolar electrodes and the Company has battery manufacturing operations to develop the project towards pilot battery production. As per the Agreement, Atraverda and the Company shall work on a joint project to develop Ebonex bipolar lead acid batteries for a range of applications.

Strategic Partners The Company does not have any strategic partners.

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THE MANAGEMENT Board Of Directors Article 98 of AoA of the Company adopted at General Meeting held on 30th January, 1979 limits a maximum of 16 directors. The Board of Directors is composed of the following persons Name, Status Father’s Name, Designation, Address and Occupation Mr R G Kapadia Independent S/o Mr G M Kapadia Chairman 9C, Woodlands 67, Peddar Road Mumbai – 400 026 Chartered Accountant

Age (years)

51

Qualification

Date of appointment and Tenure

B.Com (Hons), F.C.A

21 June 1991 Liable to retirement by rotation

Other Directorships

Public Limited Companies Asianet Satellite Communications Limited Bhoruka Power Corporation Limited Goldiam International Limited H & R Johnson (India) Limited Nilkamal Limited Prism Cement Limited Diagold Design Limited Innovassynth Technologies (India) Limited ING Vysya Life Insurance Company Limited Private Limited Companies Surin Investments Pvt Ltd Fidelity Trustee Company Pvt Ltd Health & Glow Retailing Pvt Ltd Foodworld Supermarkets Private Ltd Foreign Companies Associated Battery Manufacturers (Ceylon) Limited Chloride Eastern Limited Chloride Batteries S E Asia Pte Limited Chloride Eastern Industries Pte Limited

85

Name, Status Father’s Name, Designation, Address and Occupation Mr R B Raheja

Age (years)

53

Qualification

Date of appointment and Tenure

B.Com

12 December, 1991 Liable to retirement by rotation

Non –Independent S/o Dr B S Raheja Vice Chairman Rahejas, 61 S V Road, Khar Mumbai – 400 052 Industrialist

Other Directorships

Public Limited Companies Asianet Satellite Communications Limited EIH Associated Hotels Limited EIH Limited H & R Johnson (India) Limited Futura Polysters Limited Juhu Beach Resorts Limited Prism Cement Limited Supreme Petrochem Limited Sonata Software Limited Innovasynth Technologies (India) Limited ING Vysya Life Insurance Company Limited Private Limited Companies Amber Apartment Makers Private Limited Ameeta Grihnirman Private Limited Arjun Housing Private Limited Ardex Endura (India) Private Limited Bloomingdale Investment & Finance Private Limited Bellvne Constructions Private Limited Bay-Side Exports Private Limited Brindaban Agro Industries Private Limited Brindaban Builders Private Limited Brindaban Land Development Private Limited Beach Plaza Contractors & Developers Private Limited Chandramouli Finance & Estates Private Limited Other Directorships Colonnade Contractors & Developers Private Limited Colonnade Housing Private Limited

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Crescent Property Developers Private Limited Coronet Investments Private Limited Emgeen Holdings Private Limited Excelsior Construction Private Limited Globus Stores Private Limited Gstaad Investment & Finance Private Limited Gokul Construction Company Private Limited Gstaad Trading Company Private Limited Hathway Investments Private Limited Hathway Cable & Datacom Private Limited Kaunteya Contractors & Developers Private Limited Kaunteya Builders Private Limited Kuntinandan Contractors & Developers Private Limited Kuntiputra Properties Private Limited Lavina Contractors & Developers Private Limited Manali Investment & Finance Private Limited Matsyagandha Investments & Finance Private Limited Panchali Builders Private Limited Prerna Builders Private Limited Peninsula Estates Private Limited RMC Readymix (India) Private Limited R Raheja Investments Private Limited R B R Constructions Private Limited Other Directorships R B R Estates & Finance Private Limited Sea-side Exports Private Limited Shiraz Realtors Private Limited Shoreline Exports Private Limited

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Spur Cable And Datacom Private Limited Trophy Investment & Finance Private Limited Vidur Constructions Private Limited Villa – Capri Developers Private Limited Varahagiri Investments & Finance Private Limited Vijay Raheja Builders Private Limited ARKO Enterprises Private Limited ARKO Dealers Private Limited Bestow Contractors & Developers Private Limited Outlook Publishing (India) Private Limited ING Investment Management (India) Private Limited Optimix Technologies Private Limited Foreign Company Chloride Eastern Industries Pte Limited

Mr T V Ramanathan Non - Independent S/o Late Mr T K Venkateswaran Managing Director and Chief Executive Officer

62

B.Com, F.C.A & A.C.S

Appointment 13 May 1996 Tenure – 30 April, 2010

Public Limited Company Chloride International Limited Private Limited Company Tandon Metals Pvt. Ltd.

88

Name, Status Father’s Name, Designation, Address and Occupation 9 Woodlands Syndicate, 8/7 Alipore Road, Kolkata – 700 027 Company Executive

Age (years)

Mr G Chatterjee

57

Date of appointment and Tenure

Other Directorships

Foreign Companies Chloride Batteries S E Asia Pte Ltd Espex Batteries Limited

Non - Independent S/o Mr Govind Chatterjee Director – Industrial Flat No. 011003, UDITA, Bengal Ambuja, 1050/1 Survey Park, Santoshpur, Kolkata – 700 075 Company Executive Mr P K Kataky

Qualification

BE (Mech), PGDBA (IIM, Ahmedabad)

Appointment 13 May 1996 Tenure – 30 April, 2011

Public Limited Companies Caldyne Automatics Limited Haldia Integrated Development Agency Ltd Foreign Companies Espex Batteries Limited Chloride Batteries S E Asia Pte Ltd

59

BE (Elect)

Appointment 26 March 2005 Tenure – 30 April, 2011

Non - Independent S/o Late Mr M N Kotokey DirectorAutomotive Flat No. 33 & 34, EDEN ROC, 3rd Floor, Plot Nos 24 & 25, 3 Union Park, Pali Hill, Bandra (W), Mumbai – 400 050 Company Executive

Public Limited Company Chloride International Limited Private Limited Company Tandon Metals Pvt. Ltd. Foreign Company Associated Battery Manufacturers (Ceylon) Limited

89

Name, Status Father’s Name, Designation, Address and Occupation Dr S K Mittal

Age (years)

Qualification

Date of appointment and Tenure

Other Directorships

59

MS Phd (Engg Sc), Florida

Appointment - 13 May 1996 Tenure – 30 April, 2010

Private Limited Company Tandon Metals Pvt. Ltd.

Mr A K Mukherjee

46

Non - Independent S/o Late Mr Achintya Kumar Mukherjee Director – Finance and Chief Financial Officer 31 Woodlands Syndicate, 8/7 Alipore Road, Kolkata 700027 Company Executive Mr Vijay Aggarwal

B.Com (Hons), A.C.A & A.I.C.W.A

Appointment 1 May 2007 Tenure – 30 April, 2011

Public Limited Company Caldyne Automatics Limited Private Limited Company Tandon Metals Pvt. Ltd. Foreign Company Espex Batteries Ltd.

39

B.Tech, MBA (IIM, Ahmedabad)

30 October, 2000 Liable to retirement by rotation

Public Limited Companies Asianet Satellite Communications Limited Prism Cement Limited H & R Johnson (India) Limited Aptech Limited ING Vysya Life Insurance Company Limited (Alternate Director)

Non - Independent S/o Late Mr A P Mittal Director – R & D Flat No. 11B, Minto Park, 13 D L Khan Road, Kolkata – 700 027 Company Executive

Independent S/o Late Mr S A Aggarwal Non Executive Director 4th Floor, Sterling Diamond Appartments, 24 Mount Mary Rd Bandra (West) Mumbai – 400 050 Business Executive

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Name, Status Father’s Name, Designation, Address and Occupation

Age (years)

Qualification

Date of appointment and Tenure

Other Directorships

Private Limited Companies Ardex Endura (India) Pvt Limited RMC Readymix (India) Pvt Limited Spur Cable & Datacom Pvt Limited Mr H M Kothari

61

B.Com

12 December, 1991 Liable to retirement by rotation

Independent S/o Late Mr. M S Kothari Non Executive Director Seaview, 57 Worli Sea Face Mumbai – 400 025 Investment Banker

Public Limited Companies DSP Merrill Lynch Limited DSP Merrill Lynch Fund Managers Limited Alkyl Amines Chemicals Limited Kirloskar Oil Engines Ltd Peninsula Land Limited Private Limited Companies Hemko Patents Development Pvt Ltd Health & Glow Retailing Pvt Ltd Shuko Real Estate Pvt Ltd Arko Dealers Pvt Ltd Arko Enterprises Pvt Ltd Bestow Contractors and Developers Pvt Ltd DSP HMK Holdings Pvt Ltd DSP Investment Pvt Ltd DSP Adiko Holdings Pvt Ltd Food World Super Markets Private Ltd

91

Name, Status Father’s Name, Designation, Address, and Occupation Mr Bhaskar Mitter

Age

Qualification

Date of appointment and tenure

88

Barrister at Law

12 October, 1966 Liable to retirement by rotation

Public Limited Companies Eveready Industries India Limited Gloster Jute Mills Limited Graphite India Limited

46

Barrister at Law

26 August, 1994 Liable to retirement by rotation

Nil

78

LLB, Advocate & Solicitor

5 November, 1993 Liable to retirement by rotation

Public Limited Companies Prism Cement Limited H & R Johnson (India) Limited Supreme Petrochem Limited

Independent S/o Late Mr B L Mitter Flat No. 3B, 7/1 Queens’ Park Kolkata – 700 019 Executive Mr S N Mookherjee

Other Directorships

Independent S/o Mr S B Mookherjee 3A, Lovelock Street Kolkata – 700 019 Senior Advocate Mr A H Parpia Independent S/o Late Mr Habib R Parpia 9 Blooming Heights 4 Pali Hill, Bandra Mumbai – 400 050 Solicitor & Advocate

Mr S B Raheja Non-Independent S/o Dr B S Raheja Case Postale 3153 1211 Geneva 3 Switzerland Industrialist

Private Limited Companies Bay-Side Exports Private Limited Brindaban Agro Industries Pvt Limited R B R Construction Pvt Ltd Chika Private Limited 43

Bachelor in Business Administration

12 December, 1991 Liable to retirement by rotation

92

Public Limited Companies Supreme Petrochem Limited Prism Cement Limited ING Vysya Life Insurance Company Limited Private Limited Companies Hathway Cable & Datacom Private Limited

Name, Status Father’s Name, Designation, Address, and Occupation Mr D S Parekh

Age

63

Independent Alternate to Mr S B Raheja S/o Late Mr S T Parekh 9 Darbhanga Mansion 12 Carmichael Road Mumbai 400 026 Business Executive

Qualification

B.Com F.C.A (England & Wales)

Date of appointment and tenure

20 January, 2001 Liable to retirement by rotation

Other Directorships

Public Limited Companies H D F C Limited Infrastructure Development Finance Co. Ltd Glaxo Smithkline Pharmaceuticals Limited HDFC Asset Management Co. Ltd HDFC Chubb General Insurance CO Ltd HDFC Standard Life Insurance Co. Ltd Hindustan Unilever Limited Mahindra & Mahindra Limited Hindustan Oil Exploration Corporation Limited Castrol India Limited The Indian Hotels Co Ltd Siemens Ltd Borax Morarji Ltd Alternate Director Zodiac Clothing Co Ltd Alternate Director Bharat Bijlee Ltd Alternate Director Private Limited Companies Lafarge India Pvt Ltd

Mr W Wong Non Independent S/o Late Mr Wong Shui Luen 137 Sunset Way #05-11 Clementi Park Singapore– 597 159 Business Executive

61

FCCA, FCPA Australia, FCPA Singapore

25 March, 1994 Liable to retirement by rotation

Foreign Companies

Chloride Eastern Limited Associated Battery Manufacturers (Ceylon) Limited Chloride Eastern Industries Pte Ltd Chloride Batteries S E Asia Pte Ltd

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Brief details of the Company’s Directors: Mr R G Kapadia - Chairman & Independent Non-Executive Director, aged 51 years, is a practicing Chartered Accountant and Senior Partner of G M Kapadia & Company, an Audit firm of many years standing, located at Mumbai. Mr Kapadia is also a Director of Asianet Satellite Communications Limited, Bhoruka Power Corporation Limited, Goldiam International Limited, H & R Johnson (India) Limited, Nilkamal Limited, Prism Cement Limited and ING Vysya Life Insurance Company Limited, among other companies in India. He is also a Director of Chloride Eastern Limited, UK, Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka, Chloride Eastern Industries Pte. Ltd., Singapore and Chloride Batteries S E Asia Pte. Limited, Singapore. He was also appointed a Director of Fidelity Trustee Company Pvt. Ltd. He served as the President of the prestigious Indian Merchants Chamber for 2005-06 and is considered an expert on Taxation matters. Mr R B Raheja, B.Com, Vice-Chairman and Non-Executive Director, aged 53 years. Has a wide range of experience in Industry and Business. A Director of EIH Limited, the prominent hotel chain, he is also on the Board of EIH Associated Hotels, which run the Trident Hilton Chain as well as Juhu Beach Resorts Limited. He is also on the Board of Asianet Satellite Communications Limited, H & R Johnson (India) Limited, the largest Tile company in India, Futura Polyesters Limited, Supreme Petrochem Limited, Prism Cement Limited, Sonata Software Limited, Innovasynth Technologies (I) Limited and ING Vysya Life Insurance Company Limited. Besides these, he is a Director in a number of Private Limited companies, besides having interests in a lot of other businesses. Mr T V Ramanathan, Managing Director & Chief Executive Officer, aged 62 years is a Chartered Accountant and a qualified Company Secretary. His total experience of 39 years includes 15 years overseas of which nearly 5 years was with the World Bank. Before joining his present assignment in 1995, he was with the UB Group and has a wealth of experience in dealing with Financial and Accounting matters. He is a Director of Chloride International Limited and on the Board of ESPEX Batteries Limited, UK and Chloride Batteries South East Asia Pte. Ltd. Singapore. He is also a director in Tandon Metals Pvt. Ltd. Mr G Chatterjee, Director-Industrial, aged 57 years, has a wide range of experience in Production and Marketing. An Engineer and an MBA from IIM, he has spent over two decades in the company where he is acknowledged to have spearheaded the growth of Exide in the battery range for Industrial Applications. He has also led the move for Exide to enter into joint ventures for marketing of industrial batteries in UK and Australia. He is a Director on the Board of Caldyne Automatics Limited, Haldia Integrated Development Agency Limited, ESPEX Batteries Limited, UK, Chloride Batteries S E Asia Pte. Limited, Singapore. Mr P K Kataky, B.E. (Electrical), Director-Automotive, aged 59 years, has a wide range of experience in Marketing. His total working experience is 37 years and he has been associated with the battery industry for two decades and as an Engineer has brought to bear his innovative solutions for expanding the reach of the company in automotive batteries after market. He is also a Director of Chloride International Limited, Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka and Tandon Metals Pvt. Ltd.. Dr S K Mittal, MS Phd (Engg Sc.), Florida, Director - Research & Development, aged 59 years, has a wide range of experience in Research & Development with him having spent more than three decades in this profession. He regularly participates in the Battery Council International annual conferences and also from time to time has presented research papers in the national and international fora. He has been with Exide since its early days when the Research & Development wing was at a nascent stage and is credited

94

with having a number of international Patents, which have been registered by Exide in the recent years. He is also a director in Tandon Metals Pvt. Ltd. Mr A K Mukherjee, Director-Finance & Chief Financial Officer, aged 46 years, has a wide range of experience in financial and accounting matters, being a Chartered & Cost Accountant. He joined Exide from his previous stint with Phillips India Limited. He is also a Director on the Board of Caldyne Automatics Limited, Espex Batteries Ltd., UK and Tandon Metals Pvt. Ltd. . Mr Vijay Aggarwal, Independent Non-Executive Director, aged 39 years, is the Managing Director of H & R Johnson (I) Limited. Mr Agarwal is a B Tech and an MBA from IIM Ahmedabad, he started his career with SBI Capital Markets Limited, a prominent Merchant Banker. He is also a Director of Asianet Satellite Communications Limited, Prism Cement Limited, Aptech Limited and an Alternate Director on the Board of ING Vysya Life Insurance Company Limited. Under his supervision, H & R Johnson has expanded rapidly to become the largest Tile Maker in India. Mr H M Kothari, B.Com, Independent Non-Executive Director, aged 61 years, has a formidable reputation as a Merchant Banker heading DSP Merrill Lynch Limited in India. His total working experience is around 40 years. He is associated with a number of other companies, prominent among which are Kirloskar Oil Engines Limited, Peninsula Land Limited and Alkyl Amines Chemicals Limited. Mr Bhaskar Mitter, Barrister at Law, Independent Non-Executive Director, aged 88 years, retired as the Chairman of Andrew Yule Limited and was also the Chairman of Calcutta Electric Supply Corporation Limited for many years. His total working experience is 54 years. With his vast experience in running companies, he has been the President of Bengal Chamber of Commerce & Industry Limited and various other industry associations. He serves on the Board of Eveready Industries India Limited, Gloster Jute Mills Limited and Graphite India Limited. Mr S N Mookherjee, Independent Non-Executive Director, aged 46 years is an Advocate by profession. He has been associated with the Company since August 26, 1994 and has supported the Company with his expertise in Legal field. Mr A H Parpia, Independent Non-Executive Director, aged 78 years, is a Lawyer by profession and runs A H Parpia & Company, acknowledged as experts in the field of Land & Conveyancing issues. He is also a Director on the Board of Prism Cement Limited, H & R Johnson (India) Limited and Supreme Petrochem Limited, besides a number of Private companies. Mr S B Raheja, Bachelor in Business Administration, Non-Executive Director, aged 43 years, has a wide range of experience in Industry and business and is located in Switzerland. His total working experience is 23 years. He serves on the Board of Supreme Petrochem Limited, Prism Cement Limited and ING Vysya Life Insurance Company Limited. Mr D S Parekh, B.Com, FCA (England & Wales), alternate to Mr S B Raheja is an Independent NonExecutive Director, aged 63 years and has for the past few decades run the most successful Housing Finance Company in India, HDFC Limited. His total working experience is 35 years. He has received several awards, served on several committees constituted by the Govt. of India, the most notable of which was to restructure the Unit Trust of India. He is on the Board of a number of Public Limited companies, prominent among which are Hindustan Unilever Limited, Castrol India Limited, Glaxo SmithKline Pharmaceuticals Limited, Mahindra & Mahindra Limited and Siemens Limited. Mr Winston Wong, FCCA, FCPA Australia, FCPA Singapore, Non-Executive Director, aged 61 years, is the Managing Director of Chloride Eastern Industries Pte. Ltd. Singapore and a Director on the Board of Chloride Eastern Limited, UK, Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka and Chloride Batteries S E Asia Pte. Ltd, Singapore. His total working experience is 38 years

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DETAILS OF BORROWING POWERS OF DIRECTORS The shareholders of the company have passed a resolution at the 48th AGM of the Company held on 17th July 1995 authorizing the Board of Directors of the Company pursuant to Section 293(1) (d) of the Companies Act, 1956 to borrow such sum or sums of money as they may deem requisite for the purpose of the business of the Company, notwithstanding that the monies to be borrowed together with the monies already borrowed by the Company (apart from temporary loans obtained from the bankers of the Company in the ordinary course of business) may exceed the aggregate of the paid capital of the Company and its free reserves, provided, however that the total amount up to which monies may be borrowed shall not exceed the aggregate of paid up capital and free reserves of the Company by more than a sum of Rs 150 crores at any time. Compensation paid to Directors The total remuneration paid to the directors for the year ended 31st March, 2007 was Rs.376 lacs. Compensation payable to all Executive Directors (1) Mr. T V Ramanathan, Managing Director & Chief Executive Officer The details of terms and conditions and remuneration payable to Mr T V Ramanathan, Managing Director and Chief Executive Officer are as follows: Terms and Conditions (1) Salary

Mr T V Ramanathan Managing Director & Chief Executive Officer

Increment

Basic Salary will be increased by 10% per annum provided performance criteria as laid down by Remuneration Committee of the Board of Directors, are met.

Commission

Commission of 1% of the net profit of the Company computed in the manner laid down in Section 309(5) of the Companies Act, 1956 subject to a maximum of annual salary for each year, based on certain performance criteria to be laid down by Remuneration Committee of the Board of Directors and payable annually after the annual accounts have been approved by the Board of Directors and Members of the Company.

Performance Bonus

Subject to a maximum of annual salary based on certain performance criteria to be laid down by the Remuneration Committee of the Board of Directors.

Duties

Subject to the superintendence, control and direction of the Board, he shall have the responsibility of overall management of the business of the Company and for that purpose shall have the power to do all such acts, deeds and things on behalf of the Company or as may be required or delegated to him by the Board / Chairman.

Period

From 1st May 2007 to 30th April, 2010.

Perquisites

In addition, to the above salary, commission and incentive, all the above Executive Directors shall also be entitled to perquisites like furnished accommodation with expenditure on gas, electricity, water, maintenance and repair thereof or House Rent Allowance with expenditure on gas, electricity, water and furnishings, leave travel allowance for self and family, medical expenses and medical insurance for self and family, fees of clubs, personal accident and life insurance and such other perquisites

(2) Rs 3,25,000/- per month

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and allowances in accordance with the rules of the Company or as may be agreed to by the Board of Directors. Perquisites shall be evaluated as per Income Tax Rules, wherever applicable, and in the absence of any such rule, perquisites shall be evaluated at actual costs. Provision for use of Company’s cars and telephones at residence (including payment only for local calls and long distance calls) shall not be included in the computation of perquisites. Company’s contribution to Provident Fund and Pension Fund not exceeding 27% of salary or such percentage limit as may be prescribed by Income Tax legislation. Gratuity payable at a rate not exceeding half a month’s salary for each completed year of service, and leave including encashment of leave at the end of the tenure, as per Company’s policy. The overall amount of perquisites shall not exceed an amount equal to the annual basic salary. In computing the monetary ceiling on perquisites, Company’s contribution to Provident Fund, Pension Fund and Gratuity shall not be taken into account. Minimum Remuneration

In the absence of or inadequacy of profits in any of the financial years during the tenure of the above Executive Directors of the Company, they shall be entitled to such remuneration by way of salary along with perquisites, benefits and other allowances as mentioned above not exceeding such sum as may be prescribed under Schedule XIII of the Companies Act, 1956 from time to time.

Date Approval

The Shareholders of the Company, at the Annual General Meeting held on 20th July, 2007, approved the aforesaid details of the terms and conditions and remuneration payable to Mr T V Ramanathan as Managing Director and Chief Executive Officer.

of

(2) Dr. S.K. Mittal, Director – Research & Development The details of terms and conditions and remuneration payable to Dr S.K. Mittal, Director – Research & Development are as follows: Terms and Conditions (1) Salary

Dr S K Mittal, Director – Researh & Development

Increment

Basic Salary will be increased by 10% per annum provided performance criteria as laid down by Remuneration Committee of the Board of Directors, are met.

Commission

Commission of 1% of the net profit of the Company computed in the manner laid down in Section 309(5) of the Companies Act, 1956 subject to a maximum of annual salary for each year, based on certain performance criteria to be laid down by Remuneration Committee of the Board of Directors and payable annually after the annual accounts have been approved by the Board of Directors and Members of the Company.

Performance Bonus Duties

Subject to a maximum of annual salary based on certain performance criteria to be laid down by the Remuneration Committee of the Board of Directors. Subject to the superintendence, control and direction of the Managing Director and Chief Executive Officer, he shall have the overall responsibility for all matters

(2) Rs 2,25,000/- per month

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relating to Research & Development of designs and specifications of new products and evaluation of technology options and providing support both to automotive and industrial growth and for that purpose shall have the power to do all such acts, deeds and things on behalf of the Company or as may be required or delegated to him by the Managing Director and Chief Executive Officer. Period

From 1st May 2007 to 30th April, 2010.

Perquisites

In addition, to the above salary, commission and incentive, all the above Executive Directors shall also be entitled to perquisites like furnished accommodation with expenditure on gas, electricity, water, maintenance and repair thereof or House Rent Allowance with expenditure on gas, electricity, water and furnishings, leave travel allowance for self and family, medical expenses and medical insurance for self and family, fees of clubs, personal accident and life insurance and such other perquisites and allowances in accordance with the rules of the Company or as may be agreed to by the Board of Directors. Perquisites shall be evaluated as per Income Tax Rules, wherever applicable, and in the absence of any such rule, perquisites shall be evaluated at actual costs. Provision for use of Company’s cars and telephones at residence (including payment only for local calls and long distance calls) shall not be included in the computation of perquisites. Company’s contribution to Provident Fund and Pension Fund not exceeding 27% of salary or such percentage limit as may be prescribed by Income Tax legislation. Gratuity payable at a rate not exceeding half a month’s salary for each completed year of service, and leave including encashment of leave at the end of the tenure, as per Company’s policy. The overall amount of perquisites shall not exceed an amount equal to the annual basic salary. In computing the monetary ceiling on perquisites, Company’s contribution to Provident Fund, Pension Fund and Gratuity shall not be taken into account.

Minimum Remuneration

In the absence of or inadequacy of profits in any of the financial years during the tenure of the above Executive Directors of the Company, they shall be entitled to such remuneration by way of salary along with perquisites, benefits and other allowances as mentioned above not exceeding such sum as may be prescribed under Schedule XIII of the Companies Act, 1956 from time to time.

Date Approval

The Shareholders of the Company, at the Annual General Meeting held on 20th July, 2007, approved the aforesaid details of the terms and conditions and remuneration payable to Dr S K Mittal as Director – Research and Development.

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(3) Mr. G. Chatterjee, Director – Industrial The details of terms and conditions and remuneration payable to Mr G. Chatterjee, Director – Industrial are as follows: Terms and Conditions (1) Salary

Mr G. Chatterjee, Director – Industrial (2) Rs 2,50,000/- per month

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Increment

Basic Salary will be increased by 10% per annum provided performance criteria as laid down by Remuneration Committee of the Board of Directors, are met.

Commission

Commission of 1% of the net profit of the Company computed in the manner laid down in Section 309(5) of the Companies Act, 1956 subject to a maximum of annual salary for each year, based on certain performance criteria to be laid down by Remuneration Committee of the Board of Directors and payable annually after the annual accounts have been approved by the Board of Directors and Members of the Company.

Performance Bonus

Subject to a maximum of annual salary based on certain performance criteria to be laid down by the Remuneration Committee of the Board of Directors.

Duties

Subject to the superintendence, control and direction of the Managing Director and Chief Executive Officer, he shall have the overall responsibility for all matters relating to manufacturing, marketing and sales activities pertaining to the products of the industrial group and for that purpose shall have the power to do all such acts, deeds and things on behalf of the Company or as may be required or delegated to him by the Managing Director and Chief Executive Officer.

Period

From 1st May 2007 to 30th April, 2011.

Perquisites

In addition, to the above salary, commission and incentive, all the above Executive Directors shall also be entitled to perquisites like furnished accommodation with expenditure on gas, electricity, water, maintenance and repair thereof or House Rent Allowance with expenditure on gas, electricity, water and furnishings, leave travel allowance for self and family, medical expenses and medical insurance for self and family, fees of clubs, personal accident and life insurance and such other perquisites and allowances in accordance with the rules of the Company or as may be agreed to by the Board of Directors. Perquisites shall be evaluated as per Income Tax Rules, wherever applicable, and in the absence of any such rule, perquisites shall be evaluated at actual costs. Provision for use of Company’s cars and telephones at residence (including payment only for local calls and long distance calls) shall not be included in the computation of perquisites. Company’s contribution to Provident Fund and Pension Fund not exceeding 27% of salary or such percentage limit as may be prescribed by Income Tax legislation. Gratuity payable at a rate not exceeding half a month’s salary for each completed year of service, and leave including encashment of leave at the end of the tenure, as per Company’s policy. The overall amount of perquisites shall not exceed an amount equal to the annual basic salary. In computing the monetary ceiling on perquisites, Company’s contribution to Provident Fund, Pension Fund and Gratuity shall not be taken into account.

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Minimum Remuneration

In the absence of or inadequacy of profits in any of the financial years during the tenure of the above Executive Directors of the Company, they shall be entitled to such remuneration by way of salary along with perquisites, benefits and other allowances as mentioned above not exceeding such sum as may be prescribed under Schedule XIII of the Companies Act, 1956 from time to time.

Date Approval

The Shareholders of the Company, at the Annual General Meeting held on 20th July, 2007, approved the aforesaid details of the terms and conditions and remuneration payable to Mr G Chatterjee as Director - Industrial.

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(4) Mr. P.K. Kataky, Director – Automotive The details of terms and conditions and remuneration payable to Mr P.K. Kataky, Director – Automotive are as follows: Terms and Conditions (1) Salary

Mr P.K. Kataky, Director – Automotive

Increment

Basic Salary will be increased by 10% per annum provided performance criteria as laid down by Remuneration Committee of the Board of Directors, are met.

Commission

Commission of 1% of the net profit of the Company computed in the manner laid down in Section 309(5) of the Companies Act, 1956 subject to a maximum of annual salary for each year, based on certain performance criteria to be laid down by Remuneration Committee of the Board of Directors and payable annually after the annual accounts have been approved by the Board of Directors and Members of the Company.

Performance Bonus

Subject to a maximum of annual salary based on certain performance criteria to be laid down by the Remuneration Committee of the Board of Directors.

Duties

Subject to the superintendence, control and direction of the Managing Director and Chief Executive Officer, he shall have the overall responsibility for all matters relating to manufacturing, marketing and sales activities pertaining to the products of the automotive group and for that purpose shall have the power to do all such acts, deeds and things on behalf of the Company or as may be required or delegated to him by the Managing Director and Chief Executive Officer.

Period

From 1st May 2007 to 30th April, 2011.

Perquisites

In addition, to the above salary, commission and incentive, all the above Executive Directors shall also be entitled to perquisites like furnished accommodation with expenditure on gas, electricity, water, maintenance and repair thereof or House Rent Allowance with expenditure on gas, electricity, water and furnishings, leave travel allowance for self and family, medical expenses and medical insurance for self and family, fees of clubs, personal accident and life insurance and such other perquisites and allowances in accordance with the rules of the Company or as may be agreed to by the Board of Directors.

(2) Rs 2,50,000/- per month

Perquisites shall be evaluated as per Income Tax Rules, wherever applicable, and in the absence of any such rule, perquisites shall be evaluated at actual costs.

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Provision for use of Company’s cars and telephones at residence (including payment only for local calls and long distance calls) shall not be included in the computation of perquisites. Company’s contribution to Provident Fund and Pension Fund not exceeding 27% of salary or such percentage limit as may be prescribed by Income Tax legislation. Gratuity payable at a rate not exceeding half a month’s salary for each completed year of service, and leave including encashment of leave at the end of the tenure, as per Company’s policy. The overall amount of perquisites shall not exceed an amount equal to the annual basic salary. In computing the monetary ceiling on perquisites, Company’s contribution to Provident Fund, Pension Fund and Gratuity shall not be taken into account. Minimum Remuneration

In the absence of or inadequacy of profits in any of the financial years during the tenure of the above Executive Directors of the Company, they shall be entitled to such remuneration by way of salary along with perquisites, benefits and other allowances as mentioned above not exceeding such sum as may be prescribed under Schedule XIII of the Companies Act, 1956 from time to time.

Date Approval

The Shareholders of the Company, at the Annual General Meeting held on 20th July, 2007, approved the aforesaid details of the terms and conditions and remuneration payable to Mr P K Kataky as Director - Automotive.

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(5) Mr. A.K. Mukherjee, Director – Finance and Chief Financial Officer

The details of terms and conditions and remuneration payable to Mr A.K. Mukherjee, Director – Finance and Chief Financial Officer are as follows: Terms and Conditions (1) Salary

Mr A.K. Mukherjee, Director – Finance and Chief Financial Officer

Increment

Basic Salary will be increased by 10% per annum provided performance criteria as laid down by Remuneration Committee of the Board of Directors, are met.

Commission

Commission of 1% of the net profit of the Company computed in the manner laid down in Section 309(5) of the Companies Act, 1956 subject to a maximum of annual salary for each year, based on certain performance criteria to be laid down by Remuneration Committee of the Board of Directors and payable annually after the annual accounts have been approved by the Board of Directors and Members of the Company.

Performance Bonus

Subject to a maximum of annual salary based on certain performance criteria to be laid down by the Remuneration Committee of the Board of Directors.

Duties

Subject to the superintendence, control and direction of the Managing Director and Chief Executive Officer, he shall have the overall responsibility for all matters relating to Finance (Treasury functions), Accounts, Statutory Audit, Cost Audit and Management Information Systems and for that purpose shall have the power to do all such acts, deeds and things on behalf of the Company or as may be required or

(2) Rs 1,00,000/- per month

101

delegated to him by the Managing Director and Chief Executive Officer. Period

From 1st May 2007 to 30th April, 2011.

Perquisites

In addition, to the above salary, commission and incentive, all the above Executive Directors shall also be entitled to perquisites like furnished accommodation with expenditure on gas, electricity, water, maintenance and repair thereof or House Rent Allowance with expenditure on gas, electricity, water and furnishings, leave travel allowance for self and family, medical expenses and medical insurance for self and family, fees of clubs, personal accident and life insurance and such other perquisites and allowances in accordance with the rules of the Company or as may be agreed to by the Board of Directors. Perquisites shall be evaluated as per Income Tax Rules, wherever applicable, and in the absence of any such rule, perquisites shall be evaluated at actual costs. Provision for use of Company’s cars and telephones at residence (including payment only for local calls and long distance calls) shall not be included in the computation of perquisites. Company’s contribution to Provident Fund and Pension Fund not exceeding 27% of salary or such percentage limit as may be prescribed by Income Tax legislation. Gratuity payable at a rate not exceeding half a month’s salary for each completed year of service, and leave including encashment of leave at the end of the tenure, as per Company’s policy. The overall amount of perquisites shall not exceed an amount equal to the annual basic salary. In computing the monetary ceiling on perquisites, Company’s contribution to Provident Fund, Pension Fund and Gratuity shall not be taken into account.

Minimum Remuneration

In the absence of or inadequacy of profits in any of the financial years during the tenure of the above Executive Directors of the Company, they shall be entitled to such remuneration by way of salary along with perquisites, benefits and other allowances as mentioned above not exceeding such sum as may be prescribed under Schedule XIII of the Companies Act, 1956 from time to time.

Date Approval

The Shareholders of the Company, at the Annual General Meeting held on 20th July, 2007, approved the aforesaid details of the terms and conditions and remuneration payable to Mr A K Mukherjee as Director – Finance and Chief Financial Officer.

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CORPORATE GOVERNANCE The guidelines in respect of corporate governance are applicable to the company as its shares are listed on BSE, NSE and CSE. The Company is ensuring on-going compliance with all requirements pertaining to corporate governance. The company has complied with SEBI guidelines in respect of Corporate Governance specially with respect to broad basing of Board, Constituting the Committees such as shareholding/ investor Grievance Committee, etc. and also some of the non-mandatory requirements of corporate governance norms as enumerated in clause 49 of the listing agreement with stock exchanges. The following committees of the Board of Directors for compliance with the corporate governance requirements have been constituted:

102

• • •

Audit Committee Shareholder’s Committee /Investor Grievance Committee; and Remuneration Committee.

AUDIT COMMITTEE The Audit Committee was constituted vide a resolution passed by the Board at its meeting held on 27th April, 1997. The Board on 28th April, 2000 adopted the terms and reference as mentioned in the Clause 49 of the Listing Agreement. The following are the terms of reference under Clause 49 of the Listing Agreement: •

Overseeing the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, efficient and credible.



Recommending to the Board, the appointment, reappointment and if required, the replacement or removal of statutory auditor and the fixation of audit fees.



Approval of payment to statutory auditors for any other services rendered by the statutory auditors.



Appointment, removal and terms of remuneration of internal auditors.



Reviewing with the management, the annual financial statements before submission to the Board for approval, with particular reference to: 1.

Matters required to be mentioned in the Director’s responsibility statement which are to be included in the Board’s report in terms of clause (2AA) of Section 217 of the Companies Act, 1956;

2.

Changes, if any in accounting policies and practices and reasons for the same;

3.

Major accounting entries involving estimates based on the exercise of judgement by management;

4.

Significant adjustments made in the financial statements arising out of audit findings;

5.

Compliance with listing and other legal requirements relating to the financial statements;

6.

Disclosure of any significant related party transactions;

7.

Qualifications in the draft audit report, if any;



Reviewing with the management, the quarterly financial statements before submission to the Board for approval;



Reviewing with the management, the performance of statutory and internal auditors, and adequacy of the internal control systems;



Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit;



Discussion with internal auditors on any significant findings and follow up thereon;

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Reviewing internal audit reports in relation to internal control weakness;



Reviewing management letters/ letters of internal control weakness issued by the statutory auditors;



Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or failure of internal control systems of a material nature and reporting the matter to the Board;



Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussions to ascertain any area of concern; and



To look into the reasons for substantial defaults in the payments to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors

The audit committee consists of the following Directors: NAME OF THE DIRECTOR Mr R G Kapadia

DESIGNATION COMMITTEE Chairman

Mr Bhaskar Mitter

Member

Mr S N Mookherjee

Member

Mr Vijay Aggarwal

Member

IN

THE

NATURE DIRECTORSHIPS Independent Non Director Independent Non Director Independent Non Director Independent Non Director

OF Executive Executive Executive Executive

The Managing Director & Chief Executive Officer, Director – Finance & Chief Financial Officer and the Chief – Internal Audit are permanent invitees to the Audit Committee meetings and Mr Barun Das, Divisional Head – Legal & Company Secretary is the Secretary of the Committee. The Company has complied with the requirement Audit Committee meetings as per the Listing Agreement. The dates of the meeting held during the last three years are given below: Year 2006-07 2005-06 2004-05

Number of meetings held 5 5 4

Dates 21.04.2006, 16.06.2006, 21.07.2006, 18.10.2006, 18.01.2007 27.04.2005, 16.05.2005, 26.07.2005, 20.10.2005, 11.01.2006 21.04.2004, 13.07.2004, 27.10.2004, 10.01.2005

Shareholders’ Grievance Redressal Committee The Shareholders’ / Investors’ Grievance committee was constituted vide a resolution passed by the Board at its meeting held on 28th April, 2000. The terms and reference as mentioned in the Clause 49 of the Listing Agreement was adopted by the Board for the Shareholders’ / Investors Grievance Committee. The terms of reference of this committee inter alia include issuing of share certificates, approving transfer of shares, consolidation of share certificates and exercising such powers in connection with the transfer and transmission of shares, consolidation and sub-division of share certificates, issues of share certificates etc. The composition of Shareholders’ Grievance Redressal Committee is as follows:

104

NAME OF THE DIRECTOR Mr Bhaskar Mitter

DESIGNATION COMMITTEE Chairman

Mr T V Ramanathan Mr G Chatterjee

Member Member

IN

THE

NATURE DIRECTORSHIPS Independent Non Director Executive Director Executive Director

OF Executive

Remuneration Committee The Remuneration committee was constituted vide a resolution passed by the Board at its meeting held on 2nd May, 2002. The names of the committee members are as below: NAME OF THE DIRECTOR Mr Bhaskar Mitter

DESIGNATION COMMITTEE Chairman

Mr R G Kapadia

Member

Mr S N Mookherjee

Member

Mr Vijay Aggarwal

Member

Mr T V Ramanathan

Member

IN

THE

NATURE DIRECTORSHIPS Independent Non Director Independent Non Director Independent Non Director Independent Non Director Executive Director

OF Executive Executive Executive Executive

Shareholding of Directors The Articles of the company do not require the Directors to hold any qualification shares. The shareholding of the Directors as on 30.11.2007 is as follows: Sl no 1.

Name of the Director Mr T V Ramanathan Managing Director Executive Officer

and

No. of shares held 43500

% of holding 0.006

Chief

2.

Mr Bhaskar Mitter Independent Non Executive Director

80000

0.011

3.

Mr A H Parpia Independent Non Executive Director

209000

0.028

4.

Mr H M Kothari Independent Non Executive Director

199200

0.027

5.

Mr D S Parekh Alternate Director & Independent Non Executive Director

21180

0.003

Interest of Directors All the Executive Directors of the company, apart from remuneration and their shareholding in the company if any, have no other interest in the company, except in respect of the commercial transactions between the company, its subsidiaries and other companies in which they are Directors/ interested.

105

CHANGES IN THE DIRECTORS IN THE LAST THREE YEARS Name of the Director Mr P K Kataky

Date of change 26.03.2005

Nature of Change / Reason Appointed as an Additional Director and also as Director – Automotive

Mr S Chand

31.12.2005

Resigned upon retirement.

Mr S B Ganguly

30.04.2007

Resigned upon retirement.

Mr A K Mukherjee

01.05.2007

Appointed as an Additional Director and also as Director – Finance

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ORGANISATION CHART

Organisation Structure Board of Directors T V Ramanathan Managing Director & Chief Executive Officer Dr. S K Mittal Director - R&D

Commercial - Procurement

A K Mukherjee Director - Finance

Information Technology - ERP Systems Projects - New and Expansion

B Das VP - Legal and Company Secretary

TQM Public Relations

M Chaudhuri VP - Personnel & Administration

R P Ray President - Submarine Battery Business

P K Kataky Director - Automotive

Marketing

Manufacturing

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G Chatterjee Director - Industrial

Quality Assurance and Process Control

Marketing

Manufacturing

Quality Assurance and Process Control

KEY MANAGEMENT PERSONNEL The Key managerial personnel of the Company, other than the whole-time directors, are as under : Sl Name and Designation Age Qualification Date of Experience in no Address in Joining years years

Exide

Industry

Present Profile & responsibilities

Remuneration paid at the end of the last FY (2006-07) (Rs in lacs)

Previous employment

1.

Mr Barun Das

Divisional Head – Legal & Company Secretary

57

B Com (Hons), ACA, ACIS(UK), Grad CIMA(UK), ACS

01.01.1995

13

32

To ensure all legal and statutory compliance for the Company

15

Statesman Limited Company Secretary

2.

Mr Monodip Chaudhuri

Divisional Head – Personnel & Administration

57

M.A.

14.10.1998

9

35

To ensure human resource management of the Company in a manner which is consistent with the Company’s business objective.

15

Shaw Wallace Company Limited

All the abovementioned key managerial personnel are permanent employees of the Company.

108

Relationship of the Key Managerial Personnel with the Promoter, Directors and other Key Managerial Personnel None of the Key Managerial Personnel is related with either the Promoter, Directors or any other Key Managerial Personnel. Details of Shareholding of the Key Managerial Personnel in the Company None of the Key Managerial Personnel hold any shares in the Company except as given below : Sl No. 1.

Name of the Shareholders

Number of Shares

Mr Barun Das

8320

Bonus or Profit Sharing Plan for the Key Managerial Personnel The Company has developed a performance based incentive scheme linked to variable pay structure for its employees. The Company’s compensation for employees has a variable component linked to the corporate and individual performance. Save and except the variable components to the key managerial personnel there is no bonus or profit sharing plan for the key managerial as on the date of the Letter of Offer.

Changes in the Key Managerial Personnel There had been no changes in the key managerial personnel during the last three years.

Interest of Key Managerial Personnel Other than the remuneration paid to the key managerial personnel, the key managerial personnel do not have any other interest in the Company. Except as stated otherwise in this Letter of Offer, the Company has not entered into any contract, agreement or arrangement during the preceding two years from the date of this Letter of Offer in which its Directors are interested directly or indirectly and no payments have been made to them in respect of these contracts, agreements or arrangements or are proposed to be made to them. Employees As on the date of filing the Letter of Offer with SEBI, the Company does not have any employee stock option scheme or employee stock purchase scheme. No amount or benefit has been paid or given or are intended to be given to any of the employees of the Company (including whole-time directors) except the normal remuneration for services rendered as employees and dividend on equity shares, if any, held by them.

109

THE PROMOTER The Promoter of the Company is Chloride Eastern Limited (CEL). CEL was incorporated as “The Chloride Electrical Storage Company (India) Limited” in England, on 23rd August, 1937, bearing company registration Number 330927 under the Companies Act, 1929 of United Kingdom. The name of CEL was changed to Chloride Overseas Limited on 14th February, 1952 and finally changed to Chloride Eastern Limited on 1st February, 1966. The registered office of CEL is situated at 162-164, Upper Richmond Road, Putney, London SW 15 2 SL, England. The principal activity of CEL is to hold shares in its associate company, Exide Industries Limited. Shareholding Pattern The entire shares of Chloride Eastern Limited are held by Chloride Eastern Industries Pte. Ltd., Singapore. Board of Directors The details of the Board of Directors of Chloride Eastern Limited as on 30 November, 2007 are as given in the table below: Name Mr. W. Wong Mr. S. B. Raheja Mr. R. G. Kapadia

Designation Director Director Director

None of the Directors of CEL hold any shares in the Company. Audited Financial Performance:

Dividend Income (Rs in lakhs) Profit after tax (Rs in lakhs) Equity Capital (Rs) Reserves and Surplus (Rs in lakhs) Face Value Per Share (Rs) Earnings Per Share (Rs) Net Asset Value Per Share (Rs)

FY 2007 1235 1109 8541 5889 85.41 1108502 5889226

(Figures in Rupees) FY 2005 996 1473 559 1269 8541 8541 4823 4298 85.41 85.41 559336 1268864 4823539 4298455

FY 2006

The shares of Chloride Eastern Limited are not listed with any Stock Exchanges. CEL has never became a sick company. There has been no change in management of Chloride Eastern Limited. Companies with which the promoter has disassociated in the last three years: The Promoter has not disassociated itself with any company in the last three years. The Permanent Account Numbers, Bank Account Numbers, the Company Registration Numbers and the addresses of the Registrars of Companies where the companies are registered have been submitted to the Stock Exchanges on which securities are proposed to be listed, at the time of filing the Letter of Offer with them.

110

Chloride Eastern Industries Pte Limited (“CEIPL”) is the Promoter of the Promoter. Details of CEIPL appear as under: History: CEIPL was incorporated in Singapore, on 7th August, 1987 bearing company registration Number 02365/1987K under the applicable laws, having its registered office at 106 Neythal Road, Singapore 628594. The name of CEIPL was changed to Chloride Eastern Industries Limited, vide fresh certificate of incorporation dated 26th January 1988 and further changed to Chloride Eastern Industries Pte Limited on 16th January, 1995. The principal activities of the company comprise investment holding and trading in Lead and battery related components. Shareholding Pattern The Shareholding Pattern of CEIPL as on 30th November 2007 are : Sl No 1.

Name of the Shareholder Liec Holdings

No. of Shares 76,317,882

Board of Directors The details of the Board of Directors of CEIPL as on 30th November, 2007 are as given in the table below: Name Mr R G Kapadia Mr R B Raheja Mr S B Raheja Mr W Wong

Designation Director Director Director Director

Audited Financial Performance:

Sales and other Income (Rs in lakhs) Profit after tax (Rs in lakhs) Equity Capital (Rs in lakhs) Reserves and Surplus (Rs in lakhs) Face Value Per Share (Rs) Earnings Per Share (Re) Net Asset Value Per Share (Rs)

FY 2007 1142 122 10944 1952 14.34 0.16 16.90

(Figures in Rupees) FY 2005 1165 1019 93 75 10944 10944 1830 1737 14.34 14.34 0.12 0.10 16.74 16.62

FY 2006

The shares of CEIPL are not listed with any Stock Exchanges. CEIPL has never became a sick company. There has been no change in management of CEIPL.

111

Common pursuits: There are no common pursuits between the Company and Chloride Eastern Limited Other than as provided in this Letter of Offer, Chloride Eastern Limited does not have any interest: (a) in the promotion of the Company; or (b) in any property acquired by the Company within two years of the date of the Letter of Offer or proposed to be acquired by it. Interest / Payment or Benefit to the Promoter Other than the dividend paid to the Promoter for the shares held by them, no amount or benefit has been paid or given by the Company within the two preceding years or is intended to be paid or given to Chloride Eastern Limited. Related Party Transactions There are no related party transactions as per the Financial Statements of the Company. Currency of Presentation Throughout the Letter of Offer unless the context otherwise requires all references to “Rupees”/”Rs.”: is the legal currency of the Republic of India.

112

DIVIDEND POLICY Dividends, other than interim dividends, will be declared at the Annual General Meeting of the shareholders based on the recommendations of the Board of Directors. The Board may, at its discretion, recommend dividends to be paid to the Company’s shareholders. Generally, the factors that may be considered by the Board of Directors before making any recommendations for the dividend include, without limitation to the Company’s future expansion plans and capital requirements, profits earned during the fiscal year, cost of raising funds from alternate sources, liquidity position, applicable taxes including tax on dividend, as well as exemptions under tax laws available to various categories of investors from time to time and general market conditions. The dividends declared by the Company during the last five years are as below

Rate of Dividend Dividend Amount Dividend Tax

(Rs in lakhs) Year ended March 31, 2003 40%

Year ended March 31, 2007 35%

Year ended March 31, 2006 30%

Year ended March 31, 2005 25%

Year ended March 31, 2004 40%

2625

2250

1875

2849

1424

446

316

263

365

183

113

FINANCIAL STATEMENTS Auditors' report To The Board of Directors Exide Industries Limited 59E, Chowringhee Road Kolkata – 700 020 Dear Sirs, 1.

We have examined the financial information of Exide Industries Limited (‘Company’) as at March 31, 2007, 2006, 2005, 2004 and 2003 and three months ended June 30, 2007, annexed to this report, prepared by the Company and approved by the Board of Directors, in accordance with the requirements of:

a)

paragraph B(1) of Part II of Schedule II to the Companies Act, 1956 ('the Act');

b) the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000 ('the Guidelines') and the related clarifications issued by the Securities and Exchange Board of India ('SEBI') as amended to date, c)

the terms of reference dated 29th August 2007 received from the Company, requesting us to carry out the assignment, in connection with the offer document being issued by the Company for its proposed Rights Issue; and

d) The Guidance Note on Reports in Company Prospectuses (Revised) issued by the Institute of Chartered Accountants of India. The Company proposes to make a rights issue of 50,000,000 equity shares, having a face value of Re. 1/each, at an issue price of Rs. 30 per share (referred to as the 'Offer'). Financial information as per audited financial statements: 2.

The financial information of Exide Industries Limited has been extracted by the management from the financial statements of Exide Industries Limited for the years ended March 31, 2007, 2006, 2005, 2004 and 2003 and approved by the Board of Directors.

3.

We have also examined the financial information of the Company for the broken period April 1, 2007 to June 30, 2007 prepared and approved by the Board of Directors for the purpose of disclosure in the offer document of the Company. The financial information for the above period was examined to the extent practicable, for the purpose of audit of financial information in accordance with the Auditing and Assurance Standards issued by the Institute of Chartered Accountants of India. Those Standards require that we plan and perform our audit to obtain reasonable assurance, whether the financial information under examination is free of material misstatement. Based on the above, we report that in our opinion and according to the information and explanations given to us, we have found the same to be correct and the same have been accordingly used in financial information appropriately.

114

4.

In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI Guidelines and terms of our engagement agreed with you, we further report that:

a)

The Restated Summary Statement of Assets and Liabilities, restated Summary Statement of Profit or loss and Restated Cash Flow Statement (‘Summary Statements’) of the Company, as at and for the years ended March 31, 2007, 2006, 2005, 2004 and 2003, examined by us, as set out in Annexures I, II and III to this report are after making such adjustments and regrouping as in our opinion were appropriate and are more fully described in Significant Accounting Policies, Notes and Changes in Significant Accounting Policies (Refer Annexures IV and V)

b) Based on the above, we are of the opinion that the restated financial information of the Company have been made after incorporating: i)

the impact arising on account of changes in accounting policies adopted by the Company as at and for the period ended June 30, 2007 applied with retrospective effect in the summary statements;

ii) Adjustments for the material amounts in the respective financial years to which they relate. iii) There are no extraordinary items which need to be disclosed separately in the summary statements; and iv) There are no qualifications in the auditors’ reports, which require any adjustments to the summary statements. Other Financial Information 5.

At the Company’s request, we have also examined the following financial information proposed to be included in the offer document prepared by the management and approved by the Board of Directors of the Company and annexed to this report relating to the Company for the year ended March 31, 2003, March 31, 2004, March 31, 2005, March 31, 2006, March 31, 2007 and period ended June 30, 2007. i)

Statement of accounting ratios based on the adjusted profits relating to earnings per share, net asset value, operating margin, return on capital employed, enclosed as Annexure VI

ii) Details of Secured Loans and assets charged as securities, enclosed as Annexure VII iii) Details of Unsecured Loans, enclosed as Annexure VIII iv) Details of Sundry Debtors, enclosed as Annexure IX v) Details of Loans and Advances, enclosed as Annexure X vi) Details of Related Party Transactions, enclosed as Annexure XI vii) Statement of tax shelters, enclosed as Annexure XII viii) Statement of dividend paid/proposed, enclosed as Annexure XIII ix) Capitalization Statement as at June 30, 2007, enclosed as Annexure XIV x) Statement of Cost of Investments, enclosed as Annexure XV xi) Statement of Contingent Liabilities and Commitments as at June 30, 2007, enclosed as Annexure XVI xii) Statement of Remuneration to Managing Director and Whole time Directors, enclosed as Annexure XVII

115

In our opinion, the financial information as disclosed in the annexures to this report, read with the respective significant accounting policies and notes disclosed in Annexures IV and V, and after making such adjustments and re-groupings as were considered appropriate, have been prepared in accordance with Part II of Schedule II of the Act and the Guidelines. This report should not be in any way construed as a reissuance or redating of any of the previous audit reports issued by us, nor should this report be construed as a new opinion on any of the financial statements referred to herein. This report is intended solely for your information and for inclusion in the Offer Document in connection with the proposed public offer of the Company, and is not to be used, referred to or distributed for any other purpose without our prior written consent.

S.R. BATLIBOI & Co. Chartered Accountants Sd/Per Rahul Roy Partner Membership No: 53956 Place: Kolkata Date: November 5, 2007

116

Summary Statement of Restated Assets and Liabilities As at 30th June 2007 A

B C

D

E

F G

H I

Fixed Assets Gross Block Less : Depreciation Net Block Less : Revaluation Reserve Net Block after adjustment for Revaluation Reserves Capital Work-inprogress Sub Total Investments Current Assets, Loans and Advances Inventories Sundry Debtors Cash & Bank Balances Loans and Advances Sub Total Total Assets (A+B+C) Liabilities and Provisions Loan Funds Secured Loans Unsecured Loans Sub Total Deferred Tax Liabilities – Net Current Liabilities & Provisions Current Liabilities Provisions Sub Total Total Liabilities and Provisions Net Worth (D-H) Represented by Shareholders Funds Share Capital Reserves & Surplus

Annexure - I Rs in lakhs As at 31st March

2007

2006

2005

2004

2003

96535 50013 46522 4048

94713 48465 46248 4248

88400 43495 44905 4978

85899 37953 47946 5597

80787 33160 47627 6164

75265 27754 47511 6724

42474

42000

39927

42349

41463

40787

2894

3101

621

379

151

396

45368 41551

45101 37801

40548 27853

42728 11162

41614 1987

41183 1902

42418 23564 166 2524 68672 155591

39661 14794 142 2579 57176 140078

24172 15125 1737 2856 43890 112291

22758 16087 3619 3027 45491 99381

21233 12916 126 2110 36385 79986

18040 13532 265 2988 34825 77910

26589 6004 32593 4350

27787 4683 32470 4370

15627 13358 28985 4260

11672 17347 29019 4940

8444 11453 19897 4690

25484 2682 28166 4820

37641 11091 48732 85675

32324 8279 40603 77443

21847 7012 28859 62104

16980 6082 23062 57021

17594 6221 23815 48402

12663 5481 18144 51130

69916

62635

50187

42360

31584

26780

7500 66464

7500 59383

7500 47665

7500 40457

7122 30626

3561 29943

117

Less : Revaluation Reserve Reserves & Surplus (Net of Revaluation Reserve) Net Worth

4048

4248

4978

5597

6164

6724

62416

55135

42687

34860

24462

23219

69916

62635

50187

42360

31584

26780

Notes : (1) The above figures should be read along with the Statement of Notes to the Restated Financial Information and Statement of Significant Accounting Policies as appearing in Annexures IV & V. (2)

Necessary adjustments have been made to the Audited Financial Statements in accordance with the requirements of Paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

118

Summary Statement of Restated Profits & Losses For the 3 months ended 30th June 2007 Income Sales Of products manufactured by the Company Of products traded by the Company Sub Total Less : Excise Duty, Sales Tax,Value added Tax & Octroi Net Sales Other Income Total Income Expenditure Materials Consumed Staff Costs Other Expenses Interest & Finance Costs Depreciation Total Expenditure Profit before Tax & Exceptional Items Exceptional Items Profit before tax Less : Provision for Taxation Profit after Tax

Annexure II Rs in lakhs For the year ended 31st March

2007

2006

2005

2004

2003

84258

235715

176024

147319

119533

107333

618

2542

103

75

-

-

84876 18459

238257 51236

176127 38178

147394 29867

119533 24156

107333 21233

66417 55 66472

187021 949 187970

137949 670 138619

117527 205 117732

95377 246 95623

86100 145 86245

40917 3950 8380 533

113688 12396 30067 2771

82095 9784 23505 2244

70429 8738 20477 1146

49106 8682 19376 847

44191 8591 17477 2917

1492 55272 11200

5555 164477 23493

5603 123231 15388

5522 106312 11420

5209 83220 12403

4699 77875 8370

-11200 3919

-23493 8007

-15388 4995

170 11250 3930

-12403 4180

-8370 3060

7281

15486

10393

7320

8223

5310

Notes : (1) The above figures should be read along with the Statement of Notes to the Restated Financial Information and Statement of Significant Accounting Policies as appearing in Annexures IV & V. (2)

Necessary adjustments have been made to the Audited Financial Statements in accordance with the requirements of Paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

119

Statement of Restated Cash Flow Particulars

A

B

Cash Flow from Operating Activities Net Profit before Interest, Tax and Exceptional Items Adjustment for: Add: Depreciation and Amortisation Unrealised (Gain) / Loss in Foreign Exchange Rent Income / Lease Equalisation Profit on Sale of Investments Profit/(Loss) on Fixed Assets Sold / Discarded Interest Income Dividend Income Operating Profit before Working Capital Changes (Increase)/ Decrease in Trade and other Receivables (Increase)/ Decrease in Inventories Increase /(Decrease) in Trade Payables and other Liabilities Cash generated from Operation Less: Payment of Direct Taxes Exceptional Items Net Cash from Operating Activities Cash Flow from Investing Activities Purchase of Fixed Assets Sale of Fixed Assets Interest Received Dividend Received Sale of Investments Acquisition of Shares Rent Received Purchase of Investments Upgradation of SAP / CRM

Annexure III Rs in lakhs For the year ended 31st March

For the 3 months ended 30th June 2007

2007

2006

2005

2004

2003

12087

26406

17651

12874

14124

11316

1492

5555

5604

5522

5209

4699

(316)

(80)

165

(170)

(698)

118

--

(18)

(20)

(59)

(59)

(59)

--

(398)

--

--

--

--

(5)

(58)

13

9

33

39

(38) (23) 13197

(82) (327) 30998

(189) (544) 22680

(144) (106) 17926

(236) (70) 18303

(152) (50) 15911

(8702)

(92)

1107

(3740)

1344

542

(2757)

(15489)

(1414)

(1526)

(3193)

(919)

6364

11757

5442

740

3589

1543

8102

27174

27815

13400

20043

17077

(1961)

(8319)

(5455)

(4034)

(3917)

(2747)

-6141

-18855

-22360

(170) 9196

-16126

-14330

(2142) 25 43 23 -(3750) ----

(10291) 442 81 352 500 (10050) 18 ---

(3501) 121 214 514 9078 (25769) 20 ---

(7112) 241 118 142 -(97) -(9078) (89)

(5470) 17 256 75 ---(84) (206)

(3780) 17 165 15 ----(205)

120

c

Net Cash Flow from Investing Activities Cash Flow from Financing Activities Net Increase in Other Borrowings Issue of Equity Shares Buy back of Shares Interest Paid Repayment of Long term borrowings Proceeds from Long Term Borrowings Dividend paid including Dividend Tax Net Cash Flow from Financing Activities Net Increase in Cash an`1d Cash Equivalents Cash and Cash Equivalents (Opening Balance) Cash and Cash Equivalents (Closing Balance) Notes to the cash Flow Statement Cash and Cheques in hand (including Remittance in transit) Unclaimed Dividend Account Fixed Deposit Balance with bank Total

(5801)

(18948)

(19323)

(15875)

(5412)

(3788)

117

2131

(11178)

11114

(5422)

(3580)

--(754) (69)

--(2481) (9978)

--(2193) (456)

5689 -(1481) (2989)

--(984) (12166)

-(81) (3196) (5511)

390

11392

11037

1049

9319

2943

--

(2566)

(2129)

(3210)

(1600)

(1230)

(316)

(1502)

(4919)

10172

(10853)

(10655)

24

(1595)

(1882)

3493

(139)

(113)

142

1737

3619

126

265

378

166

142

1737

3619

126

265

26

19

24

25

22

18

112

112

97

88

77

69

-28 166

-11 142

600 1016 1737

3500 6 3619

5 22 126

153 25 265

121

STATEMENT OF NOTES TO RESTATED FINANCIAL INFORMATION Annexure - IV

a.

Sales are net of discounts, trade incentives etc. and price adjustments, settled during the year by the Company.

b.

Excise duty includes Rs. 260 lakhs paid on issue of batteries on account of warranty during the 3 months period ended 30 June 2007.

c.

The Company has a full-fledged Research and Development Center and it has thereby been able to considerably further its efficiency. During the 3 months period ended 30 June 2007, a sum of Rs. 255 lakhs, including capital expenditure Rs.64 lakhs, was spent on Research and Development work.

d.

Stores and Spares consumed is exclusive of Rs.8 lakhs being the amounts allocated to other heads of expenses during the 3 months period ended 30 June 2007.

e.

The names of small scale units, to whom amounts are due for more than 30 days (being, however, within the agreed credit terms) as at 30 June 2007 are as follows :

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

ORIENTAL RUBBER & PLASTIC THE SUPREME INDUSTRIES LIMITED LUNA PLASTIC WORKS PVT LTD PAN INDUSTRIES MAYURA ENTERPRISES, MASCOT DECORS, ELECTROCOATING & INSULATION K A RALLI & SONS SUSANTA ENGINEERING WORKS SIVA ENTERPRISE DEE RAM'S ENTERPRISES OMKAR FABRICATORS MEMBA CHEM INDUSTRIES PVT. LTD., CROWN RUBBER PRODUCTS ARDAN PLASTIC INDUSTRIES PVT LTD BARABAGAN INDUSTRIES ELITE PLASTIC INDUSTRIES BRIN & CO HRUDYANATH LALCHAND & CO BEST ENGINEERS, AKASH PLASTIC, SUPRAVENI CHEMICALS ARDAN PLASTIC INDUSTRIES PVT. LTD., ACCURATE PLAST MOULD, B D D CHEMICALS HEMCO INDUSTRIES KAMALA BOARD BOX ALPINE INDUSTRIES,

29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56

122

STEEL CRAFT INDIA K A RALLI & SONS PVT LTD CHETAN ENGINEERING WORKS NATHS ACIDS SANGHI GASES, BHATIA PLASTO PRINTS CERAFIL AEM PLASTICS PVT LTD KUBER ENTERPRISES SUSANTA ENGINEERING WORKS STEEL CRAFT INDIA NEW STANDARD ENTERPRISES THERMOWEL INDUSTRIES SRI PARVATHI POWER PRINTERS ANUPAMA RUBBER CO., HI-TECH ACCUMULATORS PVT. LTD., SRI KOLLAPURIAMMA ENTERPRISES PEENYA INDUSTRIAL GASES SHREE INSUPAC, S S ENTERPRISE SUPER-TECH BATTERY COMPONENTS P.LTD PAVAN FABS BHRAMARA POLYMERS PRIVATE LIMITED SUNRISE PACKAGING INDUSTRIES, PLASMA INDUSTRIES TELELECT INDIA K. M. SHELAT & SONS CMC MANUFACTURING CO PVT LTD

f.

The Company has not been informed by any supplier of being covered under Micro, Small and Medium Enterprises Development Act, 2006. As a result, no interest provisions/payments have been made by the Company to such creditors, if any, and no disclosures are made in these accounts.

g.

Pursuant to the approval of the shareholders at the 59th Annual General Meeting of the Company held on July 21, 2006, the Equity Shares of the Company of face value of Rs. 10/- each were subdivided into Equity Shares of Re. 1/- each with effect from 15 September, 2006, being the Record Date fixed by the Board of Directors for the purpose.

h.

The diminution of Rs. 55 lakhs in the value of certain long term unquoted investments, being temporary in nature, has not been provided as at 30 June, 2007.

i.

Details of amount payable (when due) to Investor Education & Protection Fund are as follows : As at 30 June 2007 Rs. lakhs Unclaimed Dividend Unclaimed Public Deposits Total

j.

112 7 119

The particulars of amounts due from Subsidiary Companies are as follows:

Name of the Subsidiary

A-Sundry Debtors Chloride Batteries S.E.Asia Pte Limited Caldyne Automatics Limited Chloride International Ltd. Espex Batteries Limited B-Loans&Advances Espex Batteries Limited k.

30/6/2007

Rs in lakhs Max. amount o/s during the period from April to June 2007 30/6/2007

1314 259 83 488

1314 305 83 488

8

8

Amount Due

Materials consumed includes :-

April – June 2007 2006 – 2007 2005 – 2006 2004 – 2005 2003 – 2004 2002 – 2003

Exchange fluctuation

Export Incentives

Rs in lakhs Warranty Costs

(838) (589) 48 (359) (131) (17)

(106) (386) (377) (968) (973) (930)

1,247 4,280 3,671 3,002 1,935 1,626

123

l.

The Break-up of Deferred Tax liability as on 30 June 2007 is as follows : 30 June 2007 Rs.in Lakhs A.

Deferred Tax Liability i) Timing Difference in depreciable assets.

4433

ii) Expenses claimed as deduction as per Income Tax Act,1961 but not booked incurrent period.

1102

Total B.

5535

Deferred Tax Asset i)Expenses allowable against taxable income in future years ii)Expenses disallowed in earlier assessments which are being contested Net Deferred Tax Liability (A-B)

m.

367 818

4350

The movements in ‘Provision for Product Related Warranty/ Guarantee’ Account during the period are as follows: 3 months period ended 30 June 07 Rs. in lakhs Opening Balance:Provision Add: Amount created during the period Less: Product related warranties issued for the period Closing Balance

4160 1507 1070 4597

The above provision is for the expected warranty claims which would be cleared by way of issue of batteries free of cost over the next 12-18 months. n.

Basis for calculation of basic and diluted earning per share is as under : 3 months period ended 30 June 07 Profit after taxation as per Profit & Loss Account Weighted average number of equity shares Nominal Value of Shares Basic and diluted earning per share

2006-07

2005-06

2004-05

2003-04

2002-03

7281

15486

10393

7320

8223

5310

7500

7500

7500

7206

6139

3563

Re.

1.00

1.00

1.00

1.00

1.00

1.00

Rs.

0.97

2.06

1.39

1.02

1.34

1.49

Rs. in lakhs No. in lakhs

124

o.

BUSINESS SEGMENT As the Company’s business activity falls within a single primary business segment, viz. ‘Lead Acid Storage Batteries’, the disclosure requirements of Accounting Standard–17 “Segment Reporting”, issued by the Institute of Chartered Accountants of India are not applicable.

p.

GEOGRAPHICAL SEGMENTS The Company primarily operates in India and therefore the analysis of geographical demarcated into its Indian and Overseas operations as under : Revenue – Gross Sales April – June 2006 –07 2005 – 06 2004 – 05 2003 –04 2007 Rs in Rs in Rs in Rs in Rs in lakhs lakhs lakhs lakhs lakhs India 82849 230018 169187 141761 114633 Overseas 2027 8239 6940 5633 4900

segments is

2002 –03 Rs in lakhs 102977 4356

Assets and additions to tangible and intangible fixed assets by geographical area: The following tables show the carrying amount of segment assets and addition to segment assets by geographical area in which the assets are located: Carrying amount of segment assets 30.6.07 31.3.07 31.3.06 31.3.05 31.3.04 31.3.03 Rs in Rs in Rs in Rs in Rs in Rs in lakhs lakhs lakhs lakhs lakhs lakhs India 66130 55934 42497 44557 35212 34222 Overseas 2542 1242 1393 934 1173 603 68672 57176 43890 45491 36385 34825

India Overseas

June 2007 Rs in lakhs 1986 --

Addition to Fixed Assets 2006-07 2005-06 2004-05 Rs in Rs in Rs in lakhs lakhs lakhs 8019 3311 6992 ----

2003-04 Rs in lakhs 5828 --

2002-03 Rs in lakhs 3878 --

q.

The Company has paid Rs. 16 lakhs towards lease of residential apartments during the 3 months’ period ended 30 June 2007 . These are cancellable leases, renewable by mutual agreement. Generally, there is no escalation clause and no other restrictions imposed by the lease arrangements. There are no sub-leases.

r.

Pending finalisation of Wage agreements with the employees at Hosur, Taloja and Chinchwad units, the liability for differential wages/salaries was provided in the books as per Management estimates in financial year 2005/06.

s.

(i) The company had raised a sum of Rs. 5782 lakhs during the year 2004-05 through issue of shares at a premium, for utilisation for long term fund requirements. (ii) In view of further issue of share capital during the year 2004-05 the equity share holding of Chloride Eastern Ltd., UK, the erstwhile Holding Company had come down to 48.86%, and thus it has ceased to be the Holding Company with effect from 10/01/2005.

t.

As per Hon’ble Calcutta High Court’s Order dated 17th March, 2003, expenditure on upgradation of SAP software, including Customer Relationship Module, were adjusted against Securities Premium Account in the following financial years as follows : Rs. in lakhs 2002-03 2003-04 2004-05 576 206 89

125

u.

Exceptional items represent one time separation costs paid to the employees of Ahmednagar Plant on shifting of its existing manufacturing facility in the financial year 2004-05.

v.

The Company had received demands of Rs. 234 Lakhs (Rs.234 Lakhs) towards electricity charges for earlier years in respect of its Shamnagar unit, payable in 72 monthly instalments. However, Hon’ble Calcutta High Court subsequently revised the tariff for the above periods, based on which the Company was entitled to refund of Rs.198 Lakhs (Rs.123 Lakhs). The payment of Rs.70 Lakhs (Rs.41 Lakhs) upto 31.03.04, including Rs.29 Lakhs for the year 2003-04, has now been restated in the respective years and the amount refundable to the company has been accounted for.

w.

The Company has adopted a policy to minimise the risks associated with the fluctuations in the price of lead by hedging the mismatch in the future market. However, it conducts the hedging transactions only to the extent of its expected imports and does not conduct any speculative operations in the market. The net realised gain of Rs 210 lakhs on such metal hedging transactions during the year, has been credited to Raw Materials & Components consumed in the financial year 2003-04.

x.

Personnel Costs as disclosed in Schedule-17, includes Rs 295 Lakhs as separation costs to the employees in one of its units.

y.

In terms of Accounting Standard-26, deferred revenue expenditure in respect of Voluntary Retirement Scheme, as on 1st April 2002, amounting to Rs. 441 Lakhs has been adjusted against opening reserves as on 1st April 2002.

z.

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company. The Company provides certain post-retirement healthcare benefits to the employees qualifying for such benefits under the scheme at 31st March 2006, and accordingly the number of beneficiaries is frozen on that date. These benefits are unfounded. The Company has a Pension plan, a part of the liability whereof upto 31st march 2003 is in the nature of a defined benefit plan. From 1st April 2003 onwards, the pension liability remains as a defined contribution liability which is contributed annually to a fund. The scheme is funded with an insurance company. The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the respective plans for the three months period ending 30th June 2007.

126

Rs lakhs Post Pension Plan Retirement (Benefit Medical Benefit Based)

Gratuity

I

II

III

IV

Expenses recognized in the statement of Profit & Loss Account for the 3 months period ended 30th June2007 1. Current Service Cost 2. Interest Cost 3. Expected Return on plan assets 4. Actuarial (Gains) / Losses 5. Total Expense Net Asset / (Liability) recognized in the Balance Sheet as at 30th June 2007 1. Present Value of Defined Benefit Obligation as at 30th June 2007 2. Fair Value of Plan Assets as at 30th June 2007 3. Net Asset / (Liability) as at 30th June 2007 Change in Obligation during the 3 months ended 30th June 2007 1. Present Value of Defined Benefit Obligation at the beginning of the year 2. Current Service Cost 3. Interest Cost 4. Benefits Paid 5. Actuarial (Gains) / Losses 6. Present Value of Defined Benefit Obligation at the end of the Period Change in the Fair Value of Plan Assets during the 3 months ended 30th June 2007 1. Plan assets at the beginning of the year 2. Expected return on plant assets 3. Contribution by employer 4. Actual Benefits Paid 5. Actuarial (Gains) / Losses 6. Plant assets at the end of the period 7. Actual return on Plan Assets

36 45 (52) 136 165

2 4 -(2) 4

-22 (31) (21) (30)

2404

215

966

2277

--

1258

(127)

(215)

292

2282

215

1191

36 45 (95) 136 2404

2 4 (4) (2) 215

-22 (219) (28) 966

2320 52 -(95) -2277 52

--4 (4) ----

1453 31 -(219) -1265 24

V. The Company expects to contribute Rs 150 lakhs to gratuity in 2007-08 and Rs nil to Pension in 2007 08

127

VI

The major categories of plan assets as a percentage of the fair value of total plan assets Investment with insurer

Gratuity

Post Retirement Medical Benefit

Pension Plan

100%

--

100%

VII. Actuarial Assumptions 1. Discount Rate 2. Expected rate of return on plan assets 3. Mortality pre retirement 4. Mortality post retirement

7.50% p.a 9.10% p.a. Standard Table LIC (1994-96) Ultimate Mortality for annuitants LIC ( 1996-98) Ultimate 19.30%

5. Employee Turnover Rate

VIII. Healthcare cost trend rates have no effect on the amounts recognized in the profit and loss account, since the benefit is in the form of a fixed amount as per the various grades, which is not subject to change IX. The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

128

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

a.

Annexure V

Basis of Preparation The Company prepares its accounts under the Historical Cost Convention except for in case of fixed assets where revaluation is carried out. This financial statement has been prepared in accordance with the applicable accounsting standards in India . For recognition of Income and expenses, Mercantile System of Accounting is followed.

b.

Revenue Recognition Revenue from sale of goods including manufactured products is recognised upon passage of title to the customers, which generally coincides with delivery. Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from material costs.

c.

Fixed Assets Fixed Assets are stated at cost or revalued amounts as the case may be. The cost comprises of cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to capital reserve.

d.

Impairment The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external / internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price of assets and their ‘Value in use’. The estimated future cash flows are discounted to their present value at the weighted average cost of capital.

e.

Investments Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long-Term investments. Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Long Term Investments are considered at cost, unless there is other than temporary decline in value thereof, in which case adequate provision is made for diminution in the value of Investments. Investments in foreign companies are carried at exchange rates prevailing on the date of their acquisition.

f.

Depreciation i)

The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.

ii)

a) Depreciation is provided on straight-line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except for the assets shown in (b) below. Further, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.

129

b) Based upon their respective useful economic life, depreciation on the following assets is provided at a rate higher than those specified in schedule- XIV of the Companies Act 1956: Class of assets

Useful economic Life

Air conditioners, Refrigerators, Washing Machines, Water Coolers, Televisions (included in Furniture & Fittings)

6

Motor Vehicles Computer Hardware Weighing Scales, & Transformers Pallet Trucks c)

Rate of Depreciation

16.33%

6

16.33%

4 15 10

24.50% 6.53% 9.80%

Acquired Goodwill is written off over a period of five years.

iii.

Depreciation includes amount written off in respect of leasehold properties over the respective lease period or useful lives whichever is shorter.

iv.

Depreciation on the amount capitalised during the year on account of Foreign Exchange fluctuation is provided prospectively over the residual life of the respective assets.

v.

Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal.

vi.

In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

g.

Intangible Assets Research and Development Costs Research costs are expensed as incurred. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years. The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.

h.

Leases: i) In respect of assets given/acquired on finance lease prior to 1st April, 2001 : a)

In respect of assets given on finance lease, depreciation in order to comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956, read with Schedule VI thereof, is provided at rates which ensure that full depreciation is provided over the period of lease. Adjustments as appropriate are made in Income and Leased assets account for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.

130

b) In respect of assets acquired on finance lease, the lease rentals are charged to profit and loss account as and when accrued.

ii)

In respect of assets given/acquired on finance lease on or after 1st April, 2001 : In order to comply with Accounting Standard – 19 pronounced by the Institute of Chartered Accountants of India: a)

Assets given under a finance lease are recognized as receivables at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest as per the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue. Initial direct costs such as legal charges, brokerage etc are recognized immediately in the Profit & Loss Account.

b) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased items, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Leased assets capitalized are depreciated over the shorter of the estimated useful life of the asset or the lease term. iii)

Operating leases: a)

Assets acquired under Operating Leases represent assets where the lessor effectively retains substantially all the risks and benefits of their ownership. Operating lease payments are recognized as an expense in the Profit and Loss account on a straightline basis over the lease term.

b) Assets given under operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account. i.

Foreign Currency Transactions (i) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. (ii) Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. (iii) Exchange Differences Exchange differences arising on the settlement/conversion of monetary items, are recognized as income or expenses in the year in which they arise.

131

(iv) Forward Exchange Contracts The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year. j.

Inventories i) Raw materials, components, stores and spares are valued at Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis. ii) Work-in-progress and finished goods are valued at Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.

k.

Borrowing Costs Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit and Loss Account.

l.

Hedging The Company has adopted a policy to minimize the risks associated with the fluctuations in the price of lead by hedging the mismatch in the futures market, only to the extent of its expected imports. The above hedging contracts are accounted for on the date of their settlement and realised gain/loss thereof is recognised in the profit and loss account. The ‘open’ contracts as on the Balance Sheet date are valued at the prevailing market rate and the net resultant loss, if any, is provided for in the accounts and charged to materials consumed, whereas the net unrealized gains arising out of such reinstatement is not recognised as a matter of prudence.

m.

Excise Duty

n.

Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date. Retirement and other employee benefits i)

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective trusts.

ii)

Gratuity liability and Post employment Medical Benefit liability are defined benefit obligations and are provided for on the basis of an actuarial valuation made at the end of each financial year.

iii)

Short term compensated absences are provided for based on estimates.

132

o.

iv)

Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss account.

v)

Pension liability is split into a defined benefit portion and a defined contribution portion as indicated in note no. ‘r’. The contributions towards defined contribution are charged to the Profit and Loss account of the year when the contribution becomes due. The Defined benefit portion is provided for on the basis of an actuarial valuation made at the end of each financial Product Related Warranty/ Guarantee Claims Provision for product related warranty/ guarantee costs is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims.

p.

Taxation Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised.

q.

Earning per share Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

r.

Provision A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard-29, are not discounted to its present value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

s..

Contingent Liabilities No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.

133

Summary of Adjusted Accounting Ratios

A B C

Annexure-VI Rs. In Lakhs Year ended 31st March

3 months ended 30th June 2007 69916 7281 7500

2007

2006

2005

2004

2003

62635 15486 7500

50187 10393 7500

42360 7320 7500

31584 8223 7122

26780 5310 3561

7500

7500

7500

7206

6139

3563

0.97

2.06

1.39

1.02

1.34

1.49

41.66

24.72

20.71

17.28

26.04

19.83

9.32

8.35

6.69

5.65

4.43

7.52

Net Worth Adjusted Profit after Tax Number of shares outstanding at the end (*) (in lakhs) D Weighted average number of shares outstanding (*) (in lakhs) Earnings Per Share (EPS) Rs (B/D) Return on Net Worth (%) (B/A) Net Asset Value per Share (Rs) (A/C) * At nominal value Per Share of Re 1/Definition of Key Accounting ratios i.

EPS represents Basic Earnings per share calculated as per Accounting Standard 20 issued by ICAI.

ii.

Return on net worth is arrived at by dividing PAT by total shareholder’s funds (Net Worth) at the end of the year.

134

A. Statement of Restated Secured Loans Annexure-VII Rs. In Lakhs Particulars Non Convertible Debentures Term Loans Overdraft Grand Total

As at 30th June 2007 --

2007 --

20000 6589 26589

20000 7787 27787

As at 31st March 2006 2005 --10000 5627 15627

-11672 11672

B. Principal Terms of Secured Loans as on 30.06.2007

2004 2500

2003 12166

-5944 8444

2500 10818 25484

Annexure to Secured Loans Rs. In Lakhs

Sr.No.

Particulars

1.

Term Loan The Hongkong & Shanghai Banking Corporation Limited Citibank N.A.

8.42%

Citibank N.A.

2.

Bank Overdraft a. Bank Overdraft b. Buyers’ Credit c. FCNRB & PCFC

Rate of Interest

Outstanding amount

Repayment terms

Security

5000

Bullet (3 Years)

8.25%

5000

Bullet (3 Years)

7.62%

10000

Bullet (3 Years)

Hypothecation of movable assets at Haldia & Shamnagar Hypothecation of movable assets at Chinchwad & Taloja Hypothecation of movable assets at Hosur

Various $ Libor + 50 bps $ Libor + 75 bps

135

1939 2615

On maturity

Stock & Book Debts Stock & Book Debts

2035

On maturity

Stock & Book Debts

A. Statement of Restated Unsecured Loans

Annexure- VIII

Rs In Lakhs

Sl no

1.

2.

3. 4.

5. 6.

B.

Particulars

As at 30th June 2007 4968

As at 31st March 2007

2006

Sales Tax loan 4647 from Small Industries Promotion Corporation of Tamil Nadu Limited Sales Tax loan 36 36 from West Bengal Industrial Development Corporation Limited Public Deposits --Commercial Paper 1000 -Loans External --Commercial Borrowings Loan from --Subsidiary Company Grand Total 6004 4683 Breakup of Unsecured Loans as on 30.06.2007 Annexure to Unsecured Loans

2005

2004

2003

3780

3163

2604

2024

73

109

109

109

---

-5000

---

549 --

9305

8750

8740

--

200

325

--

--

13358

17347

11453

2682

Rs. In Lakhs Name of the lender 1. Sales Tax loan from Small Industries Promotion Corporation of Tamil Nadu Limited 2. Sales Tax loan from West Bengal Industrial Development Corporation Limited 3 Commercial Paper

Amount 4968

36

1000

136

Interest Rate Interest Free

Repayment Schedule From June 2009 to March 2016

Interest Free

15th March 2008

8.45%

27th September, 2007

Statement of Restated Balances of Sundry Debtors Annexure-IX Rs.in Lakhs Particulars Debts outstanding over six months Secured – Considered good Unsecured – Considered good Unsecured – Considered doubtful Less : Provision for doubtful debts Other Debts Secured – Considered good Unsecured – Considered good Grand Total

As at 30th June 2007

As at 31st March 2006 2005

2007

-808

-530

-563

5

120

(5)

2004

2003

-702

-766

-813

136

109

247

198

(120)

(136)

(109)

(247)

(198)

-22756

-14264

-14562

-15385

-12150

-12719

23564

14794

15125

16087

12916

13532

Statement of Restated Loans and Advances Annexure-X Rs.in Lakhs

Particulars Advances recoverable in cash or kind Dividend Receivable Deposits with Customs, Sales Tax and Excise Authorities Deposits Others Interest accrued on deposits Loan to Subsidiary Loan to Others Inter Corporate Deposits Advance Tax, Refunds receivables Grand Total

As at 30th June 2007 1408

2007 1222

14 136

14 405

38 385

957 -8 1 ---

925 4 8 1 ---

2524

2579

137

As at 31st March 2006 2005 1569 1547

2004 1047

2003 592

9 379

45 307

50 608

852 3 8 1 ---

750 27 8 5 -302

700 2 8 1 ---

623 22 -1 1000 92

2856

3027

2110

2988

1.

Statement of Related party transactions as per Accounting Standard 18 for the reporting periods Annexure XI A. List of Related Parties 30.06.07 31.03.07 31.03.06 31.03.05 31.03.04 Holding Chloride Eastern Limited, Chloride Eastern ------Company UK Limited, UK (Ceased to be a Holding Company w.e.f 10.01.2005) Subsidiary Companies

Associate Companies

Persons having a direct or indirect

Chloride Batteries S E Asia Pte Limited, Singapore Chloride International Limited

Chloride Batteries S E Asia Pte Limited, Singapore Chloride International Limited

Chloride Batteries S E Asia Pte Limited, Singapore

Caldyne Automatics Limited Espex Batteries Limited, UK

Chloride Batteries S E Asia Pte Limited, Singapore Chloride International Limited Caldyne Automatics Limited Espex Batteries Limited, UK

Caldyne Automatics Limited Espex Batteries Limited, UK

Caldyne Automatics Limited Espex Batteries Limited, UK

Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka

Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka

Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka

Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka

ING Vysya Life Insurance Company Limited

ING Vysya Life Insurance Company Limited MSA (India) Limited (upto 1 March, 2007)

ING Vysya Life Insurance Company Limited MSA (India) Limited (upto 1 March, 2007)

MSA (India) Limited

Chloride Eastern Limited, UK

Chloride Eastern Limited, UK

Chloride Eastern Industries Pte Limited, Singapore

Chloride Limited, UK

Eastern

138

Chloride Limited

International

31.03.03 Chloride Eastern Limited, UK

Chloride Batteries S E Asia Pte Limited, Singapore Chloride International Limited (formerly Exide Products Limited) Caldyne Automatics Limited Espex Batteries Limited, UK

Chloride Batteries S E Asia Pte Limited, Singapore Exide Products Limited

MSA (India) Limited

MSA (India) Limited

Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka

Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka Chloride Eastern Industries Pte Limited, Singapore

Chloride Eastern Industries Pte Limited, Singapore

Caldyne Automatics Limited Chloride International Limited (Upto 30.06.2002)

control over the Company

Key Management Personnel

Name of the Companies / firms / in which Directors / Key Management Personnel are interested

Chloride Eastern Industries Pte Limited, Singapore LIEC Holdings SA, Switzerland Mr S B Raheja

Chloride Eastern Industries Pte Limited, Singapore LIEC Holdings SA, Switzerland Mr S B Raheja

Chloride Eastern Industries Pte Limited, Singapore LIEC Holdings SA, Switzerland Mr S B Raheja

LIEC Holdings Switzerland Mr S B Raheja

Mr S B Raheja

Mr S B Raheja

Mr T V Ramanathan

Mr S B Ganguly

Mr S B Ganguly

Mr S B Ganguly

Mr S B Ganguly

Mr S B Ganguly

Mr G Chatterjee

Mr T V Ramanathan

Mr T V Ramanathan

Mr T V Ramanathan

Mr T V Ramanathan

Mr P K Kataky Dr S K Mittal Mr A K Mukherjee Mr Ranabir Chakraborty Mr R P Ray

Mr T V Ramanathan Mr G Chatterjee Dr S K Mittal Mr P K Kataky Mr Ranabir Chakraborty Mr R P Ray

Mr S Chand Mr G Chatterjee Dr S K Mittal Mr P K Kataky

Mr S Chand Mr G Chatterjee Dr S K Mittal Mr P K Kataky

Mr S Chand Mr G Chatterjee Dr S K Mittal Mr P K Kataky

Mr S Chand Mr G Chatterjee Dr S K Mittal Mr P K Kataky

Mr Ranabir Chakraborty

Mr R P Ray

Mr R P Ray

Mr Barun Das Mr Monodip Chaudhuri

Mr Barun Das Mr Monodip Chaudhuri

Mr Ranabir Chakraborty Mr R P Ray Mr Barun Das

Mr R P Ray Mr Barun Das

Mr Barun Das Mr Monodip Chaudhuri

Mr Barun Das Mr Monodip Chaudhuri

Mr Chaudhuri Prism Limited

Monodip

Mr Monodip Chaudhuri

Cement

R & S Business Centre Sonata Software Limited

R & S Business Centre Sonata Software Limited

R & S Business Centre Hathway Investments Pvt Limited Hathway Cable & Datacom Pvt. Ltd Chivach Media Pvt Ltd Sonata Software Ltd

Prism Cement Limited

Prism Limited

Cement

139

SA,

LIEC Holdings Switzerland

SA,

LIEC Holdings SA, Switzerland

B. Transaction with Related Parties 30.06.07 I

II

III

IV

V

VI

VII VIII IX

X

Sales and services to and other recoveries from related parties Subsidiaries Associate Companies Companies / firms / in which Directors / Key Management Personnel are interested Purchase /other services from related parties Subsidiaries Associate Companies Royalty / Technical Assistance Fees Paid / Payable Companies / firms / in which Directors / Key Management Personnel are interested Dividend Paid/Payable Holding Company Dividend Received Subsidiaries Associate Companies Purchase of Fixed Assets Subsidiary Sale of Fixed Assets Subsidiaries Loans Received Subsidiaries Expenses incurred by the Company on behalf of the Group / Subsidiaries Subsidiaries Companies / firms / in which Directors / Key Management Personnel are interested Interest Costs Subsidiaries

31.03.07

Rs in lakhs 31.03.05 31.03.04

31.03.06

31.03.03

1737 --

6348 4

4882 5

4247 --

3089 33

1526 37

--

--

3

--

--

--

265 --

983 --

523 --

135 --

23 1

9 7

1

7

7

7

7

10

--

--

--

1466

733

577

---

103 56

64 10

29 --

70 --

24 26

--

--

--

--

--

3

--

216

--

--

--

--

--

--

13

325

--

--

---

---

---

---

1 --

-34

--

--

18

7

--

--

140

XI

XII

XIII

XIV XV

XVI

XVII

XVIII

XIX XIX (i)

XIX (ii)

Payment of Rent & Maintenance Charges Subsidiaries Companies / firms / in which Directors / Key Management Personnel are interested Royalty/Technical Assistance Fees Received / Receivable Subsidiaries Associates Information & Technology Costs Companies / firms / in which Directors / Key Management Personnel are interested Interest Income Subsidiaries Remuneration Key Management Personnel Publicity Expenses Companies / firms / in which Directors / Key Management Personnel are interested Loans / Advances Granted Subsidiaries Rendering of Services Subsidiaries Outstanding Balance Payable Purchase of Goods

5 --

16 --

4 --

4 22

4 23

4 21

10 --

44 --

38 --

42 --

-38

-35

--

--

--

5

156

90

--

1

--

1

--

--

139

442

505

315

274

230

--

--

--

--

--

139

--

--

--

--

8

--

1

2

2

2

1

1

Subsidiaries Associate Companies Companies / firms / in which Directors / Key Management Personnel are interested Loan Accepted

---

---

---

103 --

---

---

--

--

--

--

--

2

Subsidiaries Companies / firms /

---

--

200

325

--

--

141

XIX (iii)

XIX (iv)

XIX (v)

XIX (vi)

XX (i)

XX (ii)

XX (iii) XX (iv) XX (v)

in which Directors / Key Management Personnel are interested Remuneration Key Management Personnel Technical Assistance Expenses Companies / firms / in which Directors / Key Management Personnel are interested Information & Technology Companies / firms / in which Directors / Key Management Personnel are interested Rent & Maintenance Charges Subsidiaries Companies / firms / in which Directors / Key Management Personnel are interested Outstanding Balance Receivable – Sales & Services Subsidiaries Associate Companies Dividend Received Subsidiaries Associates Technical Assistance Income Subsidiaries Loan Given Subsidiaries Interest Income Subsidiaries

63

184

208

88

79

65

5

4

3

3

3

3

--

--

--

--

11

2

---

---

---

---

---

1 21

2143 --

1060 --

1046 5

654 --

1048 28

82 20

14 --

14 --

38 --

9 --

45 --

24 26

21

11

10

10

10

37

9

9

8

8

8

--

--

1

1

--

--

--

142

EXIDE INDUSTRIES LIMITED Tax Shelter Statement Based on Restated Profits

Particulars A. 1.

2.

3.

B. 1. 2.

3. 4. 5. 6. 7. 8. 9. 10. 11. C. D.

E. F.

Tax at Notional Rates Profit before Tax - Chargeable at Normal Rate - Chargeable at Special Rate Total Profit before Tax Tax Rate (including surcharge & Education Cess) - Normal Rate (%) - Special Rate on Long Term Capital Gain (after indexing) (%) Tax at Notional Rates - Chargeable at Normal Rate - Chargeable at Special Rate Tax at Notional Rates (A) Adjustments Difference between Book and Tax Depreciation Difference between Excise Duty on opening stock and closing stock Dividend exempt from Tax Provision for Leave Encashment Capital Expenditure scientific Research Pension Fund Expenditure on ERP upgradation Voluntary Retirement Scheme Gratuity Fund Export Profits U/s 80HHC Others Net Adjustments (B) Tax on Net Adjustment Tax on Timing Differences - On depreciable Assets - On Expenses Total Tax on Timing difference (D) Fringe Benefit Tax Wealth Tax Total Tax Provided (A+C+D+E+F)

For the 3 months ended 30th June 2007

Annexure – XII Rs. In lakhs For the year ended 31st March

2007

2006

2005

2004

2003

11200 -11200

23095 398 23493

15388 -15388

11250 -11250

12403 -12403

8370 -8370

33.99 --

33.66 17.05

33.66 --

36.59 --

35.88 --

36.75 --

3807 -3807

7774 68 7842

5180 -5180

4117 -4117

4450 -4450

3076 -3076

502

1179

2009

12

(30)

(190)

(240)

(1195)

(403)

41

57

(355)

(23) 47

(227) (44)

(519) 113

(86) 48

(3) (42)

(26) 105

(64)

(210)

(195)

(316)

(74)

(99)

---

268 --

89 --

(400) (89)

(157) (206)

339 --

--

(110)

(111)

(110)

(110)

(110)

--64 286 97

43 -8 (288) (97)

(101) -(171) 711 239

(154) -(197) (1251) (458)

(106) (170) 393 (448) (161)

(86) (190) 1821 1209 444

(126) 106 (20)

(451) 561 110

(616) (64) (680)

25 225 250

(29) (101) (130)

154 (634) (480)

29 6 3919

127 25 8007

235 21 4995

--

--

143

-21 3930

21 4180

20 3060

EXIDE INDUSTRIES LIMITED Statement of Dividends Paid

Annexure – XIII Rs in lakhs

Particulars Equity Shares ( lakhs) Rate of Dividend Dividend Amount Dividend Tax

2007 7500 35% 2625 446

For the year ended 31st March 2006 2005 2004 7500 7500 7122 30% 25% 40% 2250 1875 2849 316 263 365

Capitalisation Statement (Restated) Rs in lakhs

2003 3561 40% 1424 183

Annexure

Particulars Loan Funds Short Term Debts Long Term Debts Total Debts Shareholder’s Funds Share Capital Reserves & Surplus (net of Revaluation Reserve) Total Shareholder’s Fund Debt Equity Ratio (Long term Debt / Equity)

144

XIV

Pre Issue as at 30th June 2007

Adujsted for Rights after conversion

7625 24968 32593

7625 24968 32593

7500 62416 69916 0.36

8000 76816 84816 0.29

Statement of Restated Investments

Annexure XV Rs in Lakhs Rs.in Lakhs

Particulars

Class

As at 31st March

As at 30th

Face Value

JUNE 2007 No. of Amoun Shares/ t Units

2007 No. of Amou Shares/ nt Units

2006 No. of Amou Shares/ nt Units

2005 No. of Amou Shares/ nt Units

2004 No. of Amou Shares/ nt Units

2003 No. of Amoun Shares/ t Units

20

150000

20

150000

20

118

91800

118

91800

118

1035

Long term investments (fully paid) Unquoted 1.In Subsidiary Companies – Fully paid up equity shares Chloride International Limited

Equity

10

450000

20

450000

20

450000

20

Caldyne Automatics Limited Chloride Batteries S E Asia Pte Ltd Espex Batteries Limited Associated Battery Manufacturers (Ceylon) Limited

Equity

Rs 10

91800

118

91800

118

91800

118

450000 [Bonus Shares 2:1 issued during the year] 91800

Equity

Sing $1

7000000

1035

7000000

Equity

GBP 1

102000

78

102000

78

102000

78

102000

78

102000

78

--

--

Equity

SLRp 10

3896640

731

3896640

731

3896640

731

3896640

731

3104640

634

3104640

634

Equity

Rs 10

--

510000

102

510000 [Bonus Shares issued

102

2.In Associate Companies – Fully Paid up Equity Shares MSA (India) Ltd

1035

--

7000000

1035

--

--

7000000

145

510000

102

7000000

1035

7000000

165000

1035

96

ING Vysya Life Insurance Company Limited 3. Others Arkay Energy (Rameswarm) Limited Haldia Integrated Development Agency Ltd 4. Trade – Fully paid up Debentures Woodlands Hospital and Medical Research Centre Limited ½% Debentures 5% Nonredeemable Registered Debentures 5. Government Securities 6. Current Unquoted Units in Mutual Funds Total

382500000

39449

345000000

700000

70

700000

500000

50

500000

245000000

25699

--

--

2:1] --

--

--

--

70

700000

70

--

--

--

--

--

--

50

5000

1

--

--

--

--

--

--

--

20

--

20

--

20

--

--

1

--

1

--

1

--

Equity

Rs 10

35699

Equity

Rs 10

Equity

Rs 10

Debent ures Debent ures

Rs 100

20

--

20

--

20

Rs 6000

1

--

1

--

1

--

--

--

--

--

9078 41551

37801

27853

11162

1987

Note : (1) Invetments in Government Securities amounting to Rs 43,750 only as at each of the year end / period as shown above has not been included in statement since the figures given are in Rs Lakhs.

146

1903

EXIDE INDUSTRIES LIMITED Annexure XVI Statement of Restated Contingencies and Commitments as on 30th June 2007

1.

Contingent Liabilities: a. Bills discounted with scheduled banks b. Outstanding bank guarantees / indemnity bonds c. Sales Tax / Excise Claims d. Claims against the company not acknowledged as debts

Rs lakhs 298 660 167 25

2.

Estimated amount of contracts remaining to be executed on capital account – Rs 885 Lakhs

Note : (1) Contingent Liabilities and Capital Commitments have been disclosed only for the period ended 30th June 2007. EXIDE INDUSTRIES LIMITED Annexure XVII Statenent of Remuneration to Managing Director and Whole time Directors 1.

Remuneration to Managing Director and Whole-time Directors Rs in lakhs

Salary & Performance Bonus Commission Contribution to Provident and other funds Estimated value of perquisites TOTAL

For the 3 months ended 30th June 2007 66

For the year ended 31 March

2007

2006

2005

2004

2003

190

227

87

79

65

32 15

102 50

113 56

87 40

79 36

65 43

11

34

43

35

32

26

124

376

439

249

226

189

147

AUDITORS’ REPORT

To The Board of Directors Exide Industries Limited 59E, Chowringhee Road Kolkata – 700 020 Dear Sirs, 1.

We have examined the restated consolidated financial information of Exide Industries Limited (‘Company’) and its subsidiaries consisting of Chloride International Limited, Caldyne Automatics Limited, Chloride Batteries S E Asia Limited, ESPEX Batteries Limited and Associated Battery Manufacturers (Ceylon) Limited as at March 31, 2007, 2006, 2005, 2004 and 2003 and three months ended June 30, 2007, annexed to this report, prepared by the Company and approved by the Board of Directors, in accordance with the requirements of :

a)

paragraph B (1) of Part II of Schedule II to the Companies Act, 1956 (‘the Act’) ;

b)

the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000 (‘the Guidelines’) and the related clarifications issued by the Securities and Exchange Board of India (‘SEBI’) as amended to date,

c)

the terms of reference dated 29th August 2007 received from the Company, requesting us to carry out the assignment, in connection with the offer document being issued by the Company for its proposed Rights Issue; and

d)

The Guidance Note on Reports in Company Prospectuses (Revised) issued by the Institute of Chartered Accountants of India.

The Company proposes to make a rights issue of 50,000,000 equity shares, having a face value of Re. 1/- each, at an issue price of Rs. 30 per share (referred to as the ‘Offer’). Financial information as per audited financial statements : 2.

The financial information have been extracted by the management from the consolidated financial statements for the years ended March 31, 2007, 2006, 2005, 2004 and 2003 and approved by the Board of Directors.

a)

We did not audit the financial statements of Chloride International Limited, India for the years ended 31 March 2007, 2006, and 2005, and three months period ended 30 June 2007. These financial statements have been audited by another firm of Chartered Accountants, M/s. Surendra Didwania & Co. Financial statements for the years ended 31 March 2004 and 2003 were audited by us.

b)

We did not audit the financial statements of Caldyne Automatics Limited, India for the years ended 31 March 2007, 2006, 2005, 2004 and 2003 and three months period ended 30 June 2007. These financial statements have been audited by another firm of Chartered Accountants, M/s. Surendra Didwania & Co.

c)

We did not audit the financial statements of Chloride Batteries S E Asia Limited, Singapore for the years ended 31 March 2007, 2006, 2005, 2004 and 2003, and three months period ended 30 June 2007. These financial statements have been audited by another firm of Chartered Accountants, M/s. Ernst & Young Singapore (for the years ended 31 March 2007, 2006 and 2005 and three months ended 30 June 2007) and M/s. Pricewaterhouse Coopers Singapore (for the years ended 31 March 2004 and 2003).

d)

We did not audit the financial statements of ESPEX Batteries Limited, U.K., which became a subsidiary of the Company with effect from 1 May 2003, for the years ended 31 March 2007, 2006, 2005 and 2004, and

148

three months period ended 30 June 2007. These financial statements have been audited by another firm of Chartered Accountants, M/s. Hayvenhursts Limited. e)

We did not audit the financial statements of Associated Battery Manufactureres (Ceylon) Limited, Sri Lanka, which became a subsidiary of the Company with effect from 9 August 2004, for the years ended 31 March 2007, 2006 and 2005, and three months period ended 30 June 2007. These financial statements have been audited by another firm of Chartered Accountants, M/s. Ernst & Young Srilanka. The financial statements of these subsidiaries reflect the following total assets and total revenue for the respective years / period.

Year / Period ended

(Rs. In Lakhs) Total Revenue

Total Assets

30 June 2007

10,077

4,496

31 March 2007

10,711

18,531

31 March 2006

8,892

14,890

31 March 2005

7,727

13,148

31 March 2004

4,387

7,414

31 March 2003

3,623

5,814

The reports of these auditors for the respective years have been furnished to us and our opinion in so far it relates to the amounts included in these Consolidated Restated Summary Statement of Assets and Liabilities, Consolidated Statement of Profit and Loss and Consolidated Restated Cash flow Statement are based solely on the report of the other auditors. Attention is drawn to the following matters relating to these subsidiaries, which have been included in the Consolidated Restated Summary of Assets and Liabilities, Consolidated Restated Summary of Profits and Losses and Consolidated Restated Cash flow statement. i)

The financial information of foreign subsidiaries as per their respective financial statements in foreign currency have been translated into INR as per the requirements of Accounting Standard 11 – “Accounting for the effects of changes in foreign currency rates” issued by the Institute of Chartered Accountants of India.

ii)

The financial statements of these subsidiaries are drawn up in accordance with the Generally Accepted Accounting Principles applicable in the respective country of their incorporation, which do not necessarily conform to the accounting policies of the Company. Such financial statements have been audited by the respective auditors in accordance with the Generally Accepted Auditing Standards applicable in those respective countries.

3.

We have also examined the consolidated financial information of the Company and the subsidiaries for the broken period April 1, 2007 to June 30, 2007 prepared and approved by the Board of Directors for the purpose of disclosure in the offer document of the Company. The financial information for the above period were examined to the extent practicable, for the purpose of audit of financial information in accordance with the Auditing and Assurance Standards issued by the Institute of Chartered Accountants of India. Those Standards require that we plan and perform our audit to obtain reasonable assurance, whether the financial information under examination is free of material misstatement.

149

Based on the above, we report that in our opinion and according to the information and explanations given to us, we have found the same to be correct and the same have been accordingly used in financial information appropriately. We did not audit the financial statements of all the subsidiaries for the three months period ended 30 June 2007, as mentioned in Para 2 above, and our opinion thus, insofar it relates to amounts included in respect of these subsidiaries, is based solely on the reports of other auditors and figures certified by the management. 4.

In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI Guidelines and terms of our engagement agreed with you, we further report that :

a)

The Consolidated Restated Summary Statement of Assets and Liabilities, Consolidated Restated Summary Statement of Profit or loss and Consolidated Restated Cash Flow Statement (‘Summary Statements’) of the Group, as at and for the years ended March 31, 2007, 2006, 2005, 2004 and 2003, examined by us, as set out in Annexures I, II and III to this report are after making such adjustments and regrouping as in our opinion were appropriate and are more fully described in the Significant Accounting Policies, Notes and Changes in Significant Accounting Policies (Refer Annexures IV and V). The financial statements of the subsidiaries have not been restated since such restatements are not likely to be material for the issuer Company.

b)

Based on the above, we are of the opinion that the restated financial information have been made after incorporating : i)

the impact arising on account of changes in accounting policies adopted by the Company as at and for the period ended June 30, 2007 applied with retrospective effect in the summary statements ;

ii)

Adjustments for the material amounts in the respective financial years to which they relate.

iii)

There are no extraordinary items which need to be disclosed separately in the summary statements; and

iv)

There are no qualifications in the auditors’ reports, which require any adjustments to the summary statements.

Other Financial Information 5.

At the Company’s request, we have also examined the following financial information proposed to be included in the offer document prepared by the management and approved by the Board of Directors of the Company and annexed to this report relating to the Group for the year ended March 31, 2003, 2004, 2005, 2006 and 2007 and period ended June 30, 2007. i)

Statement of accounting ratios based on the adjusted profits relating to earnings per share, net asset value, operating margin, return on capital employed, enclosed as Annexure VI.

ii) Details of Secured Loans and assets charged as securities, enclosed as Annexure VII iii) Details of Unsecured Loans, enclosed as Annexure VIII iv) Details of Sundry Debtors, enclosed as Annexure IX v) Details of Loans and Advances, enclosed as Annexure X vi) Details of Related Party Transactions, enclosed as Annexure XI vii) Statement of dividend paid/ proposed, enclosed as Annexure XII

150

viii) Capitalization Statement as at June 30, 2007, enclosed as Annexure XIII ix) Statement of Cost of Investments, enclosed as Annexure XIV x) Statement of Contingent Liabilities and Commitments as at June 30, 2007, enclosed as Annexure XV xi) Statement of Remuneration to Managing Director and Whole time Directors, enclosed as Annexure XVI In our opinion, the financial information as disclosed in the annexures to this report, read with the respective significant accounting policies and notes disclosed in Annexures IV and V, and after making such adjustments and re-groupings as were considered appropriate, have been prepared in accordance with Part II of Schdule II of the Act and the Guidelines. This report should not be in any way construed as a reissuance or redating of any of the previous audit reports issued by us, nor should this report be construed as a new opinion on any of the financial statements referred to herein. This report is intended solely for your information and for inclusion in the Offer Document in connection with the proposed public offer of the Company, and is not to be used, referred to or distributed for any other purpose without our prior written consent.

S.R. BATLIBOI & CO. Chartered Accountants Sd/Per Rahul Roy Partner Membership No : 53956 Place : Kolkata Date : November 5, 2007

151

EXIDE INDUSTRIES LIMITED AND ITS SUBSIDIARIES Consolidated Summary Statement of Restated Assets and Liabilities

Annexure - I Rs in lakhs

A

B C

D

E

F G

H I J

Fixed Assets Gross Block Less : Depreciation Net Block Less : Revaluation Reserve Net Block after adjustment for Revaluation Reserves Capital Work-inprogress Sub Total Investments Current Assets, Loans and Advances Inventories Sundry Debtors Cash & Bank Balances Loans and Advances Sub Total Total Assets (A+B+C) Liabilities and Provisions Loan Funds Secured Loans Unsecured Loans Sub Total Deferred Tax Liabilities – Net Current Liabilities & Provisions Current Liabilities Provisions Sub Total Total Liabilities and Provisions Minority Interest Net Worth (D-H-I) Represented by Shareholders Funds Share Capital Reserves & Surplus

As at 30th June 2007

As at 31st March 2007

2006

2005

2004

2003

100982 52176 48806 4404

98989 50585 48404 4607

92438 45522 46916 5346

89719 39846 49873 5597

82552 33887 48665 6164

77056 28473 48583 6724

44402

43797

41570

44276

42501

41859

3155

3347

662

412

190

425

47557 39591

47144 35841

42232 25889

44688 9205

42691 736

42284 736

44763 26351 384

42426 17729 378

26435 17985 1868

24672 18513 3687

22358 13904 289

18887 15061 397

2594 74092 161240

2676 63209 146194

3051 49339 117460

3146 50018 103911

2400 38951 82378

3315 37660 80680

28178 6004 34182 4412

29471 4683 34154 4390

16549 13158 29707 4296

12736 17076 29812 4969

8817 11453 20270 4712

25816 2682 28498 4843

38749 11450 50199 88793

33902 8649 42551 81095

24173 7112 31285 65288

18827 6234 25061 59842

17846 6874 24720 49702

14042 5484 19526 52867

752 71695

720 64379

615 51557

526 43543

140 32536

76 27737

7500 68599

7500 61486

7500 49403

7500 41640

7122 31578

3561 30900

152

Less : Revaluation Reserve Reserves & Surplus (Net of Revaluation Reserve) Net Worth

4404

4607

5346

5597

6164

6724

64195

56879

44057

36043

25414

24176

71695

64379

51557

43543

32536

27737

Net Worth attributable to the : Members of Issuer Company 71695 Minority Shareholders 752

64379 720

51557 615

43543 526

32536 140

27737 76

Notes : (1) The above figures should be read along with the Statement of Notes to the Restated Financial Information and Statement of Significant Accounting Policies as appearing in Annexures IV & V. (2) Necessary adjustments have been made to the Audited Financial Statements in accordance with the requirements of Paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

153

Exide Industries Limited and its Subsidiaries Consolidated Summary Statement of Restated Profits & Losses For the 3 months ended 30th June 2007 Income Sales Of products manufactured by the Company Of products traded by the Company Sub Total Less : Excise Duty, Sales Tax,Value added Tax & Octroi Net Sales Other Income Total Income Expenditure Materials Consumed Staff Costs Other Expenses Interest & Finance Costs Depreciation Total Expenditure Profit before Tax & Exceptional Items Exceptional Items Profit before tax Less : Provision for Taxation Profit after Tax Less: Minority Interest Net Profit Profit attributable to the : Members of Issuer Company Minority Shareholders

Annexure II Rs in lakhs For the year ended 31st March

2007

2006

2005

2004

2003

86565

245006

183261

155179

123357

111372

851

4653

2131

914

697

720

87416 18531

249659 51587

185392 38451

156093 29969

124054 24244

112092 21795

68885 69 68954

198072 860 198932

146941 771 147712

126124 237 126361

99810 197 100007

90297 499 90796

42320 4399 8679 590

120633 14199 31367 2930

88011 11424 24467 2362

75812 10266 21732 1227

51832 9509 19972 838

45524 9342 19374 2911

1532 57720 11434

5721 174850 24082

5763 132027 15685

5812 114849 11512

5286 87437 12570

4766 82056 8879

-11434 3984

-24082 8157

-15685 5066

170 11342 3951

-12570 4212

-8879 3104

7450 32 7418

15925 105 15820

10619 89 10530

7391 12 7379

8358 4 8354

5775 22 5753

15820 105

10530 89

8354 4

5753 22

7418 32

7379 12

Notes : (2) The above figures should be read along with the Statement of Notes to the Restated Financial Information and Statement of Significant Accounting Policies as appearing in Annexures IV & V. (2)

Necessary adjustments have been made to the Audited Financial Statements in accordance with the requirements of Paragraph 6.10.2 of The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000.

154

Exide Industries Limited and its Subsidiaries Consolidated Statement of Restated Cash Flow

Particulars

A

B

Cash Flow from Operating Activities Net Profit before Interest, Tax and Exceptional Items Adjustment for: Add: Depreciation and Amortisation Unrealised (Gain) / Loss in Foreign Exchange Rent Income / Lease Equalisation Profit on Sale of Investments Profit/(Loss) on Fixed Assets Sold / Discarded Interest Income Dividend Income Operating Profit before Working Capital Changes (Increase)/ Decrease in Trade and other Receivables (Increase)/ Decrease in Inventories Increase /(Decrease) in Trade Payables and other Liabilities Cash generated from Operation Less: Payment of Direct Taxes Exceptional Items Net Cash from Operating Activities Cash Flow from Investing Activities Purchase of Fixed Assets Sale of Fixed Assets Interest Received Dividend Received Sale of Investments

Annexure III Rs in lakhs For the year ended 31st March

For the 3 months ended 30th June 2007

2007

2006

2005

2004

2003

12380

27157

17845

13066

14323

11862

1532

5721

5763

5812

5286

4766

(316)

(80)

165

(170)

(698)

118

(1)

(18)

(23)

(59)

(59)

(59)

--

(403)

(4)

(49)

--

--

(14)

(58)

(168)

(1)

30

39

(40) (23) 13518

(83) (224) 32012

(197) (480) 22901

(164) (77) 18358

(278) (25) 18579

(195) (26) 16505

(8525)

253

614

(4840)

1880

(125)

(2338)

(15991)

(1763)

(2199)

(3430)

(1009)

5781

10967

6094

1769

3100

1519

8436

27241

27846

13088

20129

16890

(1999)

(8469)

(5510)

(4078)

(3939)

(2765)

-6437

-18772

-22336

(170) 8840

-16190

-14125

(2327) 34 14 23 --

(10842) 446 85 224 500

(3582) 500 233 480 902

(7190) 300 129 85 61

(5586) 23 298 51 --

(3880) 17 210 ---

155

c

Acquisition of Shares Rent Received Purchase of Investments Upgradation of SAP / CRM Net Cash Flow from Investing Activities Cash Flow from Financing Activities Net Increase in Other Borrowings Issue of Equity Shares Buy back of Shares Interest Paid Repayment of Long term borrowings Proceeds from Long Term Borrowings Dividend paid including Dividend Tax Net Cash Flow from Financing Activities Net Increase in Cash and Cash Equivalents Cash and Cash Equivalents (Opening Balance) Cash and Cash Equivalents (Closing Balance) Notes to the cash Flow Statement Cash and Cheques in hand (including Remittance in transit) Unclaimed Dividend Account Fixed Deposit Balance with bank Total

(3750) 1 ---

(10050) 18 ---

(25769) 23 ---

--(9103) (89)

---(206)

---(205)

(6005)

(19619)

(19033)

(15807)

(5420)

(3858)

60

2898

(11258)

11517

(5155)

(3625)

--(783) (94)

--(2583) (9978)

--(2325) (456)

5689 -(1576) (3095)

--(1017) (12393)

-(81) (3235) (5688)

390

11592

11047

1048

9319

3153

--

(2572)

(2130)

(3218)

(1632)

(1234)

(427)

(643)

(5122)

10365

(10878)

(10710)

5

(1490)

(1819)

3398

(108)

(443)

378

1868

3687

289

397

840

383

378

1868

3687

289

397

84

20

43

30

24

18

112

112

97

88

77

69

18 169 383

18 228 378

628 1100 1868

3501 68 3687

56 132 289

194 116 397

156

EXIDE INDUSTRIES LIMITED AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF NOTES TO RESTATED FINANCIAL INFORMATION Annexure - IV a.

Principles of consolidation of financial statements:

The consolidated financial statements which relate to Exide Industries Ltd. (EIL) and its subsidiary companies, have been prepared on the following basis – i.

The financial statements of the company and its subsidiaries are consolidated on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenditure, after fully eliminating intra group balances, intra group transactions and any unrealized profit/ loss included therein.

ii.

The consolidated financial statements have been prepared using uniform accounting policies for like transactions and are presented, to the extent possible, in the same manner as the company’s separate financial statements.

iii.

The excess / shortfall of cost to the company of its investments in the subsidiary companies is recognized in the financial statements as goodwill / capital reserve, as the case may be. The goodwill amount so arisen is tested for impairment at each year-end.

iv.

During the year 2003-04, EIL has acquired 56% of equity shares in Espex batteries, UK at Rs. 78 Lakhs. As a result of such acquisition during the year 2003-04. the net assets and the net income of the group have been increased by Rs. 81 Lakhs and Rs. 1 Lakh respectively.

v.

Upto August 9, 2004, Associated Battery manufacturers (Ceylon) Limited (ABML), Srilanka, was an ‘Associate Company’ as defined by Accounting Standard-23, Accounting for Investments in Associates in Consolidated Financial Statements. However, in 2004-05 EIL has acquired 12.5% of equity shares in ABML and consequently, EIL’s accumulated investments in ABML has gone upto 61.5%. Thus, ABML has become a subsidiary company of EIL with effect from the above date. EIL’s investment in ABML upto 9th August 2004, had been accounted for under the ‘Equity method’ and the group’s share of ABML’s reserves as on the above date, amounting to Rs. 106 Lakhs was credited to general Reserve/Consolidated profit & loss Account. ABML has been considered as a subsidiary during the preparation of the consolidated accounts with effect from 10th August, 2004 and the net assets and net income of the group have increased by Rs. 1809 Lakhs and Rs. 164 Lakhs respectively, as on 31 March, 2005.

157

vi.

The subsidiary companies considered in the financial statements are as follows:

Name

% of Voting power as on 31st March

Country of Incorporation

Chloride International Limited (CIL Caldyne Automatics Ltd (CALDYNE) Chloride Batteries S.E. Asia Pte Ltd. (CBSEA) & its wholly owned subsidiary (Exide Batteries Pvt. Ltd.) Espex Batteries Limited (ESPEX) Associated Battery Manufacturers (Ceylon) Ltd. (ABML)

vii.

2007

2006

India

As on 30th June 2007 100

100

100

100

100

100

India

51

51

51

51

51

51

Singapore

100

100

100

100

100

100

UK

51

51

54.25

56

56

-

Srilanka

61.50

61.50

61.50

61.50

-

-

2005

2004

2003

Foreign Exchange fluctuations on conversion of the accounts of EIL’s foreign subsidiaries have been taken to “Foreign Currency Translation Reserve” (Arising on Consolidation).

Minority Interest In terms of Accounting Standard 21, the minority interest has been computed in respect of Caldyne Automatics Ltd., Espex Batteries Limited and Associated Battery Manufacturers (Ceylon) Limited, all nonfully owned subsidiaries. In the FY 2002-03 pursuant to the scheme of amalgamation approved by the Hon’ble High Court of Calcutta as on 9th Oct’2002, the Assets and Liability of Chloride International Limited (CIL), a 100% subsidiary company, have been transferred to and vested with the company with effect from 1st July 2002. The Amalgamation has been accounted for in the company’s books under “Pooling of Interest” method in accordance with Accounting Standard-14 issued by The Institute of Chartered Accountants of India, in the following manner: i.

Amounts lying to the credit of Profit & Loss Account and General Reserve in the books of CIL have been treated as Profit & Loss Account balance and General Reserve respectively.

ii.

The balance amount representing the excess of value of Assets over the Liabilities has been reflected as General reserve in the company’s books.

b.

Sales are net of discounts, trade incentives etc. and price adjustments, settled during the year by the Company.

c.

Excise duty includes Rs. 260 lakhs paid on issue of batteries on account of warranty during the 3 months period ended 30 June 2007.

d.

The Company has a full-fledged Research and Development Center and it has thereby been able to considerably further its efficiency. During the 3 months period ended 30 June 2007, a sum of Rs. 255 lakhs, including capital expenditure of Rs.64 lakhs, was spent on Research and Development work.

158

e.

Stores and Spares Consumed is exclusive of Rs.8 lakhs being the amounts allocated to other heads of expenses during the 3 months period ended 30 June 2007.

f.

The names of small scale units, to whom amounts are due for more than 30 days (being, however, within the agreed credit terms) as at 30 June 2007 are as follows :

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

ORIENTAL RUBBER & PLASTIC THE SUPREME INDUSTRIES LIMITED LUNA PLASTIC WORKS PVT LTD PAN INDUSTRIES MAYURA ENTERPRISES, MASCOT DECORS, ELECTROCOATING & INSULATION K A RALLI & SONS SUSANTA ENGINEERING WORKS SIVA ENTERPRISE DEE RAM'S ENTERPRISES OMKAR FABRICATORS MEMBA CHEM INDUSTRIES PVT. LTD., CROWN RUBBER PRODUCTS ARDAN PLASTIC INDUSTRIES PVT LTD BARABAGAN INDUSTRIES ELITE PLASTIC INDUSTRIES BRIN & CO HRUDYANATH LALCHAND & CO BEST ENGINEERS AKASH PLASTIC SUPRAVENI CHEMICALS ARDAN PLASTIC INDUSTRIES PVT. LTD., ACCURATE PLAST MOULD B D D CHEMICALS HEMCO INDUSTRIES KAMALA BOARD BOX ALPINE INDUSTRIES

29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56

STEEL CRAFT INDIA K A RALLI & SONS PVT LTD CHETAN ENGINEERING WORKS NATHS ACIDS SANGHI GASES BHATIA PLASTO PRINTS CERAFIL AEM PLASTICS PVT LTD KUBER ENTERPRISES SUSANTA ENGINEERING WORKS STEEL CRAFT INDIA NEW STANDARD ENTERPRISES THERMOWEL INDUSTRIES SRI PARVATHI POWER PRINTERS ANUPAMA RUBBER CO. HI-TECH ACCUMULATORS PVT. LTD., SRI KOLLAPURIAMMA ENTERPRISES PEENYA INDUSTRIAL GASES SHREE INSUPAC S S ENTERPRISE SUPER-TECH BATTERY COMPONENTS P.LTD PAVAN FABS BHRAMARA POLYMERS PRIVATE LIMITED SUNRISE PACKAGING INDUSTRIES, PLASMA INDUSTRIES TELELECT INDIA K. M. SHELAT & SONS CMC MANUFACTURING CO PVT LTD

g.

The Company has not been informed by any supplier of being covered under Micro, Small and Medium Enterprises Development Act, 2006. As a result, no interest provisions/payments have been made by the Company to such creditors, if any, and no disclosures are made in these accounts.

h.

Pursuant to the approval of the shareholders at the 59th Annual General Meeting of the Company held on July 21, 2006, the Equity Shares of the Company of face value of Rs. 10/- each were sub-divided into Equity Shares of Re. 1/- each with effect from 15 September, 2006, being the Record Date fixed by the Board of Directors for the purpose.

159

i.

Details of amount payable (when due) to Investor Education & Protection Fund are as follows : As at 30 June 2007 Rs. lakhs Unclaimed Dividend Unclaimed Public Deposits Total

j.

112 7 119

Materials consumed includes :Rs in lakhs

April – June 2007 2006 – 2007 2005 – 2006 2004 – 2005 2003 – 2004 2002 – 2003 k.

Exchange fluctuation

Export Incentives

Warranty Costs

(838) (589) 48 (359) (131) (17)

(106) (386) (377) (968) (973) (930)

1,247 4,280 3,671 3,002 1,935 1,626

The Break-up of Deferred Tax liability as on 30 June 2007 is as follows : 30 June 2007 Rs.in Lakhs A.

Deferred Tax Liability i) Timing Difference in depreciable assets. ii) Expenses claimed as deduction as per Income Tax Act,1961 but not booked incurrent period. Total

B.

Deferred Tax Asset i)Expenses allowable against taxable income in future years ii)Expenses disallowed in earlier assessments which are being contested

1102 5535

367 818

4412

Net Deferred Tax Liability (A-B) l.

4495

The movements in ‘Provision for Product Related Warranty/ Guarantee’ Account during the period are as follows: 3 months period ended 30 June 07 Rs. in lakhs

Opening Balance:Provision Add: Amount created during the period Less: Product related warranties issued for the period

160

4274 1555 1108

8 4713

Less: Effect of Foreign exchange Movement Closing Balance

The above provision is for the expected warranty claims which would be cleared by way of issue of batteries free of cost over the next 12-18 months. m.

Basis for calculation of basic and diluted earning per share is as under : 3 months period ended 30 June 07

200506

200405

200304

200203

Profit after taxation as per Profit & Loss Account

Rs. in lakhs

7418

15820

10530

7379

8354

5753

Weighted number of equity shares

No. in lakhs

7500

7500

7500

7206

6139

3563

Re.

1.00

1.00

1.00

1.00

1.00

1.00

Rs.

0.99

2.11

1.40

1.02

1.36

1.61

average

Nominal Value of Shares Basic and diluted earning per share n.

200607

Business Segment As the Company’s business activity falls within a single primary business segment, viz. ‘Lead Acid Storage Batteries’, the disclosure requirements of Accounting Standard–17 “Segment Reporting”, issued by the Institute of Chartered Accountants of India are not applicable.

o.

Geographical Segments The Company primarily operates in India and therefore the analysis of geographical segments is demarcated into its Indian and Overseas operations as under :

India Overseas

April-June 2007 Rs. in lakhs 83212 4204

Revenue (Goss Sales) 2006-07 2005-06 2004-05 Rs. in lakhs Rs. in lakhs Rs. in lakhs 226257 23402

170986 14406

147753 8340

2003-04 Rs. in lakhs

2002-03 Rs. in lakhs

117824 6230

104262 7830

Assets and additions to tangible and intangible fixed assets by geographical area: The following tables show the carrying amount of segment assets and addition to segment assets by geographical area in which the assets are located:

India Overseas

30.6.07 Rs. in lakhs 67346 6746 74092

Carrying amount of segment assets 31.3.07 31.3.06 31.3.05 Rs. in lakhs Rs. in lakhs Rs. in lakhs 57031 44217 45341 6178 5122 4677 63209 49339 50018

161

31.03.04 Rs. in lakhs 35452 3499 38951

31.3.04 Rs. in lakhs 34532 3128 37660

India Overseas

June 2007 Rs. in lakhs 1988 169

Addition to Fixed Assets 2006-07 2005-06 2004-05 Rs. in lakhs Rs. in lakhs Rs. in lakhs 8249 3687 6760 116 65 446

2003-04 Rs. in lakhs 5619 313

2002-03 Rs. in lakhs 3942 263

p.

The Company has paid Rs. 16 lakhs towards lease of residential apartments during the 3 months’ period ended 30 June 2007 . These are cancellable leases, renewable by mutual agreement. Generally, there is no escalation clause and no other restrictions imposed by the lease arrangements. There are no sub-leases.

q.

Pending finalisation of Wage agreements with the employees at Hosur, Taloja and Chinchwad units, the liability for differential wages/salaries was provided in the books as per Management estimates in financial year 2005/06.

r.

(i) The company had raised a sum of Rs. 5782 lakhs during the year 2004-05 through issue of shares at a premium, for utilisation for long term fund requirements. (ii) In view of further issue of share capital during the year 2004-05 the equity share holding of Chloride Eastern Ltd., UK, the erstwhile Holding Company had come down to 48.86%, and thus it has ceased to be the Holding Company with effect from 10/01/2005.

s.

As per Hon’ble Calcutta High Court’s Order dated 17th March, 2003, expenditure on upgradation of SAP software, including Customer Relationship Module, were adjusted against Securities Premium Account in the following financial years as follows :

t.

2003-04

576

206

Rs. in lakhs 2004-05 89

Exceptional items represent one time separation costs paid to the employees of Ahmednagar Plant on shifting of its existing manufacturing facility in the financial year 2004-05. u.

v.

2002-03

The Company had received demands of Rs. 234 Lakhs (Rs.234 Lakhs) towards electricity charges for earlier years in respect of its Shamnagar unit, payable in 72 monthly instalments. However, Hon’ble Calcutta High Court subsequently revised the tariff for the above periods, based on which the Company was entitled to refund of Rs.198 Lakhs (Rs.123 Lakhs). The payment of Rs.70 Lakhs (Rs.41 Lakhs) upto 31.03.04, including Rs.29 Lakhs for the year 2003-04, has now been restated in the respective years and the amount refundable to the company has been accounted for.

CBSEA has following unabsorbed tax losses which can subject to the relevant provisions of the Income Tax Act Cap. 134, be carried forward and utilized to offset against future taxable profits. Rs: in Lakhs As on 31st March 2007 2006 2005 2004 2003 As on 30th June 2007 Unabsorbed -52 348 388 637 825 Tax Losses

162

Deferred tax asset has not been recognized on the unabsorbed tax losses as it is not certain that future taxable profits will be available for utilization against the unabsorbed tax losses. w.

Operating Lease Commitments - CBSEA The future minimum lease payments under non-cancellable operating lease are payable as follows: Rs in Lakhs As on 30th June 2007 Not later than one financial year 20 Later than one financial year but not later than five financial years 100 Later than five financial years

783

The non-cancellable operating lease relates to the leasehold building for manufacturing and distribution purposes. This lease has a remaining lease term of 21 years and includes a clause to enable upward revision of the rental charges on a 5 yearly basis based on the prevailing market conditions. The lease terms do not contain restrictions concerning dividends, additional debt or further leasing. x.

Prior year adjustments Prior period adjustment of CBSEA relates to : (i) As at 1 April 2006, a net adjustment of Rs.59 Lakhs. in respect of the deferred tax related to revaluation of the leaseholds building, plant and equipment, furniture, fittings and office equipment of the Company, which was not recognized in prior years, has been taken up accordingly. (ii) As at 1 April 2007, a net adjustment of Rs.51 Lakhs. in respect of the deferred tax relating to revaluation of leasehold building, plant and equipment, furniture, fittings and office equipment of the Company, was recognized and adjusted, taken into consideration of the effect of change in tax rate from 20% to 18% of Rs.6 Lacs.and the movement in deferred tax liability of Rs.3 Lacs. for the year ended 31 March 2007. The comparative figures for the deferred tax liability, accumulated losses and revaluation reserve in the Company’s balance sheet have been restated accordingly.

y.

The Company has adopted a policy to minimise the risks associated with the fluctuations in the price of lead by hedging the mismatch in the future market. However, it conducts the hedging transactions only to the extent of its expected imports and does not conduct any speculative operations in the market. The net realised gain of Rs 210 lakhs on such metal hedging transactions during the year, has been credited to Raw Materials & Components consumed in the financial year 2003-04.

z.

Personnel Costs in quarter ending June 2007 as disclosed in Schedule-17, includes Rs 295 Lakhs as separation costs to the employees in one of its units.

aa.

In terms of Accounting Standard-26, deferred revenue expenditure in respect of Voluntary Retirement Scheme, as on 1st April 2002, amounting to Rs. 441 Lakhs has been adjusted against opening reserves as on 1st April 2002.

ab.

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company. The Company provides certain post-retirement healthcare benefits to the employees qualifying for such benefits under the scheme at 31st March 2006, and accordingly the number of beneficiaries is frozen on that date. These benefits are unfounded.

163

The Company has a Pension plan, a part of the liability whereof upto 31st march 2003 is in the nature of a defined benefit plan. From 1st April 2003 onwards, the pension liability remains as a defined contribution liability which is contributed annually to a fund. The scheme is funded with an insurance company.

I

II

III

IV

The following tables summaries the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the respective plans for the three months period ending 30th June 2007. Rs lakhs Gratuity Post Pension Plan Retirement (Benefit Medical Benefit Based) Expenses recognized in the statement of Profit & Loss Account for the 3 months period ended 30th June2007 1. Current Service Cost 36 2 -2. Interest Cost 45 4 22 3. Expected Return on plan assets (52) -(31) 4. Actuarial (Gains) / Losses 136 (2) (21) 5. Total Expense 165 4 (30) Net Asset / (Liability) recognized in the Balance Sheet as at 30th June 2007 1. Present Value of Defined Benefit Obligation as at 30th June 2007 2. Fair Value of Plan Assets as at 30th June 2007 3. Net Asset / (Liability) as at 30th June 2007 Change in Obligation during the 3 months ended 30th June 2007 1. Present Value of Defined Benefit Obligation at the beginning of the year 2. Current Service Cost 3. Interest Cost 4. Benefits Paid 5. Actuarial (Gains) / Losses 6. Present Value of Defined Benefit Obligation at the end of the Period Change in the Fair Value of Plan Assets during the 3 months ended 30th June 2007 1. Plan assets at the beginning of the year 2. Expected return on plant assets 3. Contribution by employer 4. Actual Benefits Paid 5. Actuarial (Gains) / Losses 6. Plant assets at the end of the period 7. Actual return on Plan Assets

164

2404

215

966

2277

--

1258

(127)

(215)

292

2282

215

1191

36 45 (95) 136 2404

2 4 (4) (2) 215

-22 (219) (28) 966

2320 52 -(95) -2277 52

--4 (4) ----

1453 31 -(219) -1265 24

V. The Company expects to contribute Rs 150 lakhs to gratuity in 2007-08 and Rs nil to Pension in 2007 08 Gratuity Post Pension Plan Retirement Medical Benefit VI The major categories of plan assets as a percentage of the fair value of total plan assets Investment with insurer 100% -100% VII. Actuarial Assumptions 1. Discount Rate 2. Expected rate of return on plan assets 3. Mortality pre retirement 4. Mortality post retirement 5. Employee Turnover Rate

7.50% p.a 9.10% p.a. Standard Table LIC (1994-96) Ultimate Mortality for annuitants LIC ( 1996-98) Ultimate 19.30%

VIII. Healthcare cost trend rates have no effect on the amounts recognized in the profit and loss account, since the benefit is in the form of a fixed amount as per the various grades, which is not subject to change IX. The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. X. The details of retirement benefit obligation towards Gratuity at ABML, is as follows :Rs Lakhs 157 6 (1) (12) 150

Opening Balance as on 1st April, 2007 Add : Amount created during the year Less : Payments Effect of Foreign Exchange Movements Balance as on 30th June, 2007

165

EXIDE INDUSTRIES LIMITED AND ITS SUBSIDIARIES Consolidated Statement of Significant Accounting Policies Annexure V a.

Basis of Accounting The consolidated accounts have been prepared under the Historical Cost Convention modified by revaluation of fixed assets in accordance with the applicable accounting standards in India, except for the foreign subsidiaries CBSEA, ESPEX and ABML whose accounts have been prepared under ‘Singapore Financial Reporting Standards’ , ‘Financial Reporting Standards for smaller entities, UK’, and Srilanka Accounting Standards respectively, but suitably modified to conform to the uniform accounting policies, except where disclosed otherwise. For recognition of Income and expenses, Mercantile System of Accounting is followed.

b.

Revenue Recognition Revenue from sale of goods including manufactured products is recognized upon passage of title to the customers which generally coincides with delivery. Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from material costs.

c.

Fixed Assets Fixed Assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to revaluation reserve. The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external / internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price of assets and their ‘Value in use’. The estimated future cash flows are discounted to their present value at the weighted average cost of capital.

d.

Investments Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long-Term investments. Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Unquoted and Long Term Investments are considered at cost, when there is a decline, other than temporary in value thereof, in which case adequate provision is made for diminution in the value of Investments. Investments in foreign companies are carried at exchange rates prevailing on the date of their acquisition.

e.

Depreciation i.

The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly. ii. a. Depreciation is provided on straight line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956 except for certain assets of EIL and the entire assets of foreign subsidiaries (CBSEA , ESPEX and ABML) , where depreciation is provided with reference to the useful economic lives of the respective assets. Further, in respect of certain assets at EIL whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.

166

b. Based upon their respective useful economic life, depreciation on the following assets is provided at a rate higher than those specified in schedule- XIV of the Companies Act 1956: Class of assets

Useful economic Life

Air conditioners, Refrigerators, Washing Machines, Water Coolers, Televisions (included in Furniture & Fittings) Motor Vehicles Computer Hardware Weighing Scales & Transformers Pallet Trucks

6

Rate of Depreciation

16.33%

6

16.33%

4 15 10

24.50% 6.53% 9.80%

c. Acquired Goodwill is written off over a period of five years. However, the amount of goodwill arising on consolidation is tested for impairment at each year-end. iii.

Depreciation includes amount written off in respect of leasehold properties over the respective lease period.

iv. Depreciation on the amount capitalised during the year on account of Foreign Exchange fluctuation is provided prospectively over the residual life of the respective assets, except in case of CBSEA, Espex and ABML, the foreign subsidiaries, where the same is charged to revenue as per the local accounting practice. v. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata reference to the month of addition/disposal.

basis

with

vi. In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. f.

Intangibles Research & Development Costs Research Costs are expensed as incurred. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years. The carrying value of Development Costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.

g.

Borrowing Costs Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit and Loss Account.

167

h.

Hedging EIL has adopted a policy to minimize the risks associated with the fluctuations in the price of lead by hedging the mismatch in the futures market only to the extent of its expected imports. The above hedging contracts are accounted for on the date of their settlement and realised gain/loss thereof is recognised in the profit and loss account. The ‘open’ contracts as on the Balance Sheet date are valued at the prevailing market rate and the net resultant loss, if any, is provided for in the accounts and charged to materials consumed, whereas the net unrealized gains arising out of such reinstatement is not recognised as a matter of prudence.

i.

Leases iv)

In respect of assets given/acquired on finance lease prior to 1st April, 2001 : a)

In respect of assets given on finance lease, depreciation in order to comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956, read with Schedule VI thereof, is provided at rates which ensure that full depreciation is provided over the period of lease. Adjustments as appropriate, are made in Income and Leased assets account for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.

b) In respect of assets acquired on finance lease, the lease rentals are charged to profit and loss account as and when accrued. v)

In respect of assets given/acquired on finance lease on or after 1st April, 2001 and since inception in case of foreign subsidiaries : a)

Assets, if any , given under a finance lease (including on hire purchase in case of CBSEA) are recognized as a receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest under the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue.

b) Assets, if any , acquired under finance leases (including on hire purchase in case of CBSEA and Espex), which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term. vi)

Operating leases: a)

Assets acquired under Operating Leases represents assets where the lessor effectively retains substantially all the risks and benefits of their ownership. Operating lease payments are recognized as an expense in the Profit and Loss account on a straight-line basis over the lease term.

b) Assets given under operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs including depreciation are recognized as an expense in the Profit and Loss Account.

168

j.

Foreign Currency Transactions (i) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. (ii) Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. (iii) Exchange Differences Exchange differences arising on the settlement/conversion of monetary items, are recognised as income or as expenses in the year in which they arise except those relating to acquisition of fixed assets outside India, in which case such exchange differences are capitalised. (iv) Forward Exchange Contracts The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognised as income or as expense for the year. (v) Translation of Non-Integral Foreign Currency Operations The translation of the financial statements of a non-integral foreign operation results in the recognition of exchange differences arising from(a) translating income and expense items at the exchange rates at the dates of transactions and assets and liabilities at the closing rate (b) translating the opening net investment in the non-integral foreign operation at an exchange rate different from that at which it was previously. All resulting exchange differences are accumulated in a foreign currency translation reserve until the disposal of the net investment.

k.

Product Related Warranty/ Guarantee Claims Provision for product related warranty/ guarantee costs is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims.

l.

Trade & Other Payables Trade and other payables are recognized at historical costs. At CBSEA and ABML, Long Term Trade and other payables including payable to holding Company and related Company are initially recognized at fair values and subsequently measured at amortized cost using the effective interest method. Gains and losses are recognized in the profit & loss account when the liabilities are derecognized as well as through the amortisation process.

m.

Earning per share Earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

169

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. n.

Inventories i) Raw materials, components, stores and spares are valued at Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis. ii) Work-in-progress and finished goods are valued at Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.

o.

Excise Duty Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.

p.

Retirement and other employee benefits

i)

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective trusts. CBSEA participates in the national pension schemes as defined by the laws of Singapore and make contributions to the Central Provident fund scheme in Singapore.

ii)

At EIL, Gratuity liability and Post employment Medical Benefit liability are defined benefit obligations and are provided for on the basis of an actuarial valuation made at the end of each financial year. At ABML, in order to meet the Gratuity liability, a provision is carried forward in the balance sheet, equivalent to an amount calculated based on the half month’s salary of the last month of the financial year of all employees for each completed year of service, commencing from the first year of service. For Caldyne and Chloride Gratuity liability is accounted for on the basis of annual premium determined by the insurance company.

iii)

Short term compensated absences are provided for based on estimates.

iv)

Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss account.

v)

q.

Pension liability is split into a defined benefit portion and a defined contribution portion as indicated in note no. ‘ q ’. The contributions towards defined contribution are charged to the Profit and Loss account of the year when the contribution becomes due. The Defined benefit portion is provided for on the basis of an actuarial valuation made at the end of each financial Taxation Provision for Income-Tax comprises of current tax, deferred tax charge or release and fringe benefit tax. Current income- tax and fringe benefit is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Laws as applicable to EIL, CIL and Caldyne and the respective Income Tax Laws prevailing in those countries where the foreign subsidiaries (CBSEA, Espex and ABML] are incorporated.

170

In case of EIL, CIL and Caldyne, Deferred income taxes reflect the impact of current year timing difference between taxable income and accounting income for the year and reversal of timing differences of earlier years Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In case of CBSEA, ABML and Espex, Deferred Income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. Deferred tax assets are not recognized unless there is ‘virtual certainty’ except for the foreign subsidiaries, where that sufficient future taxable income will be available against which such deferred tax assets will be realized. At each balance sheet date EIL, CIL and Caldyne re-assesses unrecognized deferred tax assets and recognizes it to the extent that it has become reasonably certain or virtually certain, and in case of CBSEA, Espex and ABML, if it is probable that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred Tax Assets and deferred tax liabilities across various countries of operations are not set-off against each other as EIL does not have a legal right to do so. r.

Provision A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard-29, and the relevant pronouncements in case of the foreign subsidiaries, are not discounted to its present value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. AT CBSEA, if the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to passage of time is recognized as finance costs.

s.

Contingent Liabilities No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.

171

EXIDE INDUSTRIES LIMITED and its Subsidiaries Consolidated Summary of Adjusted Accounting Ratios

A B C

Annexure-VI Rs. In Lakhs Year ended 31st March

3 months ended 30th June 2007 71695 7418 7500

2007

2006

2005

2004

2003

64379 15820 7500

51557 10530 7500

43543 7379 7500

32536 8354 7122

27737 5753 3561

7500

7500

7500

7206

6139

3563

0.99

2.11

1.40

1.02

1.36

1.61

41.39

24.57

20.42

16.95

25.68

20.74

9.56

8.58

6.87

5.81

4.57

7.79

Net Worth Adjusted Profit after Tax Number of shares outstanding at the end (*) (in lakhs) D Weighted average number of shares outstanding (*) (in lakhs) Earnings Per Share (EPS) Rs (B/D) Return on Net Worth (%) (B/A) Net Asset Value per Share (Rs) (A/C) * At nominal value Per Share of Re 1/Definition of Key Accounting ratios iii.

EPS represents Basic Earnings per share calculated as per Accounting Standard 20 issued by ICAI.

iv.

Return on net worth is arrived at by dividing PAT by total shareholder’s funds (Net Worth) at the end of the year.

172

EXIDE INDUSTRIES LIMITED AND ITS SUBSIDIARIES A. Consolidated Statement of Restated Secured Loans

Particulars Non Convertible Debentures Term Loans Overdraft Hire Purchase Contract Grand Total

Annexure-VII Rs. In Lakhs As at 31st March 2006 2005 2004 2003 --2500 12166

As at 30th June 2007 --

2007 --

20175 8003 --

20200 9259 12

10000 6531 18

-12728 8

106 6211 --

2832 10818 --

28178

29471

16549

12736

8817

25816

B. Principal Terms of Secured Loans as on 30.06.2007 Annexure to Secured Loans Rs. In Lakhs Sr.No.

Particulars

1.

Term Loan The Hongkong & Shanghai Banking Corporation Limited Citibank N.A.

8.42%

2.

Repayment terms

Security

5000

Bullet (3 Years)

8.25%

5000

Bullet (3 Years)

Citibank N.A.

7.62%

10000

Bullet (3 Years)

ICICI Bank Ltd

10.00%

Hypothecation of movable assets at Haldia & Shamnagar Hypothecation of movable assets at Chinchwad & Taloja Hypothecation of movable assets at Hosur Hypothecation of factory premises of Caldyne Automatics Limited

Bank Overdraft a. Bank Overdraft b. Buyers’ Credit c. FCNRB & PCFC

Rate of Interest

Various $ Libor + 50 bps $ Libor + 75 bps

Outstanding amount

175

3353 2615

On maturity

Stock & Book Debts Stock & Book Debts

2035

On maturity

Stock & Book Debts

173

EXIDE INDUSTRIES LIMITED AND ITS SUBSIDIARIES C. Consolidated Statement of Restated Unsecured Loans

Sl no

Particulars

1.

Sales Tax loan from Small Industries Promotion Corporation of Tamil Nadu Limited Sales Tax loan from West Bengal Industrial Development Corporation Limited Public Deposits Commercial Paper Loans External Commercial Borrowings Overdraft Grand Total

2.

3. 4. 5.

6.

Annexure- VIII Rs In Lakhs

As at 31st March 2006 2005 2004 3780 3163 2604

As at 30th June 2007 4968

2007 4647

36

36

73

109

109

109

-1000

---

---

-5000

---

549 --

--

--

9305

8750

8740

--

-6004

-4683

-13158

54 17076

-11453

-2682

2003 2024

D. Breakup of Unsecured Loans as on 30.06.2007 Annexure to Unsecured Loans Rs. In Lakhs Name of the lender 1. Sales Tax loan from Small Industries Promotion Corporation of Tamil Nadu Limited 2. Sales Tax loan from West Bengal Industrial Development Corporation Limited 3 Commercial Paper

Amount 4968

36

1000

174

Interest Rate Interest Free

Repayment Schedule From June 2009 to March 2016

Interest Free

15th March 2008

8.45%

27th September, 2007

EXIDE INDUSTRIES LIMITED AND ITS SUBSIDIARIES Consolidated Statement of Restated Balances of Sundry Debtors Annexure-IX Rs.in Lakhs

Particulars Debts outstanding over six months Secured – Considered good Unsecured – Considered good Unsecured – Considered doubtful Less : Provision for doubtful debts Other Debts Secured – Considered good Unsecured – Considered good Grand Total

As at 30th June 2007

As at 31st March 2006 2005

2007

-1107

-859

-616

61

624

(61)

2004

2003

-858

-926

-890

602

570

683

658

(624)

(602)

(570)

(683)

(658)

-25244

-16870

-17369

-17655

-12978

-14171

26351

17729

17985

18513

13904

15061

Consolidated Statement of Restated Loans and Advances Annexure-X Rs.in Lakhs

Particulars Advances recoverable in cash or kind Dividend Receivable Deposits with Customs, Sales Tax and Excise Authorities Deposits Others Interest accrued on deposits Loan to Others Inter Corporate Deposits Advance Tax, Refunds receivables Grand Total

As at 30th June 2007 1404

As at 31st March 2006 2005 1797 1622

2007 1326

-142

-411

-389

1047 -1 ---

934 4 1 ---

2594

2676

2004 1060

2003 593

-385

-330

26 619

862 2 1 ---

757 37 1 -344

707 2 1 300 --

641 22 1 1300 113

3051

3146

2400

3315

175

EXIDE INDUSTRIES LIMITED AND ITS SUBSIDIARIES 2. Consolidated Statement of Related party transactions as per Accounting Standard 18 for the reporting periods B. List of Related Parties 30.06.07 31.03.07 31.03.06 31.03.05 Holding Chloride Eastern Limited, ------Company UK (Ceased to be a Holding Company w.e.f 10.01.2005)

Associate Companies

Persons having a direct or indirect control over the Company

Key Management Personnel

ING Vysya Life Insurance Company Limited

Annexure XI 31.03.04 Chloride Eastern Limited, UK

31.03.03 Chloride Eastern Limited, UK

MSA (India) Limited

MSA (India) Limited

Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka

ING Vysya Life Insurance Company Limited MSA (India) Limited (upto 1 March, 2007)

ING Vysya Life Insurance Company Private Limited MSA (India) Limited

MSA (India) Limited

Eastern

Chloride Eastern Limited, UK

Chloride Eastern Limited, UK

Chloride Eastern Industries Pte Limited, Singapore

Chloride Eastern Industries Pte Limited, Singapore

Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka Chloride Eastern Industries Pte Limited, Singapore

Chloride Eastern Industries Pte Limited, Singapore LIEC Holdings SA, Switzerland Mr S B Raheja

Chloride Eastern Industries Pte Limited, Singapore LIEC Holdings SA, Switzerland Mr S B Raheja

Chloride Eastern Industries Pte Limited, Singapore LIEC Holdings SA, Switzerland Mr S B Raheja

LIEC Holdings Switzerland

LIEC Holdings Switzerland

LIEC Holdings SA, Switzerland

Mr S B Raheja

Mr S B Raheja

Mr S B Raheja

Mr T V Ramanathan

Mr S B Ganguly

Mr S B Ganguly

Mr S B Ganguly

Mr S B Ganguly

Mr S B Ganguly

Mr G Chatterjee

Mr

Mr T V Ramanathan

Mr T V Ramanathan

Mr T V Ramanathan

Mr T V Ramanathan

Chloride Limited, UK

T

V

176

SA,

SA,

Name of the Companies / firms / in which Directors / Key Management Personnel are interested

Mr P K Kataky Dr S K Mittal Mr A K Mukherjee Mr Ranabir Chakraborty Mr R P Ray

Ramanathan Mr G Chatterjee Dr S K Mittal Mr P K Kataky Mr Ranabir Chakraborty Mr R P Ray

Mr Barun Das Mr Monodip Chaudhuri Mr Chng Hee Teck

Mr Barun Das Mr Monodip Chaudhuri Mr Chng Hee Teck

Mr S K Mukherjee Mr A Durairaj Mr T W Atkins

Mr S K Mukherjee Mr A Durairaj Mr T W Atkins

Prism Cement Limited

Prism Limited

Cement

Mr S Chand Mr G Chatterjee Dr S K Mittal Mr P K Kataky

Mr S Chand Mr G Chatterjee Dr S K Mittal Mr P K Kataky

Mr S Chand Mr G Chatterjee Dr S K Mittal Mr P K Kataky

Mr S Chand Mr G Chatterjee Dr S K Mittal Mr P K Kataky

Mr Ranabir Chakraborty Mr R P Ray Mr Barun Das

Mr Ranabir Chakraborty

Mr R P Ray

Mr R P Ray

Mr R P Ray Mr Barun Das

Mr Barun Das Mr Monodip Chaudhuri

Mr Monodip Chaudhuri Mr Fong Chee Heng Mr S K Mukherjee Mr A Durairaj Mr T W Atkins

Mr Monodip Chaudhuri

Mr Fong Chee Heng

Mr Barun Das Mr Monodip Chaudhuri Mr Fong Chee Heng

Mr Fong Chee Heng Mr S K Mukherjee Mr R M D Bhandara Mr T W Atkins

Mr S K Mukherjee

Mr S K Mukherjee

Prism Limited

R & S Business Centre Sonata Software Limited

R & S Business Centre Sonata Software Limited

R & S Business Centre Hathway Investments Pvt Limited Hathway Cable & Datacom Pvt. Ltd Chivach Media Pvt Ltd Sonata Software Limited

177

Cement

B. Transaction with Related Parties 30.06.07 I

II

III

IV

V

VI

VII

VIII

Sales and services to and other recoveries from related parties Associate Companies Purchase /other services from related parties Associate Companies Companies / firms / in which Directors / Key Management Personnel are interested Royalty / Technical Assistance Fees Paid / Payable Companies / firms / in which Directors / Key Management Personnel are interested Royalty / Technical Assistance Fees Received / Receivable Associate Companies Dividend Paid/Payable Holding Company Payment of Rent & Maintenance Charges Companies / firms / in which Directors / Key Management Personnel are interested Information & Technology Costs Companies / firms / in which Directors / Key Management Personnel are interested Rental Income Companies / firms / in which Directors / Key Management

31.03.07

4

Rs in lakhs 31.03.05 31.03.04

31.03.06

5

92

37

1

17

7

7

10

38

35

1466

733

577

22

23

30

5

156

90

3

6

237

1003

857

814

1

7

7

7

3

178

31.03.03

3

IX

X

XI

XII

XIII

XIV

XV

XV (i)

XV (ii)

XV (iii)

Personnel are interested Interest Paid Companies / firms / in which Directors / Key Management Personnel are interested Dividend Income Associate Companies Remuneration Key Management Personnel Publicity Expenses Companies / firms / in which Directors / Key Management Personnel are interested Expenses Others Companies / firms / in which Directors / Key Management Personnel are interested Inter Corporate Deposit Repaid Companies / firms / in which Directors / Key Management Personnel are interested Outstanding Balance Payable Technical Assistance Expense Companies / firms / in which Directors / Key Management Personnel are interested Remuneration Key Management Personnel Information and Technology Companies / firms / in which Directors / Key Management Personnel are interested

6

171

56

10

580

615

422

25

26

330

277

139

33

211

5

4

3

3

3

3

63

218

218

88

79

65

11

2

179

XVI (i)

XVI (ii)

XVI (iii)

Outstanding Balance Receivable – Sales & Services Associate Companies Dividend Received

5

Associate Companies Technical Assistance Income Associate Companies

29

26

26

10

180

37

EXIDE INDUSTRIES LIMITED AND ITS SUBSIDIARIES Consolidated Statement of Dividends Paid Particulars Equity Shares ( lakhs) Rate of Dividend Dividend Amount Dividend Tax

2007 7500 35% 2625 446

Annexure – XII Rs in lakhs

For the year ended 31st March 2006 2005 2004 7500 7500 7122 30% 25% 40% 2250 1875 2849 316 263 365

2003 3561 40% 1424 183

EXIDE INDUSTRIES LIMITED and its Subsidiaries Consolidated Capitalisation Statement (Restated) Annexure XIII Rs in lakhs

Particulars Loan Funds Short Term Debts Long Term Debts Total Debts Shareholder’s Funds Share Capital Reserves & Surplus (net of Revaluation Reserve) Total Shareholder’s Fund Debt Equity Ratio (Long term Debt / Equity)

181

Pre Issue as at 30th June 2007

Adujsted for Rights after conversion

9039 25143 34182

9039 25143 34182

7500 64195 71695 0.35

8000 78595 86595 0.29

EXIDE INDUSTRIES LIMITED AND ITS SUBSIDIARIES Consolidated Statement of Restated Investments Particulars

Class

Annexure XIV Rs in Lakhs

As at 30th

Face Value

JUNE 2007 No. of Amoun t Shares/ Units

2007 No. of Amou Shares/ nt Units

2006 No. of Amou Shares/ nt Units

As at 31st March 2005 No. of Amou Shares/ nt Units

510000

510000

2004 No. of Amou Shares/ nt Units

2003 No. of Amoun Shares/ t Units

510000 [Bonus Shares issued 2:1] 310464 0

102

165000

102

634

310464 0

634

Long term investments (fully paid) Unquoted 1.In Associate Companies – Fully Paid up Equity Shares MSA (India) Ltd

Associated Battery Manufacturers (Ceylon) Limited ING Vysya Life Insurance Company Limited

Equit y

Rs 10

Equit y

SLRp 10

Equit y

Rs 10

--

3825000 00

--

39449

--

3450000 00

--

35699

2450000 00

2. Others

182

95

25699

--

102

--

--

--

--

--

Arkay Energy (Rameswarm) Limited Haldia Integrated Development Agency Ltd Brown Group Motels Limited 3. Trade – Fully paid up Debentures Woodlands Hospital and Medical Research Centre Limited ½% Debentures 5% Nonredeemable Registered Debentures 5% Nonredeemable Registered Debentures 61/2% Nonredeemable Registered Debentures 4. Government

Equit y

Rs 10

700000

70

700000

70

700000

70

--

--

--

--

--

--

Equit y

Rs 10

500000

50

500000

50

5000

1

--

--

--

--

--

--

1

Debe ntures Debe ntures

Rs 100 Rs 6000

45

--

45

--

45

--

45

--

45

--

45

--

1

--

1

--

1

--

1

--

1

--

1

--

Debe ntures

Rs 6500

1

--

1

--

1

--

1

--

1

--

1

--

Debe ntures

Rs 1000

2

--

2

--

2

--

2

--

2

--

2

--

--

--

183

--

--

--

Securities 5. Non Current – Quoted Brown Beach Hotel Hutton National Bank Asia Capital Limited 6. Current Unquoted Units in Mutual Funds Total

10400

1

10400

1

10400

1

10400

1

601804

19

300902

20

300902

22

300902

22

11000

1

11000

1

11000

1

11000

2

9078 39591

35841

25889

9205

736

Note : (1) Invetments in Government Securities amounting to Rs 43,750 only as at each of the year end / period as shown above has not been included in statement since the figures given are in Rs Lakhs.

184

736

EXIDE INDUSTRIES LIMITED AND ITS SUBSIDIARIES

Annexure XV Consolidated Statement of Restated Contingencies and Commitments as on 30th June 2007

3.

Contingent Liabilities: a. Bills discounted with scheduled banks b. Outstanding bank guarantees / indemnity bonds c. Sales Tax / Excise Claims d. Claims against the company not acknowledged as debts

Rs lakhs 298 1177 176 25

4.

Estimated amount of contracts remaining to be executed on capital account – Rs 885 Lakhs

Note : (1) Contingent Liabilities and Capital Commitments have been disclosed only for the period ended 30th June 2007. Annexure XVI Consolidated Statenent of Remuneration to Managing Director and Whole time Directors 1.

Remuneration to Managing Director and Whole-time Directors Rs in lakhs

Salary & Performance Bonus Commission Contribution to Provident and other funds Estimated value of perquisites TOTAL

For the 3 months ended 30th June 2007 97

For the year ended 31 March

2007

2006

2005

2004

2003

333

337

228

79

65

32 15

102 50

113 56

87 45

79 36

65 33

11

36

43

35

32

26

155

521

549

395

226

189

185

MANAGEMENTS’ DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS Shareholders should read the following discussion of Company’s financial condition and results of operations together with audited financial statements which appear in the section titled “Financial Information” in this Letter of Offer .The following discussion is based on audited financial statements for financial year 2004, 2005, 2006 and 2007. The Company’s financial year ends on March 31 of each year, so all references to a particular fiscal are to the twelve-month period ended March 31 of that year. Unless otherwise indicated, all financial and statistical data relating to the industry in the following discussion are derived from various industry reports. Unless otherwise stated, the financial information used in this section is derived from the consolidated audited financial statements under Indian GAAP, as restated. Overview of the business of the Company: India has clocked three years of high GDP growth, the average touching 8.6% and nearly US$ 20 billion foreign exchange reserves. However, the fly in the ointment is inflation, which continues at 6.5%. The India story seems to be continuing to hold the imagination of international investors. However, the Reserve Bank of India has unleashed all its inflation curbing weapons, having restructured the CRR and interest rates. In such a scenario, most analyst expect growth to moderate along with inflation. Exports continue to cross coveted milestones. The balance of trade, however, turning increasingly negative, on account of both oil and food grain imports, is an are of concern. The Company maintained its position as India’s and South Asia’s largest power solutions company. Actual production of automotive batteries for four wheelers increased from 4.6 million units to 5.6 million units. Whereas for two wheeler batteries, the increase was from 5.8 million units to 7 million units. The production of batteries for industrial applications touched 1000 million Ah. Rs lakhs 31.03.07 31.03.06 31.03.05 31.03.04 Income Sales Of products manufactured by the Company Of products traded by the Company Sub Total Less: Excise Duty, Sales Tax and VAT Net Sales Other Income Total Income Expenditure Materials consumed Staff Costs Other expenses Interest & Finance Costs Depreciation Total Expenditure Profit before tax and Exceptional Items Less : Exceptional Items Profit before tax

235715

176024

147319

119533

2542 238257 51236

103 176127 38178

75 147394 29867

-119533 24156

187021 949 187970

137949 670 138619

117527 205 117732

95377 246 95623

113688 12396 30067 2771 5555 164477 23493

82095 9784 23505 2244 5603 123231 15388

70429 8738 20477 1146 5522 106312 11420

49106 8682 19376 847 5209 83220 12403

-23493

-15388

170 11250

-12403

186

Less : Provision for taxation Profit after Tax PAT as a percentage of total income from Operations

8007 15486 8.24

4995 10393 7.50

3930 7320 6.22

4180 8223 8.60

COMPARISION OF RECENT FINANCIAL YEAR WITH THE PREVIOUS FINANCIAL YEAR ON THE MAJOR HEADS OF THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT Result of operations and major increase or decrease in the heads of the Balance Sheet and Profit & Loss Account as at and for the year ended 31st March, 2007 compared to the year ended 31st March, 2006 Net Sales The net sales in FY 2007 was Rs 187021 lakhs as compared to the previous year of Rs 137949 lakhs resulting in an increase of about 36% over the last year. Other income has also increased from Rs 670 lakhs to Rs 949 lakhs. Overall company registered a growth of 20% in terms of volume. Growth was registered in all segments of business. Increase in other income in Financial Year 2006-07 was due to : Sl no 1. 2. 3. 4. 5.

Particulars Profit on sale of investments Profit on sale of assets sold/discarded Increase in dividend from trade investments Increase in sundry income Increase in technical assistance fees Less : Reduction in dividend from non-trade investments Net Increase

Rs in Lakhs 398 58 85 35 5 302 279

Material Consumption Material consumption cost increased from Rs 82095 lakhs in the FY 2006 to Rs 113688 lakhs in the FY 2007. This significant increase was mainly due to continuous hike in Lead prices as well as growth in volume of business. Staff Costs Staff cost (administrative cost) as a percentage of income from operations was : FY 2007 – 6.60 % FY 2006 – 7.06 % In absolute value, staff cost has increased from Rs 9784 lakhs in FY 2006 to Rs 12396 lakhs in FY 2007 due to increase in salaries and wages. However, since value growth of business is more than staff cost increase, hence as a percentage of income from operations it indicates reduction compared to FY 2006. Depreciation Depreciation expenses reduced marginally from Rs 5603 lakhs in FY 2006 to Rs 5555 lakhs in FY 2007 mainly due to certain assets reaching residual value at the end of the life class.

187

Profit after Tax Profit after tax increased from Rs 10393 lakhs in FY 2006 to Rs 15486 lakhs in FY 2007. Profit after tax increased from 7.37% of total income from operations to 8.24% of total income from the operations in the FY 2007 due to higher operating profit. Fixed Assets Gross block as at 31st March 2007 at Rs 94713 lakhs increased by Rs 6313 lakhs compared to March 2006. This increase is mainly due to significant investment in Plant and Machinery for capacity build up in line with expected business growth. Inventory The total inventory as at 31st March 2007 increased by 64% compared to 31st March 2006 from Rs 24172 lakhs to Rs 39661 lakhs. This significant increase was mainly due to business volume growth of 17% and an average increase in metal cost of 33%. Sundry Debtors Sundry debtors as at 31st March 2007 decreased by Rs 331 lakhs compared to 31st March 2006 from Rs 15125 lakhs to Rs 14794 lakhs. The above reduction in debtors is due to higher sales growth in replacement segment with payment terms ‘cash and carry’. Sundry Creditors The Micro, Small and Medium Enterprises Act, 2006 provides that any enterprise falling under the category of ‘Micro’ and ‘Small’ has to enroll / register itself with the appropriate authority, after fulfilling required formalities to avail of the benefits under this Act. After enactment of above Act in June 2006 suppliers / service providers of every unit of the Company were enquired about their status and their registration number under this Act, if applicable. No feedback was received by the Company from any of the suppliers during the financial year 2006 –07. Again, in May 2007, letters / e-mails were sent to suppliers of goods and service providers from the respective units of the Company requesting them to inform their status under the above act and also the registration number, if applicable, with a specified date. However no reply was received by the Company from any of the suppliers / service providers. Thus, even after making every effort to know the status of the suppliers / service providers under this Act, no confirmation is received from any of them. Moreover, as per policy of the Company, suppliers of goods and service providers are always paid according to the agreed payment term (which is normally not more than 45 days), if there is no dispute over / objection to goods supplied or services rendered. Hence, there was no necessity to make provision for interest under this Act Result of operations and major increase or decrease in the heads of the Balance Sheet and Profit & Loss Account as at and for the year ended 31st March, 2006 compared to the year ended 31st March, 2005 Net Sales The net sales in FY 2006 was Rs 137949 lakhs as compared to the previous year of Rs 117527 lakhs resulting in an increase of about 17% over the last year. Other Income has also increased from Rs 205 lakhs to Rs 670 lakhs. Overall company registered a growth of 14% in terms of volume in almost all segments. Other Income has increased mainly due to increase in dividend from non-trade investments by Rs 392 lakhs and in dividend from trade investments by Rs 45 lakhs.

188

Material Consumption Material consumption cost increased from Rs 70429 lakhs in the FY 2005 to Rs 82095 lakhs in the FY 2006. The increase was mainly due to substantial increase in Lead prices and growth in volume of business. Staff Costs Staff cost (administrative cost) as a percentage of income from operations was : FY 2006 – 7.06% FY 2005 – 7.42% In value terms, staff cost have increased to Rs 9784 lakhs in Financial Year 2006 from Rs 8738 lakhs in Financial Year 2005 due to increase in salaries and wages. However, due to higher value growth of business, it as a percentage of income from operations, showed reduction. Depreciation Depreciation expenses increased marginally from Rs 5522 lakhs in FY 2005 to Rs 5603 lakhs in FY 2006 on account of marginal increase in the Issuers’ Fixed Assets which is primarily attributed to the purchase of new machinery and equipment. Profit after Tax Inspite of higher interest cost due to rising interest rates, profit after tax increased from Rs 7320 lakhs in FY 2005 to Rs 10393 lakhs in FY 2006. Profit after tax increased from 6.22 % of total income from operations to 7.50 % of total income from the operations in the FY 2005 due to higher operating profit. Fixed Assets Gross block as at 31st March 2006 at Rs 88400 lakhs increased by Rs 2501 lakhs compared to March 2005. This increase is mainly due to significant investment in Plant and Machinery in tune with continuous augmentation of capacity and efficiency. Inventory The total inventory as at 31st March 2006 increased by 6% compared to 31st March 2005 from Rs 22758 lakhs to Rs 24172 lakhs. This increase is in line with normal business growth. Sundry Debtors Sundry debtors as at 31st March 2006 decreased by Rs 962 lakhs compared to 31st March 2005 from Rs 16087 lakhs to Rs 15125 lakhs. The above reduction in debtors is due to continuous focus on credit control management. Result of operations and major increase or decrease in the heads of the Balance Sheet and Profit & Loss Account as at and for the year ended 31st March, 2005 compared to the year ended 31st March, 2004 Net Sales The net sales in FY 2005 was Rs 117732 lakhs as compared to the previous year of Rs 95623 lakhs resulting in an increase of about 23% over the last year. Other income has decreased from Rs 246 lakhs to Rs 205 lakhs. Overall company registered a growth in almost all segments aggregating to 14.12% in terms of volume.

189

Material Consumption Material consumption cost increased from Rs 49106 lakhs in the FY 2004 to Rs 70429 lakhs in the FY 2005. The increase was due to increase in Lead prices as well as business growth. Staff Costs Staff cost (administrative cost) as a percentage of income from operations was : FY 2005 – 7.42% FY 2004 – 9.08% In terms of value, staff costs have increased to Rs 8738 lakhs in Financial Year 2005 from Rs 8682 lakhs in Financial Year 2004 due to increase in salaries and wages. However, due to higher value growth of business, it indicates reduction as a percentage of income from operations. Depreciation Depreciation expenses increased marginally from Rs 5209 lakhs in FY 2004 to Rs 5522 lakhs in FY 2005 on account of increase in the Issuers’ Fixed Assets which is primarily attributed to the purchase of new machinery and equipment. Profit after Tax Profit after Tax decreased from Rs 8223 lakhs in FY 2004 to Rs 7320 lakhs in FY 2005. Profit after tax decreased from 8.60 % of total income from operations in Financial Year 2004 to 6.22 % of total income from the operations in the FY 2005, due to lower Operating Profit (as a result of higher material costs) and Exceptional Item of Rs 170 lakhs representing one time separation costs to employees of one of the units. Fixed Assets Gross block as at 31st March 2005 at Rs 85899 lakhs increased by Rs 5112 lakhs compared to March 2004. This increase is mainly due to significant investment in Plant and Machinery for capacity build up in line with expected business growth. Inventory The total inventory as at 31st March 2005 increased by 7% compared to 31st March 2004 from Rs 21233 lakhs to Rs 22758 lakhs. Inspite of increase in metal cost of about 40% and business growth of about 14% inventory level was restricted to a relatively lower level as a result of continuous inventory rationalization process. Sundry Debtors Sundry debtors as at 31st March 2005 increased by Rs 3171 lakhs compared to 31st March 2004 from Rs 12916 lakhs to Rs 16087 lakhs. The above increase is in line with increase in gross sales.

Reasons for the difference in the figures of the gross block between the balance sheet and cash flow statement: The Gross Block of fixed assets represents value of fixed assets at cost (after adjustment of effect of foreign currencies) and reduction of Gross Block of assets sold, while the Net Cash Flow due to purchase/ sale of Fixed Assets has been arrived at after considering the actual net increase/ decrease in capital creditors and actual sale proceeds of fixed assets.

190

A Statement explaining the movement of Fixed Assets appearing in Balance Sheet vis-à-vis the Cash Flow Statement is as follows: MOVEMENT OF FIXED ASSETS - GROSS BLOCK APPEARING IN BALANCE SHEET JUN 2007 Opening Gross Block Add: Additions to Fixed Assets Add: Effect of Restatement of Foreign Currencies Less: Gross Block of Assets sold /discarded

94,713

Closing Gross Block

96,535

06-07

05-06

88,400

1,986 (164)

85,899

8,019 20 (1,726)

3,311 5 (815)

94,713

88,400

04-05

03-04

80,787

75,265

6,992 7 (1,887)

5,828 61 (367)

85,899

80,787

MOVEMENT OF FIXED ASSETS APPEARING IN CASH FLOW STATEMENT

Additions to Fixed Assets Add: Closing CWIP Less: Opening CWIP Add: Net (Increase)/Decrease of Capital Creditors

JUN 2007 1,986 2,894 (3,101) 363

Cash Outflow for Purchase of Fixed Assets Less: Proceeds from Sale of Fixed Assets

2,142

Net Cash Outflow

2,117

06-07 8,019 3,101 (621) (208) 10,291

(25)

(442) 9,849

(Rs in Lakhs )

04-05 6,992 379 (151) (108)

03-04 5,828 151 (396) (113)

02-03 3,878 396 (495) 1

3,501

7,112

5,470

3,780

3,380

(241) 6,871

3,878 5 (270) 75,265

(Rs in Lakhs )

05-06 3,311 621 (379) (52) (121)

02-03 71,652

(17) 5,453

(17) 3,763

Schedule of Fixed Assets for Financial Years 2002-03, 2003-04, 2004-05, 2005-06 and 2006-07 are as follows. Statement of Restated Fixed assets as at 31st March 2003 GROSS BLOCK Cost/valuation as at 1.4.2002 Rs. Goodwill Land Freehold Leasehold Buildings Plant & Machinery Moulds Furniture & Fittings Motor Vehicles Computers Assets given on lease: Plant & Machinery

10,000,000 300,953,748 170,959,917 1,466,121,770 4,250,288,470 637,518,073 100,612,749 24,073,496 104,481,814

Total

7,165,210,037

100,200,000

Additions Rs. 650,523 38,956,478 265,672,339 55,284,830 2,366,523 6,201,051 19,208,803 388,340,547

Deductions Rs. 8,741,910 13,235,584 2,804,901 1,904,629 369,430 27,056,455

DEPRECIATION Depreciation/ Less: on Sales/ Amortisation Adjustments Rs. Rs.

Cost/valuation as at 31.03.2003 Rs.

As at 1.4.2002 Rs.

10,000,000

8,000,000

2,000,000

301,604,271 170,959,917 1,505,078,248 4,507,218,899 679,567,318 100,174,371 28,369,918 123,321,187

5,042,743 178,525,984 1,606,772,756 300,293,767 43,497,827 10,747,617 60,027,813

5,561,957 39,172,614 374,355,311 66,158,894 7,086,608 4,196,878 22,487,014

4,836,599 9,463,547 2,439,370 1,202,313 369,430

As at 31.03.2003 Rs. 10,000,000 10,604,700 217,698,597 1,976,291,468 356,989,115 48,145,065 13,742,183 82,145,397

NET VALUE As at 31.03.2003 Rs. 301,604,271 160,355,217 1,287,379,650 2,530,927,432 322,578,203 52,029,305 14,627,735 41,175,790

100,200,000

59,646,526

6,012,000

5,920,000

59,738,526

40,461,474

7,526,494,128

2,272,555,033

527,031,276

24,231,259

2,775,355,051

4,751,139,078

Less : Revaluation Reserve

Net Block after adjustment of Revaluation Reserve Add: Capital Work-in-progress

Sub Total of Fixed Assets

191

672,416,375 4,078,722,703 39,600,558 4,118,323,261

Statement of Restated Fixed assets as at 31st March 2004 GROSS BLOCK

Goodwill Land Freehold Leasehold Buildings Plant & Machinery Moulds Furniture & Fittings Motor Vehicles Computers Assets given on lease: Plant & Machinery Total

Cost/valuation as at 1.4.2003 Rs. 10,000,000

Additions Rs. -

DEPRECIATION

Deductions Rs. -

Cost/valuation as at 31.03.2004 Rs. 10,000,000

As at 1.4.2003 Rs. 10,000,000

Depreciation/ Amortisation Rs. -

NET VALUE

Less: on Sales/ Adjustments Rs. -

As at 31.03.2004 Rs. 10,000,000

As at 31.03.2004 Rs. -

301,604,271 170,959,917 1,505,078,248 4,507,218,899 679,567,318 100,174,371 28,369,918 123,321,187

25,359,103 505,604,999 31,900,059 4,821,516 3,494,872 17,716,917

476,276 19,258,747 11,146,851 967,697 2,827,079 1,987,979

301,604,271 170,959,917 1,529,961,075 4,993,565,151 700,320,526 104,028,190 29,037,711 139,050,125

10,604,700 217,698,597 1,976,291,468 356,989,115 48,145,065 13,742,183 82,145,397

2,110,313 40,623,313 422,690,798 69,133,083 7,512,537 3,952,400 22,567,140

74,770 13,119,028 10,003,495 839,703 2,270,442 1,810,078

12,715,013 258,247,140 2,385,863,238 416,118,703 54,817,900 15,424,141 102,902,458

301,604,271 158,244,904 1,271,713,935 2,607,701,914 284,201,823 49,210,290 13,613,570 36,147,667

100,200,000 7,526,494,128

588,897,466

36,664,629

100,200,000 8,078,726,965

59,738,526 2,775,355,051

6,012,000 574,601,584

5,915,000 34,032,516

59,835,526 3,315,924,119

40,364,474 4,762,802,846

Less : Revaluation Reserve Net Block after adjustment of Revaluation Reserve Add: Capital Work-in-progress Sub Total of Fixed Assets

616,359,718 4,146,443,128 15,108,633 4,161,551,761

Statement of Restated Fixed assets as at 31st March 2005 GROSS BLOCK Cost/valuation as at 1.4.2004 Rs. Goodwill Land Freehold Leasehold Buildings Plant & Machinery Moulds Furniture & Fittings Motor Vehicles Computers Assets given on lease: Plant & Machinery Total

10,000,000

Additions Rs.

Deductions Rs.

-

Cost/valuation as at 31.03.2005 Rs.

-

As at 1.4.2004 Rs.

10,000,000

10,000,000

DEPRECIATION Depreciation/ Less: on Sales/ Amortisation Adjustments Rs. Rs. -

-

As at 31.03.2005 Rs. 10,000,000

NET VALUE As at 31.03.2005 Rs. -

301,604,271 170,959,917 1,529,961,075 4,993,565,151 700,320,526 104,028,190 29,037,711 139,050,125

76,379,437 536,641,503 71,385,713 3,101,188 3,500,407 8,823,706

443,455.00 23,367,590 47,237,822 8,144,058 3,228,726 3,571,411 2,500,370

301,160,816 170,959,917 1,582,972,921 5,482,968,832 763,562,181 103,900,652 28,966,707 145,373,461

12,715,013 258,247,140 2,385,863,238 416,118,703 54,817,900 15,424,141 102,902,458

2,110,314 42,886,641 456,699,024 70,781,709 8,716,377 3,585,641 12,333,945

3,346,710 39,241,686 7,357,371.00 2,603,570 2,998,774 2,368,210

14,825,327 297,787,072 2,803,320,575 479,543,042 60,930,707 16,011,008 112,868,194

301,160,816 156,134,590 1,285,185,850 2,679,648,257 284,019,140 42,969,945 12,955,699 32,505,267

100,200,000 8,078,726,965

699,831,953

100,200,000 188,693,431

8,589,865,488

59,835,526 3,315,924,119

6,191,474 603,305,125

66,027,000 123,943,321

3,795,285,923

4,794,579,564

Less : Revaluation Reserve

Net Block after adjustment of Revaluation Reserve Add: Capital Work-in-progress

Sub Total of Fixed Assets

559,669,547 4,234,910,017 37,888,420 4,272,798,437

Statement of Restated Fixed assets as at 31st March 2006 GROSS BLOCK

Goodwill Land Freehold Leasehold Buildings Plant & Machinery Moulds Furniture & Fittings Motor Vehicles Computers Assets given on lease: Plant & Machinery Total

Cost/valuation as at 1.4.2005 Rs. 10,000,000

Additions Rs. -

Deductions Rs. -

Cost/valuation as at 31.03.2006 Rs. 10,000,000

as at 1.4.2005 Rs. 10,000,000

DEPRECIATION Depreciation/ Less: on Sales/ Amortisation Adjustments Rs. Rs. -

As at as at 31.03.2006 Rs. 10,000,000

NET VALUE As at 31.03.2006 Rs. -

301,160,816 170,959,917 1,582,972,921 5,482,968,832 763,562,181 103,900,652 28,966,707 145,373,461

493,950.00 35,007,329 219,956,711 51,951,099 5,139,047 2,299,580 16,709,505

585,620.00 11,360,612 49,716,452 14,159,726 2,078,076 1,563,015 2,055,821

301,160,816 170,868,247 1,606,619,638 5,653,209,091 801,353,554 106,961,623 29,703,272 160,027,145

14,825,327 297,787,072 2,803,320,575 479,543,042 60,930,707 16,011,008 112,868,194

2,110,225 43,125,462 474,778,887 65,300,229 7,361,748 3,628,972 12,540,581

39,245.00 1,957,640 37,902,866 9,930,884.04 1,513,607 1,363,247 1,982,581

16,896,307 338,954,893 3,240,196,597 534,912,386 66,778,848 18,276,733 123,426,194

301,160,816 153,971,940 1,267,664,745 2,413,012,495 266,441,168 40,182,776 11,426,539 36,600,951

8,589,865,488

331,557,221

81,519,322

8,839,903,387

3,795,285,923

608,846,104

54,690,070

4,349,441,957

4,490,461,430

Less : Revaluation Reserve Net Block after adjustment of Revaluation Reserve Add: Capital Work-in-progress Sub Total of Fixed Assets

192

497,768,211 3,992,693,219 62,093,342 4,054,786,561

Statement of Restated Fixed assets as at 31st March 2007 GROSS BLOCK

Goodwill Land Freehold Leasehold Buildings Plant & Machinery Moulds Furniture & Fittings Motor Vehicles Computers Assets given on lease: Plant & Machinery Total

Cost/valuation as at 1.4.2006 Rs. 10,000,000

Additions Rs. -

Deductions Rs. -

Cost/valuation as at 31.03.2007 Rs. 10,000,000

DEPRECIATION Depreciation/ Less: on Sales/ Amortisation Adjustments Rs. Rs. -

as at 1.4.2006 Rs. 10,000,000

As at as at 31.03.2007 Rs. 10,000,000

NET VALUE As at 31.03.2007 Rs. -

301,160,816 170,868,247 1,606,619,638 5,653,209,091 801,353,554 106,961,623 29,703,272 160,027,145

3,138,900.00 69,325,952 643,844,311 63,588,708 8,595,092 5,620,591 9,803,563

62,960,284 79,974,177 13,079,428 3,553,272 3,818,295 9,158,103

304,299,716 170,868,247 1,612,985,306 6,217,079,225 851,862,835 112,003,443 31,505,567 160,672,605

16,896,307 338,954,893 3,240,196,597 534,912,386 66,778,848 18,276,733 123,426,194

2,103,756 42,650,510 465,465,576 64,452,044 7,287,729 3,630,548 16,307,144

8,699,074 69,659,827 11,932,539.76 2,695,109 3,164,137 8,720,910

19,000,063 372,906,329 3,636,002,346 587,431,890 71,371,467 18,743,144 131,012,428

304,299,716 151,868,184 1,240,078,977 2,581,076,879 264,430,944 40,631,976 12,762,424 29,660,177

8,839,903,387

803,917,118

172,543,560

9,471,276,944

4,349,441,957

601,897,308

104,871,598

4,846,467,667

4,624,809,276

Less : Revaluation Reserve Net Block after adjustment of Revaluation Reserve Add: Capital Work-in-progress Sub Total of Fixed Assets

424,839,236 4,199,970,040 310,097,157 4,510,067,197

Reasons for increase/ decrease in unsecured loans and investments in cash flow statements (a) Secured and Unsecured loans as appearing on Page no.135 of this Letter of Offer represents the value of outstanding balances of loans availed by the company at the year end as per the books of accounts of the company. The relevant components in the Cash Flow Statement include net increase in Other Borrowings, repayment of long-term borrowings and proceeds from long-term borrowings. These figures, taken together, match with the figures of Loan Funds (Secured plus Unsecured loans) in the Balance Sheet. A Statement explaining the movement of Loans as per Balance Sheet and as per the Cash Flow Statement is as follows: (Rs. in lakhs) PARTICULARS AS PER BALANCE SHEET

JUN 2007

Secured Loans Unsecured Loans SUB TOTAL Total Increase / ( decrease ) Less Foreign Exchange (Gain ) / Loss Net Cash Inflow on Secured/Unsecured Loans PARTICULARS AS PER CASH FLOW Net Increase in Other Borrowings Repayment of Long term Borrowings Proceeds from Long Term Borrowings Total Increase in Borrowings as per Cash Flow

06-07

26,589 6,004 32,593

27,787 4,683 32,470

05-06 15,627 13,358 28,985

04-05

03-04

02-03

11,672 17,347 29,019

8,444 11,453 19,897

25,484 2,682 28,166

123

3,485

(34)

9,122

(8,269)

(6,132)

(315) 438

(60) 3,545

563 (597)

(52) 9,174

(8,269)

16 (6,148)

JUN 2007

06-07

05-06

04-05

03-04

02-03

117 (69) 390 438

2,131 (9,978) 11,392 3,545

(11,178) (456) 11,037 (597)

11,114 (2,989) 1,049 9,174

(5,422) (12,166) 9,319 (8,269)

(3,580) (5,511) 2,943 (6,148)

Unrealised ( Gain) / Loss in Foreign Exchange For Secured and Unsecured Loans For Fixed assets For Foreign Creditors Total Unrealised (Gain)/Loss in Foreign Exchange as per Cash Flow Statement

(315) (1) (316)

(60) (20) (80)

563 (5) (393) 165

(52) (7) (111) (170)

(61) (637) (698)

(b) Investments as appearing in Page no. 145 of this Letter Letter of Offer represent Cost of Investments as appearing at the year end in the books of accounts of the company. Change in the cost of the investments as at the end of financial year vis-à-vis as at the end of the previous year end on account of the value of fresh Investments during the year and Cost of Investments Sold during the same period.

193

16 (5) 107 118

On the other hand the Cash Flow statement appearing on Page no. 120 of this Letter of Offer is the net of actual Cash Outflow on Purchase of fresh Investments and actual Cash Inflow on account of Sale of Investments during the same period. A Statement explaining the movement of Investments as per Balance Sheet and as per the Cash Flow Statement is as follows: INVESTMENTS - BALANCE SHEET vis -a-vis CASH FLOW JUN 2007

06-07

(Rs in Lakhs )

05-06

04-05

03-04

02-03 1,902

Opening Investments at Cost Add: Value of Fresh Investments Less: Cost of Investments Sold

37,801

27,853

11,162

1,987

1,902

3,750 -

10,050 (102)

25,769 (9,078)

9,175

85

Closing Value Of Investments at Cost

41,551

37,801

27,853

11,162

1,987

Cash Outflow for Fresh Investments Less: Proceeds from Sale of Investments

3,750 -

10,050 (500)

25,769 (9,078)

9,175 -

85

-

Net Cash Outflow on Investments

3,750

9,550

16,691

9,175

85

-

-

FACTORS THAT MAY AFFECT RESULTS OF OPERATIONS Unusual or infrequent events or transactions Company had invested Rs 175 lakhs in July 2007 to increase the shareholding in Caldyne Automatics Limited from 51% to 100% and a further investment of Rs 364 lakhs in August 2007 to acquire 26% shareholding in CEIL Motive Power Pty Limited, a new joint venture in Australia. Other than as described above and in this Letter of Offer, particularly in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, to the knowledge of the Company there are no events that may be described as unusual or infrequent events and transactions. Significant economic / regulatory changes that may affect income from operations Other than as described in this Letter of Offer, particularly in “Risk Factors” and “Business”, there are no significant economic / regulatory changes that materially affect or are likely to affect the income from continuing operations. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations Continuous increasing trend in Lead price, being prime raw material is a matter of concern. Other than as described above and in this Letter of Offer, there are no trends or uncertainties that have or had or are expected to have a material adverse impact on revenues or income of the Company from continuing operations. Future relationship between costs and income Other than as described in this Letter of Offer, there are no known factors which will have a material adverse impact on the operation of the Company and its finances. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products

194

1,902

Other than as described in this Letter of Offer, the Company has not launched any new product or has entered into business segments. New Products or business segments Other than as described in this Letter of Offer, the Company has not launched any new product or has entered into business segments. Seasonability of Business The Company does not manufacture products which are seasonal in nature. Dependence on single or few suppliers or customers The Company does not depend on a single or few suppliers or customers. The Company procures its materials from a vast number of suppliers and markets its products to a variety of customers. Competitive Conditions Other than as stated in the Letter of Offer, there are no other competitive conditions Working Results The unaudited working results of the Company for the period July to October 2007 are given as under : (Rs. in lakhs) a (i) Sales Turnover 92570 (ii) Other Income 54 b.

c

d.

Estimated Gross Profit / loss (excluding depreciation and taxes) (i) (ii)

14274

Provision for depreciation Provision for taxes

1956 4250

Estimated Net Profit / Loss

8068

195

OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS Except as described below, there is no outstanding litigation, suits or civil proceedings, or criminal proceedings, or prosecutions or tax liabilities, irrespective of whether specified in Schedule XIII of the Act, against the Company or its Directors, Subsidiaries or its Associates, and there are no defaults, nonpayment or overdues of statutory dues, overdues to banks / financial institutions, defaults against banks / financial institutions, defaults in dues payable to holders of any debentures, bonds, or fixed deposits, and arrears on preference shares issued by the Company, defaults in creation of full security as per terms of issue/ other liabilities, proceedings initiated for economic/ civil/ and other offences (including past cases where penalty may or may not have been awarded) that would result in a material adverse effect on its business. None of the aforesaid persons/ companies is on RBI’s list of wilful defaulters. No disciplinary action has been taken by the SEBI/ Stock exchanges against the Company, Directors of the Company and Promoter. A.

CASES FILED AGAINST THE COMPANY

I

Criminal Cases

1.

Case No: Regular Criminal Case No: 142 of 2000, Before the Ld. Chief Judicial Magistrate, Pune.

Maharashtra Pollution Control Board (MPCB) Vs 1. Chloride India Limited. Summons served on the Managing Director of the Company, 2. Mr A B Oke and 3. Capt P P Kand Facts : MPCB filed this Criminal Complaint u/s 41, 43, 44, 45A, read with Section 24, 25/26 and 33A of The Water (Prevention and Control of Pollution) Act, 1974. The cause of action is the alleged delay in upgradation of the Effluent Treatment Plant at the Chichwad Factory. Current Status : . The Company has filed a Criminal Revisional Application being Cr No: 4799 of 2003 for quashing and staying of the Proceedings in this matter and have obtained a Stay thereof on 20.10.2004. Matter is pending. Amount involved : Not quantifiable. 2.

Case No : C8905 of 2006, Before the Court of the Learned Chief Judicial Magistrate at Alipore

Ramesh Popat Vs Mr Satyabrata Ganguly (now ex-Chairman of Exide Industries Limited) Facts: One Ramesh Popat has filed a case in December 2006 alleging non-payment of dues of Rs. 6,42,56,746/- on account of alleged supply of garments in 1993. The cause of action for this claim is the alleged non-settlement of their invoices totaling Rs. 8,52,104/-. The claim against the Company is filed under Sections 406/420/120B of Indian Penal Code. The Ld. Magistrate had taken cognizance of the Complaint. Current Status : A Criminal Revision Application No: CRR No: 222 of 2007 before the Hon’ble High Court at Calcutta was filed and Stay of the Proceedings of this Criminal Complaint was obtained. Hearing fixed on 14.2.2008. Matter is pending. Amount involved: Not quantifiable. 3.

Case No. : C.P. Case No. 1388 of 2005, Before the Ld. Judicial Magistrate, Ranchi

Mithilesh Kumar Singh, Proprietor of Em Kay Enterprises of Ranchi, Jharkhand. Vs (i) D.K. Verma, (ii) Alok Kumar Ghai, (iii) F.J. Guzdar, All of Standard Batteries Limited (SBL) (iv) T.V. Ramanathan and (v) Barun Das, Both of Exide Industries Limited

196

Facts : This Criminal case was filed against the said persons for alleged offences under Section 403/406/420/468 and 120B of the Indian Penal Code. The cause of action is the alleged non-refund of security deposit of Rs. 10,00,000/- furnished to SBL as its Clearing and Forwarding Agent. Current Status : The Company has filed an SLP being no. 6500 of 2006 and have obtained Stay of the proceedings before the Ld. Judicial Magistrate, Ranchi on 3/1/2007. Matter is pending. Amount Involved : Not quantifiable 4. Case No.: Final report No. 144/2001 in FIR No. 344 of 2001, Before the Learned Court of the Chief Judicial Magistrate, Bikaner. Devendra Kumar, Proprietor of Kamal Batteries –vs- S.B. Ganguly (now ex-Chairnan of Exide Industries Ltd.. Devendra Beasley, Umesh Adlakha, Gunjan Johri (all officers of Exide Industries Ltd.) Fact : Devendra Kumar, Proprietor of Kamal Batteries, filed an FIR for alleged offences under Section 420/ 406 and 120B with the Kote Gate Police Station, Bikaner. The cause of action is the alleged nonsettlement of warranty claims regarding 53 batteries of different types. A Criminal case was registered by the Chief Judicial Magistrate, Bikaner. Current Status : The Company has filed an SLP being no. 857 of 2007 and have obtained Stay of the proceedings before the Ld. Chief Judicial Magistrate, Bikaner on 23/2/2007. Matter is pending. Amount Involved : Not quantifiable 5.

Case : M. F. 436/05, Before the Ld. Municipal Magistrate, Kolkata

State –vs- Mr Subir Roy, Assistant Manager-Projects, Exide Industries Limited Facts : This Complaint has been filed before the Learned. Municipal Magistrate, Kolkata against Mr Subir Roy, Assistant Manager-Projects of the Company under Section 401A of The Kolkata Municipal Corporation Act, 1980. The cause of action is the alleged unauthorised construction at 6A Hatibagan Road, Entally, Kolkata 700 014 in contravention of the above Act. Current Status : The Company, in the meantime, has filed an Application in its existingWrit Petition No. 1018 of 2006 (discussed hereinbelow under the heading “ B. CASES FILED BY THE COMPANY, II. Civil Cases filed by the Company, Serial No. 12) In the said Writ, on 22.11. 2006, Hon’ble Justice Jyotirmay Bhattacharya was pleased to direct that the Kolkata Municipal Corporation is restrained from demolishing any part of the premises without leave of the Court and the Company shall neither make any further construction nor carry out any repair work without leave of Court. Next date of hearing is 1/2/2008. Matter is pending. Amount involved : Not quantifiable. 6 & 7 Two Criminal proceedings were filed by the Inspector, Legal Metrology against the Company. The cause of action is the alleged non-printing of MRP (Maximum Retail Price) under the Standards of Weights & Measures (Enforcement) Act, 1985 and Standards of Weights & Measures (Packaged Commodities) Rules, 1977. Current Status: The Company has filed 2 Applications under Section 482 of the Criminal Procedure Code in the relevant High Courts and obtained Stay Orders on the above 2 proceedings. Matter is pending. Amount Involved : Not quantifiable. 8.

Case No. 6087 of 2007, Before the Chief Judicial Magistrate, Lucknow.

In the matter of State of U.P. –vs- Suneel Agarwal, Branch –in-Charge, Exide Industries Limited, Lucknow.

197

Facts : The relevant authority under the Payment of Bonus Act, 1965 filed a complaint under Sections 26 and 27 of the said Act and Rule 4 of the Rules framed thereunder for alleged violation of Section 28 and 29 of the said Act. Current Status : Matter has been fixed on 3.1.2008 for return of summons. Matter is pending. Amount Involved : Not Quantifiable. II.

Civil Court Matters

a. Civil Cases filed by erstwhile Dealers against the Company 1. Case : Summary Suit No. 85 of 2003, Before the Court of District Judge at Delhi In the matter of : M/s. JVC Industrial Corporation & Anr .. Plaintiffs -vs- Exide Industries Limited .. Defendant Facts : The Plaintiffs filed the Summary Suit alleging that the Defendant has wrongfully terminated their dealership arrangement and have indulged in unfair trade practices. The Plaintiffs have averred that the total amounts due and payable from the Defendant to the Plaintiffs is Rs. 4,63,940/- and have inter alia, prayed for decree for a sum of Rs. 4,63,940/- and interests thereon. Current Status : The Summary Suit is pending and the witnesses of the Defendant are being cross examined. Next date of hearing is fixed on 11.12.1007. Amount Involved : Rs. 4,63,940/2. A Suit, bearing No. 419 of 2003, has been filed against the Company in the Court of the Civil Judge (Senior Division) at Varanasi by Rupesh Kakkad, an erstwhile dealer, alleging unpaid warranty claims and claiming a sum of Rs 99,335/-. Matter is pending. Amount involved is Rs. 99,335/-. 3. A Suit, bearing No. 629 of 2004 has been filed against the Company in the Court of the Civil Judge (Junior Division) at Kanpur Nagar by B K Pandey alleging unpaid warranty claims for six batteries and claiming a sum of Rs 14,783/-. Matter is pending. Amount involved is Rs. 14,783/-. 4. A Suit, being No. 77 of 2005, has been filed by Siyaram Brothers (Rajasthan) Pvt Ltd in the Dist & Sessions Judge, Jaipur City against the Company claiming a sum of Rs 34,00,000/- allegedly on account of non-settlement of warranty claims. Next date of hearing is 14.12.2007. Matter is pending. Amount involved is Rs 34,00,000/-. 5. A Suit, bearing No. 408 of 1997, has been filed against the Company in the Calcutta High Court by Howrah Motor & Co Ltd claiming a sum of Rs 12,21,29,121/- for alleged agency commission and also for an injunction to handover title deeds pertaining to their property situate at 22 R N Mukherjee Road, Kolkata 700 001 and at Hill Cart Road, Siliguri. Matter is pending. Amount involved is Rs. 12,21,29,121/-.

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b. Civil Cases filed against the Company before the Monopolies and Restrictive Trade Practices Commission 1. Case Nos. RTPE No. 24 of 2003 re-registered as a UTP Enquiry, being UTPE No. 13 of 2007 and C.A. No. 54 of 2004 and an Interlocutory Application, before the Hon’ble MRTP Commission, New Delhi In the matter of: M/s. JVC Industrial Corporation (Complainant no. 1) &. Univolt Electro Devices Pvt. Ltd. (Complainant no. 2), collectively ‘Complainants’ -vs- Exide Industries Limited .. Respondent Facts: The Complainants have filed the above Applications inter alia, praying for directions to the Respondents to pay Rs. 6,40,00,000/- towards damages suffered by the Complainants due to alleged illegal termination of dealership. The Complainants have also filed a Summary Suit against the Company on the same cause of action praying for a decree of Rs 4,63,940/- (Rupees four lakhs sixty three thousand nine hundred and forty only). Current Status : The matter is pending before the Hon’ble MRTP Commission. Next date of hearing is 6.12.2007. Amount Involved: Rs. 6,40,00,000/2. U N Shukla, a consumer, filed a claim under Section 12-B of the Monopolies & Restrictive Trade Practices Act, 1969 in July 2007 claiming a sum of Rs. 29,332/- as alleged compensation in relation to his battery. The Office of the Director General of Investigation and Regsitration has vide its letter dated 8 June 2007 requested certain information from the Company which has been duly furnished wherein inter alia, the Company has refuted all allegations. The matter is pending. Amount Involved is Rs. 29,332/-. c. Other Civil Cases filed against the Company 1. Eviction Suit being No. RAE Suit no. 401/1135 of 1987, Martin & Harris Pvt. Ltd. –vs- Exide Industries Ltd and Civil Revision Application No. 203 of 2007, In the High Court of Judicature at Bombay, Civil Appellate Jurisdiction, Exide Industries Ltd. .. Petitioner –vs- Martin & Harris Pvt. Ltd. .. Respondents. Facts : One Martin & Harris Pvt. Ltd. filed an Eviction Suit being No. RAE Suit no. 401/1135 of 1987 against the Company seeking eviction of the Company from office premises at Fort, Mumbai (‘Suit Premises’). A Decree was passed in the said Suit on 7 September 2001 against which the Company filed an Appeal bearing No. 39 of 2002 in the Small Causes Court, Mumbai. The said Appeal was dismissed on 31 January 2007. Thereafter, the Company has filed a Revision Application in the Hon’ble High Court at Bombay. Current Status : The said Revision Application has been admitted and the said Decree has been stayed. Matter is pending. Amount Involved : Not quantifiable. 2. TER Suit No. 585/617 of 2001, Before the Court of Small Causes at Mumbai, Martin & Harris Pvt. Ltd. –vs- Chloride India Ltd. (now Exide Industries Ltd.) and Another (Defendants)

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Facts : Martin & Harris has filed another Eviction Suit being No. TER No. 585/617 of 2001 under the new Maharashtra Rent Control Act, 1999 in relation to the Suit Premises. The Defendants have filed their Written Statements. Current Status : Matter is pending. Amount involved : Not quantifiable. 3. A Suit, being No. 14 of 2002, has been filed by Fortune Multi Traders Pvt Ltd in the 4th Civil Judge (Senior Division), Alipore against the Company claiming a sum of Rs 4,00,482/-, allegedly on account of export quotas obtained for EIL. Next date of hearing is 25.1.2008. Matter is pending. Amount involved is Rs 4,00,482/-. 4. Bank of Baroda, Thane branch has filed this Suit against the Company before the Debt Recovery Tribunal – III, Mumbai being Original Application No. 286 of 2002 for recovery of Rs. 15,26,259/borrowed by Indian Lead Limited (ILL). With a view to enabling ILL to obtain funds to reclaim the scrap lead, the Company had accepted several bills of exchange drawn by ILL and discounted by the bank. These bills were paid and/or settled by the Company with ILL directly. As ILL had failed to repay, the bank has filed the present Recovery Application against us. Next date of hearing is 24.12.2007. Matter is pending. Amount involved is Rs. 15,26,259/-. 5. A Suit, being No. T S 92 of 1995, re-numbered as T S 27 of 2005, was filed by Mihir Kumar Chakraborty (Plaintiff) in the 9th Asst. District Judge at Alipore, against Chloride Industries Ltd (presently known as Exide Industries Limited) and others for inter alia, praying for a decree for Rs. 11,36,024/Current Status : The Suit is pending. Next date of hearing is 11.12.2007. Amount involved : Rs. 11,36,024/-. 6. A Suit, being No. 315 of 1996 was filed by Amrik Singh Chawla in the Court of the Civil Judge, Sr Division, Phagwara for recovery of Rs 1,73,160/- for alleged breach of contract with regard to his godown in Khajurla. By an order dated 29.9.2001, the suit was decreed for a sum of Rs 73,610/-. Appeal filed by the Company with the Addl Dist Judge-II, Kapurthala was dismissed. The Company has filed Second Appeal, Being RSA No. 1894 of 2004 in the High Court of Punjab & Haryana. Current Status : Decretal amount has been deposited for stay of the lower court decree. Matter is pending. Amount involved : Rs. 1,73,610/d. Employees’ Provident Fund Matter Appeal No. ATA 213(13) of 2005, Exide Industries Limited –vs- Regional Provident Fund Commissioner, In the Employees’ Provident Fund Appellate Tribunal, New Delhi, now at Employees’ Provident Fund Appellate Tribunal, Camp, Chennai, Facts : The Regional Provident Fund Commissioner, Chennai issued a Notice dated 6 January, 2005 under Section 7Q and 14B of the Employees Provident Funds & Miscellaneous Provisions Act, 1952 (the ‘Act’) for Rs. 14,57,244/- allegedly for delayed remittances by the Standard Batteries Limited (‘SBL’) in respect of its industrial undertaking namely, the Oldham Division which was taken over by the Company with effect from 16 February 1998. Thereafter, in the proceedings before the Regional Provident Fund Commissioner, it was held by the Ld. Regional Provident Fund Commissioner, SAO, Tambaram, Chennai, Tamil Nadu, that a sum of Rs. 14,57,244/- is payable by the Company towards penal damages and penal interests.

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The Company filed the above Appeal under Section 7(1) of the Act before the Employees’ Provident Fund Appellate Tribunal inter alia praying that the impugned Order dated 16 February 2005 and the Order dated 28 February 2005 be set aside/ quashed. The Ld. Employees Provident Funds, Appellate Tribunal, New Delhi has stayed the said Orders and such stay is still continuing. Current Status: The matter has now been transferred to the Chennai Camp of the Employees’ Provident Fund Appellate Tribunal at Chennai and is pending Next date of hearing is 11.1.2008. Amount Involved : Not Quantifiable e. Public Interest Litigation. A public interest litigation (Writ Petition under Article 226 of the Constitution of India) of the State of Jammu and Kashmir for the issuance of an appropriate writ, direction or order including in the nature of Public Interest, being No. 760/2002, has been filed by one Narinder Singh against the Company and others in the High Court of Jammu and Kashmir alleging violation of Environmental Statutes and inter alia, praying for direction on the Respondents to ensure that no activity of painting on the rocks or any other fixation of advertisement in the eco sensitive Jammu-Srinagar-Leh Highway is permitted and directing the Respondents nos 8 to 18 (we being no. 10) to pay exemplary damages for allegedly causing ecological/ geological damage in view of their advertisements on the rocks, amongst others. The Company has filed the Reply in the matter and the same is pending. Amount involved is not quantifiable. III

Labour Matters

1. Neelam, a contract worker, filed a Claim against the Company in the Labour Court, Jalandhar for reinstatement with back wages. The Labour Court, vide Award dated 27 April 2005, passed an Order to that effect. Thereafter, the Company had filed a Writ Petition being no. 18352 of 2005 against the above Award in the Hon’ble High Court at Punjab & Haryana and obtained a Stay thereof on 25 November 2005. The matter is pending. The amount involved is not quantifiable. 2. One S. Suresh, a contract worker, filed a Claim against the Company in the Labour Court, Madurai being I.D. No. 121 of 2005 under Section 2-A of the Industrial Disputes Act, 1947 for reinstatement with back wages. The Company has filed the Reply. Next date of hearing is 6.12.2007. The matter is pending. The amount involved is not quantifiable. 3. One Thiruvengadam, a trainee at the Hosur factory who failed to qualify appraisal test and was therefore not confirmed, filed a Claim against the Company in the Labour Court, Salem being I.D. No. 495 of 2000 for reinstatement with back wages. The Labour Court, Salem vide Award dated 09 September 2004 passed an Award for reinstatement without back wages. EIL filed a Writ Petition being W.P. No. 8405 of 2005 against the above Award in the Hon’ble High Court at Madras and obtained a Stay thereof on 14 March 2005. Thiruvengadam also filed a separate Writ Petition being W.P. No. 20416 of 2005 in the Hon’ble High Court at Madras for quashing of the above Award dated 14 March 2005 in as much as the same denies back wages. All the matters are pending. The amount involved is not quantifiable. 4. One Magdeline D Rozario, whose services were terminated for misconduct, filed a Petition being Case no. 18/ 2007 under Section 10 (1-B) of the I D Act, 1947 in the Labour Court, Calcutta for reinstatement with back wages. Next date of hearing is 7.12.2007. Matter is pending. The amount involved is not quantifiable.

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5. One Tuhin Brahma and eleven others, who were casual employees and whose services were dispensed with, filed a Petition being Case no. VIII – 23/2006 in the Industrial Tribunal, Calcutta claiming reinstatement with back wages. Next date of hearing is 11.1.2008. Matter is pending. The amount involved is not quantifiable. 6. One Bijan Kumar Mitra and one Nabarun Basu, whose services were terminated for misconduct, respectively filed 3 and 3 Claims, respectively, before the Referee under the West Bengal Shops & Establishments Act, 1963 alleging short payment of salary/subsistence allowance during their suspension period. Bijan Kumar Mitra and Nabarun Basu also filed Petitions under Section 10 (1-B) of the Industrial Disputes Act, 1947 being Case No. 4/2007 and Case no. 28/2007, respectively, before the Labour Court, Calcutta for reinstatement with back wages. Matters are pending. The amount involved is not quantifiable. 7. A workman, viz., Ratan Chandra Kundu, who superannuated from Shamnagar factory on 31.12.2002, has filed an alleged claim under Section 7(1) of the Payment Gratuity Act, 1972 before the Deputy Labour Commissioner, Barrackpore, West Bengal claiming a sum of Rs. 58,714.20 as gratuity till 31.12.2011. Mr Kundu was paid his gratuity upto his date of retirement. The alleged claim is for the period from the date of his retirement to 2011. Matter is pending. The amount involved is not quantifiable. 8. One Shahul Hameed, an erstwhile employee of the Standard Batteries Limited, filed a Claim Petition No. 687/98 [U/s 33-C (2) of the Industrial Disputes Act, 1947] against The Standard Batteries Ltd (SBL) and the Company for payment of a sum of Rs 3,03,237/- on account of Voluntary Retirement Scheme (‘VRS’). The Labour Court on 23.6.2004 allowed the claim and ordered SBL alone to pay the above sum as the impugned VRS was offered by SBL. No order has been passed on us. Current Status : The matter is now pending adjudication at the Hon’ble High Court at Madras. Amount involved is not quantifiable. 9. Shahul Hameed, an erstwhile employee of the Standard Batteries Limited, filed an Application for Gratuity, being No. 170/2000, with Asst. Commissioner of Labour – I, Chennai against The Standard Batteries Ltd (SBL) and us. By an Order dated 11.1.2001, the Authority ordered SBL to pay a sum of Rs 46,584/- to Shahul Hameed. SBL filed an Appeal, being No. 43/2001, impugning the above order and Shahul Hameed also filed an Appeal, being No. 26/2001, for interest on Rs 46,584/-. SBL also deposited a sum of Rs 46,584/- for preferring the Appeal. Both the Appeals were filed with the Joint Commissioner of Labour, Chennai. Current Status : The matter is now pending adjudication at the Hon’ble High Court at Madras. Amount involved is not quantifiable. 10. The Exide Industries Limited Oldham Division Employees Union of the Guindy factory raised a Conciliation with the Labour Officer – III on 22.2.2006 alleging loss of Rs 300/- per month as Productivity Bonus due to stoppage of production ostensibly for outsourcing and shifting of production. As the Conciliation failed, the appropriate Government referred the matter for adjudication to the Additional Labour Court, Chennai vide Memo dated 24.5.2007. The dispute before the Addl. Labour Court, Chennai, being I.D. no. 237/ 2007, is pending. Amount involved is not quantifiable.

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IV.

Consumer Forum Matters

There are certain matters which have been filed by the consumers of the products of the Company and the zone wise classification of the said pending cases is as follows: Zone

Number of Cases

I

West

11

2,45,797/-

II

East

13

9,86,400/-

III

North

66

13,47,032/-

IV

South

5

TOTAL

V.

Amount Involved (Rs.)

29,500/-

95

26,08,729/-

Tax Matters as on December 03, 2007.

a. SALES TAX: The Company is involved in 66 Sales Tax disputes for its Units under the applicable local Sales Tax and the Central Sale Tax for the periods 1994 to 2006, inter alia, pertaining to Assessment of Dues, disputes in octroi, rejection of Form C and local Form, late payment of tax, seizure case, scrap purchase, late filing of Return, sales enhancement and pending forms. Such disputes are pending, inter alia, before the Appellate Tribunal, Tax Tribunal, Assessment Authority and Civil Court at various stages. The aggregate disputed amount as on December 3, 2007 is Rs. 683.63 lakhs. b. EXCISE DUTY: The Company is involved in 31 Excise Duty disputes for its Units, inter alia, pertaining to disallowance of Cenvat, valuation dispute, wrong credit availment, erroneous refund etc. Such disputes are pending hearing and/or adjudication, inter alia, before the Joint Commissioner, CESTAT, Commissioner (Appeals), Deputy Commissioner, Addl. Commissioner. The aggregate disputed amount as on December 3, 2007 is Rs. 828.47 lakhs. c. INCOME TAX : The Company is involved in 5 Income Tax disputes for the Assessment Years 1997-98, 1998-99, 2000-01, 2003-04 and 2004-05, inter alia, due to refund due, re-assessment proceedings, improper adjustment of MAT credit and various disallowances, inter alia, before the Hon’ble High Court at Calcutta, the Assessment Authority and the Income Tax Appellate Tribunal. The aggregate disputed amount as on December 3, 2007 is Rs. 42.97 lakhs. Sales Tax, Excise Duty and Income Tax amounts shown under Contingent Liability include matters lying with Tribunal and higher Judicial Forum and hence not comparable with the figures shown above.

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B.

CASES FILED BY THE COMPANY

I.

Criminal Cases filed by the Company

1. We have filed a case under Section 144(2) Criminal Procedure Code, 1973 bearing no: M-820 of 2005 in the Court of the Executive Magistrate, Kolkata (Bankshall) against twelve causal workmen whose services were dispensed with but were creating disturbance and affray at the Registered Office. The restraint order obtained on 03.09.2005 is continuing. Next date of hearing is 7.12.2007. Matter is pending. 2. There are certain matters which have been filed by the Company against the Company’s trade debtors under Section 138 of the Negotiable Instruments Act, 1881 and the zone wise classification of the said pending cases is as follows: Zone

Number of Cases

I

West

12

II

East

0

0

III

North

34

1,34,39,207/-

IV

South

21

41,87,778/-

67

1,86,87,545/-

TOTAL

II.

Amount Involved (Rs/-) 10,60,560/-

Civil Cases filed by the Company

1. We have filed suits being Suit No. 812 of 1997 and Suit No. 1162 of 1997 against Exide Corporation, USA and Tudor Indian Limited, respectively, before the Delhi High Court claiming a sum of Rs. 20 lakhs as damages against each of them for infringing the trademarks EXIDE and TUDOR, of which, EIL is the registered owner. Stay has been granted by the Delhi High Court on 25.04.1997 restraining use of the trademarks EXIDE and TUDOR. Next date of hearing is 7.12.2007. Matter is pending. Amount involved is Rs. 20,00,000/2. We have filed a suit being Suit No. 1238 of 2006 against DB Power Electronics Private Limited and Chloride Group Plc, United Kingdom before the Delhi High Court, claiming a sum of Rs. 20,00,000/- as damages for infringing the trademark CHLORIDE, of which, the Company is the registered owner. Stay has been granted by the Delhi High Court on 01.07.2006 restraining use of the trademark CHLORIDE. Next date of hearing is 12.12.2007. Matter is pending. Amount involved is Rs. 20,00,000/-. 3. We have filed a suit being Civil Suit No. 392 of 1999 for Rs. 6,78,26,665/- against the Howrah Motor Co Limited before the Hon’ble High Court at Calcutta, on account of dues for goods supplied. In terms of the Court Order, Howrah Motor has kept as security with the High Court, the title deed of its property at Siliguri, which has been valued by the Court at Rs. 1,25,00,000/-. Matter is pending. Amount involved is Rs. 6,78,26,665/-. 4. We have filed 11 Writ Petitions in different High Courts and obtained Stay Orders against arbitrary seizure of batteries from dealer outlets by the Department of Legal Metrology/Weights & Measures alleging violation of the Standards of Weights & Measures Act, 1976 and the Standards of Weights & Measures (Packaged Commodity) Rules, 1977. The Company has also filed 2 Transfer Petitions in the Hon’ble Supreme Court of India under Section 25 of Civil Procedure Code, 1908 to mitigate multiplicity of proceedings in different High Courts. The Hon’ble Supreme Court of India has transferred diverse Writ

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Petitions pending in different High Courts to the Delhi High Court for hearing. All the matters are pending and the amount involved is not quantifiable. 5. We have filed a suit being No. 195 of 2000 against Indian Lead Limited (ILL) before the Alipore Court, Kolkata claiming a sum of Rs. 3,65,88,745/- for failing to return recovered antimonial lead from scrap batteries sent by EIL. EIL’s claim, subsequently, stood reduced to Rs. 1,66,00,000/- after adjustments. The proceedings were stayed due to ILL’s reference to Board for Industrial and Financial Reconstruction (BIFR) on 01.04.2002. BIFR, vide its order dated 23.04.2007, declared the scheme for rehabilitation as failed and allowed the Company to proceed with this suit. However, ILL moved the Appellate Authority for Industrial and Financial Reconstruction and obtained a Stay of the BIFR’s order on 29.05.2007. The Suit no. 195 of 2000 is fixed for hearing on 4.1.2008. Matter is pending. Amount involved is Rs. 1,66,00,000/-. 6. We have filed a suit being Civil Suit No. 172 of 2005 against Arun Das Ghosh, proprietor of Digital Data in the High Court at Calcutta claiming a sum of Rs. 25.72 lakhs on account of goods supplied. On 25.07.2007, the High Court passed an Order, in terms of which, all immovable properties and bank accounts of Digital Data and its associate, Hita Technologies Pvt. Ltd. have been attached. The matter is pending. Amount involved is Rs. 25.72 lakhs. 7. We have filed a suit being Civil Suit No. 294 of 2005 against Shree Ganesh Industries and its Partners in the Hon’ble High Court at Calcutta claiming a sum of Rs. 1.13 crores for failing to return recovered antimonial lead. The matter is pending. Amount involved is Rs. 1.13 crores. 8. We have filed a suit being Money Suit No. 43 of 2003 against Spirax Marshall Ltd. and Patel Roadways Ltd. in the City Civil Court at Calcutta for Rs. 3,27,685/- for failing to deliver machinery despite receiving the purchase consideration. Next date of hearing is 18.12.2007. The matter is pending. Amount involved is Rs. 3,27,685/-. 9. We have filed a suit being Money Suit No. 29 of 2003 against Swaraj Mitra, proprietor of Friends Industries in the Sealdah Court for Rs. 7,27,488/- for failing to return lead sheet and lead strips, duly converted. Matter is pending. Amount involved is Rs. 7,27,488/-. 10. We have filed a suit being Money Suit No. 53 of 2003 against Surekha Rajgaria, proprietress of Ganapati Pigments in the City Civil Court, Calcutta for Rs. 4,16,545/- for failing to return lead, duly converted. Next date of hearing is 20.12.2007. Matter is pending. Amount involved is Rs. 4,16,545/-. 11. We have filed a suit being Money Suit No. 48 of 1994 against Falta Knitwear Industries Limited in the Alipore Court claiming a sum of Rs. 29,83,563/- towards damages for not fulfilling export orders. Next date of hearing is 6.12.2007. Matter is pending. Amount involved is Rs. 29,83,563/-. 12. We have filed a Writ, being W.P no. 1018 of 2006, against the Kolkata Municipal Corporation and Others impugning the Notice dated 18 October 2005 issued by the Kolkata Municipal Corporation under Section 401 of the Kolkata Municipal Corporation Act, 1980 alleging unauthorized construction in one of premises occupied by the Company at Kolkata. On or about 22 November 2006, Hon’ble Justice Jyotirmay Bhattacharya was pleased to direct that the Kolkata Municipal Corporation is restrained from demolishing any part of the premises without leave of the Court and the Company shall also neither make any further construction nor carry out any repair work without leave of Court. Matter is pending. Amount involved is not quantifiable.

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13. We have filed a Writ Petition being No. 13832 of 2007 in the High Court of Madras against the Corporation of Chennai and the Assistant Revenue Officer against the Final Assessment Notice dated 7.12.2006 for a sum of Rs 38,31,222/- with regard to the Guindy factory. In terms of the order passed by the High Court on 24.4.2007, a sum of Rs 8,28,498/- has been deposited with the Corporation and the matter has been stayed. The matter would be heard subsequently. The matter is pending and the amount involved is not quantifiable. The Company has provided a sum of Rs 20,25,694/- in the Accounts. 14. There are certain Money and Summary Suits which have been filed by the Company against its trade debtors under and the zone wise classification of the said pending cases is as follows: Zone

Number of Cases

I

West

7

15,45,289/-

II

East

8

37,61,873/-

III

North

17

61,21,340/-

IV

South

9

43,11,933/-

41

1,57,40,435/- *

TOTAL

Amount Involved

* Fully provided for in the Accounts III.

Labour Cases

1. Our Company filed a suit being No. 43 of 2000 against Arindam Majumdar in the Alipore Court, Kolkata claiming a sum of Rs. 6.85 lakhs for breaching the Indemnity Bond executed in favour of the Company. Matter is pending. Amount Involved : Rs. 6.85 lakhs. 2. Our Company has commenced disciplinary proceedings by issuing a Show Cause Notice and Charge Sheet dated 6.6.2007 to Mr Hukam Singh Rawat, Employee Code No. 1105, located at the Jhandewalan Service Station, Delhi for falsifying warranty claims in collusion with a dealer to cause wrongful losses. A domestic enquiry has been ordered. The same is underway. Matter is pending. Amount Involved : Not quantifiable. IV.

Consumer Case filed by the Company

1. We have filed a Complaint, being No. 66 of 2001, in the District Consumer Disputes Redressal Forum, Ahmednagar under Section 12 of the Consumer Protection Act, 1986 against Bank of Maharashtra, Ahmednagar branch (Bank) for illegally and arbitrarily debiting a sum of Rs 1,25,803/- as interest from the Account of EIL with the bank. The Forum on 15.9.2001 held that there has been deficiency of service and the Bank has been ordered to refund the above sum with interest at the rate of 24% per annum. Current Status : Matter is pending before the newly constituted Bench of the Maharashtra State Commission at Aurangabad. Amount involved is Rs. 1,25,803/-.

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V.

Intellectual Property Matters

Our Company has filed 24 Opposition Proceedings against Applications filed by diverse parties for trademarks, which are deceptively similar to the registered trademarks of the Company. CASES INVOLVING THE COMPANY’S DIRECTOR a) Maharashtra Pollution Conmtrol Board (MPCB) filed a Criminal Complaint u/s 41, 43, 44, 45A, read with Section 24, 25/26 and 33A of The Water (Prevention and Control of Pollution) Act, 1974 against the Managing Director and others. The cause of action is the alleged delay in upgradation of the Effluent Treatment Plant at the Chichwad Factory. The above matter has been discussed in the section on litigations against the Company. b) Em Kay Enterprises of Ranchi, Jharkhand filed a Criminal case against Mr T V Ramanathan and others for alleged offences under Section 403/406/420/468 and 120B of the Indian Penal Code. The cause of action is the alleged non-refund of security deposit of Rs. 10,00,000/- furnished by them to Standard Batteries Limited as its Clearing and Forwarding Agent. The above matter has been discussed in the section on litigations against the Company. No other Director of the Company is involved in any civil proceedings/criminal prosecution and/or has been declared as a ‘Wilful Defaulter’ by RBI. D. DETAILS OF PAST PENALTIES IMPOSED ON THE COMPANY OR ANY OF THE DIRECTORS OF THE COMPANY. There have been no instances in the past of any significant penalties that has been imposed on the Company or the Company’s Directors by any statutory authorities. E. CASES FILED BY OR AGAINST THE PROMOTER OF THE COMPANY There are no litigation against the Promoter of the Company. F. CASES FILED BY OR AGAINST VENTURES PROMOTED BY THE PROMOTER OF THE COMPANY As on date there is no venture, which has been promoted by the Promoter of the Company. G. CASES FILED BY OR AGAINST BY COMPANY’S SUBSIDIARIES 1. Caldyne Automatics Limited - Subsidiary i). Claim against Caldyne Automatics Limited – Subsidiary A commercial dispute of Rs. 50,00,000/- between Caldyne Automatics Limited and Infinity E V Motors Private Limited is pending in arbitration proceedings before the Andhra Pradesh Industry Facilitation Council. Matter is pending. Amount involved is Rs. 50,00,000/-.

207

2.. Matters filed by Caldyne Automatics Limited a) Civil : A Suit, being No. 91 of 2005, in the Court of Civil Judge, Sr Division, Barasat against Raj Kumar Jaiswal, Proprietor of M/s Jaiswal Battery Service for recovery of a sum of Rs 16,58,000/-. The suit is pending. Amount involved is Rs. 16,58,000/-. b) Criminal : Two criminal complaints under Section 138 of the Negotiable Instruments Act, 1881 have been filed against Raj Kumar Jaiswal, Proprietor of M/s Jaiswal Battery Service for bouncing of cheques aggregating Rs 16,53,000/-. Amount involved is Rs. 16,53,000/-. It is to be noted that amounts mentioned hereinabove may vary depending on the final adjudication /Judgment of the relevant forums/ Courts. H. MATERIAL DEVELOPMENTS Subsequent to the Balance Sheet date, i.e., 31st March 2007, the material developments are : 1.

The Company in July 2007 has acquired the remaining 49% shareholding in Caldyne Automatics Limited (Caldyne) consequent to which Caldyne has become a 100% subsidiary of the Company.

2.

The Company has signed on 24th July, 2007 a Joint Venture Agreement with Mr. Colm Neasy, Mr. Chris Connell and Ceil Motive Power Pty Limited, Australia under which the Company has invested Aus $ 1.04 million (INR 364 lakhs), partly for acquiring 26% shareholding and partly as a long term loan with a repayment period of ten years and a moratorium for an initial three year period.

3.

The Company has signed a Joint Research Agreement with Atraverda Limited, UK a research organization to jointly develop bi-polar technology. This joint research will enable the Company to develop bi-polar Lead acid batteries for a range of power storage applications.

4.

The Company has made an additional investment in September 2007 of Rs 1250 lakhs for subscribing to the Rights Issue of ING Vysya Life Insurance Company Limited and to maintain its shareholding at 50%.

5.

The Company is in the advanced stage of acquiring a smelter locally to augment the local availability of Lead and Lead Alloys so as to reduce the dependence on the import, which is susceptible to high volatility in prices in the international market. The Board at its meeting held on 4.10.2007 has already authorized the Management to take necessary steps in this regard. Pursuant to such decision, the Company has acquired 100% shares of Tandon Metals Pvt. Ltd. vide Share Purchase Agreement dated October 31, 2007, by which the said Tandon Metals Pvt. Ltd. has become a wholly owned subsidiary of the Company. Valuation of the acquired company was done by an independent valuer M/s Natverlal Vepari & Co., Chartered Accountants, Mumbai vide their report dated 24/10/2007.

Apart from the above, there have been no material developments, since the date of the last balance sheet otherwise than as disclosed in the section 'Management's Discussion and Analysis Of Financial Condition And Results Of Operations' on page 186.

208

GOVERNMENT APPROVALS

Except for pending approvals mentioned under this section and under the section titled “Risk Factors” beginning on page vii of the Letter of Offer, the Company has received the necessary consents, licenses, permissions and approvals from the Government / RBI and various government agencies for the present business. The Company can undertake all the present activities and activities as proposed in the section titled ‘Objects of the Issue” beginning on page 25 of the Letter of Offer. The Company has received the following significant Government approvals, licenses and permissions: Incorporation 1.

Certificate of Incorporation bearing No. 21-14919 dated 31st January, 1947 from the Registrar of Companies, Calcutta.

2.

The Corporate Identification Number of the Company is U31402WB1970PLC014919.

3.

The name of the Company have been changed from time to time as detailed below : 1.

Associated Battery Makers (Eastern) Limited to Chloride India Limited

Fresh Certificate of Incorporation dated 2nd August, 1972

2.

Chloride India Limited Industries Limited

Chloride

Fresh Certificate of Incorporation dated 12th October, 1988

3.

Chloride Industries Limited to Exide Industries Limited

Fresh Certificate of Incorporation dated 25th August, 1995

to

4. The Permanent Account Number of the Company is AAACE6641E. I. APPROVALS FOR THE ISSUE 1. The Board of Directors has, pursuant to a resolution passed at its meeting held on August 28, 2007 authorised the Issue. 2. Approval from the Bombay Stock Exchange Limited dated 16th October 2007 3. Approval from the National Stock Exchange of India Limited dated 17th October 2007 4. Approval from the Calcutta Stock Exchange Association Limited dated 16th October 2007

209

II. APPROVALS FOR THE BUSINESS OF THE COMPANY

1. Approvals/Licences obtained for the Company’s Haldia Unit

Subject Sl Acts/ Rules/ Matter No Notification HALDIA, WEST BENGAL Factory 1 Factories Act 1948

2

Labour

1

2

Contract Labour

1

Municipal/ Gram Panchayat

1

Employee’s Provident Fund & Miscellaneous Provisions Act,1952 Employees State Insurance Act, 1948 Contract Labour (Abolition & Regulation) Act, 1970 West Bengal Municipal Act, 1993

2

Environment

1

Water (Prevention & Control of Pollution) Act, 1974 & Air (Prevention &

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Licence to work a factory issued to M/s Exide Limited, (Export Factory), Durgachak Haldia, Distt.-Midnipore (East) Licence to work a factory issued to M/s Exide Limited, (Haldia Domestic), Durgachak Haldia, Distt.-Midnipore (East) Issue of separate code no for separate compliance in respect of M/s Exide Limited,, Durgachak Haldia, Distt.-Midnapore (East).

Chief Inspector West Bengal

of

Chief Inspector West Bengal

of

Certificate of registration under the Employees State Insurance Act, 1948 Certificate of registration under the Act issued to M/s Exide Limited,, Durgachak Haldia, Distt.-Midnipore (East) for maximum 1000 contract labourers. Licence for the use of part of Holding for the purpose of manufacture of Lead Acid Storage Battery to M/s Exide Industries Limited at Durgachak Haldia, Distt.-Midnipore (East). Certificate of Enlistment to M/s Exide Industries Limited at Durgachak Haldia, Distt.Midnipore (East). Consent to Operate to M/s Exide Industries Limited at Durgachak Haldia, Distt.-Midnipore (East) U/S- 25& 26 of the Water (Prevention & Control of Pollution) Act, 1974 and U/S 21 of the Air (Prevention & Control of Pollution)

Licence/ consent / approval/ Regn. Number

Date of Issue

Factories

L.no-10384, Regist. No. -3MD/x/81

25/03/81 19/12/06

renewal-

Valid for the Year 2007

Factories

L.no-10079, Regist. No. -4MD/x/80

14/05/80 19/12/2006

renewal:-

Valid for the Year 2007

Office of the Regional Provident Fund Commissioner West Bengal.

WB/CA/41266

03/08/2004

NA

Deputy Regional Director Employees’ State Insurance Corporation .Kolkata Office of Registering Officer, Basudebpur, Khanjanchak, Purba, Medinipur

41-5891-62

22/02/1990

NA

143/CON/R/2005

30/06/78

2007

Haldia Municipality

L.No-486 Reg. No.122

7/05/07

31/03/2008

Haldia Municipality

Certificate No.175

7/05/07

31/03/2008

West Bengal Pollution Control Board

CO 26193 validity period extended by Memo No. 3178/1A-172/2000 (Part III) P&P Dt. 20/02/2007

19/01/2006

Applied for renewal

210

No.-594

Reg.

Valid Upto

Subject Matter

Sl No

2

Indian Explosives Laws

1

Acts/ Rules/ Notification Control of Pollution) Act, 1981. Hazardous Waste (Management & Handling) Rules, 1989. Indian Explosives Act, 1884

2

Description of Licence/ consent/ Approval/ Regn. Act, 1981 to continue operation of the industrial unit and to discharge liquid effluents and to emit gaseous effluents. Grant of Authorization for operating a facility for collection, reception, treatment, storage, transport and disposal and sale of hazardous wastes to M/s Exide Industries Limited at Durgachak Haldia, Distt.-Midnipore (East) Licence to Store Compressed gas (LPG) in pressure vessel or vessels to Exide Industries Limited, Durgachak Haldia, Distt.-Midnapore (East). Renewal of Licence-storage of LPG in pressure vessels in the bottling plant at Durgachak Haldia, Distt.-Midnapore (East).

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

West Bengal Pollution Control Board

Memo No. 191/2s (HW)1079/2001

03/03/2006

5 years30/11/2010

Chief Controller of Explosives, East Circle Office, Kolkata

S/HO/WB/03/3(S1795)

12/04/07

31/03/2008

Deputy Chief Controller of Explosives for Joint Chief Controller of Explosives East Circle Office, Kolkata

LIC. No.:S/HO/WB/03/99(S2193)

11/04/07

31/03/2008

Special Officer & Deputy Secretary, Local Govt. & Urban Development Deptt., Govt of W.B. Registering Authority, Midnapore Division, Central Excise Commercial Tax Officer, Bhowanipur Charge

Med-E/ N /324/91

Fire Services Laws

1

West Bengal Fire Services Act, 1950

Licence to use the building or premises being No. 91, Durgachak Haldia, Distt.-Midnapore (East) as a workshop.

Tax

1

Central Excise

2

Central Sales Tax

Certificate of registration for manufacture of excisable goods under the Central Excise Rules, 2002 Certificate of Registration under Central Sales Tax (Registration and Turnover) Rules, 1957 granted to Exide Industries Limited having its principal place of business at 59E, Chowringhee Road, Calcutta- 700 020 and has been registered as a dealer under Central Sales Tax Act, 1956 for its factory situated at Durgachak, Haldia.

3

VAT

Certificate of Registration under West Bengal Value Added Tax Rules , 2005 granted to Exide Industries Limited having its principal place of business at 59E, Chowringhee Road, Kolkata- 700020 in West Bengal and has been registered as a dealer under West Bengal Value

11/06/07

6/R-II/MDP/CIL/92

30/06/1992

1288 (AW) C (Central)

Date of 29/05/1957

19/06/2008

NA

Issue-

NA

Valid From- 01/07/1957

Deputy Commissioner, Tax, Corporate Division

211

Sales

19200141007

13/12/2006 Valid From- 01/04/2005

NA

Subject Matter

Sl No

Acts/ Rules/ Notification

4

Professional Tax

Description of Licence/ consent/ Approval/ Regn. Added Tax Act, 2003. Certificate of registration under West Bengal State Tax on Profession, Trades, Callings & Employment Act, 1974

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Professional Tax Officer West Bengal South Unit –2 Midnapore.

PRWM 2445344

April,1980.

NA

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Licence to work a factory issue to M/s Exide Industries Limited at 91, New Chord Road, Shyamnagar, Authpur, 24 Paraganas (N) pin743128 Issue of separate/Sub Code no., for separate compliance in respect of M/s Exide Industries Ltd. at 91, New Chord Road, Shyamnagar, Authpur, 24 Paraganas (N) pin-743128

Chief Inspector West Bengal

L.No. TP/X

13/08/45 05/01/07

Assistant Provident Fund Commissioner (Circle-I), Regional Office-Kolkata, west Bengal

R-NE/WB/CA/41265

30/07/2004

NA

Licence to M/s Chloride India Limited, 91, New Chord Road, Shyamnagar, Authpur743128 to use an Insurance Franking Machine to be supplied by M/s Republic Engineering Corporation Ltd., for the purpose of paying contribution. Certificate of registration U/S 7 of the Act to M/s Exide Industries Limited, 91, New Chord Road, Shyamnagar, Authpur, 24 paraganas (N) pin-743128 for maximum 400 contract labourers. Licence granted to M/s Exide Industries Limited, 91, New Chord Road, Shyamnagar, Authpur, 24 paraganas (N) pin-743128., Certificate of Enlistment under West Bengal Municipal Act, 1993 granted to Exide Industries Limited at 91, New Chord Road, Athpur.

Regional Director, Employees’ State Insurance Corporation

L.No.780 Code No. 41-375664

6/04/76

NA

Government of West Bengal, Office of Registering Officer, Barrackpore

BKP/COM/R/2/74

11/12/74

NA

Collector, Fire Licence & Services Department, Govt. of West Bengal Executive Officer, Office of the Municicipal Councillors, Bhatpara, North 24-Parganas

(WBM/1-1633) Bhat/45/18/76 of 2007-2008

17/04/2007

16/04/20 08

6784

24/04/2007

31/03/20 08

2. Approvals/Licences obtained for the Company’s Shamnagar Unit Subject Matter

Sl Acts/ Rules/ No Notification SHAMNAGAR, WEST BENGAL Factory 1 Factories Act 1948

Labour

1

2

Employee’s Provident Fund & Miscellaneous Provisions Act,1952 Employees State Insurance Act, 1948

Contract Labour

1

Contract Labour (Abolition & Regulation) Act, 1970

Fire Laws

Services

1

West Bengal Fire Services Act, 1950

Municipal/ Gram Panchayat

1

West Bengal Municipal Act, 1993

212

of

Factories

2252,Reg.No.-600-

renewal-

Valid for Year 2007

Subject Matter

Sl No 1

Acts/ Rules/ Notification Water (Prevention & Control of Pollution) Act, 1974 & Air (Prevention & Control of Pollution) Act, 1981.

Description of Licence/ consent/ Approval/ Regn. Consent to Operate to M/s Exide Industries Limited at 91, New Chord Road, Shyamnagar, Authpur, 24 Paraganas (N) pin-743128, U/S25& 26 of the Water (Prevention & Control of Pollution) Act, 1974 and U/S 21 of the Air (Prevention & Control of Pollution) Act, 1981 to continue operation of the industrial unit and to discharge liquid effluents and to emit gaseous effluents.

Issuing Authority

2

Hazardous Waste (Management & Handling) Rules, 1989.

Indian Explosives Laws

1

Indian Explosives Act, 1884

Authorization for operating a facility for collection, reception, treatment, storage, transport and disposal and sale of hazardous wastes granted to M/s Exide Industries Limited at 91, New Chord Road, Shyamnagar, Authpur, 24 Paraganas (N) pin-743128 Renewal of Licence-storage of LPG in pressure vessels in the bottling plant at Vill ShamnagarDistrict: North24-Parganas, West Bengal.

Fire Laws

1

West Bengal Fire Services Act, 1950

Licence to use the building or premises being No. 91, New Chord Road, Shyamnagar, Authpur as a warehouse.

1

Central Excise

2

Central Sales Tax

Certificate of registration for manufacture of excisable goods under the Central Excise Rules, 2002 Certificate of Registration under Central Sales Tax (Registration and Turnover) Rules, 1957 granted to Exide Industries Limited having its principal place of business at 59E, Chowringhee Road, Calcutta- 700 020 and has been registered as a dealer under Central Sales Tax Act, 1956 for its factory situated at 91, New Chord Road, Athpur, Shamnagar, 24 Parganas (N), West Bengal.

Environment

Tax

Services

3

VAT

Certificate of Registration under West Bengal Value Added Tax Rules, 2005 granted to Exide

Licence/ consent / approval/ Regn. Number C032095

Date of Issue

West Bengal Pollution Control Board

Memo no.:214/2S 1084/2001 (Pt-I)

20/03/2006

28/02/20 11

Deputy Chief Controller of Explosives for Joint Chief Controller of Explosives East Circle Office, Kolkata Special Officer & Deputy Secretary, Local Govt. & Urban Development Deptt., Govt of W.B. Deputy Commissioner/Assistant Commissioner of Central Excise, Barrackpore Division Assistant Commissioner, Commercial Taxes, Corporate Division, West Bengal

LIC. No.:S/HO/WB/03/19(S1829)

9/02/07

31/03/20 08

Bhat/45/18/76

Issued on 23/3/2007 and valid from 17/04/07

16/04/08

AAACE6641EXM006

27/07/2003

NA

1288 (AW) C (Central)

Date of 29/05/1957

West Bengal Pollution Control Board

(HW)-

Valid Upto 31/12/20 07

27/10/2006

Issue-

NA

Valid From- 01/07/1957

Deputy Commissioner, Tax, Corporate Division

213

Sales

19200141007

Issued on 01/04/2005 and valid from

NA

Subject Matter

Sl No

4

Acts/ Rules/ Notification

Professional Tax

Description of Licence/ consent/ Approval/ Regn. Industries Limited as a dealer for its factory situated at 91, New Chord Road, Athpur, Shamnagar, 24 Parganas (N), West Bengal.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Certificate of Registration under West Bengal State Tax on Professions, Trades, Callings and Employments Act, 1979 granted to Exide Industries Limited located at 91, New Chord Road, Post Office, Athpur, 24 Parganas (North)

Professional Tax Officer Central Unit

RWC 2090716

19-08-1998

NA

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

7945 or CH 1187

11/2004 renewed

31/12/2007

01/04/2005

3. Approvals/Licences obtained for the Company’s Guindy Unit Subject Matter

Sl No Guindy, Tamil Nadu Factory 1

Labour

Acts/ Rules/ Notification

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Factories 1948

Licence granted to Exide Industries Limited (Oldham Division) 21/22, Alandur Road, Guindy Cancellation of exemption and issuance of Code No. granted to M/s Standard Batteries Limited 21/22, Alandur Road, Guindy Licence granted to Exide Industries Limited (Oldham Division) 21/22, Alandur Road, Guindy.

Deputy Chief Factories

Office of Regional Provident Fund Commissioner, Tamilnadu & Pondicherry State Director Employee, Employee State Insurance Corporation

C3/TN/MS/290/Exm/Regl/96 code no-TN/290

13/08/96

NA

51-3300-62

NOT KNOWN

NA

Deputy Chief Factories

R.C No. 1/2007

29/08/2007

NA

1/1203/AI/07

22/10/2007

21/10/2008

S140010556

27/02/2007

31.03.2008

Act,

1

E.P.F & M.P Act 1952

2

Employees Insurance 1948

Contract Labour

1

Contract Labour (Abolition & Regulation) Act, 1970

Fire Laws

Services

1

Tamil Nadu Fire Service Act, 1985

Certificate of Registration under the Contract Labour (Abolition & Regulation) Act, 1970 granted to Exide Industries Limited located at Oldham Division, 21/22 Alandur Road, Guindy, Chennai-32 for two contractors employing 36 workers for different nature of works mentioned therein. Fire Services Licence for Exide Industries Limited 21/22 Alandur Road, Guindy Chennai

Municipal/Gram

1

Chennai

Trade Licence to Standard Batteries Limited

State Act,

City

Inspector

Inspector

of

of

Divisional Officer, Fire & Rescue Services Department, Chennai Licence Inspector

214

Subject Matter

Sl No

Panchayat

Acts/ Rules/ Notification Municipal Corporation Act, 1919 Endorsement in terms of Press Note (22) no. 10/104/85-L.P. dated 16.8.85.

Description of Licence/ consent/ Approval/ Regn. for 21/22 Alandur Road, Guindy Chennai

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Industrial Licences for M/s Standard Batteries Limited for the manufacture of various type of storage battery in Bombay and Madras

Department of Industrial Development Secretariat for Industrial Approvals Special Cases Section.

BOMBAY (i) L/5(10) 13/ LEEI/70 DT. 13.08.70 (ii) L/29/1/53/ L/5 (10)/1 DT. 31.3.53 (iii). L/5 (11)/ 24/ 72-LEE DT. 28.01.72 (iv). CIL: 296 (75) DT. 11.08.73 (v). L/5 (11) 21/ LEE/71 DT. 1.12.71 MADRAS (i). L/19/69-LEE DT. 5.11.73 (ii). CIL NO. 03 (76) DT. 21.02.76 (iii). Endt. No.2/19/69-E1 DT. 25.11.74 2462/2004 HWM/005191/2004/CHN

25/ 09/ 1989

NA

7/05/2005

Five years from Date of Issue.

Renewal Consent Order No4470- Boards Proceedings No.TNPCBD/HUM/T-14/F133/CHN/2006

04/04/2006

31/03/07

Renewal Consent Order No. 6899 Boards Proceedings No.TNPCBD/HUM/T-14/F133/CHN/2006

04/04/2006

Applied For Renewal on 19/02/2007 31/03/07

CM/L-0416031

06/02/2007

Applied Forn Renewal on 19/02/2007 31/01/2008

Industrial

1

Environment

1

Environment Protection Act, 1986 and Hazardous Wastes (Management & Handling) Rules, 1989

Authorization for operating a facility for collection/ storage/and disposal of Hazardous Waste to Exide Industries Limited, 21/22 Alandur Road (Old Ham Division) R.S No. 120/2, Guindy

Tamil Nadu Pollution Control Board

2

Air (Prevention & Control of Pollution) Act, 1961

Consent granted under Section 21 to the Managing Director Exide Industries Limited, 21/22 Alandur Road (Old Ham Division) R.S No. 120/2, Guindy authorizing him to operate his industrial plant in the Air Pollution Control area.

Tamilnadu Board

Water (Prevention & Control of Pollution) Act, 1974

Consent granted under Section 25 to the Managing Director Exide Industries Limited, 21/22 Alandur Road (Old Ham Division) R.S No. 120/2, Guindy authorizing him to continue to discharge of sewage and trade effluents.

Tamilnadu Board

BIS (Certification) Regulations, 1988

Renewal of Certification Marks Licence issued to Exide Industries Limited, Oldham Division,

Bureau of Indian Standards, Southern Regional Office Marks

3

Bureau of Indian Standards

1

215

Pollution

Pollution

Control

Control

Subject Matter

Sl No

Acts/ Rules/ Notification and BIS Act, 1986

2

Coal Laws

Mines

1

1

Coal Mines Regulations, 1957/Metalliferous Mines Regulation, 1961 Coal Mines Regulations, 1957/ Metalliferous Mines Regulation, 1961 Coal Mines Regulations, 1957/ Metalliferous Mines Regulation, 1961 Coal Mines Regulations, 1957// Metalliferous Mines Regulation, 1961 Central Excise

2

State Sales Tax

3

VAT

4

Professional Tax

2

3

4

Tax

Description of Licence/ consent/ Approval/ Regn. 21/22, Alandur, Guindy for the Product : Miners Cap Lamp assemblies Renewal of Certification Marks Licence issued to Exide Industries Limited, Oldham, 21/22, Alandur, Guindy for the Product : Miners Cap Lamp batteries. Extension of approval of Oldham GW Type miner’s lamps manufactured by Exide Industries Limited, Oldham, 21/22, Alandur, Guindy.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Bureau of Indian Standards, Southern Regional Office Marks Department Chennai-II

CM/L-0287854

13/02/2007

31/01/2008

Ministry of Labour & Employment Directorate General of Mines Safety, Dhanbad

No.-16(17) 77- Genl/1036 earlier approval as per:IS:2512-1973 AND IS:56791986.

18.05.2006

31.01.2009

Extension of approval of GT type miner’s Cap lamp manufactured by Exide Industries Limited, Oldham, 21/22, Alandur, Guindy for use in mines.

Ministry of Labour & Employment Directorate General of Mines Safety, Dhanbad

No. 16(16) 88 Gen/509

24/02/2006

31.01.2009

Extension of approval of GT2 type miner’s Cap lamp manufactured by Exide Industries Limited, Oldham, 21/22, Alandur, Guindy for use in mines.

Ministry of Labour & Employment Directorate General of Mines Safety, Dhanbad

No. 16(9) 2001-Genl/372

7/02/2005

31.01.2008

Extension of approval of 4.0V/1.0A ‘Krypton’ gas filled prefocus miners cap lamp bulbs manufactured by “Phillips” Hong Kong and supplied by Exide Industries Limited, Oldham, 21/22, Alandur, Guindy for use in mines.

Ministry of Labour & Employment Directorate General of Mines Safety, Dhanbad

No. 16(16) 88 Gen/509

27/09/2006

30.09.2009

Certificate of registration for manufacture of excisable goods under the Central Excise Rules, 2002 AS APPLICABLE TO EXIDE REGIONAL OFFICE AS APPLICABLE TO EXIDE REGIONAL OFFICE Certificate of registration under State Tax on Profession, Trades, Callings & Employment Act

Deputy Commissioner/Assistant Commissioner of Central Excise

AAACE6641EXM012

09/09/2003

NA

Corporation of Chennai

PE 009

Not Known

NA

Department Chennai-II

216

4.

Subject Matter

Approvals/Licences obtained for the Company’s Hosur Unit

Sl No

Acts/ Rules/ Description of Licence/ consent/ Notification Approval/ Regn.

Issuing Authority

Licence/ consent / Date of Issue approval/ Regn. Number

Valid Upto

Deputy Chief Inspector of Factories, Hosur Employee’s Provident Fund Organisation, Sub-Regional Office, Salem

48990

25/10/2005

TN/SL/35062

14/01/1997

31/12/20 07 NA

HOSUR, TAMIL NADU Factory

1

Factories Act 1948 Employee’s Provident Fund & Miscellaneous Provisions Act,1952

Licence to work a factory

Labour

1

Contract Labour

1

Contract Labour (Regulation and Abolition) Act,1970 & Tamil Nadu Contract Labour Rules, 1975

Amendment of registration certificate issued to M/s Exide Industries Limited, Chichurakanapalli-Vill, SevaganapalliPanchayat

Office of Deputy Chief Inspector of Factories, Hosur

A1/5569/06 R.C.No. KG-109

29/12/06

31/12/200 7

Municipal/ Gram Panchayat Fire Services Laws

1

Certificate of Enlistment (Trade License)/Factory Running licence. Licence granted to Exide Industries Limited, Chichurakanapalli-Vill, SevaganapalliPanchayat Renewal Consent order for existing operation of plant U/S 21 in the Air Pollution Control Area to Chief Operating Manager of M/s Exide industries Limited Vill, 246, Chichurakanapalli, Dist- Dharmapuri, Tamil Nadu. Renewal Consent order for discharge of sewage and trade effluents U/S 25 to the Chief Operating Manager of M/s Exide industries Limited Vill, 246, Chichurakanapalli, DistDharmapuri, Tamil Nadu.

Panchayat

No: 256

19/04/2007

Divisional Officer, Fire Rescue Services, Krishnagiri Division, Krishnagiri Tamil Nadu Pollution Control Board

R.C. No. 2/05/B/2007

11/04/2007

31/03/200 8 11/04/200 8

Environment

1

Air (Prevention & Control of Pollution) Act, 1981

15143

26/04/07

31/03/200 8

2

Water (Prevention & Control of Pollution) Act, 1978

Tamilnadu Board

19092

26/04/07

31/03/200 8

1

217

Pollution

Control

Subject Matter

Sl No

Acts/ Rules/ Description of Licence/ consent/ Notification Approval/ Regn.

Issuing Authority

Licence/ consent / Date of Issue approval/ Regn. Number

Valid Upto

Indian Explosives Laws

1

Indian Explosives Act, 1884

Renewal of Licence for existing Petroleum B Class installation at Sevaganpalli, 245/2, Hosur, Dist. Dharmapuri, Tamil Nadu, to M/s Exide industries Limited, Hosur Project, A109, SNS Arcade, Airport road, Banglore. Renewal of Licence for storage of Propane gas in pressure vessels at Vill, 246, Chichurakanapalli, Dist- Dharmapuri, Tamil Nadu to M/s Exide industries Limited, Hosur Project, A-109, SNS Arcade, Airport road, Banglore. Renewal of Licence for possession of cylinder filled with compressed gas in the licensed premises at M/s Exide industries Limited, Vill, 246, Chichurakanapalli, Hosur, DistKrishnagiri, Tamil Nadu. Certificate of registration for manufacture of excisable goods under the Central Excise(No. 2) Rules, 2001 Certificate of registration under the State Value Added Tax Act

Chief Controller of Explosives South Circle Office, Chennai

L.No.P/SC/TN/15/79(P37457 )

2/12/2005

31/12/200 8

Joint Chief Controller of Explosives South Circle Office, Chennai

L.No.S/HO/TN/03/29 (S2215)

19/06/07

31/03/200 8

Deputy Controller of Explosives South Circle Office, Chennai

L.No.G/SC/TN/06/691 (G3889)

18/08/05

30/09/201 0

Superintendent of Excise, Range Hosur

AAACE6641EXM002

13/2/1997

NA

33220640025

1/1/2007

N.A.

Certificate of registration under State Tax on Profession, Trades, Callings & Employment Act

The President, Sevaganapalli (Panchayat)

NA

NA

NA

2

3

Tax

1

Central Excise

2

VAT

3

Professional Tax

Commercial Tamil Nadu

Tax

Central

Department,

5. Approvals/Licences obtained for the Company’s Bawal Unit Subject Matter

Sl No BAWAL, HARYANA Factory 1

Labour

1

Acts/ Rules/ Notification

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Factories Act 1948

Renewal of Factory Licence in the name of M/s Exide Industries Limited Plot no.179, Sector-3, HSIDC, Bawal, Rewari for 495 employees. Approval to the applicability of the EPFMP Act, 1952 to M/s Exide Industries Limited, Plot No.179, Sector-3, TMT, Manesar, Gurgaon

Chief Inspector of Factories, Haryana

MOH/E-6/3820-serial 6812

2003

31/12/200 7

Office of the Regional Provident Fund Commissioner

HR/GGN/ 25443

Employee’s Provident Fund & Miscellaneous Provisions

218

no-

5/7/2002 with from 1/06/2002

effect

NA

Subject Matter

Sl No 2

Contract Labour

1

Fire Laws

1

Services

Environment

1

Acts/ Rules/ Notification Act,1952 Employees State Insurance Act, 1948

Contract Labour (Abolition & Regulation) Act, 1970

Water (Prevention & Control of Pollution) Act, 1974 & Air (Prevention & Control of Pollution) Act, 1981 & Hazardous Waste (Management & Handling) Rules, 1989 Indian Explosives Act, 1884

Indian Explosives Laws

1

Tax

1

Central Excise

2

Central Sales Tax

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Registration of Employee’ s and Factories/ Establishment under Section 2(12) of the ESI Act 1948- issued to Exide Industries Limited, Plot No. 179, Sector-3, HSIDC Growth Centre, Bawal (Rewari) Application for amendment of registration certificate under Contract Labour Act, 1970 for establishment Exide Industries Limited at HSIDC Growth Centre Bawal

Employee’s State Insurance Corporation, Faridabad

13/31008/34/303

8/12/2000

NA

Labour Commissioner.

27.12.2006

NA

NOC issued to M/s Exide Industries Limited, Plot No.179, Sector-3, TMT, Manesar, Gurgaon Application for Extension of validity period of Consent Water (Prevention & Control of Pollution) Act, 1974 & Air (Prevention & Control of Pollution) Act, 1981 & Hazardous Waste (Management & Handling) Rules, 1989 2007 to 2009 for Exide Industries Limited, Plot No. 179, Sector-3, HSIDC Growth Centre, Bawal (Rewari)

Fire Station Officer, Rewari

Original Certificate noCLA/RG-303/1457/332/ I54/NI/10/HR/448/RWR, 14/05application vide challan no.78 510FSR

22/03/2007

21/03/200 8

Haryana State Pollution Control Board, C-11, Sector-6, Panchkula

HSPCB/Consent/2007/50

30/08/07

31/03/09

Licence to Store compressed gas in pressure vessel or vessels to Exide Industries Limited, Plot No. 179, Sector-3, HSIDC Growth Centre, Bawal (Rewari) Certificate of registration for manufacture of excisable goods under the Central Excise Rules, 1944 granted to Exide Industries Limited located at Plot No. 179, Sector-3, HSIDC, Growth Centre, Bawal, Distt. Rewari, Haryana Certificate of registration under the Central Sales Tax Act, 1956 read with Central Sales Tax (Registration & Turnover) Rules, 1957

Government of India, Ministry of Commerce & Industry Petroleum & Explosive Safety Organization

S/HO/HN/03/141

19/06/03 27/04/07

Superintendent, Central Excise Range, Rewari

R-2/01/RE/2000

03/02/2000

NA

Assessing Authority, Rewari

RWR/CST/4293

Date of Issue- 17/11/99 Valid From- 18/06/99

NA

219

For Hazardous Waste it is 31 March 2008

renewal-

31/03/201 0

Subject Matter

Sl No

Acts/ Rules/ Notification

Description of Licence/ consent/ Approval/ Regn. granted to Exide Industries Limited for manufacturing, reselling & trading of all kinds of lead acid storage batteries and other item as per the Memorandum & Articles of Association of the Company situated at Rewari.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

3

Haryana Value Added Tax Act, 2003

Certificate of Registration under Haryana Value Added Tax Act, 2003 granted to Exide Industries Limited having its principal place of business at Plot No. 179, Sector 3, HSIDC Bawal

Assessing Authority, Rewari

TIN- 06042704293

01.04.2003

NA

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Allotment of code no. U/the Act for compliance thereto- M/s Exide Industries Limited, at Santa Cruz Division, Valwla, Santa Cruz (E), Mumbai-55

Office of Regional Provident Fund Commissioner

MH/PF/APP/43303/Emp VI/RBR/184 Code no.MH/306

3/06/98

NA

Licence to work a factory issue to M/s Exide Industries Limited (SF division) at T-17, MIDC, (E) Estate, Taloja, Dist. Raigad Certificate of Registration granted to M/s Exide Industries Limited, at T-17, MIDC, Panvel, Taloja, Dist. Raigad

Chief Inspector of Factories, Maharastra

48751-079796 renewalNakase/Krase/Ra145/95/796/96 ACC/Raigad/CLA/RC/26/98

21/12/2000

31/12/200 9

8/12/1998 last amended on 30/04/2007

For the year 2007

Provisional No Objection Certificate for the Company’s plant building on Plot No. T-17 MIDC, Taloja Industrial Area.

Chief Fire Officer & Advisor, MIDC, Mumbai

MIDC/FIRE/PROV-NOC 1430

3/10/2007

Valid for 1 year from 3/10/2007. The Final No Objection Certificate

6.

Approvals/Licences obtained for the Company’s Taloja Unit

Subject Matter

Sl Acts/ Rules/ No Notification TALOJA, MAHARASHTRA Labour 1 Employee’s Provident Fund & Miscellaneous Provisions Act,1952 Factory 1 Factories Act 1948

Contract Labour

1

Contract Labour (Abolition & Regulation) Act, 1970

Fire Laws

1

MIDC Regulations

Services

Office of Registering Officer, Raigad

220

Fire

Subject Matter

Sl No

Acts/ Rules/ Notification

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Environment

1

Consent to Operate to M/s Exide Industries Limited at T-17, MIDC, Panvel, Taloja, Dist. Raigad, U/S- 26 of the Water (Prevention & Control of Pollution) Act, 1974 and U/S 21 of the Air (Prevention & Control of Pollution) Act, 1981 to continue operation of the industrial unit and to discharge liquid effluents and to emit gaseous effluents & authorization under the provisions of HW (M&H) Rules.

Maharashtra Pollution Control Board

BO/RO (P&P)/ /CC-42

16/03/2007

Tax

1

Water (Prevention & Control of Pollution) Act, 1974 & Air (Prevention & Control of Pollution) Act, 1981 & Hazardous Waste (Management & Handling) Rules, 1989. Central Excise

Registration Certificate to certify that M/s Exide Industries Limited is registered for manufacturing Excisable Goods at T-17, MIDC, Panvel, Taloja, Dist. Raigad.

Superintendent Central Excise, Range VI, Taloja,Div

AAACE6641EXM005

26/05/05

NA

Certificate of Registration as a dealer to M/s Exide Industries Limited T-17, MIDC, Panvel,

Notified Authority

196480

9/03/99

NA

2

Sales Tax Registration &

221

Valid Upto shall be issued at a later date upon complianc e of certain recommen dations made in the Provisiona l No Objection Certificate and satisfactor y inspection thereof. 30/08/201 0

Subject Matter

Sl No

3

Acts/ Rules/ Notification Turnover Rules, 1957, CST,1956 Bombay Sales Tax Act, 1959

4

VAT

5

Maharastra State Tax on Profession, Trades, Callings And Employment Act, 1975 Maharastra State Tax on Profession, Trades, Callings And Employment Act, 1975

6

Description of Licence/ consent/ Approval/ Regn. Taloja, Dist. Raigad

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Certificate of Registration as a dealer to M/s Exide Industries Limited T-17, MIDC, Panvel, Taloja, Dist. Raigad.

Sales Tax Maharashtra

410209S-311

9/03/99

NA

Sales Tax Department, Maharashtra. Commissioner of Profession Tax , Maharashtra state,Mumbai

TIN NO.27560299176V.

01/04/06.

NA

PT/E1/3/2/18/177 FORM-IIA

23/03/98

NA

Commissioner of Profession Tax , Maharashtra State,Mumbai

PT/R/1/3/2/3379 FORM-IA

23/03/98

NA

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Licence to work a factory issue to M/s Exide Industries Limited at Kanjur, Village Road, Kanjurmarg, Bhandup, Mumbai-400078

Chief Inspector Maharastra

3/10/91 renewal

31/12/200 7

Same as Taloja Factory

Mumbai/A/362/31403/E644—Renewal499/91/VUM/33092/6 Same as Taloja Factory

Same as Taloja Factory

Same as Taloja Factory

Certificate of registration under the Employees State Insurance Act, 1948

Same as Taloja Unit

Same as Taloja Unit

Same as Taloja Unit

Trade Licence to M/s Exide Industries limited

Briha-Mumbai Mahanagarpalika

142475

22/04/91-last

Same as Taloja Unit 31/12/200

Certificate of registration to certify that M/s Exide Industries Limited T-17, MIDC, Panvel, Taloja, Dist. Raigad is engaged in /employment with the profession/trade/calling and has been enrolled as under the Act. Certificate of registration to certify that M/s Exide Industries Limited T-17, MIDC, Panvel, Taloja, Dist. Raigad has been registered as an employer under the Act.

Department,

7. Approvals/Licences obtained for the Company’s Kanjurmarg Unit

Subject Sl Acts/ Rules/ Matter No Notification KANJURMARG, MAHARASHTRA Factory 1 Factories Act 1948

Labour

1

2

Municipal/

1

Employee’s Provident Fund & Miscellaneous Provisions Act,1952 Employees State Insurance Act, 1948 Mumbai Municipal

222

of

Factories,

payment

Subject Matter Gram Panchayat

Sl No

Acts/ Rules/ Notification Corporation Act

2

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue on-26/12/2006

Valid Upto 7

Trade Licence to M/s Exide Industries limited Kanjur, Village Road, Kanjurmarg, Bhandup, Mumbai-400042 Consent to Operate to M/s Exide Industries Limited at Kanjur, Village Road, Kanjurmarg, Bhandup, Mumbai-400078, U/S- 25& 26 of the Water (Prevention & Control of Pollution) Act, 1974 and U/S 21 of the Air (Prevention & Control of Pollution) Act, 1981 to continue operation of the industrial unit and to discharge liquid effluents and to emit gaseous effluents & authorization under the provisions of HW (M&H) Rules.

Briha-Mumbai Mahanagarpalika

24860

26/12/05 last payment on 22/12/2006

31/12/200 7

Maharastra Board

Control

Consent No.BO/ROM/Mumbai56/04/R/CC-07

24/01/2005

30/04/200 9

Asst. Commissioner of Central Excise, Kanjur, Mumbai

AAACE6641EXM008

13/12/2003

NA

Sales Tax Officer (II), Registration Branch, Mumbai

400042/C/267(Central)

10/03/1998

NA

Same as Chinhwad Unit NA

Pollution

Environment

1

Tax

1

Water (Prevention & Control of Pollution) Act, 1974 & Air (Prevention & Control of Pollution) Act, 1981 & Hazardous Waste (Management & Handling) Rules, 1989.. Central Excise

2

Central Sales Tax

Certificate of registration for manufacture of excisable goods under the Central Excise Rules, 2002 granted to Exide Industries Limited located at Kanjur Village Road, Mumbai. Certificate of registration under the Central Sales Tax Act, 1956 read with Central Sales Tax (Registration & Turnover) Rules, 1957 granted to Exide Industries Limited located at Kanjur Marg, Mumbai

3

VAT

Certificate of registration

Same as Chinhwad Unit

Same as Chinhwad Unit

Same as Chinhwad Unit

4

Professional Tax

Certificate of registration under Maharashtra State Tax on Profession, Trades, Callings & Employments Act, 1975 granted to Exide Industries Limited located at Kanjur Village Road, Kanjur Marg (East) Mumbai- 400 042

Sales Tax Officer (II), Registration Branch, Mumbai

PT/R/1/1/32/8848

29/042002

223

8. Approvals/Licences obtained for the Company’s Chinchwad Unit Subject Matter

Sl Acts/ Rules/ No Notification CHINCHWAD, MAHARASHTRA Factory 1 Factories Act 1948

Description of Licence/ consent/ Approval/ Regn.

Labour

Issue of separate/Sub Code no., for separate compliance in respect of M/s Exide Industries Ltd. at D-2, MIDC, Estate, Chinchwad, Pune 411 019

1

2

Employee’s Provident Fund & Miscellaneous Provisions Act,1952 Employees State Insurance Act, 1948 Contract Labour (Abolition & Regulation) Act, 1970

Contract Labour

1

Fire Services Laws Environment

1

Relevant Statute

1

Indian

1

Water (Prevention & Control of Pollution) Act, 1974 & Air (Prevention & Control of Pollution) Act, 1981 & Hazardous Waste (Management & Handling) Rules, 1989. Indian Explosives

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Director, Industrial Safety & Health Regional Provident Fund Commissioner, Pune

Licence No. 081401 Reg. No. 2(m)(i)/36.362.1 MH/PUN/120342/circle/943

18/01/2003

31/12/2010

Date of Issue – 15-012004 With effect from – 0112-2003

NA

Chinchwad factory informed that there are no documents with them

31-4863-34

NA

Certificate of Registration No. 35 already granted, is amended under Rule 20 of The Maharashtra Contract Labour (R.A) Rules 1971, as per the application of the establishment dated 30/03/2007 aqnd issued to Exide Industries Limited, Chinchwad, Pune 411019 for 37 Contractor having maximum no of 565 Contract employee for the period as mentioned therein. Licence to M/s Exide Industries Ltd. at D-2, MIDC, Estate, Chinchwad, Pune 411 019 Consent to Operate to M/s Exide Industries Limited at, D-2, MIDC, Estate, Chinchwad, Pune 411 019 U/S- 25& 26 of the Water (Prevention & Control of Pollution) Act, 1974 and U/S 21 of the Air (Prevention & Control of Pollution) Act, 1981 to continue operation of the industrial unit and to discharge liquid effluents and to emit gaseous effluents.

Asstt. Commissioner of Labour, Registering and Licensing Officer

35

04/04/2007

NA

Pimpri Chinchwad Municipal Corporation, Pune Member Secretary, MPCB

291/2007

16/06/2007

31/03/2010

No.

27/12/2005

31/12/2010

Licence to Exide Industries Limited of D-2

Jt.

G/WC/MH/06/1124(G13721)

08/06/2005

30/09/2008

Chief

224

Controller

of

BO/PCI-II/ROPN/EIC PN- 0764-05/R/CC-486

Subject Matter

Sl No

Explosives Laws

Acts/ Rules/ Notification Act, 1884

2

Tax

1

Central Excise

2

Central Sales Tax

3

VAT

4

Professional Tax

5

Service Tax

Description of Licence/ consent/ Approval/ Regn. MIDC Estate Chinchwad (East), Pune, Maharashtra for the possession of cylinders filled with compressed gas in the premises under the provisions of the Indian Explosives Act, 1884. Licence to Exide Industries Limited of D-2 MIDC Estate Chinchwad (East), Pune, Maharashtra for the possession of cylinders filled with compressed gas in the premises under the provisions of the Indian Explosives Act, 1884. Certificate of registration for manufacture of excisable goods at Exide Industries Limited, D2, MIDC, Estate, Chinchwad, Pune 411 019 Certificate of registration under Central Sales Tax( Registration & Turnover) Rules, 1957 granted to D2, MIDC Industrial Estate, Chinchwad East.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

PV(WC)S852/MS/S/HO/MH/03/631(S 902)

Lsat Renewed 31/03/2007

Deputy Commissioner/ Assistant Commissioner of Central Excise

AAACE6641EXM003

07/01/2003

Registration Officer, Sales Tax Department, Maharashtra.

TIN 27560299176C

01/04/2006

Certificate of Registration under section 16 of the Maharashtra Value Added Tax Act, 2002 to Exide Industries Limited of D-2 Block MIDC Industrial Estate, Chinchwad (E) Pune-19 Certificate of Registration under Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975 granted to Chloride India Limited located at D-2 Block MIDC Industrial Estate, Chinchwad (E) Pune-19 and has been registered as an employer. Certificate of Registration under section 69 of the Finance Act, 1994 granted to Exide Industries Limited of D-2 Block MIDC Industrial Estate, Chinchwad (E) Pune-19 having undertaken to comply with the conditions prescribed in the Service Tax Rules 1994 and any order issued thereunder is certified to have been registered with the Central Excise department for payment of Service Tax on Service of Goods Transport

Registration Officer, Sales Tax Department, Maharashtra

TIN-27560299176V

01/04/2006

NA

Profession Tax Officer, Poona City III Dn. And Dist. Poona.

PT/R/2/2/7/409

08/08/1975

NA

Superintendent, Central Excise (STC), Pune-1

STC/GTA/141/PI-04

22/01/2005

NA

Explosives, Mumbai

West

Jt. Chief Explosives, Mumbai

Controller of West Circle,

225

Valid Upto

Circle,

(Central)-

-

31/12/1010

NA

Subject Matter

Sl No

Acts/ Rules/ Notification

Description of Licence/ consent/ Approval/ Regn. Agent.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

9. Approvals/Licences obtained for the Company’s Branches, Godowns & Research and Development Centre. Subject Matter

Sl No.

Acts/ Rules/ Notification

Lucknow, Uttar Pradesh Shops & 1 Uttar Pradesh Establishment Shops & Establishment Act 1962 2 Uttar .Pradesh Shops & Establishment Act 1962 VAT 1 Uttar Pradesh Vat Rules Gaziabdad, Uttar Pradesh VAT 1 UP Vat Rules

Jaipur, Rajasthan Shop & 1 Establishment VAT

1

Rajasthan Shops & Establishment 1959 Rajasthan Sales Tax Act, 1954

Jamshedpur, Jharkhand Shops & 1 Bihar Shops & Establishment Establishment Act s 1953 2 Bihar Shops &

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Registration of M/s Exide Industries Limited for its establishment at 6 Mill Road, Ashbag, Lukhnow

Uttar Pradesh Shops Establishment Authority.

&

10/6048

31/03/03-renewal20/06/06

2010-2011

Registration of M/s Exide Industries Limited for its establishment at Exide House, 11 Mahatma Gandhi Marg, Lucknow.

Uttar Pradesh Shops Establishment Authority.

&

5/1538

11/1/77-renewal21/7/2005

20090102010

Registration of M/s Exide Industries Limited for its establishment at Exide House, 11 Mahatma Gandhi Marg, Lucknow.

Assistant Commisioner, Sector-1, Lucknow

09950000068

22/04/1977

NA

Registration of M/s Exide Industries Limited for its establishment at B-42, Patel Nagar, Gaziabad, Uttar Pradesh

Assistant Commisioner, Sector-1, Lucknow

09950000068

22/04/1977

NA

Registration of M/s Exide Industries Limited for its establishment at Exide House, 4 Calcutta Farm Janpath, Shamnagar, Jaipur Registration of M/s Exide Industries Limited for its establishment at Exide House, 4 Calcutta Farm Janpath, Shamnagar, Jaipur

Jaipur Shops Authority

Sn/846/RP/P/18/97

29/01/97-renewal27/01/05

31/12/07

Officer,

1421/02563

15/09/1995

NA

Registration of M/s Exide Industries Limited for the establishment at 309, Yashkamal Complex, Main Road, Bishtupur, Jamshedpur Registration of Exide Industries Limited for

Bihar Shops & Establishment Authority, Jamshedpur.

S.G-21748/ 2527

5/5/1987-renewal23/03/2007

31/12/2007

Bihar

S.G 31072/30389/Jug-

20/05/2005

31/12/2007

&

Establishment

Commercial Taxation Circle B, Jaipur

226

&

Shops

Establishment

Bishtu-

renewal-

Subject Matter

Trade Licence/ Certificate of Enlistment

Sl No.

1

Acts/ Rules/ Notification

Description of Licence/ consent/ Approval/ Regn.

Establishment Act 1953 Relevant Municipal Act

establishment at Station Road, Jamshedpur. Licence for Tax on trade for

Bhubaneswar, Orissa Shops & 1 O.S & O.E Act, Establishment 1956

Date of Issue

Area

9319

20.08.2003

Registration of M/s Exide Industries Limited for establishment at 362/3855, Gautam Nagar, Opp, BBSR. Licence U/S-554 of O.M.C Act-2003 to M/s Exide Industries Limited for establishment at 362/3855 Gautamnagar BBSR

District Labour Officer (Khunda) Bhubneshwar

I-713

01.01.2002 01/01/2007

Bhubneshwar Corporation

59701

9/04/07

For year 2007-08

Jugsalai,

Authority, Jamshedpur. Jamshedpur Committee

Notified

12/04/2007 31.03.2008

renewal-

31/12/2007

3

O.S & O.E Act, 1956

Notice of daily work hours of works of Employees & notice to observe holiday on Sunday to Exide Industries Limited.

District Labour Officer (Khunda) Bhubneshwar

I-713

01/01/2007

31/12/2007

Assam Shops & Establishment Act and Rules Guwahati Municipal Corporation Act, 1969

Certificate of Registration issued to M/s Exide Industries Limited for establishment Near Car Ghar, Dispur Trade Licence to Exide Industries Limited for premises at G.S. Road.

Inspector of Establishments

SEA/CE/03/1/154

21/06/1999 renewal-for 2007

31/12/2007

Assam Muncipal Corporation

5321

30.11.02 28/03/07

31/03/2008

Bihar Shops & Establishment Act 1953 Bihar Shops & Registration Act 1953 Bihar Value Added Tax Ordinance, 2005

Registration of Exide Industries Limited for establishment at B-25, Krishnapuri, Patna.(Service Centre) Registration to M/s Exide Industries Limited for establishment at Indraprastha Apartment, 101, West Boring Canal Road, Patna Certificate of registration issued to M/s Exide Industries Limited to certify that the Company is registered under the Act. 101, West Boring Canal Road, Patna

Inspector of Shop & Establishment, Patna,

P.T 60062

21.05.07

Inspector of Shop & Establishment, Patna,

P.T-482761-2027-34

27.1.06 02.02.07

Deputy Commissioner of Commercial Taxes. Patliputra Circle, Patna.

10050070091

1.4.2005

2

1

1

227

Municipal

Valid Upto

O.M.C Act-2003

2

TAX

Licence/ consent / approval/ Regn. Number 2369

2

Dispur, Assam Shops & 1 Establishment Trade Licence/ Certificate of Enlistment Patna, Bihar Shops & Establishment

Issuing Authority

Shops

and

renewal-

31/12/07

renewal-

31.12.2007

NA

Subject Matter

Sl No.

Acts/ Rules/ Notification

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

2

Central Sales Tax Act-1956

Certificate of Registration U/S 8 of the CST Act-1956 to M/s Exide Industries Limited for place of business situated at Shri Krishnapuri, Patna. 101, West Boring Canal Road, Patna Certificate of registration under section-5, on entry of goods into local area for consumption use or sale.

Deputy Commissioner of Commercial Taxes. Patliputra Circle, Patna. Deputy Commissioner of Commercial Taxes. Patliputra Circle, Patna.

Registration to Exide Industries Limited for establishment at Raheja’s, 5th Floor, 8C, Main Avenue, V.P Road, Santa Cruz (West). Registration to Exide Industries Limited for establishment at Exide House, W.No.60, Chhaori, Nagpur Registration to Exide Industries Limited for establishment at S-29 Parwati Industrial Estate Parwati,Pune Satara Road, Pune-9 Rahejas, 5th Floor, 8C, Main Avenue, V.P Road, Santacruz, Mumbai- 400 054

2 3

3

Bihar Tax on Entry of Goods into Local area for consumption, use or unto there in Ordinance 1993. Mumbai/ Pune/ Nagpur, Maharashtra Shops & 1 Mumbai Shops & Establishment Establishment Act, 1948 2 Mumbai Shops & Establishment Act, 1948 3 Mumbai Shops & Establishment Act, 1948 Profession 1 Tax

Indore, Madhya Pradesh Shops and 1 M.P Shops & Establish,men Establishment Act, t 1958 Trade 1 M.P Municipal Licence/ Corporation ActCertificate of 1956 Enlistment Profession 1 Tax

Date of Issue

Valid Upto

16/09/96

NA

PR 199. ET

13.09.04 liable to pay tax since-22/08/03

NA

Inspector under the Bombay Shops & Establishment Act-1948.

HW-II/004941

4/09/0310/11/06

renewal-

2007

Inspector under the Bombay Shops & Establishment Act-1948.

II-60-3

7/2/04 19.11.04

renewal-

2007

Inspector under the Bombay Shops & Establishment Act-1948.

Parwati-II-10920

29/3/2003 9/11/2006

renewal-

2007

Profession Tax Officer, Mumbai

PT/R/1/1/21/8727

Not Available

NA

Katol Road, Nagpur- 440 013

Profession Tax Officer, Mumbai

PT/R/4/6/36/9-EIL

Not Available

NA

S-29, Parvati Industrial Estate, Pune Satara Road, Pune- 411 009

Profession Tax Officer, Mumbai

PT/R/1/1/21/8727

Not Available

NA

Registration to Exide Industries Limited for establishment at 27, Press Complex, A.B. Road, Indore Trade Licence to M/s Exide Industries Limited for establishment at 27 Press Complex. A.B Road, Indore.

Inspector under the M.P Shops & Establishment Act, 1958

50114798

12/01/2007

31/12/2007

Indore Municipal Corporation

90114759

09/04/2007

31/03/2008

Registration of M/s Exide Industries Limited for located at 27 Press Complex. A.B Road,

Commissioner of Commercial Tax, M.P

78501300426

01/07/2003

NA

228

Licence/ consent / approval/ Regn. Number P.R.1947

Subject Matter

Sl No.

Acts/ Rules/ Notification

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Trade Licence to M/S Exide Industries Limited for establishment at 201, Subham Complex, Vastrapur Road, Ahmedabad 382 427

Bodak Dev Gram Panchayat, TADaskroi Dist. Ahmedabad

NA

24/11/2003

NA

Registration to M/S Exide Industries Limited located at 201, Subham Complex, Vastrapur Road, Ahmedabad 382 427

Profession Ahmedabad

PR-0703000002

01/08/2003

NA

Registration of establishment for 43/1, Tumkur Road, Yeshwantpur, Bangalore-22

Government of Department of Labour

10/NO/0100/04-8-32004

7/7/87 21/01/04

Certificate of Registration granted to Exide Industries Limited located at 44/3331, Kaloor North, NH-47

Assistant Labour Officer, Ernakulam II Circle, Kochi

K-535

11/09/2007

31/12/2007

44/3331, Kaloor North, NH-47

Health Inspector, Corporation of Cochin

C.16/215/07-08

15/10/2007

31/08/2007

Registration to Exide Industries Limited for Establishment at Exide House, 177 H & I, Industrial Area-I, Chandigarh- 160002 Registration to Exide Industries Limited for Establishment at Exide House, 177 H & I, Industrial Area-I, Chandigarh- 160002 Registration to Exide Industries Limited for Establishment at Exide House G.T Road, Jalandhar(Punjab) Statement for Registration of Establishment

Assessing Authority, Chandigarh

CHA14418

06/08/1993

NA

Notified Authority, Chandigarh

CHA-CST-14216

06/08/1993

NA

Excise & Taxation Department, Punjab

03501043692

01/04/2004

NA

Labour Inspector GR-I, Circle 4,

Jal/2/5/69/491

18/12/1969

31/03/2008

Indore.

Ahmedabad, Gujarat Trade 1 Grampanchayat Licence/ Act Certificate of Enlistment Profession 1 Tax Bangalore, Karnataka Shops and 1 Karnataka Shops Establishment & Establishment Act, 1961 Cochin, Kerala Shops and 1 Kerala Shops & Establishment Establishments Act, 1960 Trade Licence/ Certificate of Enlistment

2

Kerala Municipal Act 1994

Jalandhar/ Chandigarh, Punjab TAX 1 Punjab General Sales Tax Rules, 1949 2 Central Sales Tax Act, 1956

Shops

and

3

Punjab Vat Rules, 2005

1

Punjab Shops &

229

Tax

officer

(1),

Karnataka

renewal-

31/ 12/ 08

Subject Matter

Sl No.

Acts/ Rules/ Notification

Establishment

Description of Licence/ consent/ Approval/ Regn.

Valid Upto

Issued to Exide Industries Limited located at 29, Race Course Road, opposite Masonic Hospital, Coimbatore – 641 018

Asst.Inspector of Labour Circle II,Coimbatore –18

Reg.No.1741007/14.5.0 7

14/05/2007

NA

Profession Tax

Profession Tax issued to Exide Industries Limited,CBE

Corporation of Coimbatore, Profession Tax ,Ward No.26, East Zone

142515

NA

NA

Certificate of Registration granted to Exide Industries Limited, Plot No.98, 106 & 107, Tadbund Cross Road, Opp. IBP Ptrol Bund, Secunderabad – 500 009 Certificate of Registration granted to Exide Industries Limited, 6-3-571/2, Rockdale Compound, Somajiguda, Hyderabad.

Labour Officer, Hyderabad

454/LO III Hyd/CN No. 1047/97

Renewed on 29.08.07

31-12-2007

Commissioner, Municipal Corporation of Hyderabad

050-200-3444 (BATTERY CHARGING)

Renewed on 29.08.07

31-03-2008

Profession Tax No. issued to Exide Industries Limited

Professional Tax Officer, Khairatabad Circle, Hyderabad handled by Commercial Taxes dept. Khairatabad Circle, Hyderabad.

PJT/07/1/2239 – Major Head : 0028, Minor Head : 107, Sub Head : 01

13/9/07 payment made for Aug’07

NA

Hyderabad, Andhra Pradesh Shops and 1 Andhra Pradesh Establishment Shops & Establishment Act 1988 Trade 1 Hyderabad Licence/ Municipal Certificate of Corporation Act Enlistment 1955 Profession 1 Andhra Pradesh Tax State Tax on Professionals, Trades, Callings and Employement Act 1987

Road,

Date of Issue

issued to Exide Jalandhar(Punjab)

Coimbatore Corporation Act

G.T

Licence/ consent / approval/ Regn. Number

Commercial Establishment Act, 1958 Coimbatore, Tamil Nadu Shops and 1 Tamilnadu Shops Establishment & Establishments –Form III Act 1958 1

House

Issuing Authority

Jalandhar Renewed 13/09/2007

Circle

III,

on-

10. Approvals/Licences obtained for the Company’s Regional Offices Subject Matter

Sl No.

Acts/ Rules/ Notification

A. Kolkata, West Bengal Environme 1 Enviromental Law nt

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Consent to Establish to M/s Exide Limited for installation of 02no. of D.G Sets of Capacities

West Bengal Board

230

Pollution

Control

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

587/WBPCB-ROI/R/939/2005

31/10/2006

NA

Subject Matter

Trade Licence/ Certificate of Enlistment Municipal

Sl No.

Acts/ Rules/ Notification

1

Kolkata Municipal Act 1980

1

Kolkata Municipal Act, 1980

Profession Tax

1

Weast Bengal State Tax on Professions, Traders, Callings and Employees Act

Factory

1

Factories Act-1948

B. Mumbai, Maharashtra Shops and 1 Bombay Shops & Establish,m Establishment Act, ent 1948 Profession 1 Tax

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Licence/ consent / approval/ Regn. Number

Date of Issue

Valid Upto

Kolkata Municipal Corporation , Licence Department

No.L-/009387Assessee No:110540900103

13/01/05

31/03/2008

Receipt for Drainage & Sewerage Serviceslocation of discharge of sewage and drainage effluents- 6A, Hati bagan Road, Kolkata-14.for the bill no-000432 dated-27/06/07. Registration to Exide Industries Limited located at 6A, Hatibagan Road, Kolkata-14

Kolkata Municipal Corporation

D200701316

21.08.07

01/04/200731/03/2008

RCE 0901474

Not Available/ Not Traceable

NA

Licence to Work A Factory given to Exide Industries Limited for factory at 6A, Hatibagan Road, Kolkata-14

Directorate of Factories

1.1.65 renewal30/01/06

2006. Renewal Application was made in Form 2 on 19/1/2007.

Registration to M/s Exide Industries Limited for premises at Wallace Str. Fort, Mumbai 400001 Registration to M/s Exide Industries Limited at Wallace Str. Fort, Mumbai 400001

Inspector under the Bombay Shops & Establishment Act-1948.

A-II 4130

10.04.97 renewal8.8.2007

Till 2008

Profession Tax - Officer , Mumbai

PT/R/1/1/21/8727

NA

NA

125 KVA each with acoustic enclosures at 6A, Hati Bagan Road, PO: Entally. PS: Belapurkur, KMC Ward No.54, Kolkata-14. Trade Licence to M/s Exide Industries Limited establishment at 6A, Hati Bagan Road, Kolkata-14

Directorate of Profession Tax

C. Chennai, Tamil Nadu

231

Commercial

and

L.No-6496. Registration TP/x/65

No.-247-

Subject Matter

Sl No.

Acts/ Rules/ Notification

Description of Licence/ consent/ Approval/ Regn.

Issuing Authority

Licence/ consent / approval/ Regn. Number 07-110-PE-381

Date of Issue

Valid Upto

Profession Tax

1

CCMC Act

Profession Tax No. issued to Exide Industries Limited

Corporation of Chennai, Profession Tax

23/10/2007 payment made for 2007-2008

31/3/2008

Trade Licence/ Certificate of Enlistment

2

CCMC Act

Licence U/S 207 of CCMC Act-Trade licence for Battery Charging to Exide Industries Limited for premises at 751, Anna Salai.

Corporation of Chennai Revenue Department.

N110029858

31/3/2007

31/3/2008

1

Delhi Value Added Tax Act

Registration to Exide Industries Limited located at 3E/1, Jhandewalan Extension, New Delhi

Govt. of NCT of Delhi, Sales Tax Department

07220053992

Not Applicable

NA

D. New Delhi VAT

11. Approvals/Licences obtained for the Company’s Head Office Subject Matter Profession Tax

Sl No 1

Shops and Establishment

1

Acts/ Rules/ Notification West Bengal State Tax on Professions,Trades , Callings and Employment Act, 1979 West Bengal Shops & Establishments Act, 1963

Description of Licence/ consent/ Approval/ Regn. Certificate issued to Exide Industries Limited located at 59E, Chowringhee Road, Kolkata700020

Issuing Authority

Certificate Issued to Exide Industries Limited located at 59E, Chowringhee Road, Kolkata700020

Supervising Inspector, Shops & Establishment, West Bengal

Commercial Tax Authority, West Bengal

232

Licence/ consent / approval/ Regn. Number ECS 3350240

Date of Issue

Valid Upto

Not Traceable

NA

CAL/BHOW/P-II/2380

Renewed 05/01/2006

From-

05/01/2009

Subject Matter Municipal/ Gram Panchayat Importer Exporter Code

Sl No 1

&

Acts/ Rules/ Notification Kolkata Municipal Corporation Act

1

Description of Licence/ consent/ Approval/ Regn. Certificate of Enlistment isuued to Exide Industries Limited located at 59E, Chowringhee Road, Kolkata- 700020

Issuing Authority

Registration Cum Membership Certificate issued to Exide Industries Limited located at 59E, Chowringhee Road, Kolkata- 700020

Federation of Indian Export Organisation under Ministry of Commerce, Govt. of India

Licence Department, Municipal Corporation

Kolkata

Licence/ consent / approval/ Regn. Number Assessee No.- 11 070 13 0029 4

Date of Issue

Valid Upto

07/09/2007

31/03/2008

245/2004-05

18/06/2007

For 5 years from the date of issue.

Licence/ consent / approval/ Regn. Number 53331

Date of Issue

Valid Upto

21/05/2007

21/03/2008

12. Approvals/Licences obtained for the Company’s Research & Development Centre Subject Matter Municipal/ Gram Panchayat Shops and Establishment

Sl No 1

Ministry of Science & Technology

1

1

Acts/ Rules/ Notification The West Bengal Municipal Act, 1993 West Bengal Shops & Establishments Act, 1963

Description of Licence/ consent/ Approval/ Regn. Certificate of Enlistment issued to Exide Industries Limited located at 217, Nazrul Islam Avenue, Kolkata- 700 059 Certificate Issued to Exide Industries Limited located at 217, Nazrul Islam Avenue, Kolkata700 059

Issuing Authority

Registering Authority, Shops & Establishment, Barrackpore, 24 Parganas (North)

N24P/Rajerhat/PII/1102

12/05/2006

For 3 years from the date of Issue.

Recognition of In-house R&D Unit situated at 217, Nazrul Islam Avenue, Kolkata- 700 059

Govt. of India, Department of Scientific & Industrial Research.

TU/IV/RD/215/2007

01/04/2007

31/03/2010

Rajarhat Gopalpur Municipality

233

A. Licence / Approvals which have expired and have been applied for renewal: 1.

GUINDY UNIT •

Consent granted under Section 21 of The Air (Prevention & Control of Pollution) Act, 1981 for the Company’s Unit situated at 21/22, Alandur Road (Old Ham Division) R.S. No.120/2, Guindy, authorizing to operate industrial plant in the Air Pollution Control area issued by Tamil Nadu Pollution Control Board bearing Renewal Consent Order No – 4470 Boards Proceeding No. TN PCB D/HUM/T-14/F-133/CHN/2006 which was valid till 31.03.07 had been applied for renewal.



Consent granted under Sec 25 of The Water (Prevention & Control of Pollution) Act, 1974 for the Company’s Unit situated at 21/22, Alandur Road (Old Ham Division) R.S. No.120/2, Guindy authorizing discharge of sewage and trade effluents issued by Tamil Nadu Pollution Control Board bearing Renewal Consent Order No – 6899 Boards Proceeding No. TN PCB D/HUM/T-14/F-133/CHN/2006 was issued on 04.04.2006 was valid till 31.03.2007 and had been applied for renewal.

2.

TALOJA UNIT •

3.

The Chief Fire Officer & Fire Advisor has granted a Provisional No Objection Certificate for the Company’s Unit at T-17, MIDC, Panvel, Taloja, Dist : Raigad. The final No Objection Certificate will be issued at a later date upon compliance of certain recommendations made in the Provisional No Objection Certificate and satisfactory inspection thereof. The said Provisional No Objection Certificate is valid for one year from its date of issue being 3/10/2007. HALDIA UNIT



4.

Consent to Operate under Section 25 and 26 of the Water (Prevention & Control of Pollution) Act, 1974 and under Section 21 of the Air (Prevention & Control of Pollution) Act, 1981 to continue operation of the industrial unit and to discharge liquid effluents and to emit gaseous effluents has expired on 30.11.2007 and has been applied for renewal. BANGALORE BRANCH OFFICE



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



Certificate of Registration under the State Tax on Profession, Trade, Callings & Employment Act has expired and had been applied for renewal.

5.

CHANDIGARH BRANCH OFFICE •

6.

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



Renewal application made under Factories Act, 1948.

234

b) Licence / Approvals which are in the name of Standard Batteries Limited The following registrations for the Company’s Guindy factory are still in the name of Standard Batteries Limited from whom the Company has acquired the said factory as a part of acquisition of its industrial undertaking. However, the Company has not yet changed the said registrations to its name: SL No.

Acts/ Rules/ Notifications

1

E.P.F & M.P Act 1952

2

Chennai City Municipal Corporation Act, 1919 Endorsement in terms of Press Note (22) no. 10/104/85-L.P. dated 16.8.85.

3

Description of licence/ approvals/ registrations Cancellation of exemption and issuance of Code No. granted to M/s Standard Batteries Limited 21/22, Alandur Road, Guindy Trade Licence for 21/22 Alandur Road, Guindy Chennai

Issuing Authority

Licence

Issue Date

Valid upto

Office of Regional Provident Fund Commissioner, Tamilnadu & Pondicherry State

C3/TN/MS/290/Exm/R egl/96 code no-TN/290

13/08/96

NA

Licence Inspector

S140010556

27/02/2007

31.03.200 8

Industrial Licences for the manufacture of various type of storage battery in Bombay and Madras

Department of Industrial Development Secretariat for Industrial Approvals Special Cases Section.

BOMBAY (i) L/5(10) 13/ LEEI/70 DT. 13.08.70 (ii) L/29/1/53/ L/5 (10)/1 DT. 31.3.53 (iii). L/5 (11)/ 24/ 72LEE DT. 28.01.72 (iv). CIL: 296 (75) DT. 11.08.73 (v). L/5 (11) 21/ LEE/71 DT. 1.12.71 MADRAS (i). L/19/69-LEE DT. 5.11.73 (ii). CIL NO. 03 (76) DT. 21.02.76 (iii). Endt. No.2/19/69E1 DT. 25.11.74

25/ 09/ 1989

NA

235

OTHER REGULATORY AND STATUTORY DISCLOSURES Authority for the Issue Pursuant to the resolution passed by the Board of Directors of the Company under Section 81(1) under the Companies Act, 1956, at its meeting held on August 28, 2007, it has been decided to make this offer to the Equity Shareholders of the Company with a right of renunciation exercisable by the Shareholders in the manner as set out in this Letter of Offer in the section titled “Issue Related Information. Consent of Lenders The agreements in respect of the loan taken by the Company do not contain any covenants inter-alia for altering the Company’s share capital and for the Company’s expansions and diversifications plans. Prohibition by SEBI Neither the Company, nor its Directors nor the Promoter Group Companies, nor companies with which the Company’s Directors are associated with as directors or promoters, have been prohibited from accessing or operating in the capital markets under any order or direction passed by SEBI. Further, none of the directors or person(s) in control of the Promoters (as applicable) has been prohibited from accessing the capital market under any order or direction passed by SEBI. Further the promoters, their relatives (as per Companies Act, 1956), the Company, group companies, associate companies are not detained as willful defaulters by RBI/Government authorities and there are no violations of securities laws committed by them in the past or pending against them. Eligibility for the Issue Exide Industries Limited is an existing listed company. It is eligible to offer this Rights Issue in terms of Clause 2.4.1(iv) of the SEBI DIP Guidelines. Disclaimer Clause AS REQUIRED, A COPY OF THE LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE LETTER OF OFFER TO SECURITIES AND EXCHANGE BOARD OF INDIA (‘SEBI’) SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER. THE LEAD MANAGERS TO THE ISSUE, SBI CAPITAL MARKETS LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE LETTER OF OFFER, THE LEAD MANAGERS ARE EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER, SBI CAPITAL MARKETS LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED DECEMBER 6, 2007 IN ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATIONS 1992 WHICH READS AS FOLLOWS:

236

1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC. AND OTHER MATERIALS IN CONNECTION WITH THE FINALISATION OF THE LETTER OF OFFER PERTAINING TO THE SAID ISSUE; 2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, IT’S DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT: a) THE LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE; b) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE, AS ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND c)

3.

THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE.

WE CONFIRM THAT BESIDE OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE LETTER OF OFFER ARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATION IS VALID.

The filing of Letter of Offer does not, however, absolve the Company from any liabilities under Section 63 or Section 68 of the Act or from the requirement of obtaining such statutory and other clearances as may be required for the purpose of the proposed Issue. SEBI further reserves the right to take up, at any point of time, with the Lead Managers any irregularities or lapses in the Letter of Offer. In addition to the Lead Managers, the issuer is also obligated to update the offer document and keep the public informed of any material changes till the date of listing and commencement of trading of the securities offered under the Letter of Offer. Caution The Company and Lead Managers accept no responsibility for statements made otherwise than in the Letter of Offer or in the advertisements or any other material issued by or at the instance of the Company and that anyone placing reliance on any other source of information would be doing so at his/her/their own risk. All information shall be made available by the Lead Managers and the Issuer to the shareholders and no selective or additional information would be made available for a section of the shareholders or investors in any manner whatsoever including at presentations, research or sales reports etc. Disclaimer in Respect of Jurisdiction This Letter of Offer has been prepared under the provisions of Indian Law and the applicable rules and regulations thereunder. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Kolkata, India only. This Letter of Offer has been prepared under the provisions of Indian Law and the applicable rules and regulations thereunder. The distribution of the Letter of Offer and the Issue of Equity Shares on a Rights basis to persons in certain jurisdictions outside India may be restricted by the legal requirements prevailing

237

in those jurisdictions. Persons in whose possession this Letter of Offer may come are required to inform themselves about and observe such restrictions. No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that this Letter of Offer has been filed with SEBI for observations and SEBI has given its observations. Accordingly, the Equity Shares represented thereby may not be offered or sold, directly or indirectly, and this Letter of Offer may not be distributed in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in the Company’s affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date. Disclaimer clauses of Stock Exchanges The Bombay Stock Exchange Limited (BSE), the National Stock Exchange of India Limited (NSE) and the Calcutta Stock Exchange Association Limited (CSE) (hereinafter referred to as the “Stock Exchanges”) have given their permission to the Company to use their respective names in the Letter of Offer as the Stock Exchanges on which the Company’s shares issued in terms of this Issue are proposed to be listed. The Stock Exchanges have scrutinized the Letter of Offer for their limited internal purpose of deciding on the matter of granting the aforesaid permission to the Company. The Stock Exchanges, who have given their Disclaimer clauses are mentioned below: The BSE, the NSE and the CSE have vide their letters dated 16th October 2007, 17th October 2007 and 16th October 2007 respectively, given their permission to the Company to use their respective names in the Letter of Offer as the stock exchanges on which the Company’s securities are proposed to be listed. Disclaimer clause of the BSE The Company has applied for listing the securities on the Bombay Stock Exchange Limited. As required, a copy of the Letter of Offer has been submitted to The Bombay Stock Exchange Limited, (hereinafter referred to as “BSE” or the “Exchange”). BSE has given vide its letter 16th October, 2007 permission to the Company to use the Exchange’s name in the Letter of Offer as one of the stock exchanges on which this Company’s securities are proposed to be listed. The Exchange has scrutinized the Letter of Offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in any manner: (i) warrant, certify or endorse the correctness or completeness of any of the contents of the Letter of Offer; or (ii) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or (iii) 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 that the Letter of Offer has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange 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 for any other reason whatsoever. Disclaimer clause of the NSE The Company has applied for listing the securities on the National Stock Exchange of India Limited. As required, a copy of the Letter of Offer has been submitted to National Stock Exchange of India Limited (hereinafter referred to as “NSE”). NSE has given vide its letter NSE/LIST/58443-C dated 17th October 2007, permission to the Issuer to use its name in the Letter of Offer as one of the Stock Exchanges on which this Issuer’s securities are proposed to be listed. NSE has scrutinized the Letter of Offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Issuer. It is to be distinctly understood that the aforesaid permission, given by NSE, should not in any way be deemed or construed that the Letter of Offer 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 the Letter of Offer; nor does it warrant that this Issuer’s securities will be listed or will continue to be listed on the Exchange; nor does it take any responsibility for the financial or other soundness of this Issuer, its promoters, its management, or any scheme or project of this Issuer. Every person who desires to apply for or otherwise acquire any

238

securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against 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. Disclaimer clause of the CSE The Company has applied for listing the securities on the Calcutta Stock Exchange Limited. As required, a copy of the Letter of Offer has been submitted to The Calcutta Stock Exchange Limited, (hereinafter referred to as “CSE” or the “Exchange”). CSE has given vide its letter 16th October, 2007 permission to the Company to use the Exchange’s name in the Letter of Offer as one of the stock exchanges on which this Company’s securities are proposed to be listed. The Exchange has scrutinized the Letter of Offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in any manner: (i) warrant, certify or endorse the correctness or completeness of any of the contents of the Letter of Offer; or (ii) warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or (iii) 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 that the Letter of Offer has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange 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 for any other reason whatsoever. Filing The Letter of Offer has been filed with Securities Exchange Board of India, SEBI Bhavan, Plot No C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051, for its observations and also with all the Stock Exchanges where the securities to be issued in terms of the Letter of Offer are proposed to be listed. Listing The existing Equity Shares of the Company are listed on the BSE, the NSE and the CSE. The Equity Shares to be issued through this Issue would also be listed on the Stock Exchanges mentioned above. The fully paid up Equity Shares allotted pursuant to this Issue will be listed as soon as practicable but in no case later than 7 days from the finalization of the basis of allotment. The Company has applied for in-principle approvals to the BSE, the NSE and the CSE for the securities proposed to be issued through the Letter of Offer. If the permission to deal in and for an official quotation of the securities is not granted by the stock exchanges mentioned above, the Company shall forthwith repay, without interest, all monies received from the applicants in pursuance of the Letter of Offer. If such money is not repaid within eight days after the Company becomes liable to repay it (i.e. 42 days after closure of the Issue), then the Company and its every director who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money, with interest as prescribed under sub-sections (2) and (2A) of Section 73 of the Act. Impersonation Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Act, which is reproduced below: “Any person who (a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein, or (b) otherwise induces a company to allot, or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years.”

239

Consent Consent in writing of the Auditors, Lead Managers, Legal Advisors, Registrar to the Issue and Banker to the Issue to act in their respective capacity have been obtained and such consents have not been withdrawn up to the time of delivery of the Letter of Offer for registration with the stock exchanges. Consents of the Lenders are not required for this Rights Issue. The Auditors of the Company have given their written consent for the inclusion of their Report in the form and content as appearing the Letter of Offer and such consents and Reports have not been withdrawn upto the time of delivery of the Letter of Offer for registration with the stock exchanges. M/s. Price Waterhouse, Chartered Accountants, have given their written consent for inclusion of income tax benefits in the form and content as appearing in the Letter of Offer accruing to the Company and its members. To the best of the Company’s knowledge there are no other consents required for making this Issue. However, should the need arise, necessary consents shall be obtained by the Company. Expert Opinion, if any. The Company has not obtained any expert opinions, except for the Statement of Tax Benefits obtained from the Chartered Accountants. Fees Payable to the Lead Manager to the Issue The fees payable to the Lead Managers to the Issue and reimbursement of their out of pocket expenses will be as stated in the Engagement Letter dated August 31, 2007 entered into by the Company with SBI Capital Markets Limited, copy of which is available for inspection at the Registered Office of the Company Fees Payable to the Registrars to the Issue The fees payable to the Registrars to the Issue will be as per the Memorandum of Understanding dated 30th August, 2007 a copy of which is available for inspection at the Registered Office. Underwriting Commision, Brokerage and Selling Commission. No Underwriting Commision, Brokerage and Selling Commission will be paid for the Issue. Previous Rights and Public Issue, if any in the last five years The Company has not made any Rights Issue and Public Issue in the last five years. Previous Issue of shares otherwise than for Cash: Except as stated in the section titled “Capital Structure” beginning on page 17 of the Letter of Offer, the Company has not issued any Equity Shares for consideration otherwise than for cash. Commission or brokerage on previous issues The Company has not paid any commission or brokerage on previous issues. Particulars in regard to the Issuer company and other listed companies under the same management within the meaning of Section 370(1B) of the Companies Act, 1956 which have made any capital issue during the last three years There are no listed companies under the same management as per provision of Section 370(1B) of the Companies Act, 1956.

240

Promise versus Performance The Company Promise versus performance for the last three issues are as follows: A. Rights Issue of 1978: The Company did not make any promise made in 1978 Rights Issue B. Rights Issue of 1995: The Company had issued 41,30,944 Equity Shares of face value of Rs. 10/- each for cash at premium of Rs., 40/- per share with detachable tradeable warrants aggregating Rs. 20.65 Crores on Rights basis vide Letter of Offer dated October 25, 1995. The details of achievement of the objects of the Issue as mentioned in the Letter of Offer were: Sr. No. 1.

2. 3.

Objects mentioned in the Letter of Offer Part finance the cost of the Project for manufacture of VRLA batteries at Hosur, Tamil Nadu. Augment the long-term working capital requirements of the Company Meet the expenses of the Issue

Status of Achievement Achieved

Achieved Achieved

Profitability Projections made in the 1995 Rights Issue and the actuals appear as under: Rs in lakhs Particulars Year ended Year ended Year 31.03.1996 31.03.1997 31.03.1998 Promised Actual Promised Actual Promised Gross Income 31800 28271 38400 39970 44400 PBIDT 4287 4321 6050 6975 6525 Interest 1237 1519 1740 2228 1820 Depreciation 650 611 850 1144 925 Profit Before Tax 2400 2191 3460 3604 3780 Profit After Tax 2100 2041 2960 3093 3180 Equity Capital 2479 2479 2892 2883 2892 8734 7988 12768 12182 15370 Reserves and Surplus (excluding Revaluation Reserves) Revaluation Reserves 4041 3979 3931 3715 3821 45 42 54 52 63 Book Value per Share (excluding Revaluation Reserve) (Rs) 62 58 68 65 76 Book Value per Share (including Revaluation Reserve) (Rs) Earnings Per Share (Rs) 8 8 10 11 11

ended Actual 44780 7407 2800 1996 2611 2335 2883 13503

3587 57

69

8

C.Rights Issue of 1998: The Company had issued 72,08,454 Equity Shares of face value of Rs. 10/- each for cash at premium of Rs. 90/- per share aggregating Rs. 72.08 Crores on Rights basis vide Letter of Offer dated April 16, 1998. The details of achievement of the objects of the Issue as mentioned in the Letter of Offer were:

241

Sr. No.

Objects mentioned in the Letter of Offer

1.

To part finance the cost of acquisition of industrial undertakings and current assets of:

Status of Achievement Achieved

a. The Standard Batteries Limited located at Taloja and Kanjur Marg in Maharashtra and Guindy in Tamilnadu and b. Cosepa Fiscal Industries Limited at Ahmednagar, Maharashtra. 2. 3.

To part finance the cost of acquisition of Balancing Equipment and Residential Buildings for the Senior Management. To meet the expenses of the Issue

Achieved Achieved

Profitability Projections made in the 1998 Rights Issue and the actuals appear as under: Rs in lakhs Year ended 31.03.1998 Promised Actual

Particulars Sales & Income from operations Sales Products manufactured Products traded Total Sales Lease Rent (after adjustment for lease equalization) Others Total Revenue

54290 200 54490 437 55 54982

55609 490 56099 354 66 56519

-50 140 -16 60 266 3300

22 48 215 -12 57 354 905

Total Income

58548

57778

Expenditure Purchase of Finished Goods Raw Materials consumed Stores & Spares Consumed Power & Fuel Personnel Costs Excise Duty, Sales Tax & Octroi

170 25442 711 2282 3881 11500

3 23955 1311 2286 3850 11877

Other Income Dividend Export Incentives Interest Income Profit on disposal of fixed assets Insurance and other claims Other receipts Increase / (Decrease) in Stock

242

Other Expenses Interest Directors’ Remuneration Depreciation Total Expenditure

6351 3115 54 2050 55556

6549 3015 59 1996 54901

2992

2877

75 97 500 2320

75 113 275 2414

79 2241

78 2336

Balance Profit Less : Provision for Doubtful Insurance Claims Exchange loss on ECB Loan Taxation (including Wealth Tax – Rs lacs) Profit Before Extra-Ordinary Items Less : Prior Year Adjustments / Exceptional Items (net of tax) Profit After Extra-Ordinary Items Promoter Group companies The Promoter group Company has not made any public issue.

Outstanding debentures, bonds, redeemable preference shares and other instruments issued by the Company, outstanding as on the date of the Letter of Offer and terms of issue The Company has no outstanding debentures or bonds and redeemable preference shares and other instruments as on the date of the Letter of Offer. Stock Market Data for the Company’s Equity Shares (i)

The Ordinary Shares of the Company are actively traded on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited

(ii)

The Promoter and /or its Directors have not purchased and/or sold any equity shares , directly or indirectly, during a period of six months preceding the date on which this Letter of Offer is filed with SEBI.

(i) The following is the movement in the share price of the Company on the BSE: Year

08.09.2006 to 31.03.2007 01.04.2006 to 07.09.2006 01.04.2005 to 31.03.2006 01.04.2004 to 31.03.2005

High

Low

Average Price (Rs)

Date 01.02.2007

Rs. 50.70##

Volume 4005549

Date 12.12.2006

Rs. 35.65##

Volume 104972

41.60##

07.09.2006

388.45#

657561

14.06.2006

186.00#

4436

285.92#

23.03.2006

278#

45390

18.04.2005

138.00#

3971

206.67#

24.12.2004

180#

23888

23.06.2004

97.60#

5043

144.26#

# On stocks before split, i.e., face value of Rs 10/- per share ## On stocks after split, i.e. face value of Re 1/- per share effective from 08.09.2006

The closing market price of the equity share of the Company on the BSE on the day after the Board approved the Issue i.e.on 28th August, 2007 was Rs. 60.15 per share. (Source: BSE Website) (ii) The following is the movement in the share price of the Company on the NSE:

243

Year

High

08.09.2006 to 31.03.2007 01.04.2006 to 07.09.2006 01.04.2005 to 31.03.2006 01.04.2004 to 31.03.2005

Low

Average Price (Rs)

Date 01.02.2007

Rs. 50.90##

Volume 7671673

Date 12.12.2006

Rs. 35.75##

Volume 260081

42.68##

30.08.2006

373.60#

1270801

08.06.2006

187.30#

26793

278.34#

30.12.2005

275#

31836

18.04.2005

136#

20904

200.88#

24.12.2004

181#

103434

24.06.2004

96.00#

11547

145.75#

The closing market price of the equity share of the company on the NSE on the day after the Board approved the Issue i.e., on 28th August, 2007 was Rs 60.00 per share. (Source : NSE website)

(iii) The following is the movement in the share price of the Company on the CSE: In the last three years, trading on CSE has been negligible. There has been no trade except for the following two trades. Year

2005 – 06 2004 – 05

High

Date 14.07.2005 10.10.2004

Rs. 217.95# 154.90#

Low

Volume N.A. N.A.

Date 14.07.2005 08.06.2004

Rs. 217.95# 101.50#

Average Price (Rs) Volume N.A N.A.

217.95# 128.20#

# On face value of Rs 10/- per share.

(iv) The total volume of securities traded in each month during the preceding six months on the BSE and the NSE is as follows: BSE

Details of High Price

Month June 2007 July 2007 August 2007 September 2007 October 2007 November 2007

Date 11.06.2007 23.07.2007 31.08.2007 25.09.2007 31.10.2007 19.11.2007

NSE

Details of High Price

Month June 2007 July 2007 August 2007 September 2007 October 2007 November 2007

Date 11.06.2007 23.07.2007 31.08.2007 25.09.2007 31.10.2007 19.11.2007

Rs. 50.35 63.00 63.45 67.00 78.45 88.60

Rs. 50.30 62.90 63.55 66.90 78.35 88.40

Details of Low Price Volume 2493543 3643538 303247 389580 1152493 670166

Date 05.06.2007 18.07.2007 10.08.2007 10.09.2007 17.10.2007 8.11.2007

Rs. 45.20 45.45 52.00 60.30 55.00 63.00

Total Volume Volume 54844 79965 221231 139219 236365 67039

Details of Low Price Volume 811500 8523959 752614 617970 1689803 1218210

244

Date 01.06.2007 18.07.2007 10.08.2007 20.09.2007 17.10.2007 7.11.2007

Rs. 45.25 45.25 52.25 60.00 53.00 63.35

4539446 17161870 8603503 4262841 8331425 4312710 Total Volume

Volume 335418 218068 1260178 97251 418506 543310

5859680 31608259 18418598 6695053 15264592 9703443

(v) Weekend price of equity Shares of the Company on the BSE and the NSE appear as under: BSE: Week ended

Highest Price during the week (Rs.)

Lowest Price during the week (Rs.)

Average price for the period (Rs.)

Total Volume (No. of Shares)

November 30, 2007 November 23, 2007

83.75

86.00

71.73

7,82,915

88.60

68.65

75.32

14,62,401

November 16, 2007

77.95

63.00

71.61

9,03,783

November 09, 2007

75.50

63.00

66.94

5,77,625

(Source: BSE website) NSE: Week ended

Highest Price during the week (Rs.)

Lowest Price during the week (Rs.)

Average price for the period (Rs.)

Total Volume (No. of Shares)

November 30, 2007 November 23, 2007

75.45

68.00

71.58

22,61,610

88.40

68.55

75.34

27,99,041

November 16, 2007

77.45

64.50

71.57

21,09,102

November 09, 2007

76.00

63.35

66.93

14,94,302

(Source: NSE website) The market price of the equity shares of the Company as on August 28, 2007, the date on which the resolution of the Board of Directors approving the issue was passed was Rs. 60.15 on BSE and Rs. 60.00 on NSE. The closing price of the equity shares of the Company on August 29, 2007 (i.e. one day after the Board of Directors approved the Rights Issue) was Rs. 58.80 on BSE and Rs. 58.90 on NSE. ƒ ƒ ƒ

The equity shares of the Company were in no delivery period from December 10, 2007 to December 14, 2007 The cum-rights closing price of the shares of the Company as on December 07, 2007 was Rs. 72.70 on BSE and 72.85 on NSE. The ex-rights closing price of the shares of the Company as on December 10, 2007 was Rs. 72.80 on BSE and 72.80 on NSE.

Mechanism evolved for redressal of Investor Grievances The transfer and other related work is handled by M/s. C.B.Management Services (P) Limited, Registrar & Share Transfer Agents. The Secretarial Department actively interacts with M/s. C.B.Management Services (P) Limited. for expeditious redressal of investor grievances and takes care of complaints received from statutory bodies such as SEBI, Stock Exchanges, Department of Company Affairs, etc. The name of the Company has never appeared in fortnightly press release on investor complaints of SEBI. The Company’s investor grievances arising out of the issue will be handled by M/s. C. B. Management Services (P) Limited Registrars to the Issue. The Registrars will have a separate team of personnel handling only the post issue correspondence of the Company. The Company settles investor grievances expeditiously and satisfactorily. The agreement between our Company and the Registrars will provide for retention of records with the Registrars for a period of at least one year from the last date of dispatch of letter of allotment/share certificate/refund order to enable the Registrars to redress grievances of investors.

245

All grievances relating to the Issue may be addressed to the Registrars to the Issue giving full details such as folio No., name and address of the first applicant, Equity Shares, Application Form serial number, amount paid on application and the Bank Branch where the application was deposited, along with a photocopy of the acknowledgement slip. In case of renunciation, the same details of the renouncee should be furnished. The average time taken by the Registrars for attending to routine grievances will be 15 days from the date of receipt. In case of non-routine grievances where verification at other agencies is involved, it would be the endeavour of the Registrars to attend to them as expeditiously as possible. The Company undertakes to resolve its investor grievances in a time bound manner. Disposal of Investor Grievances by the Company The status of rederessal of the investor complaints received by the Company for the last 3 years and upto November 2007 is given below: Year 2004-2005 2005-2006 2006-2007 April 2007 to November 2007

No. of complaints received 3 5 1 4

No. of complaints redressed 3 5 1 4

No. of complaints pending 0 0 0 0

The Company estimate that the average time required by the Company or the Registrar to the Issue for the redressal of routine investor grievances shall be seven working days from the date of receipt of the complaint. In case of non-routine complaints and complaints where external agencies are involved, the Company will seek to redress these complaints as expeditiously as possible. The Company has appointed Mr. Barun Das, Divisional Head – Legal & Company Secretary as the Compliance Officer and he may be contacted at: Exide Industries Limited Exide House, 59E Chowringhee Road Kolkata 700 020 West Bengal Tel No.: (033) 2283 2636 Fax No. : (033) 2283 2637 Email : [email protected] Investors can contact him or the Registrar to the Issue in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of allotment / share certificates, credit of allotted Equity Shares in the respective beneficiary account or refund orders, etc. Changes, if any, in the Auditors in the last three years, and reasons, thereof There have been no changes in the Auditors of the Company in the last three years. Capitalisation of Reserves or Profits, during the last five years The Company has not capitalized its reserves during the last five years except the Bonus Issue of Equity Shares in 2003. For details, please refer “Build-up of Equity Share Capital” page no. 18 of the Letter of Offer. Revaluation of Assets, if any, during the last five years: The Company has not revalued its assets in the past five years.

246

ISSUE RELATED INFORMATION TERMS OF THE ISSUE Ranking of Equity Shares The Equity Shares being issued shall be subject to the provisions of the Memorandum and Articles of the Company and shall rank pari passu in all respects with the existing Equity Shares including rights in respect of dividend. The Allottees will be entitled to dividend or any other corporate benefits, if any, declared by the Company after the date of allotment of Equity Shares pursuant to the Issue. See the section titled “Main Provisions of the Articles of Association of the Company” beginning on page 268 of the Letter of Offer for a description of the Articles of Association. Mode of Payment of Dividend The Company shall pay dividend, if declared, to the shareholders as per the provisions of the Companies Act, 1956. Terms of Payment Full amount of Rs 30/- per share is payable on application. Payment should be made in cash / or by cheque/ demand draft drawn on any bank which is situated at and is a member or a sub member of the Bankers’ to the Issue, clearing house located at the center where the application is accepted. A separate cheque / draft must accompany each application form. Outstation cheques / drafts will not be accepted and application(s) accompanied by such cheques / drafts will be rejected. Applicants residing at places other than the cities where the collection centers have been opened should send their completed CAF by registered post / speed post to the Registrars to the Issue, C B Management Services (P) Limited along with bank drafts payable at Kolkata, net of demand draft and postal charges in favour of “Exide Industries Limited – Rights Issue’ crossed “A/c Payee only” so that the same is received on or before closure of the Issue Fractional Entitlements Fractional entitlement will be ignored. Equity shareholders whose fractional entitlement is being ignored would be given preferential allotment of one additional equity share each, if they apply for an additional equity share. Face Value Each Equity Share shall have a face value of Re. 1/Issue Price Each Equity Share is being offered at a price of Rs. 30 per share for cash. Rights of the Equity Shares Subject to applicable laws, the equity shareholders shall have the following rights: • • • • • •

Right to receive dividend, if declared; Right to attend general meetings and exercise voting powers, unless prohibited by law; Right to vote on a poll either in person or by proxy; Right to receive offers for rights shares and be allotted bonus shares, if announced; Right to receive surplus on liquidation; Right to free transferability; and

247



Such other rights, as may be available to a shareholder of a listed public Company under the Companies Act and the Company’s Memorandum and Articles.

For a detailed description of the main provisions of the Articles of Association of the Company dealing with voting rights, dividend, forfeiture and lien, transfer and transmission and/or consolidation/splitting, see section titled “Main Provisions of the Articles of Association of the Company " on page 268 of this Letter of Offer Market lot Since trading of the Company’s Equity Shares is in dematerialized form, the tradable lot is one equity share. In case of physical certificates the Company would issue one certificate for the Equity shares allotted to one person (“Consolidated Certificate”). In respect of the Consolidated Certificate, the Company shall, only upon receipt of a request from the Equity shareholders, split such Consolidated Certificate into smaller denomination. The Company will not charge any fee for splitting the Consolidated Certificate. Nomination facility In accordance with Section 109A of the Companies Act, only individuals applying as sole applicants/ joint applicants can nominate non-individuals, including society, trust, body corporate and partnership firms. A holder of power of attorney cannot nominate. In accordance with Section 109A of the Companies Act, the sole or first holder, along with other joint holders, may nominate any one person in whom, in the event of the death of sole holder or in case of joint holders, death of all the holders, as the case may be, the Equity Shares allotted, if any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall in accordance with Section 109A of the Companies Act, be entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the Equity Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale/ transfer/ alienation of equity share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available on request at the Company’s Registered / Corporate Office or to the Company’s Registrar and Transfer Agents. The Applicant can make the nomination by filling in the relevant portion of the CAF. In accordance with Section 109B of the Companies Act, any person who becomes a nominee by virtue of the provisions of Section 109A of the Companies Act, 1956, shall upon the production of such evidence as may be required by the Board, elect either: a. b.

to register himself or herself as the holder of the Equity Shares; or to make such transfer of the Equity Shares, as the deceased holder could have made

Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to transfer the Equity Shares, and if the notice is not complied with within a period of ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the Equity Shares, until the requirements of the notice have been complied with. Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has already registered the nomination with the Company, no further nomination needs to be made for Equity Shares to be allotted in this Issue under the same folio. In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective DP of the applicant would prevail. If the applicant requires changing the nomination, they are requested to inform their respective DP.

248

Minimum Subscription If the Company does not receive the minimum subscription of 90% of the issue size, the entire subscription shall be refunded to the applicants within forty two days from the date of closure of the issue. If there is delay in the refund of subscription by more than 8 days after the Company becomes liable to pay the subscription amount (i.e. forty two days after closure of the issue), the Company will pay interest for the delayed period, at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956. The issue will become undersubscribed after considering the number of equity shares applied as per entitlement/ renouncement and additional equity shares, the undersubscribed portion can be applied for only after the close of the Issue. Chloride Eastern Limited, U.K., the Promoter has undertaken to subscribe to such under-subscribed portion, after considering the allotment, to ensure that the Issue is 100% subscribed. This acquisition of additional Equity Shares, if allotted to Chloride Eastern Limited, the Promoters, shall be in terms of proviso to regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of regulation 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition will not result in change of control of management of the Company. For further details please refer to section titled “Basis of Allotment” beginning on page 262 of the Letter of Offer. Arrangements for disposal of Odd Lots The Equity Shares would be traded in dematerialised form and the minimum trading lot for Equity Shares will be one Equity Share. Therefore there would not be any odd lots generated at the time of allotment. Restrictions, if any, on transfer/transmission of Shares/Debentures and on their Consolidation / Splitting The restrictions, if any, on the transfer/transmission of the Equity Shares and their consolidation / splitting are contained in the sections titled “Main Provisions of the Articles of Association of the Company” and “Capital Structure” beginning on pages 268 and 17 of the Letter of Offer. ISSUE PROCEDURE Procedure for Application The CAF would be printed in black ink for all Equity Shareholders. In case the original CAF is not received by the applicant or is misplaced by the applicant, the applicant may request the Registrars to the Issue, for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address. Non-resident shareholders may obtain a copy of the CAF from the Registrars to the Issue, M/s. C B Management Services (P) Limited located at P-22 Bondel Road, Kolkata – 700 019 by furnishing the registered folio number, DP ID number, Client ID number and their full name and address. Equity Shares offered to you pursuant to this Issue may be renounced, either in full or in part, in favour of any other person or persons. Such renouncees can only be Indian nationals/ limited companies incorporated under and governed by the Act, statutory corporations/institutions, trusts (unless registered under the Indian Trust Act), minors (through their legal guardians), societies (unless registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust/society is authorised under its constitution/bye laws to hold equity shares in a company and cannot be a partnership firm, more than three persons including joint-holders, HUF, foreign nationals (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of the Letter of Offer could be illegal or require compliance with securities laws in their jurisdiction or any other persons not approved by the Board.

249

Acceptance of the Issue You may accept the Issue and apply for the Equity Shares offered, either in full or in part, by filling Part A of the enclosed CAF and submit the same along with the Application Money payable to the Bankers to the Issue or any of the branches as mentioned on the reverse of the CAF before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors of the Company in this regard. Applicants at centers not covered by the branches of collecting banks can send their CAF together with the cheque drawn on a local bank at Kolkata or with a demand draft, net of Bank and postal charges, payable at Kolkata to the Registrar to the Issue by registered post, so as to reach before the closure of the Issue. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected. Option available to the Equity Shareholders The Composite Application Form clearly indicates the number of Equity Shares that the Equity Shareholder is entitled to. If the Equity Shareholder applies for an investment in Equity Shares, then he can: •

Apply for his entitlement in part;



Apply for his entitlement in part and renounce the other part or renounce the entire entitlement;



Apply for his entitlement in full;



Apply for his entitlement in full and apply for additional Equity Shares.

Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additional Equity Shares. Additional Equity Shares You are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are entitled to, provided that you have applied for all the Equity Shares offered without renouncing them in whole or in part in favour of any other person(s). If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional shares in Part A of the CAF. Applications for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board, in consultation if necessary with the Designated Stock Exchange and in the manner prescribed under the section entitled ‘Basis of Allotment’ beginning on page 262 of the Letter of Offer. The renouncees applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares in Part C of the CAF.

Renunciation This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part in favour of any other person or persons. Renouncees can only be Indian Nationals (including minor through their natural/legal guardian)/limited companies incorporated under and governed by the Act, statutory corporations/institutions, trusts (registered under the Indian Trust Act), societies (registered under the Societies Registration Act, 1860 or any other applicable laws) provided that such trust/society is authorised under its constitution/bye laws to hold equity shares in a company and cannot be a partnership firm, foreign nationals or nominees of any of them (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of the Letter of Offer could be illegal or require compliance with securities laws of such jurisdiction or any other persons not approved by the Board. Any renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to other Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to

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Resident Indian(s) is subject to the renouncer(s)/renouncee(s) obtaining the approval of the FIPB and/ or necessary permission of the RBI under the Foreign Exchange Management Act, 1999 (FEMA) and other applicable laws and such permissions should be attached to the CAF. Applications not accompanied by the aforesaid approval are liable to be rejected. By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, the existing Equity Shareholders of the Company who do not wish to subscribe to the Equity Shares being offered but wish to renounce the same in favour of renouncees shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s). Your attention is drawn to the fact that the Company shall not allot and/or register any Equity Shares in favour of: •

More than three persons in case of joint holders;



Partnership firm(s) or their nominee(s);



Minors;



Hindu Undivided Family;



Any trust or society (unless the same is registered under the Societies Registration Act, 1860 or the Trusts Act, 1882, as applicable, and is authorized under its constitution to hold shares of a company); Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used, this will render the application invalid. Submission of the enclosed CAF to the Banker to the Issue at its collecting branches specified on the reverse of the CAF with the form of renunciation (Part B of the CAF) duly filled in shall be conclusive evidence for the Company of the person(s) applying for Equity Shares in Part ‘C’ of the CAF to receive allotment of such Equity Shares. The renouncees applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares. Part ‘A’ of the CAF must not be used by the renouncee(s) as this will render the application invalid. Renouncee(s) will have no further right to renounce any Equity Shares in favour of any other person.

Procedure for renunciation To renounce all the Equity Shares offered to a shareholder in favour of one renouncee If you wish to renounce the Equity Shares offered pursuant to this Issue and as indicated in Part ‘A’ of the CAF, in whole, please complete Part ‘B’ of the CAF. In case of joint holding, all joint holders must sign Part ‘B’ of the CAF, in the same order as per specimen signatures recorded with the Company. The person in whose favour renunciation has been made should complete and sign Part ‘C’ of the CAF. In case of joint renouncees, all joint renouncees must sign Part ‘C’ of the CAF. To renounce in part or to renounce the whole to more than one person(s) If you wish to either accept the Equity Shares offered pursuant to this Issue in part and renounce the balance Equity Shares or renounce all the Equity Shares offered pursuant to this Issue in favour of two or more renouncees, the CAF must be first split into the requisite number of forms. Please indicate your requirement of split forms in the space provided for this purpose in Part ‘D’ of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date of receiving requests for split forms. On receipt of the required number of split forms from the Registrar, the procedure as mentioned in paragraph above shall have to be followed.

251

In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not agree with the specimen registered with the Company, the application is liable to be rejected. Renouncee(s) The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part ‘C’ of the Application Form and submit the entire Application Form to the Bankers to the Issue on or before the Issue Closing Date along with the application money in full. Change and/ or introduction of additional holders If you wish to apply for Equity Shares jointly with any other person(s), not more than three, who is/are not already a joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure, as stated above shall have to be followed. Please note that: •

Part ‘A’ of the CAF must not be used by any person(s) other than the Equity Shareholder to whom the Letter of Offer has been addressed. If used, this will render the application invalid.



Request by the applicant for the split application form should reach the Registrars to the Issue on or before January 12, 2008



Only the Equity Shareholder to whom the Letter of Offer has been addressed shall be entitled to renounce and to apply for split application forms. Forms once split cannot be split further.



Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.

How to Apply Resident Equity Shareholders Applications should be made by filling in the enclosed CAF provided by the Company. The enclosed CAF should be completed in all respects, as explained in the instructions indicated in the CAF. Applications will not be accepted by the Lead Managers or by the Registrar to the Issue or by the Company at any offices except for postal applications as per instructions given elsewhere in the Letter of Offer. The CAF consists of four parts: Part A: Part B: Part C: Part D:

Form for accepting the Equity Shares offered and for applying for additional Equity Shares Form for renunciation Form for application for renouncees Form for request for split application forms

Non-resident Equity Shareholders Applications received from the non-resident Equity Shareholders for the allotment of Equity Shares pursuant to this Issue shall, inter alia, be subject to the conditions as may be imposed from time to time by the RBI, in the matter of refund of application moneys, allotment of Equity Shares, issue of letters of allotment/ certificates/ payment of dividends etc. The Letter of Offer and the enclosed CAF shall be dispatched to non-resident Equity Shareholders in India only. The summary of options available to the Equity Shareholder is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the enclosed CAF:

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Option A.

B.

C.

D.

E.

Option Available Accept whole or part of your entitlement without renouncing the balance. Accept your entitlement in full and apply for additional Equity Shares Accept only a part of your entitlement of the Equity Shares offered to you (without renouncing the balance) Renounce your entitlement in full to one person (Joint renouncees not exceeding three are considered as one renouncee). 1. Accept a part of your entitlement and renounce the balance to one or more renouncee(s)

Action Required Fill in and sign Part A (All joint holders must sign)

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

Fill in and sign Part B (all joint holders must sign) indicating the number of Equity Shares renounced and hand over the entire CAF to the renouncee. The renouncees must fill in and sign Part C of the CAF (All joint renouncees must sign) Fill in and sign Part D (all joint holders must sign) requesting for Split Application Forms. Send the CAF to the Registrar to the Issue so as to reach them on or before the last date for receiving requests for Split Forms. Splitting will be permitted only once.

OR On receipt of the Split Form take action as indicated below. 2. Renounce your entitlement to all the Equity Shares offered to you to more than one renouncee

(i) For the Equity Shares you wish to accept, if any, fill in and sign Part A of one split CAF (only for option 1). (ii) For the Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Equity Shares renounced and hand over the split CAFs to the renouncees. (iii) Each of the renouncees should fill in and sign Part C for the Equity Shares accepted by them.

F.

Introduce a joint holder or change the sequence of joint holders

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

Applications for Equity Shares should be made only by way of the CAF, which is provided by the Company. The CAF should be completed in all respects as explained under the head “INSTRUCTIONS” indicated on the reverse of the CAF before submission to the Banker to the Issue at its collecting branches mentioned on the reverse of the CAF on or before January 28, 2008. Non-resident shareholders/renouncees should forward their applications to the Banker to the Issue as mentioned in the CAF for non-resident Equity Shareholders. No part of the CAF should be detached under any circumstances. Applicants must provide information in the CAF as to their savings / current / NRE / NRO / FCNR bank account and the name of the bank with whom such account is held to enable the Registrar to print the said details in the refund orders after the name of the payees. For applicants residing at places other than designated Bank Collecting branches. (i)

Applicants residing at places other than the cities where the collection centres have been opened should send their completed CAF by registered post/speed post to the Registrars to the Issue, M/s. C B Management Services (P) Limited, alongwith bank draft payable at Kolkata net of demand draft and postal charges in favour of “Exide Industries Ltd.-Rights Issue” crossed “A/c Payee only” so that the same are received on or before closure of the Issue (i.e. January 28, 2008).

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(ii)

The Company will not be liable for any postal delays and applications received through mail after the closure of the Issue, are liable to be rejected and returned to the applicants. Applications by mail should not be sent in any other manner except as mentioned below.

(iii)

All application forms duly completed together with cash/ cheque/demand draft for the application money must be submitted before the close of the subscription list to the Bankers to the Issue named herein or to any of its branches mentioned on the reverse of the CAF. The CAF alongwith application money must not be sent to the Company or the Lead Manager to the Issue or the Registrars to the Issue except as mentioned above.

(iv)

The applicants are requested to strictly adhere to these instructions. Failure to do so could result in the application being liable to be rejected with the Company, the Lead Manager and the Registrars not having any liabilities to such applicants.

Availability of duplicate CAF In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the applicant who should furnish the registered folio number/ DP and Client ID number and his/ her full name and address to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently. Thus, in case the original and duplicate CAFs are lodged for subscription, allotment will be made on the basis of the duplicate CAF and the original CAF will be ignored. Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to the Issue on plain paper, along with a demand draft, net of bank and postal charges, payable at Kolkata or account payee cheque drawn on local bank at Kolkata which should be drawn and marked A/c Payee Only and payable , in favour of “Exide Industries Ltd. –Rights Issue” in case of resident shareholders and non-resident shareholders applying on nonrepatriable basis and in favour of “Exide Industries Ltd.-Rights Issue-NR” in case of non-resident shareholders applying on repatriable basis and marked “A/c Payee Only” and send the same by registered post directly to the Registrar to the Issue so as to reach them on or before the closure of the Issue, i.e. January 28, 2008. The envelope should be superscribed “Exide Industries Limited – Rights Issue” The application on plain paper, duly signed by the applicants including joint holders, in the same form as per specimen recorded with the Company, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the following particulars: •

Name of Issuer, being “Exide Industries Limited”



Name and address of the Equity Shareholder including joint holders



Registered Folio Number/ DP ID No. and Client ID No



Number of shares held as on the Record Date



Certificate numbers and distinctive numbers, if held in physical form.



Number of Rights Equity Shares entitled



Number of Rights Equity Shares applied for out of entitlement



Number of additional Equity Shares applied for, if any



Total number of Equity Shares applied for



Total amount paid on application at the rate of Rs. 30/- (application amount only) per Equity Share



Allotment option either in physical or demat mode with DPID Client ID number,

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Particulars of cheque/demand draft



Savings/Current Account Number and name and address of the bank where the Equity Shareholder will be depositing the refund order. In case of depository the bank account details shall be obtained from the information available with the Depositories.



PAN number, Income Tax Circle/Ward/District, photocopy of the PAN card/PAN communication of the applicant and of each applicant in case of joint names Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of the Company



In case of Non Resident Shareholders, NRE/ FCNR/ NRO A/c No. Name and Address of the Bank and Branch;



If payment is made by a draft purchased from NRE/ FCNR/ NRO A/c No., as the case may be, an Account debit certificate from the bank issuing the draft, confirming that the draft has been issued by debiting NRE/FCNR/ NRO Account.

Payments in such cases, should be through a demand draft, net of bank charges and postal charges payable at Kolkata drawn in favor of Exide Industries Ltd.- Rights Issue in case of resident shareholders, nonresident shareholders applying on non repatriable basis and in favor of “Exide Industries Ltd.- Rights Issue-NR” in respect of non-resident shareholders applying on repatriable basis and marked “A/c Payee Only”. Attention of the shareholders is drawn to the fact that those shareholders making the application otherwise than on the CAF (i.e. on a plain paper as stated above) shall not be entitled to renounce their rights and should not utilise the CAF for any purpose including renunciation even if it is received subsequently. In case the original and duplicate CAFs and application on the plain paper or any two of these applications are lodged or if any shareholder violates any of these requirements, the Company will have the absolute right to reject any one or both of his/her/their application and refund the application money received. However, the Company is not liable to pay any interest whatsoever on money so refunded. Mutual Funds A separate application can be made in respect of each scheme of an Indian mutual fund registered with the SEBI and such applications shall not be treated as multiple applications. The applications made by asset management companies or custodians of a mutual fund should clearly indicate the name of the concerned scheme for which the application is being made. Offer to Non-Resident Equity Shareholders/Applicants As per Regulation 6 of Notification No. FEMA 20/200-RB dated May 3, 2000, the RBI has given general permission to Indian companies to issue rights shares to non-resident shareholders including additional shares. Applications received from NRIs and non-residents for allotment of Equity Shares shall be inter alia, subject to the conditions imposed from time to time by the RBI under the Foreign Exchange Management Act, 1999 (FEMA) in the matter of refund of application moneys, allotment of Equity Shares, issue of letter of allotment/ share certificate/payment of dividend etc. The rights shares purchased by nonresidents shall be subject to the same conditions including restrictions in regard to the repatriability as are applicable to the existing Equity Shares against which the new Equity Shares are issued pursuant to this Issue. By virtue of Circular No. 14 dated September 16, 2003 issued by the RBI, overseas corporate bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Further, the RBI in its Master Circular dated July 1, 2005 has stated that OCBs are not permitted to subscribe to equity shares of Indian companies on rights basis under the automatic route. OCBs shall not be eligible to subscribe to the Equity Shares pursuant to the Letter of Offer unless they obtain the prior approval of the RBI in this regard. Thus, OCBs desirous of participating in this Issue must obtain prior approval from the RBI. On providing such approval to the Company at its registered office, the OCB shall be entitled to receive the Letter of Offer and the CAF.

255

Letter of offer and CAF shall be dispatched to non-resident Equity Shareholders in India only. No Offer in the United States The Equity Shares of the Company are not registered under the United States Securities Act of 1933, as amended. The rights referred to in the Letter of Offer are being offered in India but not in the United States of America. The offering to which the Letter of Offer relates is not, and under no circumstances is to be construed as, an offering of any shares or rights for sale in the United States of America, or the territories or possessions thereof, or as a solicitation therein of an offer to buy any of the said shares or rights. Accordingly, the Letter of Offer should not be forwarded to or transmitted in or into the United States of America at any time. The Company will not accept subscriptions from any person, or his agent, who appears to be, or who the Company has reason to believe is, a resident of the United States of America and to whom an offer, if made, would result in requiring registration of the Letter of Offer with the United States Securities and Exchange Commission. Last date of Application The last date for submission of the duly filled in CAF is January 28, 2008. The Issue will be kept open for a minimum of 32 (thirty two) days and the Board or any committee thereof will have the right to extend the said date for such period as it may determine from time to time but not exceeding 60 (sixty) days from the Issue Opening Date. If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar to the Issue on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board/ Committee of Directors, the offer contained in the Letter of Offer shall be deemed to have been declined and the Board/ Committee of Directors shall be at liberty to dispose off the Equity Shares hereby offered, as provided under the section “Basis of Allotment”. INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN BE TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALIZED FORM. Mode of payment for Resident Equity Shareholders/ Applicants „

All cheques / drafts accompanying the CAF should be drawn in favour of “Exide Industries Ltd.Rights Issue” and marked ‘A/c Payee only’

„

Applicants residing at places other than places where the bank collection centres have been opened by the Company for collecting applications, are requested to send their applications together with a demand draft of an amount net of bank and postal charges favouring “Exide Industries Ltd. –Rights Issue” and marked ‘A/c Payee only’ payable at Kolkata directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. The Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.

Mode of payment for Non-Resident Equity Shareholders/ Applicants As regards the application by non-resident equity shareholders, the following further conditions shall apply: Payment by non-residents must be made by demand draft / cheque payable at Kolkata or funds remitted from abroad in any of the following ways: Application with repatriation benefits Payment by NRIs/ FIIs/ foreign investors must be made by demand draft/cheque payable at Kolkata or funds remitted from abroad in any of the following ways:

256

„

By Indian Rupee drafts purchased from abroad and payable at Kolkata or funds remitted from abroad (submitted along with Foreign Inward Remittance Certificate); or

„

By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained in Kolkata; or

„

By Rupee draft purchased by debit to NRE/ FCNR Account maintained elsewhere in India and payable in Kolkata; or

„

FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.

„

All cheques/drafts submitted by non-residents applying on repatriable basis should be drawn in favour of “Exide Industries Ltd.- Rights Issue-NR” payable at Kolkata and crossed ‘A/c Payee only’ for the amount payable.

A separate cheque or bank draft must accompany each application form. Applicants may note that where payment is made by drafts purchased from NRE/FCNR accounts as the case may be, an account debit certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/FCNR account should be enclosed with the CAF. In the absence of the above the application shall be considered incomplete and is liable to be rejected. In the case of non-residents who remit their application money from funds held in FCNR/NRE Accounts, refunds and other disbursements, if any shall be credited to such account details of which should be furnished in the appropriate columns in the CAF. In the case of NRIs who remit their application money through Indian Rupee Drafts from abroad, refunds and other disbursements, if any will be made in US Dollars at the rate of exchange prevailing at such time subject to the permission of RBI. The Company will not be liable for any loss on account of exchange rate fluctuation for converting the Rupee amount into US Dollars or for collection charges charged by the applicant’s bankers. Application without repatriation benefits As far as non-residents holding shares on non-repatriation basis are concerned, in addition to the modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in Kolkata or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Kolkata. In such cases, the allotment of Equity Shares will be on non-repatriation basis. All cheques/drafts submitted by non-residents applying on non-repatriation basis should be drawn in favour of “Exide Industries Ltd. –Rights Issue” payable at Kolkata and must be crossed ‘A/c Payee only’ for the amount payable. The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF. If the payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the bank issuing the draft, confirming that the draft has been issued by debiting the NRO account, should be enclosed with the CAF. In the absence of the above, the application shall be considered incomplete and is liable to be rejected. New demat account shall be opened for holders who have had a change in status from resident Indian to NRI. Note: „

In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to Income Tax Act, 1961.

„

In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity Shares cannot be remitted outside India.

257

„

The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

„

In case of an application received from non-residents, allotment, refunds and other distribution, if any, will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such allotment, remittance and subject to necessary approvals.

Payment by Stockinvest In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated November 5, 2003, the Stockinvest Scheme has been withdrawn. Hence, payment through Stockinvest would not be accepted in this Issue Notices All notices to the Equity Shareholder(s) required to be given by the Company shall be published in one English national daily with wide circulation, one Hindi national daily with wide circulation and one regional language daily newspaper with wide circulation and/or, will be sent by ordinary post / registered post / speed post to the registered holders of the Equity Share from time to time. General instructions for applicants (a)

Please read the instructions printed on the enclosed CAF carefully.

(b)

Application should be made on the printed CAF, provided by the Company except as mentioned under the head Application on Plain Paper and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/ or which are not completed in conformity with the terms of the Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the names of all the applicants, details of occupation, address, father’s / husband’s name, age, where applicable, must be filled in block letters.

(c)

The CAF together with cheque / demand draft should be sent to the Bankers to the Issue / Collecting Bank and not to the Company or Lead Managers to the Issue. Applicants residing at places other than cities where the branches of the Bankers to the Issue have been authorised by the Company for collecting applications, will have to make payment by Demand Draft payable at Kolkata and send their application forms to the Registrars to the Issue by REGISTERED POST. If any portion of the CAF is / are detached or separated, such application is liable to be rejected.

(d)

PAN Number: The applicant or in the case of application in joint names, each of the applicants, should mention his/ her PAN number(s) allotted under the Income-Tax Act, 1961 and also submit a photocopy of the PAN card(s) or a communication from the Income Tax authority indicating allotment of PAN (“PAN Communication”) along with the application for the purpose of verification of the number. Application Forms without the photocopy of the PAN card(s)/ PAN Communication will be considered incomplete and are liable to be rejected.

(e)

Bank Account Details: It is mandatory for applicants to provide information as to their savings/current account number and the name of the Bank with whom such account is held in the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees. Application not containing such details is liable to be rejected.

(f)

Payment by cash: The payment against the application should not be effected in cash if the amount to be paid is Rs. 20,000 or more. In case payment is effected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will

258

be paid thereon. Payment against the application if made in cash, subject to conditions as mentioned above, should be made only to the Bankers to the Issue. (g)

Signatures should be either in English or Hindi or in any other language specified in the Eight Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with the Company or depositories.

(h)

In case of an application under power of attorney or by a body corporate or by a society, a certified true copy of the relevant power of attorney or relevant resolution or authority to the signatory to make the relevant investment under this Issue and to sign the application and a copy of the Memorandum and Articles of Association and / or bye laws of such body corporate or society must be lodged with the Registrar to the Issue, within the closure of the Issue, giving reference of the serial number of the CAF. In case the above referred documents are already registered with the Company, the same need not be a furnished again. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closing Date, then the application is liable to be rejected. In no case should these papers be attached to the application submitted to the Bankers to the Issue.

(i)

In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with the Company. Further, in case of joint applicants who are renouncees, the number of applicants should not exceed three. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant.

(j)

Application(s) received from Non-Resident / NRIs, or persons of Indian origin residing abroad for allotment of Equity Shares shall, inter alia, be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund of application money, allotment of Equity Shares, subsequent issue and allotment of Equity Shares, interest, export of share certificates, etc. In case a Non-Resident or NRI Equity Shareholder has specific approval from the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF.

(k)

All communication in connection with application for the Equity Shares, including any change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first / sole applicant Equity Shareholder, folio numbers and CAF number. Please note that any intimation for change of address of Equity Shareholders, after the date of allotment, should be sent to the in house, Investor Service Department of the Company, in the case of Equity Shares held in physical form, and to the respective depository participant, in case of Equity Shares held in dematerialized form.

(l)

Split forms cannot be re-split.

(m)

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

(n)

Applicants must write their CAF number at the back of the cheque / demand draft.

(o)

Only one mode of payment per application should be used. The payment must be either in cash or by cheque / demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member or a sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF where the application is to be submitted.

(p)

A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or postdated cheques and postal / money orders will not be accepted and applications accompanied by such cheques / demand drafts / money orders or postal orders will be rejected. The Registrar will

259

not accept payment against application if made in cash. (For payment against application in cash please refer point (f) above) (q)

No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/ Registrar will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF.

Permanent Account Number or PAN SEBI vide circular No. MRD/DoP/Cir- 05/2007 dated April 27, 2007, has made PAN the sole identification number for all participants in the securities market, irrespective of the amount of transaction. The photocopy of the PAN card(s) or PAN Communication is required to be submitted with the Application Form. Applications without this information and documents will be considered incomplete and are liable to be rejected. It is to be specifically noted that Applicants should not submit the GIR number instead of the PAN as the Application is liable to be rejected on this ground. Application Number on the Cheque/Demand Draft To avoid any misuse of instruments, the applicants are advised to write the CAF number and name of the first application on the reverse of the cheque/demand draft. Grounds For Technical Rejections Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following: •

Amount paid does not tally with the amount payable by the applicant(except bank and postal charges, where applicable);



In case of physical shareholders, bank account details (for refund) are not given;



Age of first applicant not given, where applicable;



PAN photocopy/ PAN Communication not given;



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



If the signature of the existing Equity Shareholder does not match with the one given on the application form or does not match with the records available with their depositories;



Application forms are not submitted by the applicant within the time prescribed as per the application form and the Letter of Offer;



Applications not duly signed by the sole/joint applicants;



Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs to participate in the Issue;



Applications accompanied by stockinvest;



In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the applicants (including the order of names of joint holders), the Depositary Participant’s identity (DP ID) and the beneficiary’s identity;



Applications by ineligible non-residents (including on account of restriction or prohibition under applicable local laws) and where last available address in India has not been provided.

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Option to receive Equity Shares in Dematerialized Form Applicants to the Equity Shares of the Company issued through this Issue shall be allotted the securities in dematerialised (electronic) form at the option of the applicant. The Company has entered into an agreement dated 21st January, 2000with CDSL and an agreement dated 18th December, 1998 with NSDL, which enables the investors to hold and trade in securities in a dematerialised form, instead of holding the securities in the form of physical certificates. In this Issue, the allottees who have opted to receive Equity Shares in dematerialised form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant. The CAF shall contain space for indicating number of shares applied for in dematerialised or physical form or both. Applicants will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applicants, who do not furnish this information, will be issued the Equity Shares in physical form. No separate applications for Equity Shares in physical and/or dematerialized form should be made. If such applications are made, the application for Equity Shares in physical form will be treated as a multiple application and rejected. The Equity Shares of the Company will be listed on the BSE, the NSE and the CSE. Procedure for availing the facility for allotment of Equity Shares in this Issue in dematerialized form is as under: •

Open a beneficiary account with any depository participant (care should be taken that the beneficiary account should carry the name of the holder in the same manner as is exhibited in the records of the Company. In the case of joint holding, the beneficiary account should be opened carrying the names of the holders in the same order as with the Company). In case of applicants having various folios in the Company with different joint holders, the applicant will have to open separate accounts for such holdings. Those Equity Shareholders who have already opened such beneficiary account (s) with depositary participants need not comply with this step.



For Equity Shareholders already holding Equity Shares of the Company in dematerialized form as on the Record Date, the beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Equity Shares pursuant to this Issue by way of credit to such account, the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that the allotment of Equity Shares arising out of this Issue may be made in dematerialized form even if the original Equity Shares of the Company are not dematerialized. Nonetheless, it should be ensured that the depository account is in the name(s) of the Equity Shareholders and the names are in the same order as in the records of the Company.

Responsibility for correctness of information (including applicant’s age and other details) filled in the CAF vis-à-vis such information with the applicant’s depository participant, would rest with the applicant. Applicants should ensure that the names of the applicants and the order in which they appear in CAF should be the same as registered with the applicant’s depository participant. Renouncees will also have to provide the necessary details about their beneficiary account for allotment of Equity Shares pursuant to this Issue. If incomplete / incorrect beneficiary account details are given in the CAF, the applicant, including renounces, will be issued the Equity Shares in physical form. The Equity Shares allotted to applicants opting for issue in dematerialized form, would be directly credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s depository participant will provide to him the confirmation of the credit of such Equity Shares to the applicant’s depository account.

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Disposal of application and application money (i)

The Board reserves the right to reject applications in case the application concerned is not made in terms of this Letter of Offer. In case an application is rejected in full the whole of the application money received will be refunded to the first named applicant and where an application is rejected in part, the excess application money will be refunded to the first named applicant within 6 weeks from the date of closure of the subscription list in accordance with Section 73 of the Act. If there is delay of refund of application money by more than 8 days after the Company becomes liable to pay (i.e. forty-two days after the closure of Issue), the Company will pay interest for the delayed period at the rate prescribed under sub-Section (2) and (2A) of Section 73 of the Act.

(ii)

The subscription monies received in respect of this Issue will be kept in a separate bank account and the Company will not have access to nor appropriate the funds until it has satisfied the Designated Stock Exchange with suitable documentary evidence that minimum subscription of 90% of the application money for the Issue has been received.

(iii)

No acknowledgment will be issued for the application monies received by the Company. However, the Bankers to the Issue at its collection branches to the Issue receiving the CAF as applicable as per the terms of this Letter of Offer, will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF. Except for the reasons stated under paragraph titled “Grounds for Technical Rejections” in the Letter of Offer and subject to valid application, acknowledgement of receipt of application money given by the collection agent shall be valid and binding on Issuer and other persons connected with the Issue.

Impersonation Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of the Companies Act, which is reproduced below: “Any person who: (a)

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

(b)

otherwise induces a company to allot, or register any transfer of shares, therein to him, or any other person in a fictitious name,

shall be punishable with imprisonment for a term which may extend to five years.” Interest in case of delay in dispatch of Allotment Letters/ Refund Orders in case of Rights Issues The Company will issue and dispatch letters of allotment/ share certificates and/ or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any within a period of six weeks from the date of closure of the Issue. If such money is not repaid within 8 days from the day the Company becomes liable to pay it, the Company shall pay that money with interest at the rate of 15% per annum as stipulated under Section 73 of the Act. Basis of Allotment Subject to the provisions contained in this Letter of Offer, the Articles of Association of the Company and the approval of the Designated Stock Exchange, the Board or a Committee of Directors authorized by the Board will proceed to allot the Equity Shares in the following order of priority:

262

(a)

Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full or in part and also to the renouncee(s) who has/ have applied for Equity Shares renounced in their favour, either in full or in part (subject to other provisions contained under the paragraph titled “Renunciation”).

(b)

Where fractional entitlement is ignored, preferential allotment of one additional equity share to shareholders whose fractional entitlement is ignored and have applied for additional equity share.

(c)

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

(d)

Allotment to the renouncees who having applied for all the Equity Shares renounced in their favour have also applied for additional Equity Shares, provided there is surplus remaining after (a), (b) and (c) above. The allotment of such additional Equity Shares will be made on a proportionate basis at the sole discretion of the Board/ Committee of Directors but in consultation with the Designated Stock Exchange as part of the Issue and not preferential allotment (e) Equity Shares remaining after making full allotment under (a), (b), (c) and (d) above, shall be treated as under-subscribed for the purpose of regulation 3(1)(b) of the Takeover Code and shall be disposed of by the Board in manner as it in its sole discretion deems fit and the decision of the Board in this regard shall be final and binding. The undersubscribed portion can be applied for only after the close of the Issue. (f) The Basis of Allotment shall be approved by the BSE, which is the Designated Stock Exchange for the Issue. (g) The Company undertakes to complete the allotment within a period of 42 days from the date of closure of the Issue in accordance with the listing agreement with the Bombay Stock Exchange, National Stock Exchange and Calcutta Stock Exchange (h) The Company shall retain no oversubscription.

The Promoter, Chloride Eastern Limited, U.K., has undertaken to subscribe to such under-subscribed portion, after considering the allotment, to ensure that the Issue is 100% subscribed. This acquisition of additional Equity Shares, if allotted to Chloride Eastern Limited, the Promoter, shall be in terms of proviso to regulation 3(1)(b)(ii) of the Takeover Code and will be exempt from the applicability of regulation 11 and 12 of Takeover Code. This disclosure is made in terms of the requirement of Regulation 3(1)(b)(ii) of the Takeover Code. Further this acquisition will not result in change of control of management of the Company. Allotment to the Promoters of any unsubscribed portion of the Issue, over and above their entitlement shall be done in compliance with Clause 40A of the Listing Agreement and the other applicable laws prevailing at that time. Letters of Allotment / Share Certificates / Demat Credit Letter(s) of allotment/ share certificates/ demat credit or letters of regret along with refund order will be dispatched to the registered address of the first named applicant or respective beneficiary accounts will be credited within 6 (six) weeks, from the date of closure of the subscription list. In case the Company issues letters of allotment, the relative share certificates will be dispatched within three months from the date of allotment. Allottees are requested to preserve such letters of allotment (if any) to be exchanged later for

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share certificates. Export of letters of allotment (if any)/ share certificates/ demat credit to non-resident allottees will be subject to the approval of RBI. Allotment / Refund The Company will issue and dispatch letters of allotment/ share certificates/ demat credit and/ or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a period of six (6) weeks from the Issue Closing Date. If such money is not repaid within eight days from the day the Company becomes liable to pay it, the Company shall pay that money with interest as stipulated under Section 73 of the Act. Applicants residing at 15 centers where clearing houses are managed by the Reserve Bank of India (RBI), will get refunds through ECS only (Electronic Clearing Service) except where applicants are otherwise disclosed as applicable/eligible to get refunds through direct credit and/ or RTGS. In case of those applicants who have opted to receive their Rights Entitlement in dematerialized form using electronic credit under the depository system, an advice regarding their credit of the Equity Shares shall be given separately. Applicants to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit of refund within a period of six (6) weeks from the Issue Closing Date. In case of those Applicants who have opted to receive their Rights Entitlement in physical form and the Company issues letter of allotment, the corresponding share certificates will be kept ready within three months from the date of allotment thereof or such extended time as may be approved by the Company Law Board under Section 113 of the Companies Act or other applicable provisions, if any. Allottees are requested to preserve such letters of allotment, which would be exchanged later for the share certificates. The letter of allotment / refund order exceeding Rs.1,500 would be sent by registered post/speed post to the sole/first applicant's registered address. Refund orders up to the value of Rs.1,500 would be sent under certificate of posting. Such refund orders would be payable at par at all places where the applications were originally accepted. The same would be marked ‘Account Payee only’ and would be drawn in favour of the sole/first applicant. Adequate funds would be made available to the Registrar to the Issue for this purpose. After Letter of Allotment / Equity Share Certificate, as regards allotment/ refund to non-residents, the following further conditions shall apply: In case of non-residents, who remit their application monies from funds held in NRE/ FCNR accounts, refunds and/ or payment of interest/ dividend and other disbursement, if any, shall be credited to such accounts, details of which should be furnished in the CAF. Subject to the approval of the RBI, in case of non-residents, who remit their application monies through Indian Rupee draft purchased from abroad, refund and/ or payment of dividend/ interest and any other disbursement, shall be credited to such accounts (details of which should be furnished in the CAF) and will be made net of bank charges/ commission in US Dollars, at the rate of exchange prevailing at such time. The Company will not be responsible for any loss on account of exchange fluctuations for converting the Indian Rupee amount into US Dollars. The share certificate(s) will be sent by registered post at the Indian address of the non-resident applicant. Payment / Mode of making refunds The payment of refund, if any, would be done through various modes in the following order of preference: (a)

ECS: Payment of refund would be done through ECS for applicants having an account at one of the 15 centres, where clearing houses for ECS are managed by Reserve Bank of India namely 1) Ahmedabad 2) Bangalore 3) Bhubaneshwar 4) Kolkata 5) Chandigarh 6) Chennai 7) Guwahati 8) Hyderabad 9) Jaipur 10) Kanpur 11) Mumbai 12) Nagpur 13) New Delhi 14) Patna and 15) Thiruvanthapuram. This would be subject to availability of complete Bank Account Details including MICR code from the depository. The payment of refund through ECS is mandatory for

264

applicants having bank account at any of the 15 centres named herein above, except where applicant is otherwise disclosed as eligible to get refunds through direct credit or RTGS or NEFT. Direct Credit: Investors having their bank account with the Refund Bank, i.e. HDFC Bank Limited shall be eligible to receive funds, if any, through Direct Credit. The refund amount, if any, would be credited directly to their bank account with the Refund Banker. RTGS: Applicants having a bank account at any of the 15 centres detailed above, and whose Application amount exceeds Rs. 10 Lacs, shall be eligible to exercise the option to receive refunds, if any, through RTGS. All applicants eligible to exercise this option shall mandatorily provide the IFSC in the Application Form. In the event of failure to provide IFSC in the Application Form, the refund shall be made through ECS or Direct Credit, if eligibility is disclosed; NEFT (National Electronic Fund Transfer): Payment of refund shall be undertaken through NEFT wherever the applicants’ bank has been assigned the Indian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character Recognition (MICR), if any, available to that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the applicants have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the applicants through this method. The process flow in respect of refunds by way of NEFT is at an evolving stage and hence use of NEFT is subject to operational feasibility, cost, and process efficiency. For all the other applicants, including applicants who have not updated their bank particulars alongwith the nine digit MICR Code, the refund orders would be dispatched “Under Certificate of Posting” for refund orders of value up to Rs. 1500 and through Speed Post / Registered Post for refund orders of above Rs. 1500.

(b)

(c)

(d)

(e)

Please note that only applicants having a bank account at any of the 15 centres where clearing houses for ECS are managed by RBI are eligible to receive refunds through the modes detailed in (a), (b) and (c) hereinabove. Interest in case of delay in dispatch of Allotment Letters/ Refund Orders in case of Rights Issue The Company will issue and dispatch letters of allotment/ share certificates and/ or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any within a period of six weeks from the date of closure of the Issue. If such money is not repaid within 8 days from the day the Company becomes liable to pay it, the Company shall pay that money with interest at the rate of 15% per annum as stipulated under Section 73 of the Act. Particulars on Refund Orders As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the applicant’s bank account are mandatorily required to be given for printing on the refund orders. Bank account particulars will be printed on the refund orders/refund warrants, which can then be deposited only in the account specified. The Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud. Undertakings by the Company 1.

The complaints received in respect of the Issue shall be attended to by the Company expeditiously and satisfactorily.

2.

All steps for completion of the necessary formalities for listing and commencement of trading at all stock exchanges where the Equity Shares to be issued pursuant to this Issue are to be listed will be taken within seven (7) working days of finalization of basis of allotment.

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3.

The funds required for despatch of refund orders/ allotment letters/share certificates by registered post speed post / under certificate of posting shall be made available to the Registrars to the Issue by the Company

4.

Where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within 30 days or 15 days of closure of the Issue, as the case may be, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund.

5.

The certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within the specified time.

6.

No further issue of securities affecting equity capital of the Company shall be made till the securities issued/offered through the Issue are listed or till the application moneys are refunded on account of non listing, under-subscription etc.

Note •

The Company accepts full responsibility for the accuracy of information given in this Letter of Offer and confirms that to best of its knowledge and belief, there are no other facts the omission of which makes any statement made in this Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertain such facts.



All information shall be made available by the Lead Manager and the Issuer to the investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever including at road shows, presentations, in research or sales reports etc.



The Issuer and Lead Manager shall update the Letter of Offer and keep the investors informed of any material changes till the listing and trading commences.

Important •

Please read the Letter of Offer carefully before taking any action. The instructions contained in the accompanying CAF are an integral part of the conditions of the Letter of Offer and must be n



All enquiries in connection with the Letter of Offer or accompanying CAF and requests for Split Application Forms must be addressed (quoting the Registered Folio Number/ DP and Client ID number, the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and superscribed Exide-Rights Issue on the envelope) to the Registrar to the Issue at the following address: C B Management Services (P) Ltd P-22 Bondel Road Kolkata – 700 019 Tel : +91-33-2280 6692/93/94 Fax: +91-33-2287 0263 Email: [email protected]



It is to be specifically noted that this Issue of Equity Shares is subject to the section entitled ‘Risk Factors’ beginning on page vii of the Letter of Offer.

The Issue will be kept open for a minimum of 32 days unless extended, in which case it will be kept open for a maximum of 60 days.

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Utilisation of Issue Proceeds The Board of Directors declares that: (i)

The funds received against this Issue will be transferred to a separate bank account other than the bank account referred to in sub-section (3) of Section 73 of the Act.

(ii)

Details of all moneys utilised out of the Issue shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the purpose for which such moneys have been utilised.

(iii)

Details of all such unutilised moneys out of the Issue, if any, shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the form in which such unutilised moneys have been invested.

The funds received against this Issue will be kept in a separate bank account. The Company would have no access to such funds unless it satisfies the Designated Stock Exchange with suitable documentary evidence that the minimum subscription of 90% of the issue has been received.

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MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION OF THE COMPANY

Preliminary Further Issue _ Article 5

Where at any time subsequent to the first allotment of shares in the Company it is proposed to increase the subscribed capital by the issue of new shares, then subject to any directions to the contrary which may be given by the Company in general meeting, and subject only to those directions – (a)

such new 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 nearly as circumstances admit, to the Capital paid up on those shares at that date; (b) the offer aforesaid shall be made by notice specifying the number of shares offered and limiting a time not being less than fifteen days from the date of the offer, within which the offer if not accepted, will be deemed to have been declines; (c) the offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to him or any of them in favour of any other person; and the notice aforesaid shall contain a statement of this right; (d) after the expiry of the time specified in the notice aforesaid or on receipt of earlier intimation from the person to whom such notice is given that he declines to accept the shares offered, the board of directors may dispose them of in such manner as they think most beneficial to the Company. Redeemable Preference Shares – Article 6

Subject to the provisions of Section 80 of the Act, the Company shall have the power to issue preference shares which are or, at the option of the Company, are to be liable to be redeemed. The resolution authorizing such issue shall prescribe the manner, terms and conditions of redemption and upon the happening of that event the provisions of the said section shall be duly complied with.

Restriction on Allotments – Article 7

The board of directors shall observe the restrictions as to allotment of shares to the public contained in Sections 69 and 70 of the Act and shall cause to be made the returns as to allotment required by Section 75 of the Act.

No purchase of or loans on Company’s shares – Article 8

None of the funds of the Company shall be employed directly or indirectly to the purchase of or lent on the security of shares of the Company. Nor shall the Company, except as authorized by Section 77 of the Act, give, whether directly or indirectly, and whether by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the Company or in its holding company.

Commission for placing shares – Article 9

Subject to the provisions of Section 76 of the Act the Company may at any time pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares or debentures of the Company, or procuring, or agreeing to procure subscriptions (whether absolute or conditional) for any shares or debentures of the Company, but so that

268

the commission shall not exceed in the case of shares five per cent of the price at which the shares are issued and in the case of debentures two and a half percent of the price at which the debentures are issued. Instalments to be duly paid – Article 10

If by the conditions of allotment of any share, the whole or part of the amount or issue price thereof shall be payable by instalments, every such instalment shall, when due, be paid to the Company by the person who for the time being and from time to time shall be the registered holder of the share or his legal representative.

Liability of Joint Holders of Shares – Article 11

The joint holders of a share shall be severally as well as jointly liable for the payment of all the instalments and calls due in respect of such share.

Register & Index Member – Article 12

The Company shall cause to be kept at its Registered Office or at such other place as may be decided. Register and Index of Members in accordance with Sections 150 and 151 and other applicable provisions of the Act and the Depositories Act, 1996 with the details of shares held in physical and dematerialized forms in any media as may be permitted by law including in any form of electronic media.

of

The Register and Index of beneficial owners maintained by a Depository under Section 11 of the Depositories Act, 1996 shall also be deemed to be the Register and Index of Members for the purpose of the Act. The Company shall have the power to keep in any state or country outside India, a Register of Members for the residents in that state or country. Restrcitions on Registration – Article 13

A share may be registered in the name of any limited company but not in the name of a minor nor shall more than four persons be registered as joint holders of a share.

Trusts not recognised – Article 14

No notice of any trust, express, implied or constructive shall be entered on the Register of members or of Debentureholders. Same as herein otherwise provided, the Company shall be entitled to treat the registered holder of any share as the absolute owner thereof, and accordingly shall not, except as ordered by a Court of competent jurisdiction, or as by statute required, be bound to recognize any equitable or other claim to or interest in such share on the part of any other person.

Register of Director’s holdings – Article 15

The Company shall keep a register showing, as respects each director of the Company, the number, description and amount of any shares in, or debentures of, the Company or any other body corporate, being the company’s subsidiary or holding company, or a subsidiary of the Company’s holding company, which are held by him or in trust for him, or of which he has right to become the holder whether on payment or not and containing such other particulars as are prescribed by Section 307 of the Act and the said register shall be produced at the commencement of every annual general meeting of the company and shall remain open and accessible during the continuance of the meeting to any person having the right to attend the meeting.

Certificates Issue – Article 16

The Certificates of title to shares shall be issued under the seal of the Company and be signed by two directors and also by the Secretary or some other person appointed for the purpose.

269

Right to Article 17

certificate



Every member shall be entitled, free of charge, to one certificate for the shares registered in his name and, if he sells part of his holding, to one certificate for the balance. Or he may (upon paying such fee as the board of directors may from time to time determine but not exceeding one rupee per certificate) have several certificates, each for one or more shares.

Contents – Article 18

Every certificate of shares shall specify the denoting number of the shares in respect of which it is issued and the amount paid up thereon.

Time for issue – Article 19

The Company shall complete and have ready for delivery the certificates of all shares within fifteen days after allotment or within one month after application for the registration of the transfer thereof in compliance with Section 113 of the Act.

New Certificates to replace those last – Article 20

If any certificate be worn out or defaced then, upon production thereof to the board of directors, they may order the same to be cancelled , and may issue a new certificate in lieu 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 deem adequate being given a new certificate in lieu thereof shall be given to the party entitled to such lost or destroyed certificate. Such fee as the board may from time to time determine, but not exceeding one rupee, shall be paid to the Company for every certificate issued under the clause.

Joint Holders – Article 21

The certificate of shares registered in the names of two or more persons shall be delivered to the person first name on the register.

Issue / Allotment Disposal of Shares

/

Increase 51 & 52

The Company in general meeting may, from time to time, increase the capital by the creation of new shares of such amount as may be deemed expedient. The new shares shall be issued upon such terms and conditions and with such rights and privileges annexed thereto as the resolution shall prescribe and, in particular, such shares may be issued with a preferential or qualified right to dividends, and in the distribution of assets of the Company, and with a right of voting in conformity with Sections 87 and 88 of the Act. Whenever the capital of the Company shall have been increased under the provision of this clause the board of directors shall comply with the provisions of Section 97 of the Act. Except as otherwise provided by the conditions of issue or by these articles, any capital raised by the creation of new shres shall be considered as part of the existing capital and shall be subject to the provisions herein contained with reference to the payment of calls and instalments, forfeiture, lien, transfer and transmission, voting and otherwise.

Reduction of Capital – Article 53

The Company may (subject to the provisions of Sections 100 to 105 of the Act) from time to time by special resolution reduce its capital in any manner for the time being permitted by law, and in particular capital may be paid of on the footing that it may be called up again or otherwise.

270

Buy Back of Shares – Article 53A

Subject to and in full compliance of the requirements of Section 77A, 77AA and 77B of the Companies Act, 1956 or any corresponding provisions of or any re-enactment thereof and any rules and regulations that may be prescribed by the Central Government, the Securities & Exchange Board of India (SEBI) or any other appropriate authority in this regard, the Company, in general meeting may, upon the recommendation of the Board of Directors of the Company, at any time and from time to time by a Special Resolution authorize buy-back of any part of the share capital of the company fully paid up on that date.

Consolidation, SubDivision and Cancellation General Powers– Article 54

Subject to the provisions of Section 94 of the Act the Company in general meeting may from time to time consolidate and divide or subdivide its shares or any of them, and the resolution whereby any share is sub-divided may determine that, as between the holders of the shares resulting from such sub-division one or more of such shares shall have some preference or special advantage as regards dividend, capital or otherwise over or as compared with the others or other. Subject as aforesaid the Company in general meeting may also cancel shares which have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the shares so cancelled.

Modification of Rights Procedure– Article 55

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, subject to the provisions of Sections 106 and 107 of the Act, be modified, commuted, affected, abrogated or otherwise dealt with by agreement between the Company and any person purporting to contract on behalf of that class provided such agreement is ratified in writing by holders of atleast three-fourths of the issued shares of that class or is confirmed by a resolution passed at a separate general meeting of the holders of shares of that class and supported by the votes of the holders of at least threefourths of those shares, and all the provisions hereinafter contained as to general meeting, shall mutatis mutandis, apply to every such meeting, but so that the quorum thereof shall be members representing in person or by proxy three-fourths of the issued shares of the class.

Calls Calls– Article 22

The Board of Directors may, from time to time, by resolution passed at a meeting of the Board (and not by circulated resolution) make such calls as the Board thinks fit upon the members in respect of all monies unpaid on the shares held by them respectively, and each member shall the amount of every call so made on him to the persons and at the times and places appointed by the Board. A cay may be may be made payable by instalments.

Uniformity – Article 23

Every call shall be made on an uniform basis on all shares falling under the same class as required by Section 91 of the Act.

Notice – Article 24

Fourteen day’s notice at least of any call shall be given by the company specifying the time and place of payment, and the person or persons to

271

whom such call shall be paid. Instalments – Article 25

If by the terms of issue of any share or otherwise any amount is made payable at any fixed time or by instalments at fixed times whether on account of the nominal amount of the share or by way or premium, every such amount or instalment shall be payable as if it were a call duly made by the board of directors and of which due notice has been given and all the provisions herein contained in respect of calls shall relate to such amount or instalment accordingly.

Interest – Article 26

If the sum payable in respect of any call or instalment be not paid on or before the day appointed for payment thereof, the holder for the time being of the share in respect of which the call shall have been made or the instalment shall be due, shall pay interest for the same at such rate as the Board of Directors may determine but not exceeding twelve per cent per annum from the day appointed for the payment thereof to the time of actual payment.

Calls in Advance – Article 28

The Board of Directors may, if it thinks fit, receive from any member willing to advance the same, all or any part of the money due upon the shares held by him beyond the sums actually called for, and upon the money so paid or satisfied in advance or upon so much thereof as from time to time and at any time thereafter, as exceeds the amount of the calls then made upon and due in respect of the shares on account of which such advance has been made, the Company may pay or allow interest at such rate as the member paying such sum in advance and the Board agrees upon. The Board may at any time repay the amount so advanced upon giving to such member three months’ notice in writing. No such sum paid in advance of calls shall entitle the member pay such sum to participate in profits of the Company or to any portion of a dividend declared in respect of any period prior to the date upon which sum would, but for such payment, become presently payable.

Forfeiture and Lien Notice to Pay – Article 29

If any member fails to pay any call or instalment on or before the day appointed for the payment of the same, the Board of Directors may, at any time thereafter during such time as the call or instalment remains unpaid, give notice to him requiring him to pay the same together with any interest that may have accrued and all the expenses that may have been incurred by the Company by reason of such non-payment.

Contents – Article 30

The notice shall name a day (not being less than fourteen 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 appointed, the shares in respect of which the call was made or instalment is payable will be liable to be forfeited.

Forfeited – Article 31 If the requirements of any such notice as aforesaid shall not be complied with, every or any share in respect of which such notice has been given may at any time thereafter, before payment of all calls or instalments, interest and expenses due in respect thereof, be forfeited by a resolution of the Board of Directors to that effect.

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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.

Forfeited Share property of Company – Article 33

Any share so forfeited shall be deemed to be the property of the Company and the board of directors may sell, re-allot and otherwise dispose of the same in such manner as they may think fit.

Power to Annual Forfeiture – Artcle 34

The Board of Directors may at any time before any share so forfeited shall have been sold, re-allotted or otherwise disposed of, annul the forfeiture thereof upon such conditions as they think fit.

Arrears to be paid notwithstanding Forfeiture – Article 35

Any member whose shares shall have been forfeited shall, notwithstanding, be liable to pay and shall forthwith pay to the Company, all calls, instalments, interest and expenses owing upon or in respect of such shares at the time of the forfeiture, together with interest thereon from the time of the forfeiture until payment at the rate of ten percent per annum and the board of directors may enforce the payment of such monies or any part thereof if they think fit.

Effect of Article 36

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 share, except only such of those rights as by these Articles are expressly saved.

Notice of Article 32

Forfeiture

Forfeiture



Lien – Article 37

The Company shall have a first and paramount lien upon all shares, other than fully paid shares for all monies (whether presently payable or not) call or payable at a fixed time in respect of such shares.

Enforcement– Article 38

For the purpose of enforcing such lien, the Board of Directors may sell the shares subject thereto in such manner as they may think fit, but no sale shall be made until such period as aforesaid shall have arrived, and until notice in writing of the intention to sell shall have been served on such member or his representatives and default shall have been made by him of them in the payment, fulfillment or discharge or such debts, liabilities or engagements for seven days after such notice.

Application of proceeds – Article 39

The net proceeds of any such sale after payment of the costs of such sale shall be applied in or towards satisfaction of the said debts, liabilities or engagement and the balance (if any) paid to such member, his representatives or assigns.

Validity of Sales – Article 40

Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers hereinbefore given, the board of directors may for that purpose issue a duplicate certificate of the shares sold in the place and in cancellation of any other certificate that may be outstanding and 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 same and the purchaser shall not be bound to see to the regularity of the proceedings, or to the application of the purchase money, and after his name has been entered in the register in respect of such shares, the validity of the sale shall not be impeached by any person, and the remedy of any person aggrieved by the sale shall be in damages only and against the company exclusively.

Transfer

and

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Transmission of Shares Form of Transfer – Article 41

Subject to the provisions of Article 41A, the instrument of transfer shall be in writing and the provision of Section 108 of the Act and of any statutory modifications thereof for the time being shall be duly complied with in respect of transfer of shares and registration thereof and the transferor shall be deemed to remain the holder of such shares until the name of the transferee is entered in the register in respect thereof.

Dematerialisation General Power to refuse registration – Article 42

The Board of Directors may, at its absolute discretion and without assigning any reason, decline to register any transfer of shares upon which the Company has a lien and in case of shares not fully paid up may refuse to register a transfer to a transferee of whom it does not approve but if the Board, in pursuance of this Article, shall refuse to register a transfer or transmission of right, the Company shall, within two months from the date on which the instrument of transfer or the intimation of such transmission as the case may be , was delivered to the Company, send notice of the refusal to the transferee and the transferor or to the person giving intimation of such transmission, as the case may be. Any such refusal to register or failure within the period prescribed, either to register or to send notice of refusal shall be subject to the right of appeal provided by and the other provisions of Section 111 of the Act. Provided that the registration of a transfer shall not be refused on the ground of the transferor being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever except a lien on the shares.

Transmission for Joint Holders – Article 47

In the case of the death of anyone or more of the persons named in the register as the joint-holders of any share, the survivor or survivors shall be the only persons recognized by the Company as having any title to or interest in such share, but nothing herein contained shall be taken to release the estate of a deceased joint holder from any liability on shares held by him jointly with any other person.

Transmission other than Joint Holders – Article 48

The executors or administrators of a deceased member (not being a joint holder) shall be the only persons recognized by the Company as having any title to the shares registered in the name of such member, and the Company shall not be bound to recognize such executors or administrators unless they shall first produce probate or letters of administration, as may be appropriate, granted by a duly constituted Court in the Union of India. But this clause is subject to the power of the directors to waive compliance with the aforesaid requirements in any proper case and also to the general power of the directors to refuse to register. Provided that the provisions of this Article shall be subject to the provisions of Articles 48A and 48B.

Nomination – Article 48A

(1)

Every shareholder or debenture holder of the Company may at any time nominate a person to whom his shares or debentures shall vest in the event of his death in such manner as may be prescribed under the Act. (2) When the shares or debentures of the Company are held by more than one person jointly, joint holders may together nominate a person to whom all the rights in the shares or debentures, as the

274

case may be , shall vest in the event of death of all the joint holders in such manner as may be prescribed under the Act. (3) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, where a nomination made in the manner aforesaid purports to confer on any person the right to vest the shares or debentures, the nominee shall, on the death of the shareholder or debentureholder or, as the case may be on the death of the jointholders become entitled to all the rights in such shares or debentures or, as the case may be, all the joint holders, in relation to such shares or debentures, to the exclusion of all other person unless the nomination is varied or cancelled in the manner as may be prescribed under the Act. (4) Where the nominee is a minor, it shall be lawful for the holder of the shares or debentures, to make the nomination to appoint any person to become entitled to shares in, or debentures of, the Company in the manner prescribed under the Act, in the event of his death, during the minority. Transmission of Securities in case of nomination – Article 48B

(1)

A nominee, upon production of such evidence as may be required by the Board and subject as hereinafter provided, elect, either :(a) to register himself as holder of the share or debenture, as the case may be, or (b) to make such transfer of the share or debenture, as the deceased shareholder or debentureholder, as the case may be, could have made. (2) If the nominee elects to be registered as holder of the share or debenture, himself, as the case may be, he shall deliver of send to the Company, a notice in writing signed by him stating that he so elects and such notice shall be accompanied with the death certificate of the deceased shareholder or debenture holder, as the case may be. (3) A nominee shall be entitled to the dividend on shares and other advantages to which he would be entitled if he were the registered holder of the share or debenture. Provided that he shall not, before being registered as a member, be entitled to exercise any right conferred by membership in relation to meeting of the Company. Provided further that the Board may, at any time, give notice requiring any such person to elect either to register himself or to transfer the share or debenture, and if the notice is not complied with within ninety days, the Board may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the share or debenture, until the requirements of the notice have been complied with.

Title to shares otherwise than by transfer – Article 50

Any committee or guardian of a lunatic or infant or any person becoming entitled to or to transfer shares in consequence of any proceedings taken by any member for the liquidation or arrangement of his affairs or by any lawful means other than transfer may be registered as a member, subject to the other provisions of these Articles, upon furnishing such evidence as the Board of Directors think reasonable of his title or that he sustains the character in which he claims to act.

Borrowing Powers Power of Board – Article

Subject to the provision of Sections 292 and 293 of the Act, the Board

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56

of Directors may, from time to time at their discretion, by resolution passed at a meeting of the board, accept deposits from members, either in advance of calls or otherwise, and generally raise or borrow or secure the payment of any sum or sums of money for the Company. Provided, however, that where the monies to be borrowed, together with the monies already borrowed (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) will exceed the aggregate of the paid-up capital of the Company and its free reserves, that is to say, reserves not set apart for any specific purpose, such monies shall not be borrowed without the consent of the Company in general meeting.

Security – Article 57

The payment or re-payment of monies borrowed aforesaid may be secured in such manner and upon such terms and conditions in all respect as the board of directors may think fit, and in particular by a resolution passed at a meeting of the board (but not by circular resolution) by the issue of debentures of the Company, charged upon all or any part of the property of the Company, (both present and future) including its uncalled capital for the time being; and any debentures and other securities may be made assignable free from any equities between the Company and the person to whom the same may be issued.

Debentures – Article 58

Any debentures, or other securities may be issued at a discount, premium or otherwise and may be issued on condition that they shall be convertible into shares of any denomination, and with any privileges and conditions as to redemption, surrender, drawing, allotment of shares and attending (but not voting) at general meeting appointing directors and otherwise. Debentures with the right to conversion into or to an allotment of shares shall be issued only with the consent of the Company in general meeting.

Register of Article 59

Charges



The Board of Directors shall cause a proper register to be kept in accordance with the provisions of Section 143 of the Act, of all mortgages, debentures and charges specifically affecting the property of the Company, and shall cause the requirements of Sections 118, 125 and 127 to 144 (both inclusive) of the Act in that behalf to be duly complied with, so far as they fail to be complied by the Board.

Register of Article 60

Holders



The Company shall keep a register and index of debenture holders in accordance with Section 152 of the Act.

Convening Annual General Meeting – Article 64

An annual general meeting of the Company shall be held within eighteen months from the date of incorporation of the Company, and the next annual general meeting shall, be held within six months after the expiry of the financial year in which the first annual general meeting shall have been held; and thereafter an annual general meeting shall be held within six months after the expiry of each financial year; provided that not more than fifteen months shall elapse between the date of one annual general meeting and that of the next. Nothing contained in the foregoing provisions shall be taken as affecting the right conferred upon the Registrar under the second proviso of Section 166(1) of the Act to extend the time within which any annual general meeting may be held.

Time & Place – Article 65

Every annual general meeting shall be called for at a time during business hours, on a day that is not a public holiday, and shall be held at

General Meeting

276

the office or at some other place within the town of Calcutta as the board of directors may determine and the notice calling the meeting shall specify the same as the annual general meeting. Extra-Ordinary General Meetings – Article 66

The Board of Directors, may whenever they think fit, call an extraordinary general meeting and they shall do so upon a requisition in writing by any member or members holding in the aggregate not less than one-tenth of the issued capital upon which all calls or other sums then due have been paid.

Requisition – Article 67

Any requisition so made by members must state the object or objects of the meeting proposed to be called, and must be signed by the requisitionists and be deposited at the office; provided that such requisition may consist of several documents in like form, each signed by one or more requisitionists.

Proceedings Meetings

at

General

Five members present in person shall be a quorum for a general meeting.

Quorum– Article 76



If at the expiration of half an hour from the time appointed for holding a meeting of the Company, a quorum shall not be present, the meeting, if convened by or upon the requisition of members, shall stand dissolved, but in any other case, the meeting shall stand adjourned to the same day in the next week, at the same time and place or to such other day and at such other time and place as the board of directors may determine, and if at such adjourned meeting a quorum is not present at the expiration of half an hour from the time appointed for holding the meeting, the members present shall be a quorum, and may transact the business for which the meeting was called.

Chairman of General Meetings – Article 78

The Chairman of the Board of Directors appointed pursuant to Article 127 hereof shall preside as Chairman, or if he shall not be present or is unwilling to act, the Deputy Chairman / Vice Chairman, if any, of the Board of Directors shall preside as Chairman of such meeting. If there are no such Chairman, Deputy Chairman / Vice Chairman or if both such Chairman and Deputy Chairman/Vice Chairman shall not be present within fifteen minutes from the time appointed for holding of the meeting or is unwilling to act, the members shall elect one of the other Directors present to be the Chairman of the meeting, and if no Director be present or if all the Directors present decline to take the Chair, the members present shall elect one of their number to be Chairman of the Meeting.

Business at adjourned meetings – Article 80

The Chairman with the consent of the meeting, may adjourn any meeting from time to time and from place to place in Calcutta, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

Decision of Question – Article 81

At any general meeting a resolution put to vote at the meeting shall be decided on a show of hands unless, before or one the declaration of the result of such voting, the Chairman of the Meeting shall order a poll to

Failure of Article 77

Quorum

277

be taken either of his own motion or on a demand made in that behalf by any member of members present in person or by proxy and holding shares in the Company which confer a power to vote on the resolution not being less than one-tenth of the total voting power in respect of the resolution or on which an aggregate sum of not less than Rs 50,000 has been paid up. Unless a poll is duly ordered a declaration by the Chairman that on a show of hands a resolution has or has not been carried, or has or has not been carried either unanimously or by a particular majority, and an entry to that effect in the books containing the minutes of the proceedings of the Company shall be conclusive evidence of the fact, without proof of the number or proportion of the votes cast in favour of or against such resolution. Casting Vote – Article 82

In the case of any equality of votes the Chairman shall, both on a show of hands and at a poll (if any) have casting vote in addition to the vote or votes to which he may be entitled as a member.

Poll – Article 83

If a poll is demanded as aforesaid on the election of a Chairman or on any question of adjournment, it shall be taken at the meeting forthwith, but a poll demanded on any other question shall be taken at such time not later than forty-eight hours from the time when the demand was made, and at such place in Calcutta, and either by open voting or by ballot, as the Chairman shall direct. The result of the poll shall be deemed to be the resolution of the meeting at which the poll was taken. The demand for a poll may be withdrawn.

Proxy Proxy to be appointed in writing – Article 93

Every proxy (whether a member or not) shall be appointed in writing under the hand of the appointer or his attorney, or if such appointer is a corporation under the common seal of such corporation, or the hand of its attorney, who may be the appointee. The proxy so appointed shall not have any right to speak at the meeting.

Form– Article 94

An instrument appointing a proxy shall be in either of the forms in Schedule IX to the Act or a form as near thereto as circumstances admit.

Deposit at office – Article 95

The instrument appointing a proxy and the power of attorney or other authority, (if any) under which it is signed, or a notarially certified copy of that power of authority, shall be deposited at the office not later than forty-eight hours before the time for holding the meeting at which the person named in the instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid.

Directors Number of Directors – Article 98

Until otherwise determined by a general meeting, the number of directors shall not be less than three and not more than sixteen.

Qualification – Article 100

No Director shall be required to hold a share qualification.

Remuneration to Directors – Articles 101 & 101A

Unless otherwise determined by the Company in General Meeting each Director shall be entitled to receive out of the funds of the Company for each meeting of the Board of Directors or Committee thereof attended by him such fee as may from time to time be determined by the Board of Directors but not exceeding such sum as may from time to time be prescribed by the Central Government or under the Act and applicable to the Company.

278

Subject to the provisions of Sections 198, 309 and 310 of the Act, a Director who is neither in the whole-time employment of the Company nor a Managing Director may be paid remuneration by way of commission if the Company by special resolution authorizes such payment, provided that the remuneration paid to such a director, or where there is more than one such director, to all of them together, shall not exceed one per cent of the net profits of the Company. Special Remuneration – Article 102

Subject to the provisions of the sections last aforesaid, if any director be called upon to perform extra services or to make special exertions or efforts (including work done by a director as a member of a committee) the Board of Directors may provide special remuneration therefore, either by means of a fixed sum or otherwise as may be determined by the Board, and such remuneration may be additional to such as is hereinbefore provided.

Retirement and Rotation of Directors Retirement by Rotation – Articles 115 & 116

At every annual general meeting of the Company one-third of such of the directors for the time being as are liable to retire by rotation or, if their number is not three or multiple of three, the number nearest to one-third shall retire from office. The directors to retire by rotation shall be those who shall have been longest in office since their last appointment but as between persons who become directors on the same day those who are to retire, shall, in default of and subject to any agreement among themselves, be determined by lot.

Proceedings of Board of Directors Meetings of Article 122

Board



The Directors may meet together as a Board for the dispatch of business from time to time, and shall so meet at least once in every three calendar months, and they may adjourn and otherwise regulte their meeting as they think fit.

Convening –Article 123

A Director may at any time, and the Secretary, if any, upon the request of a director, shall convene a meeting of the board of directors by giving a notice in writing to every director for the time being in India, and at his usual address in India to every other person.

Quorum –Article 124

Subject to Section 287 of the Act, quorum for a meeting of the board of directors shall be one-third of its total strength (excluding directors, if any, whose places may be vacant at the time and any fraction contained in that one-third being rounded off as one), or two directors, whichever is higher, provided that where at any time the number of interested directors exceeds or is equal to two-thirds of the total strength , the number of the directors who are not interested shall be the quorum during such time.

Powers of Directors Management vested in Directors – Article 134

The management of the business of the Company shall be vested in the Board of Directors who, in addition to the powers and authorities by

279

these Articles or otherwise expressly conferred upon them, may exercise all such power and do all such acts and things as may be exercised or done by the Company and are not hereby or by statute expressly directed or required to be exercised or done by the Company in general meeting, but subject nevertheless to the provisions of the Act and of these Articles and to any regulations from time to time made by the Company in general meeting, provided that no regulation so made shall invalidate any prior act of the Board which would have been valid if such regulation had not been made; and provided further that the board shall not, except with the consent of the Company in general meeting :(a) Sell, lease or otherwise dispose of the whole, or substantially the whole, of the undertaking of the Company, or where the Company owns more than one undertaking of the whole, or substantially the whole, of any such undertaking; (b) Remit or give time for the re-payment of any debt due by a director; (c) Invest, otherwise than in trust securities, the sale proceeds resulting from the acquisition, without the consent of the Company of any such undertaking as is referred to in clause (a) or any premises or properties used for any such undertaking and without which it cannot be carried on, or can be carried on only with difficulty or only after a considerable time; (d) Borrow monies where the monies to be borrowed, together with the monies already borrowed by the Company (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) will exceed the aggregate of the paidup capital of the Company and its free reserves, that is to say, reserves not set apart for any specific purpose; or (e) Contribute to charitable and other funds not directly relating to the business of the Company or the welfare of its employees any amounts the aggregate of which will in any financial year exceed twenty five thousand rupees or five per cent of its average net profits as determined in accordance with the provisions of sections 349 and 350 of the Act during the three financial years immediately preceding, whichever is greater. Specific Powers – Article 135

Without prejudice to the general powers conferred by the last preceding clause and of the other powers conferred by these Articles, it is hereby expressly declared that the board shall have the following powers, that is to say, power – (1) To pay the costs, charges and expenses preliminary and incidental to the promotion, formation, establishment and registration of the Company. (2) Subject to sections 292 and 297 of the Act, to purchase any property, rights or privileges which the Company is authorized to acquire at such price and generally on such terms and conditions as they think fit, and to sell, let, exchange or otherwise dispose of absolutely or conditionally any part of the property, rights and privileges of the Company upon such terms and conditions, and for such consideration as they may think fit. (3) At the discretion to pay for any property, rights or privileges acquired by or services rendered to the Company either wholly or partially in cash or in shares, bonds, debentures, or other securities of the Company, and any such shares may be issued either as fully paid up or with such amount credited as paid up thereon as may be agreed upon; and any such bonds, debentures,

280

(4)

(5)

(6)

(7)

(8)

(9) (10)

(11) (12)

(13)

(14)

or other securities may be either specifically charged upon all or any part of the property of the Company and its uncalled capital or not so charged. To make, draw, endorse, sign, accept, negotiate and give all cheques, bills of lading, drafts, orders, bills of exchange, Government of India and other promissory notes and other negotiable instruments required in the business of the Company. To secure the fulfillment of any contracts, agreements or engagements entered into by the Company by mortgage or charge of all or any of the property and its unpaid capital for the time being or in such other manner as they may think fit. Subject to the terms of any agreement for the time being in force to appoint and at their discretion remove or suspend such agents, managers, secretaries, officers, clerks and servants for permanent, temporary or special services as they may from time to time think fit, and to determine their powers and duties and fix their salaries or emoluments and to require security in such instances and to such amount as they think fit. To appoint any person or persons (whether incorporated or not) to accept and hold in trust for the Company any property belonging to the Company or in which it is interested or for any other purposes, and to execute and do all such deeds, documents and things as may be requisite in relation to any such trust and to provide for the remuneration of such trustee or trustees. To institute, conduct, defend, compound or abandon any legal proceedings by or against the Company or its officers or otherwise concerning the affairs of the Company and also to compound and allow time for payment or satisfaction of any debts due and of any claims or demands by or against the Company. To refer any claims or demands by or against the Company to arbitration and observer and perform the awards. To make and give receipts, releases and other discharges for money payable to the Company and for the claims and demands of the Company. To act on behalf of the Company in all matters relating to insolvents. To determine who shall be entitled to sign on the Company’s behalf bills, notes, receipts, acceptances, endorsements, cheques, releases, contracts and documents. From time to time to provide for the management of the affairs of the Company either in different parts of India or elsewhere in such manner as they think fit, and in particular to establish branch offices and to appoint any persons to be the attorneys or agents of the Company with such powers (including power to sub-delegate) and upon such terms as may be thought fit. Subject to the provisions of sections 292 and 370 of the Act, to invest any of the monies of the Company not immediately required for the purposes thereof upon such securities and in such manner as they may think fit, with power from time to time to vary or realize such investments. Save as otherwise provided for by section 49 of the Act, all such investments shall be made and held in the name of the Company and where in pursuance of the said section, any such investments are not so held, the board shall keep or cause to be kept a register which shall be maintained and be open to inspection in manner required by the said section.

281

Managing Director and Whole-time Director –

Subject to the provisions of sections 267, 268, 269, 309, 310, 311, 316 and 317 of the Act, the board of directors shall have power to appoint from time to time one or more of their body (not including any person rendred ineligible by the provisions of section 267 of the Act) to be managing director or managing directors or whole-time director or whole-time directors of the Company for a fixsed term not exceeding five years at a time and upon such terms as the board think fit and may from time to time (subject to the profisions of section 284 of the Act and of any contract between him or them and the Company) remove or dismiss him or them from office and appoint another or others in his or their place or places.

Special Position - Article 137

Subject as hereinafter provided, a managing director or a wholetime director shall not, while he continues to hold that office, be subject to retirement by rotation but if he ceases to hold the office of director he shall, ipso facto and immediately, cease to be a managing director or a whole-time director. Provided that if at any time the number of managing directors or whole-time directors shall exceed one-third of the total number of directors of the time being then such number of the managing directors or whole-time directors as shall be in excess of such one-third shall be liable to retirement by rotation. For the purpose of this provision, those of the managing directors or whole-time directors who shall be liable to retire shall be such as shall hve been the shortest time in office.

Remuneration 138

The remuneration of a Managing Director or a Whole-time Director shall (subject to the provisions of any contract between him and the Company) from time to time be fixed by the Board of Directors and may be by way of monthly payment or a fee for each meeting or by participation in profits or by any or all of these modes. But such remuneration shall be subject to the limitations prescribed by Sections 198 and 309 of the Act and any remuneration prescribed by participation in net profits shall in no case exceed in the aggregte five per cent of such profits.

Power to Article 136

Appoint

Article

Powers – Article 139

-

The board of directors may from time to time entrust to and confer upon a managing direcor or a whole-time director for the time being such of the powers exercisable under these presents by the board as they may think fit and may c9onfer such powers for such time and ato be exercised for such objects and purposes and upon such terms andn conditions and with such restrictions as they think expedient; and they may confer such powers either collaterally with or to the exclusion of and in substitution for all or any of the powers of the board in that behalf, and may from time to time revoke, withdraw, alter or vary all or any of such powers. Provided always that the board shall not delegate the powers to make calls and to issue debentures which, by virtue of section 292 of the Act, may be exercised only by resolutions passed at meetings of the board, not the other powers specified in the said section, namely, to borrow monies otherwise than on debentures, to invest the funds of the Company and to make loans, unless such delegation be made by resolution passed at a meeting specifying such matters as are prescribed by the said section.

282

The Seal The Seal – Article 140

The Board of Directors shall provide a Common Seal for the purposes of the Company, which seal shall not be used except by the authority of the Board, or a committee of directors, and in the presence of one director and the secretary or of two directors who shall sign every instrument to which the seal is affixed.

Dividends Net Profits how divisible– Article 141

Subject to the rights of holders of shares issued upon special conditions (if any) and to other provisions of these Articles, the net profits of the Company shall be divisible among the members in proportion to the amount of capital paid-up on the shares held by them respectively.

Interim Dividend – Article 145

The Board of Directors may from time to time pay to the members such interim dividend as in their judgement may be warranted by the position of the Company.

Dividend and Call– Article 151

Any general meeting declaring a dividend may make a call on the members of such amount as the meeting may fix, but so that the call on each member shall not exceed the dividend payable to him and so that the call be made payable at the same time as the dividend; and the dividend may, if so arranged between the Company and the members be set off against the call.

Accounts Books to be kept – Article 153

The Company shall keep at the office or at such other place in India as the Board of Directors may think fit.

Winding Up Distribution of Assets – Article 180

If the Company shall be wound up, and the assets available for distribution among the members as such shall be insufficient to repay the whole of the paid-up capital such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up, on the shares held by them respectively. And if in a winding up, the assets available for distribution among the members shall be more than sufficient to repay the whole of the capital paid-up a the commencement of the winding up, the excess shall be distributed amongst the members in proportion to the capital at the commencement of the winding up or which ought to have been paid up on the shares held by them respectively. But this clause is to be without prejudice to the right of the holders of shares issued upon special terms and conditions.

Distribution Article 181

If the Company shall be wound up, whether voluntarily or otherwise, the liquidators may, with the sanction of an extra-ordinary resolution, 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.

in

specie-

283

If thought expedient any such division may be otherwise than in accordance with the legal rights of the contributories and in particular any class may be given preferential or special rights, or may be excluded altogether or in part; but in case any division otherwise than in accordance with the legal rights of the contributories shall be determined on, any contributory who would be prejudiced thereby shall have a right to dissent and ancillary rights as if such determination were a special resolution passed pursuant to Section 494 of the Act. In case any shares to be divided as aforesaid involve a liability to calls or otherwise, any person entitled under such division to any of the said shares may, within ten days after the passing of the resolution, by notice in writing, direct the liquidators to sell his proportion and pay him the net proceeds, and the liquidators shall, if practicable, act accordingly. Indemnity – Article 182

Every officer and auditor of the Company shall be indemnified out of the funds of the Company against all liability incurred by him in defending any proceedings, whether civil or criminal, in which judgement is given in his favour or in which he is acquitted or discharged or in connection with any application under Section 633 of the Act in which relief is granted to him by the Court.

284

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION The following Contract (not being contracts entered in to in the ordinary course of business carried on by the Company or entered into more than two years before the date of the Letter of Offer) which are or may be deemed material have been entered or are to be entered in to by the Company. These contracts and also the documents for inspection referred to hereunder, may be inspected at the Office of the Company Secretary situated at Exide House, 59E Chowringhee Road, Kolkata – 700 020 from 10 a.m. to 3.00 pm from the date of the Letter of Offer until the date of closure of the Subscription List. Material Contracts to the Issue

1.

Engagement Letter dated 31st August 2007 issued for appointment of SBI Capital Markets Limited as Lead Managers to the Issue.

2.

Memorandum of Understanding dated 3rd October, 2007 entered into with the Lead Manager to the Issue.

3.

Memorandum of Understanding dated 31st August, 2007 entered into with the Registrars to the Issue.

Material Documents to the Issue 1.

Certified true copies of the Memorandum and Articles of Association as amended from time to time.

2.

Certificate of Incorporation dated 31st January, 1947

3.

Certificates in relation to change of name of the Company

4.

Copy of the resolution passed at the Board Meeting held on 28th August, 2007 wherein the Issue had been approved.

5.

Report of the Statutory Auditors, M/s S R Batliboi & Co., dated 5th November, 2007 contained Restated Financial Statements for the years ended 31st March, 2007, 2006, 2005, 2004 & 2003 as per Indian GAAP and mentioned in the Letter of Offer.

6.

Copies of annual reports of the Company for the years ended 31st March, 2007, 2006, 2005, 2004 and 2003.

7.

Consent of the Statutory Auditors M/s S R Batliboi & Co, for inclusion of their report dated 28th September, 2007

8.

Consents of Statutory Auditors, Bankers to the Company, Registrars to the Issue, Banker to the Issue, Legal Counsel to the Issue, Directors of the Company, Company Secretary and Compliance Officer as referred to, in their respective capacities.

9.

Initial listing applications dated 5th October 2007, 5th October 2007 and 7th October 2007 filed with the BSE, the NSE and the CSE respectively.

10.

In-principle listing approval dated 16th October 2007, 17th October 2007 and 16th October 2007 from the BSE, the NSE and the CSE.

11.

Tripartite Agreement between NSDL, the Company and the Registrar to the Issue dated 18th December, 1998.

285

12.

Tripartite Agreement between CDSL, the Company and the Registrar to the Issue dated 21st January 2000.

13.

Due diligence certificate dated October 4, 2007 to SEBI from SBI Capital Markets Limited.

14.

Copy of the letter dated 30th August, 2007 from M/s Price Waterhouse, Chartered Accountants, tax consultants to the Company, confirming tax benefits as mentioned in the Offer Document.

15.

SEBI observation letter No.CFD/DIL/ISSUES/PB/PN/109688/2007 dated 30th November 2007.

Any of the contracts or documents mentioned in the Letter of Offer may be amended or modified at any time if so required in the interest of the Company or if required by the other parties, without reference to the shareholders, subject to compliance of the provisions contained in the Companies Act and other relevant statutes.

286

DECLARATION We, the Directors of the Company hereby declare that all the relevant provisions of the Act and the guidelines, instructions, etc. issued by Securities & Exchange Board of India established under Section 3 of the SEBI Act, Government and any other competent authority, as the case may be, have been complied with and no statement made in this Letter of Offer is contrary to the provisions of the Act, SEBI Act or the rules made or guidelines issued thereunder, as the case may be. We further certify that all disclosures in the Letter of Offer are true and correct. For Exide Industries Limited, Sd/R. G. Kapadia Non-Executive Chairman R. B. Raheja Vice Chairman and Non-Executive Director T. V. Ramanathan Managing Director & Chief Executive Officer G. Chatterjee Director - Industrial P K Kataky Director – Automative Dr S K Mittal Director – Research & Development A. K. Mukherjee Director – Finance & Chief Financial Officer S. B. Raheja Non-Executive Director T.V. Ramanathan PoA holder for W. Wong Non-Executive Director H M Kothari Non-Executive and Independent Director Bhaskar Mitter Non-Executive and Independent Director S. N. Mookherjee Non-Executive and Independent Director Vijay Aggarwal Non-Executive and Independent Director A. H. Parpia Non-Executive and Independent Director D. S. Parekh (Alternate Director to Mr S B Raheja) Non-Executive and Independent Director

Date: December 4, 2007 Place: Kolkata Encl: Composite Application Form

287

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Crystal Forms (022) 6614 0900 / 18 [email protected]

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