BLUPLAST INDUSTRIES LIMITED - Kotak Securities · SEBI Act Securities and Exchange Board of Indi a...

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Draft Prospectus Please read Section 60B of the Companies Act, 1956

BLUPLAST INDUSTRIES LIMITED

(Incorporated as a Private Limited Company in Mumbai on January 14, 1999 under the Companies Act, 1956 as “Thermoplast Industries Private Limited”, renamed as “Bluplast Industries Private Limited” w.e.f. March 11, 2005 and subsequently converted into

a Public Limited Company on July 14, 2005)

Registered Office: 113/114, Vivek Industrial Estate, Uswala Road, Near Litolier, Cama Estate, Goregaon (East), Mumbai-400063(with effect from April 4th 2001)

(Previous Registered Office, On incorporation: 108, Udyog Bhavan, Sharma Industrial Estate, Goregaon (E), Mumbai - 4000063) Tel: 022 - 26851212 / 1631 / 2897 Fax: 022 – 26851151

Corporate Office: 128, Udyog Bhawan, Sonawala Road, Goregaon (E), Mumbai – 400 063 Tel: 022 - 26852816 Fax: 022 – 26852816

Email: [email protected] Website: www.bluplast.com Contact Person: Mr. Shashinand Nagori, Compliance Officer, Tel: 022 – 26851631, E-mail: [email protected]

PUBLIC ISSUE OF 1,10,00,000 EQUITY SHARES OF RS. 10/- EACH ISSUED FOR CASH AT A PRICE BAND OF RS. 28/- TO 32/- PER EQUITY SHARE AGGREGATING TO RS. 3080 LAKHS AT THE MINIMUM PRICE AND RS. 3520 LAKHS AT MAXIMUM PRICE IN THE PRICE BAND (HEREINAFTER REFFERED TO AS THE ‘ISSUE’) BY BLUPLAST INDUSTRIES LIMITED (THE ‘COMPANY’ OR ‘ISSUER’). THE ISSUE PRICE IS 2.8 TIMES OF THE FACE VALUE AT THE LOWER END OF THE PRICE BAND AND 3.2 TIMES OF THE FACE VALUE AT THE HIGHER END OF THE PRICE BAND. (THE COMPANY SHALL DETERMINE THE FINAL PRICE BEFORE FILING THE PROSPECTUS WITH ROC). THE ISSUE WILL CONSTITUTE 58.77% OF THE FULLY DILUTED POST ISSUE PAID UP CAPITAL OF THE COMPANY.

RISK IN RELATION TO THE FIRST ISSUE TO THE PUBLIC This being the first issue of the Equity Shares of Bluplast Industries Limited (“the Company”), there has been no formal market for the Equity Shares of the Company. The face value of the Equity Shares of the Company is Rs. 10/- per share and the Issue Price is 2.8 times of the face value at the lower price band and 3.2 times of the face value at the higher price band. The Issue Price (as determined and justified by the Lead Managers and the Company as stated herein under the paragraph ‘Basis of Issue Price’) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and / or sustained trading in the Equity Shares of the Company or regarding the price at which the Equity Shares will be traded after listing.

GENERAL RISKS Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Company and the Issue including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (SEBI), nor does SEBI guarantee the accuracy or adequacy of this Draft Prospectus. Specific attention of the investors is invited to the section titled ‘Risk Factors’ beginning on page iii of this Draft Prospectus.

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

LISTING The Equity Shares offered through this Draft Prospectus are proposed to be listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE). The in-principle approval of NSE and BSE for the listing of our Equity Shares have been received pursuant to letters dated [●] and [●], respectively. BSE shall be the Designated Stock Exchange.

LEAD MANAGER REGISTRARS TO THE ISSUE

Allianz Securities Limited 33, Vaswani Mansion, 6th Floor, Dinshaw Vachha Road, Churchgate, Mumbai – 400 020 Phone: 022-22870580 Fax: 022-22870581 Email: [email protected] Website: www.aslfinancial.com Contact Person: Ms. Kavitha Basavaraj

Bigshare Services Private Ltd. E / 2, Ansa Industria Estate, Saki Vihar Road, Saki Naka, Andheri (E), Mumbai – 400 072 Tel: 91-22-28473747 / 3474 / 0652 / 0653 Fax: 91-22- 28475207 Website: www.bigshareonline.com Email: [email protected] Contact Person: Mr. V. Kumaresan

ISSUE PROGRAMME

ISSUE OPENS ON: [●] 2006 ISSUE CLOSES ON: [●] 2006

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TABLE OF CONTENTS

PAGE NO.

SECTION I: GENERAL DEFINITIONS, ABBREVIATIONS & TECHNICAL TERMS…………………………… b SECTION II: RISK FACTORS CERTAIN CONVENTIONS; USE OF MARKET DATA ………………………………… i FORWARD LOOKING STATEMENTS…………………………………………………… ii RISK FACTORS…………………………………………………………………………….. iii SECTION III: INTRODUCTION SUMMARY………………………………………………………………………………….. 1 SUMMARY OF FINANCIAL/OPERATING DATA ………………………………………. 3 THE ISSUE………………………………………………………………………………… … 5 GENERAL INFORMATION………………………………………………………………… 6 CAPITAL STRUCTURE OF THE COMPANY…………………………………………….. 9 OBJECTS OF THE ISSUE…………………………………………………………………… 17 BASIS FOR ISSUE PRICE…………………………………………………………………… 28 STATEMENT OF TAX BENEFITS…………………………………………………………. 30 SECTION IV: ABOUT THE COMPANY INDUSTRY OVERVIEW…………………………………………………………………… 38 OUR BUSINESS …………………………………………………………… 42 REGULATIONS AND POLICIES………………………………………………………….. 48 HISTORY AND CERTAIN CORPORATE MATTERS…………………….. 49 MANAGEMENT ……………………………………………………………………………. 51 PROMOTERS ……………………………………………………………………………….. 60 INFORMATION ON THE PROMOTER GROUP COMPANIES…………………………. 61 CURRENCY OF PRESENTATION………………………………………………………… 65 RELATED PARTY TRANSACTIONS 66 DIVIDEND POLICY………………………………………………………………………… 70 SECTION V: FINANCIAL INFORMATION OF THE COMPANY FINANCIAL STATEMENTS OF THE COMPANY………………………………………… 71 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ………………………………………………………………..

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SECTION VI: LEGAL AND OTHER INFORMATION OUTSTANDING LITIGATIONS …........................ 96 GOVERNMENT APPROVALS / LICENSING ARRANGEMENTS……………………….. 101 SECTION VII: OTHER REGULATORY AND STATUTORY DISCLOSURES 102 SECTION VIII: ISSUE RELATED INFORMATION TERMS OF THE ISSUE ……………………………………………………………………... 109 ISSUE PROCEDURE…………………………………………………………......................... 111 SECTION IX: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION OF THE COMPANY…………………………………………………………………………………..

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SECTION X: MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION… 142 SECTION XI: DECLARATION……………………………………………………………. 144

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SECTION I

DEFINITIONS AND ABBREVIATIONS

Conventional / General Terms Terms Description Articles/Articles of Association

Articles of Association of Bluplast Industries Limited

Companies Act/ Act The Companies Act, 1956, as amended from time to time Depository A company formed and registered under the Companies Act, 1956 (1 0f 1956), and

which has been granted a certificate of registration under sub-section (1A) of section 12 of the Securities and Exchange Board of India of India Act, 1992 (15 of 1992)

Depositories Act The Depositories Act, 1996, as amended from time to time Depository Participant

A depository participant as defined under the Depositories Act

FEMA Foreign Exchange Management Act, 1999, as amended from time to time, and the regulations framed there under

FII Foreign Institutional Investor (as defined under FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000) registered with SEBI

Financial Year/Fiscal/FY

Period of twelve months ended March 31 of that particular year, unless stated otherwise

Government/GOI The Government of India Indian GAAP Generally Accepted Accounting Principles in India I.T. Act The Income-Tax Act, 1961, as amended from time to time MOA/Memorandum/ Memorandum of Association

Memorandum of Association of Bluplast Industries Limited

NRIs/ Non-Resident Indian

A person resident outside India who is a citizen of India or a Person of Indian Origin (as defined in Foreign Exchange Management (Deposit) Regulations, 2000)

Overseas Corporate Body / OCB

A Company, partnership, society and other corporate body owned directly or indirectly to the extent of at least 60% by NRIs including overseas trusts, in which not less than 60% of beneficial interest is held by NRIs directly or indirectly but irrevocably as defined in Foreign Exchange Management (Deposit) Regulations, 2000

SEBI The Securities and Exchange Board of India constituted under the SEBI Act, 1992 SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time SEBI Guidelines SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued by SEBI on

January 27, 2000, as amended, including instructions and clarifications issued by SEBI from time to time

Stock Exchanges Bombay Stock Exchange Limited (BSE) and National Stock Exchange of India Limited (NSE)

U.S. GAAP Generally Accepted Accounting Principles in the United States of America ISSUE RELATED TERMS

Terms Description Allianz Allianz Securities Limited Applicant Any prospective investor who makes an application for Equity Shares in terms of

this Draft Prospectus Application Form The form in terms of which the applicant shall apply for the Equity Shares of the

Company Allotment Issue of Equity Shares pursuant to the Issue to the successful Applicants Allottee The successful Applicant to whom the Equity Shares are being / have been issued.

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Terms Description Bankers to the Issue

UTI Bank Ltd. and ICICI Bank Ltd.

Depository A depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996 as amended from time to time

Depository Participant

A depository participant as defined under the Depositories Act

Designated Stock Exchange

Bombay Stock Exchange Limited (BSE)

Draft Prospectus This Draft Prospectus issued in accordance with Section 60 of the Companies Act, 1956. It carries the same obligations as are applicable in case of a Prospectus and will be filed with RoC before the Issue opening date.

Eligible Employees Employees who are on the payroll of the Company as on 31st December, 2005 Employee Reservation Portion

The portion of the Issue being a maximum of 10,00,000 Equity Shares available for allocation to employees as on December 31, 2005.

Issue Closing Date The date on which the Issue closes for subscription

Issue Opening Date The date on which the Issue opens for subscription

Issue Price The price as decided by the Company and the Lead Managers for which the Equity Shares shall be issued to the public in terms of this Draft Prospectus

LM/Lead Manager Lead Manager to the Issue, in this case being Allianz Securities Limited Net Issue/ Net Issue to the Public

Public Issue less reservation for employees of the company to the extent of 10,00,000 equity shares i.e. Net Issue to Public is of 1,00,00,000 Equity Shares of Rs. 10/- each for Cash at a Price Band of Rs. 28 – 32 per Equity Share

Prospectus Refers to the prospectus to be filed with the Registrar of Companies (ROC) Public Issue/ /Issue/Fresh Issue

Public Issue of 1,10,00,000 Equity Shares of Rs. 10/- each for Cash at a Price Band of Rs. 28 – 32 per Equity Share aggregating to Rs. 3080 Lakhs at the minimum price and Rs. 3520 Lakhs at the maximum price in the price band

Registrar/Registrar to the Issue

Registrar to the Issue being Bigshare Services Private Limited

ROC / Registrar of Companies

Registrar of Companies, Maharashtra, situated at Everest, Marine Lines, Mumbai 400002.

Retail Individual Investors

Individual investors who apply for the Equity Shares of or for a value of not more than Rs.1,00,000

Company/Industry Related Terms

Auditors The Statutory Auditors of the Company viz Singrodia Goyal & Co. Board/Board of Directors Board of Directors of Bluplast Industries Limited Committee Committee of the Board of Directors of the Company authorised to take

decisions on matters related to or incidental to this Issue Corporate Office 128, Udyog Bhawan, Sonawala Road, Goregaon (E), Mumbai – 400 063. The Company/ BIL/ Bluplast/ Bluplast Industries Limited/ / Bluplast Industries Pvt. Ltd. / We/ Us/ Our Company/ The Issuer

Bluplast Industries Limited, a public limited company incorporated under the Companies Act, 1956

Equity Shares Equity Shares of the Company of Rs.10 each unless otherwise specified in the context thereof

Face Value Value of paid up equity capital per Equity Share, in this case being Rs.10 each

Registered Office/Registered Office of the Company

113/114, Vivek Industrial Estate, Uswala Road, Near Litolier, Cama Estate, Goregaon (East), Mumbai-400063

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Terms Description Promoters Mr. Kamlesh L. Jain, Mr. Indermal P.Jain, Ms. Rekha Jain, Ms. Nayana Jain “Promoter Group” or “Promoter Group Entities” or “Group Companies”

Refers to Bluplast Moulders Private Limited, Bluplast Corporation, Alaska Industries, Neelam Plastic Industries, Bluplast Industries, Bluplast Pentech and Bluplast Utility Products

Abbreviations of General Terms

Abbreviation Full Form

AS Accounting Standards as issued by the Institute of Chartered Accountants of

India AY Assessment Year BSE Bombay Stock Exchange Limited CDSL Central Depository Services (India) Limited CESTAT Customs, Excise and Service Tax Appellate Tribunal. EPS Earning Per Share EGM Extraordinary General Meeting FY / Fiscal/Financial Year

Period of twelve months ended March 31 of that particular year, unless otherwise stated

FEMA Foreign Exchange Management Act, 1999 FII Foreign Institutional Investors GDP Gross Domestic Production GoI/Government Government of India GIR Number General Index Registry Number HUF Hindu Undivided Family I.T. Act Income Tax Act, 1961, as amended from time to time KVA Kilovolt Amperes MOU Memorandum of Understanding MTPA Metric Tone Per Annum MM Millimetres MTS Metres NAV Net Asset Value NRIs Non Resident Indians NSE National Stock Exchange of India Limited O.I.A Order In Appeal O.I.O Order In Original p.a. Per annum P/E Ratio Price/Earnings Ratio PAN Permanent Account Number PAT Profit After Tax PVC Polyvinyl Chloride RBI The Reserve Bank of India RCC Reinforced concrete cement ROC Registrar of Companies, Maharashtra, Mumbai RONW Return on Net Worth Rs. / Rupees / INR Indian Rupees Sq. ft. Square feet USD/US$ United States Dollar WPC Wood Plastic Composite

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SECTION – II

RISK FACTORS

CERTAIN CONVENTIONS; USE OF MARKET DATA

In the Draft prospectus, unless the context otherwise requires, all references to one gender also refers to the other gender. Unless the context otherwise requires, the financial data in this Draft Prospectus is derived from our financial statements prepared and restated in accordance with Indian GAAP and included in this Draft Prospectus. Accordingly, financial information relating to us is presented on a non-consolidated basis for the year ended March 31 2001, 2002, 2003, 2004 2005 and six months ended September 30, 2005. Our fiscal year commences on April 1 and ends on March 31. In this Draft Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding-off. There are significant differences between Indian GAAP and U.S. GAAP; accordingly, the degree to which the Indian GAAP financial statements included in this Draft Prospectus will provide meaningful information, is entirely dependent on the reader’s level of familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Draft Prospectus should accordingly be limited. We have not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own advisors regarding such differences and their impact on our financial data. For additional definitions, see the section titled ‘Definitions and Abbreviations’ on page b of this Draft Prospectus. In the section titled ‘Main Provisions of Articles of Association of the Company’ beginning on page 121 of this Draft Prospectus, defined terms have the meaning given to such terms in the Articles of Association of the Company. Market data used throughout this Draft Prospectus was obtained from internal company reports and industry publications. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe market data used in this Draft Prospectus is reliable, it has not been independently verified. Similarly, internal company reports, while believed by us to be reliable, have not been verified by any independent sources.

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FORWARD-LOOKING STATEMENTS Statements included in this Draft Prospectus which contain words or phrases such as “will”, “aim”, “will likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “ should”, “will pursue” and similar expression or variations of such expressions, that are “forward-looking statements”. All forward looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those contemplated by the relevant forward looking statement. Important factors that could cause actual results to differ materially from our expectations include, among others: -

• • General economic and business conditions in India and other countries • Regulatory changes relating to the plastic industry sector in India and our ability to respond to them • General economic and business conditions in India and other countries; • Our ability to successfully implement our strategy, our growth and expansion, technological

changes, our exposure to market risks that have an impact on our business activities or investments;

• The monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices, the performance of the financial markets in India and globally, changes in domestic and foreign laws, regulations and taxes and changes in competition in our industry;

• Changes in the value of the Rupee and other currencies; • The occurrence of natural disasters or calamities; • Change in political conditions in India.

For further discussion of factors that could cause our actual results to differ, see the section titled “Risk Factors” beginning on page iii of this Draft Prospectus. 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 any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, the Company, and the Lead Manager will ensure that investors in India are informed of material developments until such time as the grant of listing and trading permission by the Stock Exchanges.

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II. RISK FACTORS An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in this Draft Prospectus, including the risks and uncertainties described below, before making an investment in the Equity Shares of the Company. If any of the following risks actually occur, the business, results of operations and financial condition could suffer, the trading price of the Equity Shares of the Company could decline and you may lose all or part of your investment. Prior to making an investment decision, prospective investors should carefully consider all of the information contained in this Draft Prospectus, including financial statements included in this draft Prospectus beginning on page 71. Unless stated otherwise, the financial data in this section is as per our financial statements prepared in accordance with Indian GAAP. Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or other implications of any of the risks described in this section. INTERNAL RISK FACTORS

1. Promoter Mr. Kamlesh Jain is involved in one criminal case under section 138 of Negotiable Instrument Act, 1882 filed against him in his capacity as one of the Director of Plusmore Marketing Pvt. Ltd. A criminal case under Section 138 of the Negotiable Instruments Act, 1882 has been filed against M/s Plusmore Marketing Pvt. Ltd. and its directors on account of dishonour of certain cheques aggregating to Rs. 2,23,460/-. Mr. Kamlesh Jain has been made a party to the criminal case since he used to be a director of M/s Plusmore Marketing Pvt. Ltd. However, at the time of dishonour of the cheques and the subsequent initiation of the case against M/s Plusmore Marketing Pvt. Ltd., Mr. Kamlesh Jain had already resigned as a director. For more details, please refer to section titled “Outstanding Litigations” appearing on page no. 96 of the Draft Prospectus.

2. The Company is promoted by first generation entrepreneurs and the investors will be subject to all consequential risk associated with such ventures.

Management Perception:

Mr. Kamlesh L. Jain and Mr. Indermal P. Jain are first generation entrepreneur have around 20 years experience in the thermoware industry. Further, the Company has also employed a team of professionals with several years of relevant experience to look after day to day operations of the Company.

3. The Company has not yet placed orders for the plant and machinery for the proposed expansion


The Company has finalised the list of plant and machinery, including the machineries to be imported. The Companny have entered into an agreement with Tung Tai Machine Works Company Ltd., Taiwan for purchase of imported machinery and also obtained quotations for the same. The Company will place the orders for requisite machineries after receipt of issue proceeds.

4. The proposed expansion project is entirely funded by the Public Issue. Any delay in raising the funds from IPO may have an adverse impact on the future performance of the Company.


Delays in raising funds are likely to have an impact in the growth plans of the company in the short run due to delayed deployment of funds. Due to delays, it is likely that the Company may have to rely on debt which will in turn affect the profitability of the company.

5. An increase in the prices of raw materials will raise manufacturing costs and could adversely affect the profitability of the Company. Further the company is dependent on few suppliers for raw material.

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Any abrupt or large scale increase in the prices of the raw materials can adversely affect profits of the company, in case it’s unable to pass on them to their customers. The Company is dependent on few suppliers for the requirement of raw material in domestic market. The raw materials are also available from the overseas market. In case of any problem in procurement of raw material from the domestic market, the company has an option to procure it from overseas.

6. BOB Capital Markets Limited, the appraiser is not having any financial commitment. The Appraising Agency viz. BOB capital Markets Limited is not having any financial commitment through Debt or Equity. Further they are not the monitoring agency to the utilization of issue proceeds.

7. Non-acceptance of new product, PVC Wood Composite, by Indian Consumers would impact the business operations of the Company


Though historically Indian Consumer has a preference for wood products as compared to its substitute product, management believe that PVC wood products would provide the better properties and look alike wood product to the customers. The growing prices of wood products and expected environmental friendly policies in future would lead to encouragement of PVC wood composite products over wood products. As a result of which the acceptance of PVC Wood Composite Profiles / Sheets will evolve slowly in India.

8. The business of the Company is dependent on its manufacturing facilities. The loss of or shutdown of operations at any of manufacturing facilities may have a material adverse effect on Company’s business, financial condition and results of operations. The principal manufacturing facilities at Daman 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, strikes, lock-outs continued inavailability of services of our external contractors, earthquakes and other natural disasters, industrial accidents and the need to comply with the directives of relevant government authorities. The occurrence of any of these risks could significantly affect our operating results.

Management Perception: With a view to minimise the risk of shutdown of its manufacturing facilities because of various reasons, the company plan to carry out a planned shutdowns of its various manufacturing facilities for maintenance of machineries and utilities. The Company planned to use updated technology for its products and also try to have a cordial relationship with their employees.

9. The company face competition for its products from overseas manufacturers, importers and new entrant. Besides, the company may also face competition from products made of improved or advanced materials.


The cost of PVC-wood composite manufactured indigenously would be less than the imported comparable product. Management believe that having a brand in the market will help the company in gaining a market share in PVC –Wood composite products in India.

10. The company does not have its own internal sales network and plans to distribute its products through dealer & distributor network. The Company is therefore exposed to the risk of dealers failing to adhere to the standards set for them in respect of sales which in turn could affect customer’s perception of brand and products.

Management Perception: The company has a network of 98 distributors and country wide network of dealers and sub-dealers under distributors. With a view that the distributors and the dealers promote company’s product and adhere to the standards set for them in respect of sales, the company provides various incentives and discount to them. Further from last few years the company is dealing with these dealers and distributors and the company has not faced any major problem.

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11. The Company has taken over the assets and liabilities of Alaska Industries, a partnership firm of promoters, by way of business transfer agreement in July, 2005. There are various approvals / licenses / registrations / consents in the name of Alaska Industries. Any unforeseen liability arising in future may adversely affect financial position of the company and / or may give arise to any civil dispute also. The non-approval or non-transfer of any registration / licenses / consents may also adversely affect the business operations.

12. Certain approvals like approval from Pollution Control Board, approval of sanctioned load from

Electricity Board are in the name of Thermoplast Industries Private Limited. The name of the Company was changed from Thermoplast Industries Private Limited to Bluplast

Industries Private Limited in March, 2005 and subsequently became public limited company w.e.f. July 14, 2005. The Company is in the process of getting the name changed in all its consents / approvals / registrations / licenses. The company does not forsee any problem in getting the name changed.

13. Dependence on key management team

The company may lose its key management team to competitors. If one or more members of its management team are unable or unwilling to continue with the company, it may find it difficult to replace such people and its business may be adversely affected


The company has a team of professionals who are responsible for the day-to-day operations. Some of the company’s senior management team members have been with the company for many years.

14. The Company’s inability to manage growth may lead to loss of opportunities and may hamper its future growth plans.

Management Perception: The Company has experienced growth in total income in recent years. The success of company’s business will depend greatly on its ability to effectively implement business and growth strategy. Whilst the company has successfully executed its business strategy in the past, there can be no assurance that it will be able to execute its strategy on time and within the estimated budget. The company expects its growth strategy to place significant demand on its management and other resources and require to continue developing and improving its operational, financial and other internal controls. The company’s inability to manage its business and growth strategy could have a material adverse effect on its business, financial condition and profitability.

15. The Company does not own the trademark/ brandname "Bluplast".

The company’s products are branded and marketed under “Bluplast” which is owned by an associate firm viz. Bluplast Corporation, which has given an exclusive right to use the brandname for a period of five years. The company also has to pay roylty which is dependent on turnover of company. Any adverse event or non-renewal of agreement after expiry of the term, may give rise to conflict of interest.

Management Perception: The company does not forsee any problem in renewal of the agreement as there are common promoters.

16. In the past 12 months, the company has issued equity shares, which may be at a price lower than

the lower end of the price band for the equity shares being offered in the issue.

During October - December, 2005 the Company has issued 15,40,742 Equity Shares of Rs. 10/- each for cash at a price of Rs. 25/-. The price at which equity shares have been issued in the last 12 months is not indicative of the price which may be offered in this issue. For further details, please refer to Section titled “Capital Structure” beginning on page no. 9 of the Draft Prospectus.

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17. The Company may continue to be controlled by its Promoters following this Issue and other shareholders may not be able to affect the outcome of shareholder voting during such time.

After the completion of the Issue, our Promoters will collectively hold approx. 41.23% of the outstanding Equity Shares. Consequently, our Promoters and other principal shareholders, if acting jointly, may exercise substantial control over us and inter alia may have the power to elect and remove a majority of our Directors and/or determine the outcome of proposals for corporate action requiring approval of our Board of Directors or shareholders, such as lending and investment policies, revenue budgets, capital expenditure, dividend policy and strategic acquisitions / joint ventures.

18. Covenants with lenders may restrict our operations, our capacity to expand, distribute dividends, etc.

There are certain restrictive covenants under terms and condition of the Loan agreement that we have entered into with our bankers. Some of these covenants require the prior permission of the said banks for the following:

• Formulate any scheme of amalgamation or reconstruction • Enter into additional borrowing arrangements either secured or unsecured. • Implement any scheme of expansion or acquire fixed assets of substantial value. • Undertake guarantee value on behalf of other firm • Declare any dividend more than net profit for the year. • Make any future changes in ownership of the brand “Bluplast”

However, UTI Bank Limited, vide its letter dated November 21, 2005, has given its 'No Objection

Certificate' to the Company for its proposed Initial Public Issue. 19. The Company, its Promoters, Group Companies are involved in number of legal proceedings, which

may have some financial implications on the business of the Company.

These legal proceedings are pending at different levels of adjudication before various courts, tribunals, enquiry officers and appellate tribunals, should any new development arise, such as a change in Indian law or rulings against the Company, its Promoters and Group Companies by appellate courts or tribunals, it may need to establish reserves in the financial statements, which could increase their expenses and current liabilities Furthermore, if a claim is determined against the Company, Promoters and Group Companies and it is required to pay all or a portion of the disputed amount, it could have a material adverse affect on the results of operations and cash flows of the Company. For further information regarding litigations, please refer section titled “Outstanding Litigations” on page no. 96 of this Draft Prospectus.

20. Some of our Promoter Group Companies are loss-making (Rs. In Lakhs)

Particulars PAT / Loss for FY 2003

PAT / Loss for FY 2004

PAT / Loss for FY 2005

Bluplast Moulders Pvt. Ltd. (0.82) (0.87) (0.30) Bluplast Corporation 0.06 (0.12) 0.75

For more details, please refer to the Section “Promoter Group Companies” on page no. 61 of this Draft Prospectus.

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21. The Company has following contingent liabilities not provided for in the books of accounts under Indian Accounting Standards, which may adversely affect our financial condition.

(Rs. In Lakhs) Particulars 30/09/2005 Bank Guarantee 33.05 Capital contracts remaining to be executed 14.14 Deposit remaining to be paid for exclusive use of licensed rights

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In the event such contingent liability materializes it may have an adverse affect on our financial performance.

22. Other Promoter group companies have business interest in the Company.

The group companies have number of financial and business transactions with our company. For the details please refer to section titled “Related Party Transaction” on page no. 66 of this Draft Prospectus.

23. The company has yet to receive registration certificate for registration of “Hello Genie” trademark, which it is using for business promotion strategy.

The company has applied for registration of the said trademark in May, 2005 and received temporary application number for usage of the trademark. However, company is yet to receive final certificate in this regard.

24. We require certain registrations and licenses from government and regulatory authorities and the

failure to obtain them in a timely manner or at all may adversely affect the operations of our Company. In respect of proposed manufacturing facilities at Daman, the company have obtained necessary approvals and consents for undertaking business activities. For more information, see “Government Approvals” on page no. 101 of this Draft Prospectus. We will apply for any further approval / registration / consent which may be required in future to commence the commercial production. If we fail to obtain approval of any of registrations and licenses/consents in a timely manner, or at all, the business of our Company may be adversely affected and its directors and officers may be subjected to civil or criminal proceedings.

25. Weaknesses and Threats as per the appraising agency Weakness • The Company is yet to gain expertise in marketing of PVC Wood Composite Profiles / Sheets • Although the company has experience in production of plastic products, the company does not have

expertise in manufacturing of PVC Wood Composite products. • The Company is yet to place orders for machinery and any delay in implementation schedule of the

project would lead to time and cost overrun. Threats • Large presence of the unorganized sector selling low priced products which compete with the products

manufactured by the organised sector. • Large number of plastic products are reserved for SSI sector. • The increase in oil prices are likely to increase raw material prices which will affect the profitability of

players making plastic products. • The Indian consumer has a preference for wood products as a result of which the acceptability of PVC

wood composite profiles / sheets will evolve slowly in India. • PVC Wood composite are new products that have been recently introduced even in developed

countries so industry standards are yet to be evolved for these products. The claims made by producers even in developed countries are yet to be tested.

viii

Threats • Research on various types of plastic composite products is being carried out in India as well as

developed countries in the world. Introduction of any new composite product in the market other than Wood-PVC composite can affect the marketability of the products introduced by the company.

• Any change in government regulations or policies can affect the operations of the company. • The company can face competition if PVC wood products are imported or foreign companies start

manufacturing operations for PVC wood products in India. B. EXTERNAL RISK FACTORS 1. Exchange Rate Fluctuations may have impact on the performance of the Company.

The Company is exposed to exchange rate fluctuations. Uncertainties in the global financial market may have an adverse impact on the exchange rate between Rupee vis-à-vis other currencies. The exchange rate between the Rupee and other currencies is variable and may continue to fluctuate in the future. Such fluctuations can have a serious impact on the cost of the Company.

2. Political situation and changes in the Government of India may affect the performance of the Company.

The Government of India has pursued the economic liberalization policies including relaxing restrictions on the private sector over the past several years. The present Government has also announced polices and taken initiatives that support continued economic liberalization. There is no assurance that the liberalization policies of the government will continue in the future. Protests against privatization could slow down the pace of liberalization and deregulation. A significant change in India’s economic liberalization and deregulation policies could disrupt the business and economic conditions in India.

3. Natural disasters could disrupt our operations and result in loss of revenues and increased costs.

The business of the Company is exposed to man-made and natural disasters such as, explosions, earthquakes, storms and floods as well as to terrorist attacks or other enemy actions. The occurrence of a man-made or natural disaster, terrorist attack, enemy action or other accidents could disrupt the operations of the business of the Company and result in loss of revenues and increased costs.

4. The acts of violence and terrorist attacks or war involving India could adversely affect the Company’s business.

There have been instances of terrorist attacks in many parts of the world and also in India in the recent past. Any recurrence of such events or other acts of violence/war may negatively affect the Indian capital market and may also adversely affect performance of our scrip in the stock exchanges. These acts may also result in a loss of business confidence. Any recurrence of events of terrorist attacks or other acts of violence may adversely impact the desire of corporate executives to travel to India for business purposes and thereby adversely impacting business prospects. These uncertainties make it difficult for us and our customers to accurately plan future business activities.

5. Taxes and other levies imposed by the Government of India or other State Governments, as well as other financial policies and regulations, may have a material adverse effect on our business, financial condition and results of operations.

Taxes and other levies imposed by the Central or State Governments in India that affect our industry include customs duties, excise duties, sales tax, income tax and other taxes, duties or surcharges introduced on a permanent or temporary basis from time to time. Currently we benefit from certain tax benefits that results in a decrease in the effective tax rate compared to the tax rates that we estimate would have applied if these incentives had not been available. There can be no assurance that these tax incentives will continue in the future. The non-availability of these tax incentives could adversely affect our financial condition and results of operations.

ix

6. After this Issue, the price of the Equity Shares may be highly volatile or there may be no active market for the Equity Shares which may be due to various reasons including the following:

• Volatility in the Indian and Global securities market; • The results of operations and performance; • Perceptions about our future performance or the performance of Indian Plywood Industry. • Performance of the Indian Economy.

Notes to Risk Factors:

• Public Issue of 1,10,00,000 Equity Shares of Rs. 10/- each for Cash at a Price Band of Rs. 28/- to 32/- per Equity Share aggregating to Rs. 3080 Lakhs at the minimum price and Rs. 3520 Lakhs at the maximum price.

• The net worth of our Company before the Issue (as on 30th September, 2005) was Rs. 960.48

Lakhs.

• The average cost of acquisition of one Equity Share for the Promoters is Rs. 12.09 per Equity Share of and the book value as on September 30, 2005 is Rs. 15.55 per Equity Share.

• For related party transactions, refer to the section titled ‘Related Party Transactions’ and

‘Transactions with Promoter/ Promoter Group’ on page 66 of this Draft Prospectus.

• The Investors are advised to refer to the section titled ‘Basis for Issue Price’ on page 28 of this Draft Red Herring Prospectus before making an investment in this Issue.

• None of the other ventures of the promoters have a business interest/ other interests in the Issuer

Company except as disclosed in the “Related Party Transactions” and “Transactions with Promoter/ Promoter Group” on page 66 of this Draft Prospectus.

• Trading in Equity Shares of our Company for all the investors shall be in dematerialized form

only.

• Investors may note that in case of over-subscription in the Issue, allotment shall be on a proportionate basis within the specified categories. For more information, see the section titled ‘Basis of Allotment’ at page 117 of this Draft Prospectus.

• The Registered office of the Company was changed from 108, Udyog Bhavan, Sharma Industrial

Estate, Goregaon(East), Mumba-400 063 to Gala No. 113 & 114, Vivek Industrial Estate, P-Plt, Walbhat Road, Cama Estate, Goregaon (East), Mumbai-400 063 with effect from April 1, 2001.

• The Investors may contact the LM to the Issue or the Compliance Officer for any complaints,

information or clarifications pertaining to the Issue.

• No part of the issue proceed will be paid as consideration to promoters, directors, key managerial personnels, associate or Group Companies.

Investors may contact the LM for any complaints, information or clarifications pertaining to the Issue.

1

SECTION III

INTRODUCTION

Summary

The following summary is qualified in its entirety by the more detailed information and the financial statements of the Company that appear in this Draft Prospectus. Unless otherwise stated, all financial and other data regarding our business and operations presented in this Draft Prospectus are presented on a consolidated basis. Industry Overview Overview of Indian Sector The Plastic Sector is a growing industry in India. The demand for most plastic products in India has increased at double-digit growth rate during the last decade. The consumption of plastic products in India tends to increase significantly in the years when there is significant increase in polymer availability. Notably, beyond 1999, when there was abundant availability of raw polymer resin domestically, the plastic industry year-on-year growth rate correlated well with the corresponding GDP growth rate. Overall, the key demand determinants for plastics in a country are per capita income, availability of plastics, cultural factors, and the level of environmental concerns. Consumption of plastics in India is modest compared to developed countries. Although per capita consumption of plastics in India has risen from 0.96 kg in 1995-96 to about 4.1 kg in 2004-05, it is still way below the world average of 20 kg. One of the reasons for this is that an overwhelming share of the consumption (over 80%) is accounted for by commodity plastics which are mainly used in the making of low-value household articles, pipes, moulded extruded sheets etc. The per capita plastics consumption, which is currently at 4.1 kg, is projected to go up to 8 kg by the year 2007. On the basis of the large Indian population and growth rate of Indian GDP, by the year 2010 India is projected to become the world's third largest consumer of plastics after US and China from its current eighth position. (Source: ICRA Industry Report, June 2005) STRUCTURE OF THE INDUSTRY On the basis of value added, the plastic products sector contributes to around 0.5% of GDP of the country. The plastic products sector also provides for 1% of the country’s export. An estimated 0.4 million people are employed in the sector. There is a presence of the small scale companies in the industry which account for more than 50% of the industry turnover. The Indian plastic processing Industry is highly fragmented and comprises 25000 firms with more than 400000 employees. Barring 10-15% of the firms, which can be classified as medium-scale operations, all the other units operate on a small scale basis. The top 100 players accounts for just 20% of the industry turnover. The total number of players in the sector is more than 25000. However, the degree of fragmentation, worldwide, is large and despite the small size of operations they are able to operate profitably. Further the high growth in demand ensures that the market is able to absorb the excess capacity in quick times. Overall, the degree of competition can be considered high in the Indian Plastic processing industry. (Source: ICRA Industry Report, June 2005) Business Overview The promoters of the Company Mr. Kamlesh L. Jain and Mr. Indermal P. Jain have been associated with the plastic industry for more than two decades. The promoter had started business activity in plastic product manufacturing by incorporating Bluplast Corporation in 1985. Subsequently, promoters expanded business by setting up a facility in the same line in Daman under Alaska Industries, a group company. Later, The Promoter incorporated Thermoplast Industries Private Limited in 1999 with additional unit in Daman. The manufacturing plant of the Company was set up at Daman (in Union Territory of Daman and Diu) with an initial capacity of 1940 MTPA, which has, over a period of time, been increased up to 4500 MTPA. Thermoplast Industries Private Limited later renamed as Bluplast Industries Private Limited. The Company has acquired total manufacturing unit of Alaska Industries on July 1, 2005 and became Public Company,

2

viz. Bluplast Industries Limited, with effect from July 14, 2005. The Company has been operating at 100% capacity utilization for the past three years. In the FY 2004-05, to meet the demands of its products, the Company had to outsource the work of manufacturing its products to sub-contractors on job work basis and as a result of which the Company manufactured 5465 MTPA against an installed capacity of 4500 MTPA. In July 2005, the Company acquired the business of Alaska Industries, a group concern. Pursuant to this acquisition, the Company’s manufacturing capacity increased from 4500 MTPA to 5400 MTPA. The Company manufactures plastic articles adopting the ‘Injection Moulding’ method and its product range includes Thermoware, Vacuumware, Insulatedware, Kitchenware, Utilities and pet products (e.g. Casserole with the capacity of 500ml-12500ml, Lunch Packs 3-5 containers, Flasks with the capacity of 750 ml –1500 ml, water jugs with the capacity of 2000 ml-2500 ml, Water Bottles with the capacity of 500 ml – 2500 ml, Pet Jars with the capacity of 800 ml – 2500 ml, Buckets, Bath Stools, Bath Tubs, Baskets, Dust Bins etc.). Our Vision To be one of the household utility product and PVC wood composite manufacturer by offering range of products to the satisfaction of customers at an affordable price. Business Strategy Our principal Operating strategies are • To increase market share in the plastic utility household product range in Domestic Market and also

increase the share in international market.

a. The company is increasing its installed capacity in its existing product range from 5400 MTPA to 9000 MTPA.

b. Broad base its product range to cater to various consumers so that the contribution of any

particular consumer segment does not account for a large portion of the company’s sales. • To be one of the major players in PVC Wood composite products by :

(i) Introducing high value added products such as PVC - Wood composite profile / sheets.

(ii) Market potential for export of PVC Wood Composite products to be explored.

3

SUMMARY OF FINANCIAL / OPERATING DATA

Adjusted Statement of Adjusted Profit & Loss (As Restated)

(Rs. In lakhs)

Particulars Period Ended

30.09.2005 Year Ended 31.03.2005

Year Ended 31.03.2004




INCOME

Operating Income 3075.78 4,194.57 3,882.83 3,397.26 2,296.52 789.71

Other Income 0.47 1.87 2.03 2.74 3.81 0.74 Increase (Decrease) in Stocks 82.23 152.72 93.39 58.85 45.88 115.26

Total 3158.49 4,349.16 3,978.25 3,458.85 2,346.21 905.71

EXPENDITURE

Raw Material Consumed 2604.50 3,524.29 3,170.86 2,720.56 1,845.87 637.74

Staff Costs 60.73 32.98 27.48 24.66 29.65 14.64 Other Manufacturing Expenses 161.18 310.31 371.29 348.46 211.89 82.79 Administrative, Selling and Other Expenses 99.15 148.92 140.72 97.00 65.06 23.90

Total 2,925.55 4,016.50 3,710.34 3,190.68 2,152.48 759.06 Profit Before Interest, Depreciation and Tax 232.93 332.66 267.91 268.16 193.73 146.64 Interest & Financial Charges 56.17 95.88 70.48 76.23 70.53 57.78

Depreciation 35.00 62.88 60.43 64.79 70.83 66.17

Net Profit before tax 141.76 173.90 137.00 127.14 52.37 22.69

Taxation

Current tax 34.00 14.60 11.10 12.50 4.00 1.90

Fringe Benefit Tax 0.62 - - - - -

Deferred tax

(1.19) 0.71 0.31 0.85 - -

Net Profit after tax 108.33 158.59 125.59 113.79 48.37 20.79

Income Tax adjustment - - 0.06 (1.11) 0.49 0.24 Net Profit after tax adjustments 108.33 158.59 125.53 114.90 47.89 20.55

Dividend on Shares - 18.68 13.01 8.68 7.12

3.23

Tax on Dividend - 2.62 1.70 1.11 -

0.33

Net Profit

108.33 137.30 110.82 105.11 40.77

16.98

Note: (With effect from July 01, 2005, the Company has takenover the manufacturing unit of Alaska Industries a partnership firm on a slump sale basis. Hence the figures for september '05 include the assets and liabilites of the said unit of Alaska Industries.)

4

Adjusted Statement of Assets and Liabilities as restated Rs. In Lakhs

Particulars

As at 30.09.2005

As at 31.03.2005

As at 31.3.2004

As at 31.3.2003

As at 31.3.2002

As at 31.3.2001

A. Fixed Assets:

Gross Block 877.29 672.04 591.53 552.51 520.30 480.35

Less : Depreciation 360.70 325.70 262.82 202.39 137.60 66.77

Net Block 516.59 346.34 328.71 350.12 382.70 413.57

Capital Work in Progress 5.82 2.30 0.65 0.25 - -

Total 522.40 348.64 329.36 350.37 382.70 413.57

B. Investments - - - - - -

C. Current Assets, Loans & Advances

Inventories 790.49 707.14 470.93 330.48 235.06 177.38

Sundry Debtors 1,540.95 837.83 464.27 460.18 217.93 152.18

Cash and Bank Balances 129.60 71.82 57.56 54.57 33.71 18.92

Loans and Advances 192.99 233.95 144.50 106.05 58.44 64.76

Total 2,654.04 1,850.73 1,137.26 951.27 545.14 413.25

D. Liabilities& Provisions

Share Application Money received pending for allotment 84.00 65.00 - - - 21.00

Secured Loans 1150.50 800.37 502.75 587.25 427.46 416.69

Unsecured Loans 57.72 118.15 55.82 72.93 51.28 50.05

Current Liabilities and Provisions 915.95 466.14 436.94 280.03 194.42 187.76

Deferred Tax Provisions 7.81 9.00 8.28 7.97 - -

Total 2,215.97 1,458.65 1003.80 948.18 673.16 675.50

E. Networth (A+B+C-D) 960.48 740.71 462.83 353.46 254.69 151.33

F. Represented by

Share Capital 617.55 487.30 173.53 173.53 173.53 137.03

Reserves and Surplus 364.20 254.91 291.09 182.02 83.54 16.98

Less: Miscellaneous Expenses not written off/ adjusted 21.27 1.49 1.79 2.09 2.39 2.69

Net Worth 960.48 740.71 462.83 353.46 254.69 151.33

Note: With effect from July 01, 2005, the Company has takenover the manufacturing unit of Alaska Industries a partnership firm on a slump sale basis. Hence the figures for september '05 include the assets and liabilites of the said unit of Alaska Industries..

5

The Issue

PARTICULARS NO. OF EQUITY SHARES

Present Issue 1,10,00,000 Equity Shares

Offer through this Draft Prospectus 1,10,00,000 Equity Shares of Rs. 10/- each at a premium of Rs. 18/- to 22/- per share

OUT OF WHICH:

Reserved for Employee* 10,00,000 Equity Shares of Rs 10/- each

Net Offer to the Public 1,00,00,000 Equity Shares of Rs 10/- each

Equity Shares outstanding prior to the Issue

77,16,242 Equity Shares of Rs 10/- each

Equity Shares outstanding after the Issue

1,87,16,242 Equity Shares of Rs 10/- each

Use of Proceeds We intend to use the net proceeds of the Issue after meeting Issue related expenses. Please see the section entitled "Objects of the Issue" on page 17 of this Draft Prospectus.

*There are 154 permanent employee on the rolls of the company as on December 31st 2005 . Note: Under subscription, if any, in the net offer to the public category shall be allowed to be met with spill over from the reserved category to the net issue to the public at the sole discretion of the Company in consultation with the Lead Managers.

6

GENERAL INFORMATION

Bluplast Industries Ltd. Registered Office: 113/114, Vivek Industrial Estate, Uswala Road, Near Litolier, Cama Estate, Goregaon

(East), Mumbai – 400 063 Tel No: 022-26851212, Fax No: 022- 26851151

Company Registration No. 011-117874 The Company is registered at the Registrar of Companies, Maharashtra, 100, Everest, Marine Lines, Mumbai - 400002 Board of Directors comprise of the following members:

Sr. No. Name Designation

1 Mr. Kamlesh L. Jain Managing Director 2 Mr. Indermal P. Jain Whole - Time Director 3 Mr. Prince Jain Director 4 Mr. Rajendra Jain Director 5 Mr. Janakraj Vakil Director 6 Mr. Arvind M. Mehta Director

Details of the Chairman and Managing Director / Whole time Director Mr. Kamlesh Jain, Chairman and Managing Director: Mr. Kamlesh Jain, aged 46 years, is the Managing Director of the Company. He has about 20 years of experience in Plastic Thermoware Industry. In the year 1978 he joined the Cello Group and gained experience in household plastic items. In the year 1985 he set up his own plastic household thermoware facilities under the firm name Bluplast Corporation. He has been associated with the Company since inception and has been taking part in all the activities of the Company. He supervised the launchinhg of new products introduced by the company from time to time. Mr. Indermal P. Jain, Whole – Time Director: Mr. Indermal Jain is younger brother of Shri Kamlesh Jain aged 43 years. He is a whole time director of the Company designated as Joint Managing Director. He joined Bluplast Corporation as a partner and gained experience in plastic items. He was also one of the promoter of Thermoplast Industries Pvt. Ltd which is currently known as Bluplast Industries Limited. He is involved in looking after the designing concepts of the plastic products for the Company. COMPLIANCE OFFICER Mr. Shashinand Nagori Bluplast Industries Ltd. 113/114, Vivek Industrial Estate, Uswala Road, Near Litolier, Cama Estate, Goregaon (East), Mumbai – 400 063 Tel : 022- 26851631 Fax : 022- 26851151 E-mail: [email protected] Investors can contact the Compliance Officer in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of allotment, credit of allotted shares in the respective beneficiary account, refund orders etc.

7

LEGAL ADVISER TO THE ISSUE Rajani Associates F – 4, Panchsheel, 53, ‘C’ Road, Churchgate, Mumbai – 400 020. Tel : 022-2202 1010 Fax : 022-2202 1011 E-mail: [email protected] BANKERS TO THE COMPANY UTI Bank Ltd., Royal Accord IV, Lokhandwala Complex, Andheri (West), Mumbai – 400 053. Tel: 022 – 26352646 Fax: 022 – 26328008 Email: [email protected] Website: www.utibank.com LEAD MANAGERS Allianz Securities Limited 33, 6th Floor, Vaswani Mansion, Dinsha Vachha Road, Churchgate, Mumbai - 400020 Tel: 022-22870580 Fax: 022-22870581 Website: www.aslfinancial.com Email: [email protected] Contact Person: Ms. Kavitha REGISTRARS TO THE ISSUE Bigshare Services Private Ltd. E – 2/3, Ansa Industrial Estate, Sakivihar Road, Saki Naka, Andheri (E), Mumbai – 400 072. Email: [email protected] Website: www.bigshareonline.com Contact Person: Mr. V. Kumaresan BANKERS TO THE ISSUE UTI Bank Ltd., Royal Accord IV, Lokhandwala Complex, Andheri (West), Mumbai – 400 053. Tel: 022 – 26352646 Fax: 022 – 26328008 Contact person – Mr. Sunil Gurbaxani Email ID: [email protected] Website: www.utibank.com

8

ICICI Bank Ltd., Capital Markets Division, 36, Mumbai Samachar Marg, Fort, Mumbai – 400 001. Tel: 022 – 22655285 Fax: 022 - 22611138 Email: [email protected] Contact Person: Mr. Sidhartha Routray Website: www.icicibank.com AUDITORS TO THE COMPANY Singrodia Goyal & Co. Chartered Accountants 201, Rajeshri Accord Telly Cross Lane, Off. S. N. Road, Andheri (E), Mumbai 400069 Tel: 022- 2683 6363 Fax: 022- 2682 6464 Website: www.singrodiagoyal.com E-mail: [email protected] Credit Rating As the Issue is of Equity Shares, credit rating is not required. Trustees As the Issue is of Equity Shares, the appointment of Trustees is not required. Monitoring Agency The Company has not appointed any monitoring agency. Appraising Entity BOB Capital Markets Limited, Noble Chambers (Vatsa House), 20-C/D S. A.Brelvi Road, Fort, Mumbai – 400 001. Tel: 022 – 2284 4892 / 93 Fax: 022 - 22845208 Email: [email protected] Website: www.bobcapitalmarkets.com

9

CAPITAL STRUCTURE OF THE COMPANY

Aggregate Nominal Value

(in Rs. In Lakhs)

Aggregate value at Issue

Price (in Rs. In Lakhs)

(A) Authorized Share Capital 2,00,00,000 Equity shares of Rs.10/- each 2,000.00 (B) Issued, Subscribed and Paid-up Equity Capital 77,16,242 Equity shares of Rs.10/- each fully paid up 771.62 (C) Present Issue in terms of this Draft Prospectus 1,10,00,000 Equity shares of Rs.10/- each at a price band

of Rs. 28/- to 32/- per share for cash. 1,100.00 [•]

(D) Employee Reservation Portion 10,00,000 Equity shares of Rs. 10/- each at a price band

of Rs. 28/- to 32/- per share for cash. 100.00 [•]

(E) Net Offer to the Public 1,00,00,000 Equity shares of Rs. 10/- each at a price band

of Rs. 28/- to 32/- per share for cash. 1,000.00 [•]

(F) Paid – up Capital after the issue 1,87,16,242 Equity shares of Rs. 10/- each 1,871.62 [•] (G) Share Premium Account Before the Issue

231.11

After the Issue [•]

Details of Increase in Authorised Capital Date Authorised Capital (Rs.) Face Value

(Rs.) No. of Shares Particulars

14.01.1999 25,00,000 10/- 2,50,000 Incorporation 04.10.1999 1,75,00,000 10/ 17,50,000 Increase 07.02.2005 5,00,00,000 10/- 50,00,000 Increase 25.07.2005 10,00,00,000 10/- 1,00,00,000 Increase 12.09.2005 20,00,00,000 10/- 2,00,00,000 Increase NOTES FORMING PART OF THE CAPITAL STRUCTURE: 1. Equity Share Capital History of the Company

Date of allotment

No. of sharesallotted

Face Value (Rs.)

Cumulative no. of shares

Issue Price (Rs.)

Consideration Nature of Allotment

Securities Premium

Account (Rs.) 15.01.1999 310 10 310 10 Cash Subscription to

Memorandum Nil

27.10.1999 600,000 10 600310 10 Cash Preferential Allotment to Promoters

Nil

10.03.2001 7,70,000 10 13,70,310 10 Cash Preferential Allotment to Promoters and Associates

Nil

10

Date of allotment

No. of sharesallotted

Face Value (Rs.)

Cumulative no. of shares

Issue Price (Rs.)

Consideration Nature of Allotment

Securities Premium

Account (Rs.).)05.02.2002 3,65,000 10 17,35,310 17 Cash Preferential

Allotment to the associates of Promoters

25,55,000

08.03.2005 17,35,310 10 34,70,620 10 Bonus Bonus in the ratio of 1:1

Nil

25.03.2005 13,87,690 10 48,58,310 10 Cash Preferential Allotment to the associates of Promoters

Nil

31.03.2005 14,690 10 48,73,000 10 Cash Preferential Allotment to Promoter

Nil


Nil

29.10.2005 7,47,250 10 69,22,750 25* Cash Preferential allotment to promoter

1,12,08,750


89,39,880


29,62,500

Note *: Initially the company has allotted shares @ Rs 20/- per share including premium of Rs 10/- per share. However as per resolution passed at Meeting of Board of Directors held on December 28th 2005 the premium amount was increased to Rs 15/- per share (Paid Up Rs 25/- per share). Revised Return of Allotment was also submitted with the ROC.

2. Promoters’ Contribution & Lock in

Date of acquisition

Date when fully paid up

Nature of transaction

Consideration

No. of shares Face value Issue/ transfer Price

Lock-in period***

Mr. Indermal P. Jain 15.01.1999 15.01.1999 Subscription to

Memorandum Cash 100 10 10 3 Year

27.10.1999 27.01.1999 Allotment Cash 3,00,000 10 10 3 Year 10.03.2001 10.03.2001 Allotment Cash 2,76,300 10 10 3 Year 08.03.2005 08.03.2005 Allotment Bonus 5,76,400 10 - 3 Year 25.03.2005 25.07.2005 Allotment Cash 7,42,000 10 10 1 Year 25.07.2005 N.A. Transfer Cash 3,68800 10 17 3 Year 25.07.2005 N.A. Transfer Cash 9,240 10 10 3 Year 25.07.2005 25.07.2005 Allotment Cash 2,50,000 10 10 1 Year 29.10.2005 29.10.2005 Allotment Cash 2,56,080 10 25 1 Year 31.10.2005 31.10.2005 Allotment Cash 1,08,340 10 25 1 Year 31.10.2005 31.10.2005 Allotment Cash 56,660* 10 25 3 Year 28.12.2005 28.12.2005 Allotment Cash 20,000* 10 25 3 Year

Total 29,63,920

11

Date of acquisition

Date when fully paid up

Nature of transaction

Consideration

No. of shares Face value Issue/ transfer Price

Lock-in period***

Mr. Kamlesh L. Jain 27.02.1999 N.A. Transfer Cash 10 10 10 3 Year 27.10.1999 27.10.1999 Allotment Cash 3,00,000 10 10 3 Year 10.03.2001 10.03.2001 Allotment Cash 2,86,300 10 10 3 Year 08.03.2005 08.03.2005 Allotment Bonus 5,86,310 10 - 3 Year 25.03.2005 25.03.2005 Allotment Cash 5,78,510 10 10 1 Year 31.03.2005 31.03.2005 Allotment Cash 14,690 10 10 1 Year 25.07.2005 N.A. Transfer Cash 3,68,800 10 17 3 Year 25.07.2005 N.A. Transfer Cash 9,240 10 10 3 Year 25.07.2005 25.07.2005 Allotment Cash 9,02,500 10 10 1 Year 29.10.2005 29.10.2005 Allotment Cash 1,58,964 10 25 1 Year 31.10.2005 31.10.2005 Allotment Cash 1,65,000 10 25 1 Year 28.12.2005 28.12.2005 Allotment Cash 21,000* 10 25 3 Year

Total 33,91,324 Mrs. Rekha Kamlesh Jain 15.01.1999 15.01.1999 Subscription to

Memorandum Cash 100 10 10 3 Year

08.03.2005 08.03.2005 Allotment Bonus 100 10 - 3 Year 25.07.2005 N.A. Transfer Cash 2,03,600 10 17 3 Year 25.07.2005 N.A. Transfer Cash 64 10 10 3 Year 25.07.2005 25.07.2005 Allotment Cash 1,40,000 10 10 1 Year 29.10.2005 29.10.2005 Allotment Cash 1,36,068 10 25 1 Year 28.12.2005 28.12.2005 Allotment Cash 78,250* 10 25 3 Year

Total 5, 58,182 Mrs. Nayana Indermal Jain 15.01.1999 15.01.1999 Subscription to

Memorandum Cash 62** 10 10 3 Year

08.03.2005 08.03.2005 Allotment Bonus 62 10 - 3 Year 25.07.2005 N.A. Transfer Cash 2,03,600 10 17 3 Year 25.07.2005 25.07.2005 Allotment Cash 10,000 10 10 1 Year 29.10.2005 29.10.2005 Allotment Cash 1,96,138 10 25 1 Year 28.12.2005 28.12.2005 Allotment Cash 78,250* 10 25 3 Year

Total 4,88,112 Grand Total 74,01,538

*These shares totalling to 2,54,160 have been considered under minimum promoters contibution and are also considered as eligible for Lock in period of 3 years. The company has received an undertaking from the respective Promoters whereby they have confirmed that they will bring in the difference of the Issue Price and Rs 25/- atleast one day before opening of the Issue, in order to comply with the SEBI Guidelines in respect of minimum Promoter Contribution and lock-in requirement.

** On 15.04.2003 and 24.09.2004, out of the 100 shares subscribed to Memorandum by Mrs. Nayana Indermal Jain, 38 shares were transferred to other associates of the Promoters.

***Lock-in period will commence from the date of allotment in this issue. The promoters viz. Mr. Indermal Jain, Mr. Kamlesh Jain, Mrs, Rekha Jain and Mrs Nayana Jain have given their consent for lock in vide their letter dated January 16, 2006. The shares acquired last have been locked in first and the lock in period shall commence from the date of allotment of shares in the Public Issue.

12

3. Summary of Lock-in of Promoters holding :

Shares under Lock-in for Particulars 1 year 3 year

Total shares held

PROMOTER No. of Shares

Percentage (Post Issue)

No. of Shares

Percentage (Post Issue)

Mr. Indermal P. Jain 13,56,420 7.25 16,07,500 8.59 29,63,920 Mr. Kamlesh L. Jain 18,19,664 9.72 15,71,660 8.40 33,91,324 Mrs. Rekha Kamlesh Jain

2,76,068 1.48 2,82,114 1.51 5,58,182

Mrs. Nayana Indermal Jain

2,06,138 1.10 2,81,974 1.51 4,88,112

Promoter Group Bluplast Moulders Private Limited

48,700 0.26 - 48,700

Others 2,66,004 1.42 - 2,66,004

Grand Total 39,72,994 21.23 37,43,248 20.00 77,16,242

4. Locked-in Equity Shares held by the Promoters can be pledged with banks or financial institutions as

collateral security for loans granted by such banks or financial institution. The equity shares to be held by the promoters under lock-in period shall not be sold/ hypothecated/ transferred during the lock-in period. However, in terms of Clause 4.16(b) of the SEBI Guidelines, the Equity Shares may be transferred among the Promoters/ Promoter group or to a new promoter or persons in control of the Company, subject to continuation of lock-in in the hands of the transferees for the remaining period and compliance of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 as applicable. The Equity Shares held by the persons other than the Promoters may be transferred to any other person holding shares prior to the issue, subject to the continuation of the lock-in with transferees for the remaining period and compliance with the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997, as applicable. The securities which are subject to lock-in shall carry inscription `non-transferable’ along with duration of specified non-transferable period mentioned in the face of security certificate.

5. The following equity shares have been sold / acquired by our promoters, during the period of 6

month preceding the date on which the draft prospectus is filed with SEBI.

Transferor Transferee Date on which equity shares purchased or

sold

No. of equity shares

Par Value (Rs.)

Nature of

Payment

Purchase / Sale price (In Rs.)

Kamlesh L. Jain

3,68,800/- 36,88,000/- Kamlesh L. Jain A/c Alaska Industries Indermal P.

Jain

25.07.2005

3,68,800/-

10/- Cash

36,88,000/-

Nayana I. Jain

2,03,600/- 20,36,000/- Kamlesh L. Jain A/c Bluplast Corporation Rekha

K.Jain

25.07.2005

2,03,600/-

10/- Cash

20,36,000/-

Kamlesh L. Jain A/c Bluplast Utility Products

Kamlesh L. Jain

25.07.2005 9,240/- 10/- Cash 92,400/-

Indermal P. Jain

9,240/-

92,400/-

Mr. Ashok Bajaj Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

13


sold


Par Value (Rs.)

Nature of

Payment


Mr. Daulatram Sada Rangani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Anjoo A. Bajaj

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mrs. Bharati R. Rangani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Rajkumar Bajaj

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Dipesh Malhotra

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr .Ranjit Sahani Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Dilpreetshingh Anand (HUF)

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Ashok Bajaj Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mrs. Flavia J. D'souza

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mrs. Gayatri S. Narwani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Ghanshyam Malhotra

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. H.K. Butaney Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Issardas K. Motwani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. K.M. Murthy Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mrs. Kavita R. Bajaj

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Kiran C. Panjwani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Lalchand M. Bhambani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mrs. Maya L. Bhambani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mrs. Mayasunder Shivdasani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Mildred Fernandes

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Murli R. Mukhi HUF

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mrs. Neeta Sunil Bajaj

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Shyam Raheja

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mrs. Pinky C. Panjwani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Rajkumar Bajaj

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

14


sold


Par Value (Rs.)

Nature of

Payment


Ram A. Rajani HUF

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Ramchandra Aishwani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mr. Sajan D. Narwani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mrs. Sheeladevi G. Bhatija

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mrs. Shilpa Vishal Chablani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

Mrs. Sonia M. Peswani

Mrs. Rekha K. Jain

25.07.2005 2 10/- Cash 20/-

TOTAL 11,63,344

6. The Company have not issued any shares for consideration other than cash except for issue of 17,35,310 bonus shares issued on March 8, 2005 which is approved on February 8, 2005 in the ratio of 1:1 by capitalization of reserves of the Company.

7. The Promoters Contribution brought-in by the promoters was more than the specified minimum lot as defined under SEBI Guidelines.

8. There is no “Buyback” or “Standby” or similar arrangement for the purchase of Equity Shares by the Company/ its Promoters/ Directors/LMs for purchase of Equity Shares offered through the Draft Prospectus.

9. The Company has not raised any bridge loans against the proceeds of this Issue.

10. Investors may note that in case of over-subscription, allotment will be on proportionate basis as detailed in para on “Basis of Allotment” on page no. 117 of this Draft Prospectus.

11. An over subscription to the extent of 10% of the net offer to public can be retained for the purpose of rounding off to the nearest multiple while finalising the allotment.

12. The Equity Shares offered through this Issue will be made fully paid up.

13. An applicant in the Net Offer to the Public category cannot make an application for a number of equity shares, which exceeds the net offer to the public.

14. Details of Ten Major Shareholders of the Company

a) As on the date of filing the Draft Prospectus with SEBI

Sr. no. Name of Shareholders No. of Equity shares held % age of holding 1. Kamlesh L. Jain 33,91,324 43.95 2. Indermal P. Jain 29,63,920 38.41 3. Rekha K. Jain 5,58,182 7.23 4. Nayana I. Jain 4,88,112 6.33 5. Madhu M. Shah 54,000 0.70 6. Bluplast Moulders Pvt. Ltd. 48,700 0.63

7. Sunita Rajgarhia & Paras Rajgarhia 40,000 0.52 8. Mahendra Kumar Mulchand Shah (HUF) 27,000 0.35 9. Surekha Vilas Oswal 16,000 0.21 10. Sanjay Rathi 12,000 0.16 Total 75,99,238 98.48

15

b) Ten days prior to filing Draft Prospectus with SEBI

Sr. no. Name of Shareholders No. of Equity shares held % age of holding 1. Kamlesh L. Jain 33,91,324 43.95 2. Indermal P. Jain 29,63,920 38.41 3. Rekha K. Jain 5,58,182 7.23 4. Nayana I. Jain 4,88,112 6.33 5. Madhu M. Shah 54,000 0.70 6. Bluplast Moulders Pvt. Ltd. 48,700 0.63

7. Sunita Rajgarhia & Paras Rajgarhia 40,000 0.52 8. Mahendra Kumar Mulchand Shah (HUF) 27,000 0.35 9. Surekha Vilas Oswal 16,000 0.21 10. Sanjay Rathi 12,000 0.16 Total 75,99,238 98.48

c) Two years prior to filing the Draft Prospectus with SEBI

Sr. no. Name of Shareholders No. of Equity shares held % age of holding 1. Kamlesh L. Jain 586310 33.78 2. Indermal P. Jain 576400 33.22 3. Rekha K. Jain 100 Negligible 4. Nayana I. Jain 94 Negligible 5. Kamlesh L. Jain A/c Alaska Industries 368800 21.25 6. Kamlesh L. Jain A/c Bluplast

Corporation 203600 11.73

7. Mr. Pankaj Kumar Gaggar 1 Negligible 8. Mr. Narendra B. Jain 1 Negligible 9. Mr. Mahendra kumar H. Jain 1 Negligible

10. Mrs. Sangeeta N. Jain 1 Negligible Total 1,735,308 100

15. The Promoters and Promoter Group hold the following Equity Shares of face value of Rs. 10/- each as on date which constitutes 96.55% of the aggregate Equity Share Capital of the Company, the details of which are as under:

Particulars No. of Equity Shares

% of pre-issue paid up Equity Shares

Promoters Kamlesh L. Jain 33,91,324 43.95 Indermal P. Jain 29,63,920 38.41 Rekha Kamlesh Jain 5,58,182 7.23 Nayana Indermal Jain 4,88,112 6.33 Promoter Group Bluplast Moulders Pvt. Co. Ltd. 48,700 0.63 Total 74,50,238 96.55

16. Pre-issue and Post-issue Shareholding pattern

Pre Issue Post Issue Category No. of Equity

Shares % No. of Equity

Shares %

Promoters Kamlesh L. Jain 33,91,324 43.95 33,91,324 18.12 Indermal P. Jain 29,63,920 38.41 29,63,920 15.84 Rekha Kamlesh Jain 5,58,182 7.23 5,58,182 2.98 Nayana Indermal Jain 4,88,112 6.33 4,88,112 2.61 Sub-Total (A) 74,01,538 95.92 74,01,538 39.55

16

Pre Issue Post Issue Category No. of Equity

Shares % No. of Equity

Shares %

Promoter Group Bluplast Moulders Pvt. Limited

48,700 0.63 48,700 0.26

Sub-Total (B) 48,700 0.63 48,700 0.26 Others 2,66,004 3.45 266004 1.42 Sub-Total (C) 2,66,004 3.45 2,66,004 1.42 Total pre issue share capital {(D)=(A)+(B)+(C)}

77,16,242 100.00 77,16,242 41.23

Public Issue (E) 1,10,00,000 58.77 Total post issue share capital {(F)= (D)+(E)}

1,87,16,242 100.00

Note: The shareholding pattern after the Issue is on the assumption that full allotment is done on all the shares offered through this Issue.

17. On the date of filing the Draft Prospectus with SEBI, there are no outstanding financial instruments or any other rights which would entitle the existing promoters or shareholders or any other person, any option to receive equity shares after the Issue. 18. The Company has not issued any Equity Shares out of revaluation reserves. 19. There would be no further issue of capital whether by way of issue of bonus shares, preferential allotment, right issue or in any other manner during the period commencing from submission of this Draft Prospectus with SEBI until the Equity Shares offered through this Draft Prospectus have been listed or all monies have been refunded to all investors. 20. The Company presently does not have any intention or proposal to alter its capital structure for a

period of six months from date of opening of the Issue, by way of split/consolidation of the denomination of Equity shares or further issue of Equity shares (including issue of securities convertible into Equity Shares) whether preferential or otherwise. However, during such period or a later date, it may issue Equity Shares pursuant to the plan or issue Equity shares or securities linked to equity shares to finance an acquisition, merger or joint venture or as consideration for such acquisition, merger or joint venture, or for regulatory compliance or such other scheme of arrangement if an opportunity of such nature is determined by its Board of Directors to be in the interest of the Company.

21. At any given point of time there shall be only one denomination for a class of Equity Shares of the

Company, unless otherwise permitted by law and the Company shall comply with disclosures and accounting norms as may be specified by SEBI from time to time

22. The Company has 45 (Fourty Five) shareholders as on the date of filing of this Draft Prospectus

with the SEBI.

23. Restrictive conditions under lenders agreements about capital structure

There are restrictive covenants in agreements we have entered into with certain banks for term loans and long-term borrowings. These restrictive covenants require us to seek the prior permission of the said banks for various activities, including, amongst others, alteration of our capital structure, raising of fresh capital, undertaking new projects, undertaking any merger/ amalgamation/restructuring, investing by way of share capital in or lend or advance funds to or place deposits with any other concern, secured or unsecured borrowings, undertaking guarantee obligations, declaration of dividend not exceeding 20% of the net profits and change in management.

17

OBJECTS OF THE ISSUE

The Company has chalked out the following expansion and extension of existing line of activity:

1) Expansion of existing installed capacity for manufacturing injection moulded household products at Daman from 5400 MTPA to 9000 MTPA.

2) Setting up manufacturing facilities with an installed capacity of 4,900 MTPA to manufacture new high value PVC – Wood composite profile / sheets at Daman.

In addition to the above plans, the objects of the issue also include the following: Funding margin money requirement for working capital of the company Meeting issue expenses and contingency provisions List the shares of the company on the stock exchanges

The main objects clause and objects incidental or ancillary to the main objects clause of the Memorandum of Association of our Company enables us to undertake our existing activities and the activities for which the funds are being raised through the present issue. APPRAISAL The project has been appraised by the Corporate Finance Department of BOB Capital Market Ltd., Mumbai as per their report given in the month of September, 2005 which was revised on account of exchange rate fluctuation and acquisition of Alaska Industries from internal accruals. A revised appraisal report was given in November, 2005. The scope and purpose of the appraisal was to study the financial aspects of the proposed expansion and extension of existing plans and to access the financial viability of the proposed capital expenditure plan. Appraisal Report of BOB Capital Markets Ltd. has been used as a basis of this document wherever required. BOB Capital Markets Ltd. vide their letter dated November 19, 2005 has given its consent for their name being included as an appraising agency and for their appraisal report being used in this Offer Document. However, the Appraiser neither has any financial commitment in proposed project expansion. COST OF PROJECT

The summary of the expenditure that the Company proposes to incur for implementing its projects is as follows:

Cost of Project Amount (Rs. In Lakhs)

Expansion of existing installed capacity from 5400 MTPA to 9000 MTPA 234.00

Setting up manufacturing of high value PVC - wood composite profile / sheet 1749.00

Working Capital Margin for existing, expansion and extension purpose 875.00

Public Issue Expenses 250.00

Provision For Contingency 140.00

Total 3248.00

18

MEANS OF FINANCE The aggregate fund requirement as mentioned above i.e. Rs. 3248 Lakhs is proposed to be meet as under:

Particulars Total (Rs. In Lakhs)

Public Issue of 1,10,00,000 equity shares of Rs. 10/- each at a minimum price band of Rs. 28/-

3080.00

Internal Accruals 168.00 TOTAL 3248.00

(Source: Appraisal Report) The funds requirement has been ascertained at the minimum price of the Price Band of Rs. 28/- per Equity Share. In case the issue price is fixed at the maximum price of the Price Band of Rs. 32/- per Equity Share, the excess amount of Rs. 440 Lakhs will be used to repay the outstanding Bank Borrowings which is Rs 953.41 lacs as on December 31, 2005. RATIONALE OF THE PROJECT The Company plans to achieve the following objectives by undertaking the proposed capital expenditure:

• Broad base its product range to cater to various consumers so that the contribution of any particular consumer segment does not account for a large portion of the Company’s sales.

• Counter the threat of the un-organized sector by introducing new value added products.

• Achieve economies of scale in existing product range by increasing capacity.

• Maintain competitiveness in the existing product range by improving technology. PROJECT OF THE COMPANY IS DIVIDED IN TWO PARTS 1. EXPANSION OF EXISTING BUSINESS The Company’s existing operations of injection moulded household products are located at Daman with an area of 4900 sq. mts. In order to reduce the project implementation period, the company has recently purchased the assets and business of Alaska Industries, a promoter group company, including 1850 sq. mts. of land with ready RCC constructed factory building, for a total consideration of Rs. 300 lakhs. The location of the land is in Daman, which is adjacent to Mumbai. The land is free from all encumbrances except for equitable mortgage created in favour of UTI Bank who has extended term loan of Rs. 150 lakhs for the purchase of business from Alaska Industries. Dyes and Moulds purchased from Alaska Industries worth Rs. 125 Lakhs is to be used for the expansion of existing operation. A total of Rs. 42 lakhs is required to be spent on civil works / renovation for the expansion and the balance on purchase of plant & machinery. The details of cost of expansion of existing project are as under:

Cost of Expansion Amount

(Rs. In Lakhs) Civil works 25.00 Plant & Machinery 192.00 Cabling, Water chillers and other Miscellaneous Assets 17.00 Total 234.00

19

Details of Civil work & Foundations As per quotation given by M/s Jatin U Desai, Engineers & Contractors, dated October 24, 2005, the cost of civil works is Rs. 25 lakhs, the details of which are as follows:

S. No. Item of work Amount (Rs. In Lakhs)

1. Work for alteration / renovation 5.00

2. Providing and Construction of Mezzanine Work 12.00

3. Foundation for Machine & Compressor 5.00

4. Work for Cooling Tower and Providing and Construction of Cable & Water Trench for Machine.

3.00

TOTAL 25.00 Details of Plant and Machinery The main plant which is used for setting up the project is injection moulding machines for making thermoware products and the company is currently using that plant & machinery of Woojin Selex Co. Ltd, Korea and is satisfied with the after sales support from them. The Company, therefore, decided to procure the plant and machinery for increasing the capacity of existing product range from Woojin Selex Co. Ltd of Korea only. The Company has received a quotation from Woojin Selex Co. Ltd. of Korea dated March 21, 2005 for the following machineries:

Plant No. of Set Total Amount (In U.S.D)

Injection Moulding Machine Selex S-85 2 73,800 Injection Moulding Machine Selex S-150 2 86,400 Injection Moulding Machine Selex S-200 1 51,300 Injection Moulding Machine Selex S-250 1 62,100 Total 2,73,600 Add: Freight & insurance 3% 8,208 Add: Custom Duty 35% 98,633 Add: Clearing Forwarding 3% 8,454 Total Cost in USD 3,88,895 Total Cost in Indian Rupees (1 USD = Rs 46) Say 1,78,89,170 Spare parts and ancillary machinery (In Indian Rs.) 7% 12,52,242 Total (Rs. In Lakhs) 192.00

(Source: Appraisal Report) Details of Cabling, Water chillers and other Miscellaneous Assets

S. No. Item Amount (Rs. In Lakhs)

1 Cable & Pipe fittings 4.00

2 Water Chiller 2.00

3 Overhead Crane 7.85

4 Miscellaneous Assets 3.15

17.00 (Source: Appraisal Report)

20

RAW MATERIAL REQUIREMENT FOR EXPANSION: The major raw material required are Poly Propylene, Isocyanate & Polyol. The other Raw materials are packing material, PP belts, Stickers, Foils, Stainless Steel containers etc. The Company currently procures Poly Propylene from Reliance, IPCL, Haldia and Isocynate & Polyol from Sharp Chemical, Royal Synthetics, Manali Petrochemicals Ltd. as these are available locally. There is an adequate availability of these raw materials in India and in the overseas market. The Company has not entered into any definitive agreement with the raw material suppliers in the past and is not proposing to enter into any agreement for its future requirement as it had never faced any problem in procuring them. OTHER INFRASTRUCTURE FACILITIES FOR EXPANSION As the company is proposing expansion at its existing facilities, it will be largely utilising its existing infrastructure facilities like water and fuel. Power The company is having total sanctioned load of 500 KVA from the transformer of 500 KVA, out of which the company has received the release order of 200 KVA from Electricity department, Daman & Diu. The Company does not require additional sanction load of power as the existing power connectivity is sufficient for expansion activity. The company also propose to acquire 500 KVA Capacity of DG sets as standby arrangement. Water The water requirement is mainly for cooling, drinking and sanitary purposes. Its total requirement including expansion is 10000 litres per day, which is fulfilled from tubewell and connection from Public Works Department Daman. The Company has two underground water tanks with the storage capacity of 10000 litres each as a standby arrangement. Fuel The company requires Diesel for Diesel Generating Sets, which is used as standby arrangement of power in the company, and the same is easily available in the near vicinity of the company. Effluent Treatment The company does not generate any solid, liquid or gaseous effluents and has already obtained no objection certificate from Pollution Control committee, Daman & Diu and Dadra & Nagar Haweli. Since the company is expending its activity in the same line of product, so the Company is not required to take further N.O.C for the expansion. 2. EXTENSION OF EXISTING LINE OF ACTIVITY

Project to manufacture Value Added Products – PVC Wood Profile / Sheets The company is proposing to manufacture value added products at Daman in the new unit admeasuring total area of 1850 sq. mts., which company has recently purchased from Alaska Industries, a promoter group concern. Total area of 1850 sq.mts. will be utilised for manufacture of value added products. The detail of cost of setting up the said facility is as under:

Cost of Project Amount (Rs. In Lakhs)

Renovation Cost of Factory Building 50.00 Imported Plant & Machinery 1345.00 Misc. Fixed Assets 174.00 Marketing & Brand Building 100.00 Preliminary & Pre Operating Expenses 80.00 Total 1749.00

21

Renovation Cost for the Factory Building As per quotation given by M/s Jatin U Desai, Engineers & Contractors, dated October 24, 2005, the cost for renovation of the factory taken over from Alaska Industries is estimated at Rs 50 lakhs as details given below:

Sr. No. Particulars of Expenditure Amount (In Rs. lakhs)

1. Work in Production Area Moulding Area 3.49 Blowing Area 2.72

2. Constructing of Mezzanine area 12.28 3. Preparing of underground water tank 3.00 4. Preparing of new toilet block 3.45 5. Installation of Windows and expenditure on ventilation system 2.10 6. Construction of Second Floor 18.52 7. Concreating of plot area around the factory 4.44

Total 50.00 (Source: Appraisal Report) Plant & Machinery After comparing the productivity parameters of various machinery suppliers, the Company has selected Tung Tai Machine Work Co. Ltd of Taiwan for supply of machinery for manufacturing PVC Wood Composite Profile / Sheets. Tung Tai Machine Work Co. Ltd. of Taiwan is a machinery supplier registered in Taiwan, and started his operations in 1963 and has been specializing in supplying of machinery and turnkey implementation of projects. Tung Tai Machine Work Co. Ltd is an ISO 9001:2000 approved Company under RWTUV& CE International quality standard. The paid – up Capital of Tung Tai Machine Work Co. Ltd. is $1,05,00,000 and the annual turnover for the financial year ending December 31, 2004 is $5130000. The total cost of importing the machinery is estimated at Rs 1345.00 lakhs and the details as per the quotation May 17, 2005 given by Tung Tai Machine Work Co. Ltd is as follows: Sr. No.

Particulars Model Qty. FOB in USD

TOTAL USD

(A) Imported 1 PVC Wood Composite Extruding Machines TDP-65TH 1 128000 128000 2 PVC Wood Composite Extruding Machines TPF-90TD 1 286000 286000 3 PVC Wood Composite Extruding Machines TPF-65TH 2 228000 456000 4 PVC Wood Composite Extruding Machines TCE-35 2 13200 26400 5 PVC Wood Composite Extruding Machines TPF-50H 2 51000 102000 6 Semi-Automatic Type Dosing System 2 49000 98000 7 Screw Type Conveyer 3 11000 33000 8 High Speed Mixer TMX-300L 2 48000 96000 9 High Speed Mixer TMX-500L 1 56000 56000

10 Two Colour Printing 2 78000 156000 11 Single-Head Welding Machine TSW-1 2 8000 16000 12 Twin-Head Welding Machine TTW-1 2 17000 34000 13 Single-Head Miter Saw TSC-1 2 7000 14000 14 Twin-Head Miter Saw TTC-1 2 11000 22000 15 Corner Cleaning Machine TCC-1 2 12000 24000 16 End Milling Machine TEM-1 2 5500 11000 17 Liner Cleaning Machine TLC-1 2 12000 24000 18 Seal Cutter TPC-1 2 6000 12000

22

Sr. No.

Particulars Model Qty. FOB in USD

TOTAL USD

19 50 HP Crusher TSC-50 2 18200 36400 20 15 HP Air Compressors TTA-150 4 2200 8800 21 30 Ton Chiller TDC-30 2 11000 22000 22 Rigid PVC Door Profile Mould 1 76300 76300 23 Freight + Insurance 87000 87000 24 Technology Transfer Charges 182000 182000 25 Installation + Commissioning +Training 49500 49500

Total 20,56,400 FOB 20,56,400 Add: Freight & insurance @ 3% 61692 CIF 21,18,092 Add: Custom Duty @ 35% 7,41,332.2 Add: Clearing Forwarding @3% 63,542.76 Total cost in USD 29,22,967 Total Cost (in Rs. Lakhs) (assuming 1USD = 46 RUPEES) 13,44,56,482 IN RS. LAKHS 1,345.00

(Source: Appraisal Report) Miscellaneous Assets The total expenditure to be incurred by the Company for purchasing miscellaneous assets is estimated at Rs 174 lakhs, brief details of which are as under:

Sr. No.

Particulars of Machinery Amount (in Rs lakhs)

1 Electrical Fittings & Lightings 20.00 2 Air Compressor & piping 4.00 3 Material Handling Equipment 5.00 4 Fire Fighting Equipment 2.00 5 Workshop Machines 9.00 6 Vehicles 40.00 7 D.G Sets 23.00 8 Computer, Printer, Peripherals 20.00 9 Furniture and Fixture 10.00 10 Weighing Scale 2.00 11 EOT Crane 12.00 12 Fork Lift 24.00 13 Laboratory Equipment 3.00 Total 174.00

(Source: Appraisal Report) Marketing & Brand Building The Company has provided a sum of Rs. 100 lakhs towards brand building and creation of market awareness. As per the present plan, the Company will use advertisements through electronic media like, TV Channels, Cable TV, print media and hoarding to promote the product and the brand. The company has received a media plan from Pressman Advertisement & Marketing Ltd. Dated January 13, 2005 for expense of Rs 100.00 Lakhs. The actual expenditure on TV advertising may vary as per market scenario at the time of actual placement of advertisements. The Company also intends to participate in trade fair and exhibitions in India as well as abroad to display its prducts.

23

Preliminary & Pre Operating Expenses The Company has estimated that approx Rs 80 lakhs would be incurred towards meeting the various expenses such as:

Sr. No. Particulars Amount (in Rs lakhs)

1 Increase in Share Capital 12 2 Appraisal fee 8 3 Loan Processing fee 3 4 Establishment Expenses 20 5 Insurance during construction period 5 6 Legal Expenses 4 7 Miscellaneous Expenses 3 8 Interest During Construction Period 25

Total 80 Working Capital Requirement The total margin money for working capital requirement of the Company resulting from expanding capacity in its existing product range as well as introducing new high value added products such as PVC Wood Plastic is estimated to be Rs.875 lakhs for the financial year 2006 - 07.

A. Current Assets 2006-2007 Raw Material 453 Consumables & Packing materials 15 WIP 498 Finished Goods 428 Debtors 1452 Other Current Assets 378

Sub-Total (A) 3224

B. Current Liabilities

Creditors : Goods 1385 Expenses 73

Sub-Total (B) 1458

Net Current Assets (A-B) 1766 Bank Finance 891 Margin Money for working capital 875

(Source: Appraisal Report) Public Issue Expenses The public issue expenses have been assumed at approx 8% of the issue size offered to the public i.e. issue management fees, selling commission, distribution expenses, legal fees, fees to advisors, stationery costs, advertising expenses and listing fees payable to the Stock Exchanges, among others, details of which are as under:

24

(Rs. In Lakhs) Activity Amount Issue Management fee, Brokerage & Selling Commission

80.00

Registrars fees 25.00 Printing & Distribution of Issue Stationery 70.00 Advertising and Marketing expenses 50.00 Other miscellaneous expenses 25.00 Total 250.00

Provision for Contingency The Company has provided provision for contingency of Rs.140 lakhs i.e. approx 7.5% of the capital expenditure estimated at Rs. 1974 Lakhs towards expansion and extension project cost. The cost estimates are based on the quotations for majority of the capital equipments and no major change in the cost is expected. Contingencies are mainly to provide for fluctuations in prices etc. Technical Arrangement. For manufacturing high value added products such as PVC Wood Profile / sheets, the company has entered into a technical tie-up with Tung Tai Machine Work Co. Ltd., Taiwan (Tung) for providing complete technical know-how. Details of the Memorandum of Understanding are as under: Memorandum of Understanding was entered into between the Company and Tung on September 28, 2005 for the purpose of import of machinery from Tung and to have access to Tung’s know how and Tung’s services to enable the Company to manufacture, the PVC Wood products in India. Tung shall provide the know – how to the Company in three stages: a) Pre – planning documentation: b) At the stage of project implementation: c) At the stage of regular production: Tung shall provide guarantees & support to the Company against rated production of 4900 MTPA, against manufacturing defects, provision of complete technical know how and assistance. Tung will provide the maximum 120 man days technical assistance to the Company at company’s site for the project implementation. Tung has agreed for buy back of at least 25% of company’s products manufactured by the Bluplast. Tung shall provide the company a license to use the technical know-how for the producing, installing and commencing of the Bluplast Factory for manufacture of the PVC Wood products and the Company shall not divulge to any third party, any of the technical know-how to be provided by Tung under terms of MOU. Manufacturing Process for High Value Added Products The Company proposes to introduce various types of PVC – Wood Composite profiles and each of these would require different manufacturing process depending upon the shape, size and fixture to be formed. However broadly the manufacturing process would consist of the following:

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Cooling

Cutting, Edge Trimming

Inspection

Final Product

Process Flow Chart to Manufacture of PVC-WOOD

Profile Sheets

Preparing PVC-WOOD Compound

Feeding in Extruder

Calibration

In order to manufacture PVC Wood composite profiles, wood dust, PVC resin, additives like foaming agent, stabilizer and lubricants are mixed to prepare wood PVC compound and the dry blend is stored in a silo. The dry blend and master batch granules (of required colour) are fed to the extruder where foaming of the extradite takes place before its exit from the die as foam sheets/profile is formed. The profile is extruded to dough like consistency and the profile is then extruded through a single step die with no additional calibration and only simple water bath for cooling. The scrap material obtained from manufacturing is collected, granulated and recycled. Raw Materials Requirements for High Value Added Products The major raw material required for the preparation of Plastic Wood composite profiles / sheets are:

• PVC resin (Poly Vinyl Chloride); and • Other Chemical additives • Fine wood dust

As the manufacturing facilities of the Company are centrally located at Daman, all the main raw material is easily available locally. The main suppliers of PVC resin such as Reliance, IPCL, Finolex, National Organic Chemicals Ltd have their sales depots / dealers in Daman and the Company can buy its raw material requirement from any of the above suppliers. The requirement of other raw materials like calcium carbonate, stabilizers, expanding agent, UV stabilizers, fillers & dyes would be met from domestic sources as well as from overseas market. Wood dust is locally available in abundance. Wood dust is easily available in the un-organized sector and can also be imported if required.

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The sources of wood particles can broadly classified as: Primary wood wastes: these are post-industrial wood wastes from sawmills Secondary wood wastes: these are post-industrial wood wastes generated when wooden products, such as furniture, cabinets and doors are made Post-consumer wood wastes: this can include anything from construction and demolition debris to packaging, crates and pallets. Key Infrastructural facilities for High Value Added Products a) Power After taking over the unit of Alaska Industries, the Company has the ready power connection with 500 KVA Transformer, with released order of 175 KVA. The maximum demand of power has been estimated at 360 KVA for the new line of activity, which will be taken from Daman Electricity Board and the company has already applied for the power connection release order of the balance connected load of 185 KVA. The Company has also applied for the change of name in the record of Electricity Board, Daman.

b) Water The requirement of water is mainly for cooling, drinking and sanitary purposes. Currently in the new Unit, Company has water connection from local Municipal Corporation, a Boring well and two underground water tanks with storage capacity of 10000 Litres each as standby arrangement. c) Fuel The Company does-not require fuel, as there is abundance of power available at the plant. In case of emergency, fuel and diesel is available at near-by petrol pump for DG set connectivity. d) Effluent Treatment Plant The process does not generate any effluents. e) Manpower For the proposed project to introduce high value added products, the Company proposes to employ around 90 people which would comprise of nineteen managerial and technical people, twenty two sales and administrative staff members and balance forty nine would be skilled/unskilled workers. The Company does not envisage any problem in recruiting the required personnel as the project is established in an industrial estate at Daman. SCHEDULE OF IMPLEMENTAION The Company is proposing to implement both the projects simultaneously and as a result commercial production is expected to commence by August 2006. S. No. Particulars Commencement Date Completion Date 1. Expansion of Capacity for Existing

Product Range from 5400MTPA to 9000 MTPA

January 2006 June 2006

2. Setting-up of facilities for manufacture of PVC Wood composite profile and sheets (plastic wood) with installed capacity of 4900 MTPA

January 2006 June 2006

3. Trial Production July 2006 July 2006 4. Commercial Production August 2006 - (Source: Appraisal Report)

27

YEAR-WISE DEPLOYMENT OF FUNDS ON THE PROPOSED EXPANSION AND EXTENSION PLAN S. No. Particulars Period Total Up to March

2005-06 2006- 2007

1. Expansion of Capacity for Existing Product Range from 5400 MTPA to 9000 MTPA

234 NIL 234

2. Setting-up of facilities for manufacture of PVC Wood composite profile and sheets (plastic wood) with installed capacity of 4900 Ton p.a.

1574 175 1749

3. Working Capital Margin NIL 875 875 4. Provision for Contingencies NIL 140 140 5. Public Issue Expenses 250 NIL 250 (Source: Appraisal Report) Funds Deployed Till date and the sources of such expenditure As per certificate by M/s. Singrodia Goyal & Co, Auditors of the Company dated January 13, 2006, till date the company has deployed funds as mentioned hereunder.

Sr. No.

Purpose Source Amount (Rs. In Lakhs)

1. Preliminary & Preoperating Expenses Internal Accruals 16.27 2. Public Issue Expensed Internal Accural 20.17 TOTAL 36.44

Interim Use of Proceeds Pending any use as described above, the Company intends to invest the proceeds of this Issue in high quality, interest / dividend bearing short term / long term liquid instruments including deposits with banks for the necessary duration. These investments would be authorised by Board of Directors of the Company or a duly authorised committee thereof. Any increase in the cost of the project is intended to be funded by Internal Accruals.

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BASIS FOR ISSUE PRICE The present Issue consists of 1,10,00,000 equity shares of Rs.10 each issued for cash at a price of Rs.28 –Rs.32 per Equity Share aggregating to Rs. [*] lakhs. Qualitative Factors:

• BIL is an existing profit making Company with track record in terms of turnover and profitability.

• The Company has marketing network in all over India with 98 distributors and and a network of dealers and sub dealers spread throughout India..

• An ISO 9001:2000 certified Company.

• Existing as well as the proposed plant has a locational advantage on account of vicinity of existing market, raw material availability, Low Power and Labour cost.

• The supplier of imported plant & machinery has agreed to buy-back 25% of production of PVC Wood Composite Profile / Sheets

Quantitative Factors: 1. Adjusted Earning Per Equity Share

Year Earning per Equity Share Weight 2002-03 3.26 1 2003-04 3.62 2 2004-05 4.57 3

Weighted Average 4.03 6 2. Price / Earning Ratio (P/E) in relation to the Issue Price of Rs. 28/- to 32/-

At Rs. 28/- per equity share

At Rs. 32/- per equity share

Based on the adjusted EPS for the year ended March 31, 2005 of Rs. 4.57

6.13 7.00

Based on the weighted average EPS of Rs. 4.035

6.94 7.93

Industry P/E* - Plastic Products i) Highest 238.50 ii) Lowest 1.80

iii) Average 17.60 Source: Capital Market January 16- January 29, 2006 (Plastic Products)

3. Return on Net worth (RoNW)

Year RoNW (%) Weight 2002-03 32.17 1 2003-04 27.13 2 2004-05 21.51 3

Weighted Average 25.16 6

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4. Minimum Return on Increased Net Worth required to maintain Pre-Issue EPS (FY 05) of Rs. 4.57/- is [•] at the issue price of Rs. 28/- to 32/-.

5. Net Asset Value per share (NAV)

Adjusted NAV (Rs.) As on September 30, 2005 15.55 After the Issue [*] Issue Price [*]

6. Comparison with Industry Peers

Particulars EPS (Rs.) P/E (times) Book Value

(Rs.) RONW

(%) Wim Plast 1.2 40.2 81.0 2.1% Supreme Industries 16.6 15.5 155.0 11.7% Nilkamal Plastic 14.6 14.2 142.2 10.90%

Source: Capital Market January 16- January 29, 2006 (Plastic Products) The face value of the shares of the Company is Rs. 10/- per share, isuued at the Price Band of Rs. 28 to Rs. 32 per equity share. The Issue Price of Rs [*] to be determined by the company in consultation with the Lead Managers and is justified on the basis of the above factors.

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STATEMENT OF TAX BENEFITS Board of Directors, Bluplast Industries Limited, 113 / 114, Vivek Industrial Estate, Uswala Road, Near Litolier, Cama Estate, Goregaon (E) Mumbai - 400 063

Dear Sirs,

We hereby certify that the enclosed annexure states the tax benefits available to Bluplast Industries Limited (“the Company”) and to the shareholders of the Company under the provisions of the Income Tax Act, 1961 and other direct tax laws presently in force.

The contents of this 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.

A shareholder is advised to consider in his/her/its own case, the tax implications of the investment in the equity shares particularly in view of the fact that certain recently enacted legislation may not have legal precedent or may have a different interpretation on the benefits, which an investor can avail.

FOR SHINGRODIA GOYAL & CO. CHARTERED ACCOUNTANTS Suresh Murarka Partner M.No. 44739 Mumbai

Date: November 22, 2005

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ANNEXURE TO THE STATEMENT OF TAX BENEFITS Benefits available to the Company Under the Income Tax Act, 1961.

1. Under Section 10(34) of the Act, dividend income referred to in section 115-O (whether interim or final) declared, distributed or paid by the Company as distributed or paid by any other Company on or after April 1, 2003 is completely exempt from tax in the hands of the shareholders of the Company

2. As per the provisions of Section 112(1)(b) of the Act, long –term capital gains would be subject to tax

at the rate of 20% (plus applicable surcharge and education cess). However, as per the provision to section 112(1)(b), the long term capital gains resulting on transfer of listed securities or units ( not covered by section 10(36) and 10(38), would be subject to the tax at the rate of @ 20% with indexation benefits (plus applicable surcharge and education cess ) as per the second proviso to the section 48.The amount of such tax however be limited to 10% ( plus applicable surcharge ) without indexation , at the option of the assessee.

3. Long term capital gain arising from transfer of an ‘eligible Equity Share’ in a company purchased on

or after 1st day of March 2003 and before the 1st day of March 2004 (both days inclusive) and held for a period of 12 months or more is exempt from tax under section 10 (36) of the Income Tax Act, 1961.

4. As per the provisions of section 10(38), long tern capital gain arising from the sale of equity shares in

any Company through a recognized stock exchange or from the sale of units of an equity –oriented mutual fund shall be exempt from income tax if such sale takes place after 1st of October 2004 and such sale is subject to Securities Transaction Tax.

5. The Company is eligible under section 35D of the Act to a deduction equal to one-fifth of certain

specified expenditure, including specified expenditure incurred in connection with the extension of an industrial undertaking, for a period of five successive years subject to the limits provided and the conditions specified under the said section.

6. As the provisions of section 111A, Short Term Capital gains arising from the transfer of equity shares

in any Company through a recognized stock exchange or from the sale of units of equity –oriented mutual fund shall be subject to tax @ 10% (plus applicable surcharge) provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is subject to Securities Transaction Tax.

7. In accordance with and subject to the conditions and to the extent specified in section specified 54EC

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

8. As per the provisions of section 54ED of the Act and subject to the conditions specified therein,

capital gains arising from transfer of long term assets, being listed securities or units (not covered by section 10(36) and section 10(38) ) shall not be chargeable to tax to the extent such gains are invested in acquiring Equity Shares forming part of an ‘ eligible issue of share capital’ in the manner prescribed in the said section.

9. As per the provisions of section 88E, where the business income of a resident includes profits and

gains from sale of taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securities Transaction Tax paid on such transactions. However the amount of rebate shall be limited to the amount arrived at by applying the average rate of income tax on such income.

32

10. The Company has set up a manufacturing unit for the manufacturing of plastic items at Daman (U.T), a backward state specified in the Eighth Schedule to the Income Tax Act, 1961, during the financial year 2000 – 01. The above unit has fulfilled all the conditions prescribed under sub section 4 of section 80 IB of the Income Tax Act, 1961, for initial eligibility for deduction equal to 100 % of the profit and gain derived from such industrial undertaking for five assessment years beginning with the initial assessment year i.e. AY 2001 – 02 and thereafter equal to 30% of the profit and gain derived from such industrial undertaking for next five assessment years.

Benefits available to Resident Shareholders under the Income Tax Act, 1961

1. Under Section 10(34) of the Act, dividend income referred to section 115-O (whether interim or final) declared, distributed or paid by the Company as distributed or paid by any other Company on or after April 1, 2003 is completely exempt from tax in the hands of the shareholders of the Company.

2. As per the provisions of Section 112(1)(b) of the Act, long –term capital gains would be subject to tax

at the rate of 20% ( plus applicable surcharge and education cess). However, as per the provision to section 112(1) (b), the long term capital gains resulting on transfer of listed securities or units ( not covered by section 10(36) and 10(38), would be subject to the tax at the rate of @ 20% with indexation benefits or 10% without indexation benefits (plus applicable surcharge and education cess) as per the option of the assessee.

3. As per the provisions of section 10(32) of the Income Tax Act, 1961, any income of minor children is

clubbed with the Total Income of the parents as the provisions of section 64(1A) of the I.T. Act, will be exempted from the tax to the extent of Rs.1500/- per minor child.

4. As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares

in any Company through a recognized stock exchange or from the sale of units of an equity –oriented mutual fund shall be exempt from income tax if such sale takes place after 1st of October 2004 and such sale is subject to Securities Transaction Tax.

5. As the provisions of section 111 A, Short Term Capital gains arising from the transfer of Equity

Shares in any Company through a recognized stock exchange or from the sale of units of equity –oriented mutual fund shall be subject to tax @ 10% provided such a transaction is entered into after the 1st day of October, 2004 and the transaction is subject to Securities Transaction Tax.

6. As per the provisions of section 88E, where the business income of a resident includes profits and

gains from sale of taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securities Transaction Tax paid on such transactions. However the amount of rebate shall be limited to the amount arrived at by applying the average rate of income tax on such income.

7. Long term capital gain arising from transfer of an ‘eligible Equity Share’ in a company purchased on

or after 1st day of March 2003 and before the 1st day of March 2004 (both days inclusive) and held for a period of 12 months or more is exempt from tax under section 10 (36) of the Income Tax Act, 1961.


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

9. In accordance with and subject to the conditions and to the extent specified section 54ED of the Act,

the shareholders would be entitled to the exemption from long-term capital gain tax on transfer of their assets, being listed securities or units ( not covered by section 10(36) and section 10(38) ) to the extent such capital gain is invested in acquiring Equity Shares forming part of an ‘ eligible issue of share capital’ in the manner prescribed in the said section.

33

10. In case of a shareholder being an individual or a Hindu Undivided family, in accordance with and subject to the conditions and to the extent specified in section 54F of the Act, the shareholder would be entitled to exemption from long term capital gains on the sale of shares in the Company ( not covered by sections 10 (36) and 10 (38) ), upon investment of net consideration in purchase / construction of a residential house . If part of net consideration is invested within the prescribed period in a residential house, then such gains would be not chargeable to tax on a proportionate basis. Further, if the ‘ residential house in which the investment has been made is transferred within a period of three years from the date of its purchase or construction, the amount of capital gains shall be charged to tax as long-term capital gains in the year in which such residential house is transferred.

Benefits available to Non-Resident Indian Shareholders

1. Under Section 10(34) of the Act, dividend referred to section 115- O(whether interim or final )

declared, distributed or paid by the Company on or after April 1, 2003 is completely exempt from tax in the hands of the shareholders of the Company.

2. As per the provisions of section 10(32) of the Income Tax Act, 1961, any income of minor children is clubbed with the Total Income of the parents as per the provisions of section 64 (1A) of the I.T. Act, will be exempt from the tax to the extent of Rs. 1500/- per minor child.

3. In the case of shareholder being a non-resident Indian and subscribing to shares in convertible foreign

exchange, in accordance with and subject to the conditions and to the extent specified in section115D read with section 115E of the Act, long term capital gains arising from the transfer of an Indian Company’s shares ( not covered by sections 10(36) and 10(38) ), will be subject to tax at the rate of 10% as increased by a surcharge and education cess at an appropriate rate on the tax so computed, without any indexation benefit but with protection against foreign exchange fluctuation.

4. In the case of a shareholder being a non-resident Indian and subscribing to shares in convertible

foreign exchange, in accordance with and subject to the conditions and to the extent specified in section115F of the Act, the non-resident Indian shareholder would be entitled to exemption from long term capital gains ( not covered by sections 10(36) and 10(38) ), on the transfer of shares in the Company upon investment of net consideration in modes as specified in sub-section (1) of section 115F.

5. In accordance with the provisions of section 115G of the Act, Non Resident Indians are not obliged to

file a return of income under Section 139(1) of the Act, if their only source of income is income from investments or long term capital gains earned on transfer of such investments or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the Act.

6. In Accordance with the provisions of section 115 H of the Act, when a Non Resident Indian become

assessable as a resident in India, he may furnish a declaration in writing to the assessing Officer along with his return of income for that year under Section 139 of the Act, to the effect that the provisions of chapter XII – A shall not apply to him in relation to such investment income derived from the specified assets for that year and subsequent assessment years until such assets are converted into money.

7. 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 year under section 139 of the Act, declaring therein that the provisions of chapter XII-A shall not apply to him for the assessment year and accordingly his total income for that assessment year will be computed in accordance with the other provisions of the Act.

8. In accordance with and subject to the conditions and to the extent specified in section 112(1) (b) of

the Act, tax on long term capital gains arising on sale on listed securities or units not covered by sections 10(36) and 10(38) will be at the option of the concerned shareholder, 10% of the capital gains (computed without indexation benefits) or 20% of capital gains (computed with indexation benefits) as increased by a surcharge and Education cess at an appropriate rate on the tax so computed on either case.

34

9. As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares in any Company through a recognized stock exchange or from the sale of units of an equity –oriented mutual fund shall be exempt from income tax if such sale takes place after 1st of October 2004 and such sale is subject to Securities Transaction Tax.



11. As per the provisions of section 88E, where the business income of a assessee includes profits and

gains from sale of taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securities Transaction Tax paid on such transactions. However the amount of rebate shall be limited to the amount arrived at by applying the average rate of income tax on such business income.

12. In accordance with and subject to the conditions and to the extent specified in Section 10(36) of the Act, the shareholders would be entitled to exemption from long term capital gain tax on transfer of their ‘eligible Equity Shares’ in the Company purchased during the period March 1, 2003 to February 29, 2004 (both days inclusive) and held for a period of 12 months or more.


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

14. In accordance with and subject to the conditions and to the extent specified section 54ED of the Act,

the shareholders would be entitled to the exemption from long-term capital gain tax on transfer of their assets, being listed securities or units ( not covered by section 10(36) and section 10(38) ) to the extent such capital gain is invested in acquiring Equity Shares forming part of an ‘ eligible issue of share capital’ in the manner prescribed in the said section.

15. In case of a shareholder being an individual or a Hindu Undivided family, in accordance with and

subject to the conditions and to the extent specified in section 54F of the Act, the shareholder would be entitled to exemption from long term capital gains on the sale of shares in the Company ( not covered by sections 10 (36) and 10 (38) ), upon investment of net consideration in purchase / construction of a residential house . If part of net consideration is invested within the prescribed period in a residential house, then such gains would be not chargeable to tax on a proportionate basis. Further, if the residential house in which the investment has been made is transferred within a period of three years from the date of its purchase or construction, the amount of capital gains tax exempted earlier would become chargeable to tax as long-term capital gains in the year in which such residential house is transferred.

16. As per the provisions of Section 90(2) of the Act, the provisions of the Act would prevail over the

provisions of the tax treaty to the extent they are more beneficial to the Non – Resident. Benefits available to other Non-residents

1. Under Section 10(34) of the Act, dividends referred to in section 115-O (whether interim or final ) declared, distributed or paid by the Company on or after April 1, 2003 is completely exempt from tax in the hands of the shareholders of the Company.

35

2. As per the provisions of section 10(32) of the Income Tax Act, 1961, any income of minor children is clubbed with the Total Income of the parents as per the provisions of section 64(1A) of the I.T. Act, will be exempt from the tax to the extent of Rs. 1500/- per minor child.

3. In accordance with and subject to the conditions and to the extent specified in section 112(1) (b) of

the Act, tax on long term capital gains arising on sale on listed securities or units before 1st October 2004 will be at the option of the concerned shareholder, 10% of the capital gains ( computed without indexation benefits ) or 20% of capital gains ( computed with indexation benefits ) as increased by a surcharge and Education cess at an appropriate rate on the tax so computed on either case.

4. As per the provisions of section 10(38), long term capital gain arising from the sale of Equity Shares

in any Company through a recognized stock exchange or from the sale of units of an equity –oriented mutual fund shall be exempt from income tax if such sale takes place after 1st of October 2004 and such sale is subject to Securities Transaction Tax.



6. As per the provisions of section 88E, where the business income of an assessee includes profits and

gains from sale of taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securities transaction tax paid on such transactions. However the amount of rebate shall be limited to the amount arrived at by applying the average rate of income tax on such business income.

7. In accordance with and subject to the conditions and to the extent specified in Section 10(36) of the Act, the shareholders would be entitled to exemption from the long term capital gain tax on transfer of their ‘eligible Equity Shares’ in the company purchased during the period March 1, 2003 to February 29, 2004 (both days inclusive) and held for a period of 12 months or more.

8. In accordance with and subject to the conditions and to the extent specified in Section 54EC

of the Act, the shareholders would be entitled to exemption from tax on gains arising on transfer of their shares in the Company not covered by sections 10(36) and 10(38)) if such capital gain is invested in any of the long term specified asset is transferred or converted into money at any time within a period of three years from the date of its acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the long-term specified asset is transferred or converted into money.

9. In accordance with and subject to the conditions and to the extent specified in Section 54ED

of the Act, the shareholders would be entitled to exemption from long term capital gains (not covered by sections 10(36) and10(38)) on transfer of their assets being listed securities or units to the extent such capital gain is invested in acquiring Equity Shares forming part of an ‘eligible issue of share capital’ in the manner prescribed in the said section.

10. In case of a shareholder being an individual or a Hindu Undivided Family, in accordance

with and subject to the conditions and to the extent specified in Section 54F of the Act, the shareholder would be entitled to exemption from long term capital gains (not covered by sections 10(36) and 10(38)) on the sale of shares in the Company upon investment of net consideration in purchase/construction of a residential house. If part of net consideration is invested within the prescribed period in a residential house, then such gains would not be chargeable to tax on a proportionate basis. Further, if the residential house in which the investment has been made is transferred within a period of three years from the date of its purchase or construction, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such residential house is transferred.


provisions of the tax treaty to the extent they are more beneficial to the Non – Resident.

36

Benefits available to Foreign Institutional Investors (‘FII’)

1. Under Section 10(34) of the Act, dividends referred to in section 115-O ( whether interim or final ) declared, distributed or paid by the Company on or after April 1, 2003 is completely exempt from tax in the hands of the shareholders of the Company.

2. In case of a shareholder being a Foreign Institutional Investor (FII), in accordance with and

subject to the Conditions and to the extent specified in Section 115AD of the Act, tax on long term capital gain (not covered by sections 10(36) and 10(38)) will be 10% and on short term capital gain will be 30% as increased by a surcharge and education cess at an appropriate rate on the tax so computed in either case. However short term capital gains on sale of Equity Shares of a Company through a recognised stock exchange or a unit of an equity oriented mutual fund effected on or after 1st October 2004 and subject to Securities transaction tax shall be taxed @ 10% as per the provisions of section 111A. It is to be noted that the benefits of Indexation and foreign currency fluctuation protection as provided by Section 48 of the Act are not available to FII.

3. In accordance with and subject to the conditions and to the extent specified in Section 10(36) of the

Act, the shareholders would be entitled to exemption from long term capital gain tax on transfer of their ‘eligible Equity Shares’ in the Company purchased during the period March 1, 2003 to February 29, 2004 (both days inclusive) and held for a period of 12 months or more.

4. As per the provisions of section 10(38), long term capital gain arising from the sale of Equity

Shares in any Company through a recognised stock exchange or from the sale of units of an equity oriented mutual fund shall be exempt from Income Tax if such sale takes place after 1st of October 2004 and such sale is subject to Securities Transaction tax.

5. As per the provisions of section 88E, where the business income of an assessee includes profits and

gains from sale of taxable securities, a rebate shall be allowed from the amount of income tax equal to the Securities transaction tax paid on such transactions. However the amount of rebate shall be limited to the amount arrived at by applying the average rate of income tax on such business income.

6. In accordance with and subject to the conditions and to the extent specified in /section 54EC of

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

7. In accordance with and subject to the conditions and to the extent specified in Section 54ED

of the Act, the shareholders would be entitled to exemption from long term capital gain tax (not covered by sections 10 (36) and 10(38)) on transfer of their assets being listed securities or units to the extent such capital gain is invested in acquiring Equity Shares forming part of an ‘eligible issue of share capital’ in the manner prescribed in the said section.


provisions of the tax treaty to the extent they are more beneficial to the Non – resident.

Benefits available to Mutual Funds

In case of a shareholder being a Mutual fund, as per the provisions of Section 10 (23D) of the Act, any income of Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or Regulations made there under, Mutual Funds set up by public sector banks or public financial institutions and Mutual Funds authorised by the Reserve Bank of India would be exempt from Income Tax, subject to the conditions as the Central Government may by notification in the Official Gazette specify in this behalf.

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Benefits available to Venture Capital Companies /Funds In case of a shareholder being a Venture Capital Company / Fund, as per the provisions of Section 10(23FB) of the Act, any income of Venture Capital Companies / Funds registered with the Securities and Exchange Board of India, would exempt from Income Tax, subject to the conditions specified. Benefits available under the Wealth Tax Act, 1957 As per the prevailing provisions of the above Act, no Wealth Tax shall be levied on value of shares of the Company. Benefits available under the Gift Tax Act Gift tax is not leviable in respect of any gifts made on or after October 1, 1998. Therefore, any gift of shares will not attract gift tax. Note: 1. All the above benefits are as per the current tax laws as amended by the Finance Act, 2005. 2. All the above benefits are as per the current tax law and will be available only to the sole / first named

holder in case the shares are held by joint holders.

3. 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 agreements, if any, between India and the country in which the non-resident has fiscal domicile.

4. In view of the individual nature of tax consequences, each investor is advised to consult his / her own tax advisor with respect to specific tax consequences of his / her participation in the scheme. However, a shareholder is advised to consider in his / her / its own case. The tax implications of an investment in the Equity Shares, particularly in view of the fact that certain recently enacted legislations may not have direct legal precedent or may have a different interpretation on the benefits which an investor can avail.

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INDUSTRY OVERVIEW STRUCTURE OF THE INDUSTRY On the basis of value added, the plastic products sector contributes to around 0.5% of GDP of the country. The plastic products sector also provides for 1% of the country’s export. An estimated 0.4 million people are employed in the sector. There is a presence of the small scale companies in the industry which account for more than 50% of the industry turnover. The Indian plastic processing Industry is highly fragmented and comprises 25000 firms with more than 400000 employees. Barring 10-15% of the firms, which can be classified as medium-scale operations, all the other units operate on a small scale basis. The top 100 players accounts for just 20% of the industry turnover. The total number of players in the sector is more than 25000. However, the degree of fragmentation, worldwide, is large and despite the small size of operations they are able to operate profitably, further the high growth in demand ensures that the market is able to absorb the excess capacity in quick times. (Source: ICRA Industry Report, June 2005) Classification of Plastic Products by Type of Process Used:

Plastic Products The polymer consumption in India according to various processes is as under:

Process Share in Total Consumption in India Extrusion 75.6% Injection Moulding 18.0% Blow Moulding 5.10% Rotomoulding 1.30% Total (‘000 tonnes) 4,070

(Source: ICRA Industry Report, June 2005) The Indian plastic processing Industry is highly fragmented and comprises 25000 firms with more than 400000 employees. Barring 10-15% of the firms, which can be classified as medium-scale operations, all the other units operate on a small scale basis. The top 100 players accounts for just 20% of the industry turnover. The total number of players in the sector is more than 25000. However, the degree of fragmentation, worldwide, is large and despite the small size of operations they are able to operate profitably. Further the high growth in demand ensures that the market is able to absorb the excess capacity in quick times. Overall, the degree of competition can be considered high in the Indian Plastic processing industry. The sector has a significant presence of the unorganised sector, which accounts for more than 70% of the industry turnover. More than 95% of the firms in the industry are either partnership, proprietorship or private limited companies. Further, these small companies get significant advantage in taxes. These firms, thus, provide significant level of competition to the organised sector companies, which combined together are making losses. The organised sector companies, tus, need to build up significant brand image to survive against the competition from the unorganised sector.

Extrusion Rotomoulding Blow Moulding

Injection Moulding

Film and Sheets; Fibre and Filaments Pipes Conduits and Profiles Miscellaneous Applications

Industrial Injection Moulding Household Injection Moulding and Thermo-ware / Moulded luggage

Large Circular Tanks such as Water TanksBottles, Containers, Toys

and Housewares

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CRITICAL SUCCESS FACTORS The critical success factors for the firms operating in the Indian plastic processing industry are provided as follows: Product Mix: The plastic products are used in various applications/industries—which include household, agriculture, industrial packaging, fertiliser packaging, food grain packaging, Thus, the production needs to according to a suitable product mix so as to maximise the realisations. Strong Brand Image: Many of the Plastic Products are household products like furniture, buckets, lunch boxes, bottles etc. By building strong brand image, a company can increase the premium for its products and increase the sales level. Low Polymer Purchase Costs: Plastic Processing firms purchase polymer resins and convert them into useful products. The cost of polymer is nearly 60% of the realisation of the plastic product. High Machine Productivity: The major capital cost of a plastic processing company is the moulding machine—whether extrusion moulding or blow moulding. The ability of the company to produce maximum number of products possible from the machine in a given time is a critical parameter affecting the returns from the company’s investment. Large Capacity: The financial performance of an organised sector player improves significantly when its size grows. This is expected as more than 85% of the conversion cost (difference between the finished good sales and the raw material costs) is of the fixed nature. However, as the size increases, the asset turnover falls resulting in a trade off between the two. (Source: ICRA Industry Report, June 2005) Notwithstanding the temporary declcine in demand during 2002-03 after a significantly high growth of over 10% every year for the last two decades, the demand for plastic products in the country is likely to continue to grow, albeit, at a slower rate of around 8-10% per annum over the medium term. Composition of PVC-Wood Composite: The term plastic wood composite refers to any composites that contain wood (of any form) and thermosets or thermoplastics. Thermosets are plastics that, once cured, cannot be melted again for reuse. These include resins such as epoxies and phenolics, plastics with which the forest products industry is most familiar. Thermoplastics are plastics that can be repeatedly melted, such as polyethylene and polyvinyl chloride (PVC). Thermoplastics are used to make many diverse commercial products such as milk jugs, grocery bags, and siding for homes. Comparison of PVC Wood Composite Profile / Sheet with Wood PVC Wood composite profile/sheet is a superior substitution for wood and can replace timber oriented product applications in various industries. WPC product can be worked upon like wood with respect to sawing, nailing, screwing, planning and painting etc. The new plastic wood composite is similar to wood in look, feel and smell but with better performance than wood. The features of the PVC Wood Profile Composite are: i) It is water resistant ii) It termite, insects resistance iii) It can be manufactured in different colours iv) It has easy workability v) It has low maintenance cost vi) It is humidity resistant – ideal for applications in high moisture environment vii) It is corrosion resistant viii) It is acid and alkali resistance ix) It is easy to print coat and work upon x) It is light weight and easy to work upon with greater precision xi) No surface finishing is required xii) It is suitable for mass production

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Current Situation Plastic – Wood Composites / Profiles are new products which have recently come in to prominence in developed countries of Europe and USA and these products are being imported in limited quantities in India. Since the Plastic Wood Composites industry in India is at a very nascent stage, the industry study for these new value added products would delve on the developments that are taking place in USA and Europe. (Source: Wood Plastic Composite Studies by WRAP available on the site of www.wrap.org.uk) Indian Perspective demand perspective: Wood plastic composites are currently used in, or are under development for, a wide range of applications in a number of market sectors including: (i) Door frames, picture frames, furniture components, decorative material for bathrooms, kitchen (ii) Architectural areas for wall and door paneling, partitions, bathroom and kitchen cabinets, doors,

table tops and other furniture (iii) Advertising sector for sign boards, shop window displays, manufacture of models, etc. (iv) Other misc. applications such as manufacture of switch board, portable cabins in offices,

laboratories, dining mess, housing on remote sites, shower rooms, in hotels, cabins at airports, oil exploration sites, etc.

An exhaustive list of WPC applications is as under:

End Market Applications / Sectors Construction Interiors Automotive Garden /

Outdoor Industrial / Infrastructure

Other

Cladding – exterior, horizontal & vertical

Balustrades Door and head liners

Decking Handrails Black Piano Keys

Doorframes Blinds / shutters

Ducting Fencing and Fence posts

Industrial packaging

Hot tubs

Ducting Coving Interior panels Garden Furniture

Marine pilings / bulkheads

Fascias, soffits and barge boards

Dado rails Rear shelves Outhouses (sheds etc)

Pallets / Crates Totes

Pre finished Floorboards

Decorative profiles

Spare tyre covers

Park benches Piers / docks

Roofline products

Interior panels Truck floors Playground equipment

Railings

Shingles Kitchen Cabinets

Playground surfaces

Railway sleepers

Stairs Laminate floorings

Rubbish Bins

Timber Office Furniture

Signage

Window frames & components

Shelving

Skirting boards

Sound proofing

Worktops

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Estimated Market in India Technology Information, Forecasting & Assessment Council (TIFAC) which falls under the Department of Science & Technology, Govt. of India has launched the Advanced Composites Programme in order to promote the usage of plastic composites in India.

As per information available from TIFAC, the consumption of composite materials is estimated to be about 2.2 million MT globally, with the Asia-Pacific region accounting for about 24% of this usage. The per capita consumption of composites in USA and China today stand at 5.6 Kgs & 1.5 Kgs respectively vis-à-vis that of 35 grams in India. TIFAC has identified various key product applications such as prefabricated, portable & modular buildings, exterior cladding panels, interior decorations, furniture, bridges and architecture mouldings which have the potential for boosting the consumption level of composites in India.

(Source: www.tifac.org.in) Apart from TIFAC the other study that has been undertaken for estimating the potential of Plastic – Wood Composites in India is the study by E-Composites, Inc. According to the report titled "Growth Opportunities in Indian Composites Market 2004-2010" published by E-Composites, Inc, composites industry in India is growing rapidly and in the last 2 years, the growth rate in Indian composites market has been in double digits. According to E-Composites, Inc. the market for finished composites parts in India is slated to grow to US $846 million by 2010. (Source: www.e-composites.com)

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OUR BUSINESS

Overview Two of the promoters of the Company Mr. Kamlesh L. Jain and Mr. Indermal P. Jain have been associated with the plastic industry for more than two decades. The promoter had started business activity in plastic product manufacturing by incorporating Bluplast Corporation in 1985. Subsequently, promoters expanded business by setting up a facility in the same line in Daman under Alaska Industries, a group company. Later, The Promoter incorporated Thermoplast Industries Private Limited in 1999 with additional unit in Daman. The manufacturing plant of the Company was set up at Daman (in Union Territory of Daman and Diu) with an initial capacity of 1940 MTPA, which has, over a period of time, been increased up to 4500 MTPA. Thermoplast Industries Private Limited later renamed as Bluplast Industries Private Limited. The Company has acquired total manufacturing unit of Alaska Industries on July 1, 2005 and became Public Company, Bluplast Industries Limited, with effect from July 14, 2005. The Company has been operating at 100% capacity utilization for the past three years. In the FY 2004-05, to meet the demands of its products, the Company had to outsource the work of manufacturing its products to sub-contractors on job work basis and as a result of which the Company manufactured 5465 MTPA against an installed capacity of 4500 MTPA. In July 2005, the Company acquired the business of Alaska Industries, a group concern, having manufacturing capacity of up to 1800 MTPA. Pursuant to the afore-cited acquisition, the Company's manufacturing capacity increased from 4500 MTPA to 5400 MTPA. The Company manufactures plastic articles adopting the 'Injection Moulding' method and its product range includes Thermoware, Vacuumware, Insulatedware, Kitchenware, Utilities and pet products (e.g. Casserole with the capacity of 500ml-12500ml, Lunch Packs 3-5 containers, Flasks with the capacity of 750 ml –1500 ml, water jugs with the capacity of 2000 ml-2500 ml, Water Bottles with the capacity of 500 ml – 2500 ml, Pet Jars with the capacity of 800 ml – 2500 ml, Buckets, Bath Stools, Bath Tubs, Baskets, Dust Bins etc.). Our Vision To be one of the household utility product and PVC wood composite manufacturer by offering range of products to the satisfaction of customers at an affordable price. Business Strategy Our principal Operating strategies are • To increase market share in the plastic utility household product range in Domestic Market and also

increase the share in international market.

(i) The company is increasing its installed capacity in its existing product range from 5400 MTPA to 9000 MTPA.

(ii) Broad base its product range to cater to various consumers so that the contribution of any

particular consumer segment does not account for a large portion of the company’s sales. • To be one of the major players in PVC Wood composite products by :

(i) Introducing high value added products such as PVC - Wood composite profile / sheets.

(ii) Market potential for export of PVC Wood Composite products to be explored.

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Location of the Plant The manufacturing plant of the company is located at Survey No. 709/1 to 4 & 8, 9 &710/13, Dabhel, Daman – 396210, Taluka: Daman (Union Territory of Daman and Dui). The plant is located within a radius of around 168 kms from Mumbai and 223 km from Ahmdabad. The total area of land is 4900 sq. mtrs. The land is free from all encumbrances except for the equitable mortgage created in favour of UTI Bank Ltd. who have extended credit loan facility in the normal course of business. Process Flow of Manufacturing of Injection Moulded Plastic Products The manufacturing process of injection moulded plastic products involves the following steps:-

PROCUREMENT OF RAW MATERIAL

COLOUR MIXING

MOULDING

Sampling

ASSEMBLING PU FILLING

SCREEN PRINTING / FOILING

BOX PACKING

CARTON PACKING DISPATCH

As explained in the process flow chart above, the main steps in the manufacturing process involves:

• Raw Material and Procurement: Main Raw materials are Poly Propylene, High Density Poly ethylene and Poly Ethylene Terephthalate etc., all are available in domestic market and also could be imported if needed be.

• Colour Mixing: In the first step, plastic granules are mixed with colour pigments in a mixer. This mixture is then fed into the injection moulding machine.

• Moulding: The required mould is identified and loaded on the machine depending upon the product to be manufactured. On the basis of the specifications for a given product, the parameters are set on the machine. Sampling of the product is done at this stage in order to keep a check on the quality of the product that is being manufactured. If the semi-finished (i.e. moulded) products meet with the required parameters the production is continued.

• Assembling: The product is then sent for manual assembly of various parts. • Filling: The product that is manufactured is then treated with Polyol and Isocynate in specified

proportion in order to impart insulation characteristics to Thermoware / Vacuum ware products. Simultaneously, the product is inspected for any visual defects.

• Screening Printing and Foiling: After the inspection for defects is over, designs if any are printed on the product. The manufacturing process gets completed at this stage.

• Box Packing: The product is then packed in inner boxes.

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• Cartons Packing: The inner boxes are then packed in cartons in order to minimize the possibility of damage during transportation. Once the packing of the products is complete in all respects, the products are sent to Finish Goods Godown for dispatch.

• Dispatch: The products are dispatched from the Finished Goods Godown as per the orders received from clients.

Land and Properties The company has entered into purchase agreement with M/s Alaska Industries to take over the business concern for a total consideration of Rs 300 lakhs through Business Transfer Agreement. The value of the land & building which is to be used for PVC - Wood project is Rs 175 lakhs for an area of 1850 sq.mts. The plant & machinery is valued at Rs. 125 lakhs which will be used for existing operations. The company has taken term loan of Rs. 150 lakhs from UTI Bank Limited for purchasing land & building and the balance Rs. 150 lakhs was contributed by promoters. Interest free deposit for exclusive use of “bluplast” brand Since Bluplast is an established brand in Indian as well as in the export market, the Company proposes to introduce the value added PVC Wood products under the Bluplast brand. This brand is presently owned by Bluplast Corporation and in order to get the exclusive use for the brand, the Company has paid Rs 150 lakhs as an interestfreedeposit with Bluplast Corporation. The Company will also be paying royalty to Bluplast Corporation on the basis of turnover as below:

Turnover on Annual basis Rate (%) Up to Rs. 5000 lakhs 0.50% Above Rs. 5000 lakhs and upto Rs. 10000 lakhs Rs. 25,00,000/- plus 0.25% of the excess turnover

above Rs. 5000 lakhs. Above Rs. 10000 lakhs Rs. 37,50,000/- plus 0.10% of the excess turnover

above Rs. 10000 lakhs. On March 14, 2005 the Company has entered into an Addendum to the Mark License User Agreement dated April 1, 2000 with Bluplast Corporation (as Licensor) for exclusive license to use the name, trademarks, copyrights, logos and devices pertaining to "Bluplast", w.e.f. July 1, 2005 for a period of 5 years with a renewal option, upon payment of Royalty as stated above. The Company was not required to pay any Royalty for use of the name, trademarks, copyrights, logos and devices pertaining to "Bluplast" since April 1, 2000 since the license granted to the Company was not an exclusive license. Upon signing the Addendum and being granted the exclusive rights for use of the name, trademarks, copyrights, logos and devices pertaining to "Bluplast", the Company is required to pay Royalty on the basis of the turn over as stated above and has placed an interest free deposit of Rs.150 lakhs with the Licensor. The Licensor is prohibited from granting any rights to any other person for use of the name, trademarks, copyrights, logos and devices pertaining to "Bluplast", failing which the Company is entitled to terminate this Addendum and claim refund of the interest free deposit. Save and except for these terms, the other terms and conditions of the Mark License User Agreement shall prevail. Purchase of Property Except as stated in section titled “Objects of the Issue” in this Draft Prospectus, on page 17 there is no property which the Company has purchased or acquired or propose to purchase or acquire which is to be paid for wholly, or in part, from the net proceeds of the Issue or the purchase or acquisition of which has not been completed on the date of this Draft Prospectus, other than property in respect of which: -

a) The contracts for the purchase or acquisition were entered into in the ordinary course of the business, and the contracts were not entered into in contemplation of the Issue nor is the Issue contemplated in consequence of the contracts; or

b) The amount of the purchase money is not material; or c) Disclosure has been made in this Draft Prospectus

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Except as stated in the section titled “Related Party Transactions” on page 66 of this Draft Prospectus, the Company has not purchased any property in which any Directors, have any direct or indirect interest in any payment made thereof. INFRASTRUCTURE Power The company is having total sanctioned load of 500 KVA from the transformer of 500 KVA out of which the company has received a release order of 200 KVA from Electricity Board, Daman. It also propose to acquire 500 KVA Capacity of DG sets as standby arrangement. Water The water requirement is mainly for cooling, drinking and sanitary purposes. Its total requirement is 10000 litres per day, which is fulfilled from tubewell and connection from Public Works Department Daman. The Company has a boring well and two underground water tanks with the storage capacity of 10000 litres each as a standby arrangement. Fuel The company requires the fuel like, Diesel for Diesel Generating Sets, which is used as standby arrangement of power in the company, and the same is easily available in the near vicinity of the company. Raw Materials The main raw materials used by the company are Polyproplene (PP) Granules and Isocynate, Polyol. Both these raw materials are indigenously available at the plant site as majority of the large manufacturers of these in the country have their distribution depots/ units at Daman. The company has an option to procure these raw materials from overseas suppliers also. Other raw materials used in the manufacturing plant are HDPE, Polycarbonate, ABS, Stainless Steel, Packing Materials, Stickers, Foils, Nuts, Adhesives, PP Belts etc. These are also easily available locally and company has not faced any problems in the procurement of these. The Company buys the material in the spot market as per its production schedule so that the company’s inventory holding is optimized. Pollution Control and Effluent Treatment The manufacturing process of the company does not generate any effluents. The company has obtained NOC from the State Pollution Control Board for the activities that will be carried out at its manufacturing facilities. The Company has obtained “NOC” from Pollution control Committee - Daman & Diu and Dadra & Nagar Haveli and the NOC is valid till December, Exports The products of the company have also been exported to be overseas markets like UK, Africa and Middle East. Around 3-4% of the total turnover of the company has been from exports. Export Obligation Sr. No.

EPCG License No. Date Details Capital Goods Purchased

Nature of export Required

Amount of Export Obligation

Period within which the obligation has to be fulfilled

1. 0330000 104/3/12/00 3/2/2000 12362500 Import Injection Machinery

74175000 Financial Year End 2006

(Export obligation has been achieved in full as on September 30, 2005)

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Capacity & Capacity Utilisation

Product 2002-2003 2003-2004 2004-2005 Plastic Goods Installed Capacity (MT) 4500 4500 4500 Actual Production (MT) 5675 6741 5465 % of Capacity Utilised 126% 149% 121%

Future Capacity & Capacity Utilisation of existing unit:

Product 2005-2006 2006-2007 2007-2008 Plastic Goods Installed Capacity (MT) 5400 9000 9000 Actual Production (MT) 9450 10800 11700 % of Capacity Utilised 175% 120% 130%

Future Capacity & Capacity Utilisation of proposed unit:

Product 2006-2007 2007-2008 2008-2009 PVC Wood Composite Installed Capacity (MT) 4900 4900 4900 Actual Production (MT) 2945 3436 3926 % of Capacity Utilised 60% 70% 80%

(Source: Project Appraisal) Insurance Coverage PROPERTY: Particulars Policy No. Valid from Amount Factory Building & Stocks 171800/2006/170 22/03/2005 9,27,00,000 Gaziabad Depot Stock 171800/2006/526 12/09/2005 42,66,700 VEHICLE: Particulars Policy No. Valid from Amount Vehicle – Nexia 020400/31/03/03251 07/11/2004 2,50,000 Vehicle – Accent 020400/31/05/00011 03/04/2005 4,00,000 KEY MAN: Particulars Policy No. Valid from Amount Keyman Policy – KL 902406881 11-08-2004 50,00,000 Keyman Policy – KL 902406882 11-08-2004 50,00,000 Keyman Policy – IP 902406876 11-08-2004 50,00,000 Keyman Policy – IP 902406877 11-08-2004 50,00,000 Man Power The present strength of the Company as on December 31, 2005 is 154 employees on the roll of the Company and remaining 101 employees are on contract and consultancy basis.

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The Details are as under: Sr. No. Department Skilled Employees Unskilled Employees Total 1 Production Department 19 46 65 2 Purchase Department 1 5 6 3 Marketing Department 2 9 11 4 Export Department 1 1 2 5 Finance & Accounts

Department, HR 3 6 9

6 Secreterial Department 1 1 2 7 EDP Department 2 - 2 8 Contract Labours 93 - 93 9 Consultant & Others 8 - 8 TOTAL 130 68 198 ISO 9001:2000 Certified Company – The Company has received the certificate from UKAS Quality Management, An Accreditation Body, dated November 17, 2005 and became ISO 9001:2000 certified company from that date. Marketing Strategy

• The company plans brand building through media advertising towards new product extension of PVC wood Composite and creation of market awareness.

• The Company plans to have conferences, seminars for the prospective distributors, dealers and the concerned parties like major furniture manufacturers, architects, contractors, interior decorator, fabricators, to introduce the products with samples, models and to explain the features of the product. The various alternative products available in the market will be compared along such important parameters such as cost, application durability etc.

• Direct selling campaign will be undertaken by the marketing team of the company. The company plans to establish a experienced, skilled and qualified sales team to achieve its objective through

a) Direct Mailing System through well known data-base providers. b) Direct approaching to all leading architects, interiors and builders. c) Direct approaching to all industrial houses.

• The company will use P.O.P materials like brochures, product catalogues, danglers, CD presentation

for dealers, distributors, agents etc.

• The Company plans to leverage its existing 98 distributors and existing dealer network throughout the country for promotion of PVC wood composite products. Due to its inherent properties of PVC wood which can be used in coastal and humid regions, the company intends to appoint Distributors first in the Western and Southern regions in the initial stage and then progress to Eastern and Northern regions.

In order to generate export sales, the company had entered into a Memorandum of Understanding (MOU) with Tung Tai Machine Work Co. Ltd of Taiwan for buy back of the products manufactured by the company.

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REGULATIONS AND POLICIES IN INDIA

Over the past five years, the Indian Government has removed many of the barriers hindering the sectors growth. But to fulfil the potential of the country’s plastic-export industry, the Industry has been making representations to the government to make way for further liberalisation so as to enable the players in the Industry to improvise on the lack of scale and poor operational and organisational performance of local manufacturers and also invite investment, particularly foreign direct investment. Liberalization of FDI Policy: Government has allowed foreign equity participation up to 100%, through automatic route, in the plastic sector with the only exception being that if the proposal involves import of items , which are either hazardous, banned or detrimental to environment (e.g. import of plastic scrap or recycled plastics), for which the Foreign Investment Promotion Board permission may be required. Export Promotion Capital Goods (EPCG) Scheme: The scheme facilitates import of capital goods at 5% concessional rate of duty with appropriate export obligation. Duty Exemption Pass Book (DEPB) Scheme: DEPB credit rates have been prescribed for plastic and plastic products. Duty Drawback Scheme: The exporters are allowed refund of the excise and import duty suffered on raw materials under the scheme so as to make the products more competitive in the international market.

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HISTORY AND CERTAIN CORPORATE MATTERS History Two of the promoters of the Company Mr. Kamlesh L. Jain and Mr. Indermal P. Jain, have been associated with the plastic industry for more than two decades. They started business in plastic product by incorporating Bluplast Corporation in 1985. Subsequently, the promoters expanded business by setting up facility in Daman under Alaska Industries, a group company. They later started Thermoplast Industries Private Limited in 1999 with a unit in Daman with an initial capacity of 1940 MTPA, which has, over a period of time, been increased up to 4500 MTPA. Thermoplast Industries Private Limited later renamed as Bluplast Industries Private Limited after acquiring total manufacturing unit of Alaska Industries on July 1, 2005, became Bluplast Industries Ltd with effect from July 14, 2005. The Company has been operating at 100% capacity utilization for the past three years. In the FY 2004-05, to meet the demands of its products, the Company had to outsource the work of manufacturing its products to sub-contractors on job work basis and as a result of which the Company manufactured 5465 MTPA against an installed capacity of 4500 MTPA. Milestones Date Particulars January 14, 1999 Incorporation of the Company as "Thermoplast Industries Private Limited" May, 2000 Commencement of commercial production at its unit at Daman March 11, 2005 Change of name to "Bluplast Industries Private Limited" July 14, 2005 Conversion into a Public Limited Company as "Bluplast Industries Limited" April 1, 2000 Company has acquired the license to use the Brand “Bluplast”. July 1, 2005 Company has acquired the exclusive licence of Bluplast Brand. July 1, 2005 Company has acquired the business and assets of Alaska Industries which has an

installed capacity of 900 MTPA November 17, 2005 Company has become ISO 9001:2000 Certified Company. December 10, 2005 Company has acquired a Corporate Office at 128, Udyog Bhawan, Sonawala Road,

Mumbai – 400 063. Our Main Objects The main objects as contained in our Memorandum of Association are: To carry on business of manufacturing, Traders, processing, extrusioning, moulding, colouring, dipping, assembling, exporting, importing, buying, selling, dealing, as agents, distributors and dealers in plastic materials, articles, plastic home appliances goods, products, substances, appliance, apparels, containers, packing and plastic pen materials, toys, bottles, foot wears, furniture, pipe and fittings, bangles, storage tanks made from plastic, plastic materials, resins, rubber, materials including polyethylene, cellulose, acetate moulding powder, polystyrene, PET polyvinyl chloride polycarbonate, polystyrene, PET polyvinyl chloride polycarbonate, polypropylene and copolymer epoxy resins composites, thermosetting, materials, polyol, isocynate of from other materials or combination of the same and to be used by consumers, industrial, household, government, commercial railway or for defence need and purposes. To carry on the business of manufacturing, processing, assembling, exporting, importing, buying, selling dealing as agent distributors and dealers in Plastic Thermo ware Articles and Vacuum Flasks to be used by consumers, industrial Government for commercial and household purpose. To carry on the business of manufacturer, trader, dealer, exporter, importer, broker, commission agent of wood, plastic and wood composite profile, door frame, window frame, wall board, floor board, sheets, decorative strips made of plastic and wood composite, or wood or any other articles in the manufacture of which wood or plastic plus wood composite is used, including furniture and interior decoration which may seem to the Company capable of being conveniently carried on in connection with any of the above

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whether directly or indirectly to render profitable or to enhance the value of the Company’s property of right for the time being. The main objects clause and the objects incidental or ancillary to the main objects of our Memorandum of Association enable us to undertake our existing activities and the activities for which the funds are being raised through this Issue. Changes in the Memorandum of Association Since incorporation of our Company, the following changes have been made in the Memorandum of Association:

Amendment Date of Amendment

Increase in the Authorised Capital from Rs.25,00,000/- to Rs.1,75,00,000/- divided into 17,50,000 equity shares of Rs.10/- each.

October 4, 1999

Clause 2A inserted in the MOA. AOA amended by inserting a new clause (4) in Article No.3 to read as: "(4). Prohibits any invitation or acceptance of deposits from persons other than its members, directors and their relatives."

February 7, 2005

Increase in the Authorised Capital from Rs.1,75,00,000/- to Rs.5,00,00,000/- divided into 50,00,000 equity shares of Rs.10/- each.

February 7, 2005

Name of the Company changed from Thermoplast Industries Private Limited to Bluplast Industries Private Limited.

March 11, 2005

Adoption of new set of Articles of Association for conversion of Company from private to public limited

May 25, 2005

Name of the Company changed from Bluplast Industries Private Limited to Bluplast Industries Limited.

July 14, 2005

Increase in the Authorised Capital from Rs.5,00,00,000/- to Rs.10,00,00,000/- divided into 1,00,00,000 equity shares of Rs.10/- each.

July 25, 2005

Adoption of New set of AOA to comply to requisite requirements for Listed Company.

September 12, 2005

Increase in the Authorised Capital from Rs.10,00,00,000/- to Rs.20,00,00,000/- divided into 2,00,00,000 equity shares of Rs.10/- each.

September 12, 2005

Subsidiaries of the Company The Company does not have any subsidiary. Shareholders Agreements The Company has not entered into any shareholders agreements. Strategic Partners At present, the Company does not have any strategic partners. Financial Partners At present, the Company does not have any financial partners.

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MANAGEMENT Board of Directors Under our Articles of Association, the Company cannot have less than three (3) and more than twelve (12) directors. The company currently have six (6) Directors. The following table sets forth current details regarding our Board of Directors:

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

Age Date of Appointment and

Term

Other Directorships

Mr. Kamlesh Lalchand Jain Managing Director S/o. late Mr. Lalchand Jain, 102, Indrapuri, S. V. Road, Goregaon (W), Mumbai - 400 062 Business

46 yrs.

27th February, 1999 Appointed as additional director 12th September, 2005 Appointed as Managing Director w.e.f. 2nd September, 2005

M/s. Bluplast Moulders Pvt. Ltd.

Mr. Indermal P. Jain Joint Managing Director S/o. Mr. Pannalal Jain 402, Evershine Aangan S.V. Road Goregaon (W), Mumbai 400062 Business

43 yrs.

Appointed as first director in terms of clause no 168 of Article of Association 12th September, 2005 Appointed as Joint Managing Director w.e.f. 2nd September, 2005

M/s. Bluplast Moulders Pvt. Ltd.

Mr. Prince Jain Director S/o. Mr. Hirachand Jain 1804 18th Floor, Gurukul Tower Jaywant Sawant Road Dahisar-West, Mumbai – 400 068 Business

30 yrs.

10th August, 2005 Liable to retire by rotation

NIL

Mr. Rajendra D Jain Director S/o Mr. Dwarka Prasad Jain 305 Manish Chambers Sonawala Road Goregaon-East, Mumbai 400063 Business

43 yrs


NIL

52

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

Age Date of Appointment and

Term

Other Directorships

Mr. Janakraj Vakil Director S/o. Mr. Ramnik Lal Vakil 58, Jawahar Nagar, Near Jain Mandir, Goregaon (West), Mumbai-400 062. Service

45 yrs.


NIL

Mr. Arvind M. Mehta Director S/o. Mr. Mathuradas Mehta 5, Neet Deep, 12 Bajaj Road, Vile Parle (West), Mumbai 400060 Service

60 yrs.

6th October, 2005 Liable to retire by rotation

1) M/s. Welset Plast Extrusions P Ltd 2) Welset Med Plast Pvt. Ltd.

Details of Directors (brief profile) For the brief profile of Promoter Directors viz. Mr. Kamlesh Lalchand Jain, Mr. Indermal P. Jain, see section titled "Promoters" on page no. 60 of the Draft Prospectus. Mr. Prince H. Jain, Director: Mr. Prince H. Jain is 30 years old. He is a Commerce graduate from Bombay University. He is having Diploma in Sales & Marketing Management from National Institute of Sales, Mumbai. He is associated with various companies from the age of 18. He started his career as a Sales representative of TTK Prestige Ltd. and then joined Gillette India Limited in the capacity of Territory Sales Incharge. Before joining Bluplast Industries Limited in the year 2002 he was owning the distributionship business of FMCG (Food products) of Radiance Marketing. Mr. Arvind M. Mehta, Independent Director: Mr. Arvind M Mehta is 60 years old. He is a Science graduate from Mumbai University. He is Managing Director of M/s. Welset Plast Extrusions P Ltd., Mumbai. He has been in Plastics industry for nearly 37 years. He was President of The Bombay Fountain Pen Manufacturers & Traders Association for three years. He was President of SPE-USA (Indian Section). He was also President of The All India Plastics Manufacturers Association for three years, which were marked with many landmark events. At present he is Vice President of Plastindia Foundation. He has represented Plastic Industry in CII National Executive Council Member as duly elected for two consecutive years. Mr. Janakraj R. Vakil, Independent Director: Mr. Janakraj R. Vakil is 45 years old. He is an Art graduate from Mumbai University. He completed his L.L.B from Govt. Law College, Mumbai and is enrolled with BAR council of Maharashtra. He is having more than 20 years experience in legal matters. He is also the member of Goregaon Education Society. Mr. R. D. Jain, Independent Director: Mr. R. D. Jain is 43 years old. He is a Commerce graduate from Bombay University and the Fellow member of Institute of Chartered Accountants of India. He has a experience in accounting and taxation and practicing as a Chartered Accountant for the last 17 years.

53

Borrowing Powers of the Board In respect of borrowing powers, Article 96 of the Company’s Articles of Association provides "Subject to the provisions of Section 58A, 292 and 293 of the Act and of the Companies (Acceptance of Deposits) Rules, 1975 and of these Articles or any statutory modification thereof for the time being in force the Board may, from time to time at its discretion by a 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 purpose of the Company. Provided however where the moneys to be borrowed together with the moneys already borrowed (apart from temporary loans to be obtained from the Company’s bankers in the ordinary course of business) exceed the aggregate of the paid up capital of the Company and its, free reserves (not being reserves set apart for any specific purpose) the Board of Directors shall not borrow such money without the sanction of the Company in General Meeting." See section titled "Main Provisions of the Articles of Association" on page no. 121 of the Draft Prospectus. The shareholders of the Company at the EGM held on October 4, 1999 authorised the Board to borrow maximum of Rs. 5000 Lakhs. Compensation of the Directors Mr. Kamlesh Lalchand Jain: Mr. Kamlesh L. Jain was appointed as director of the Company on 27th February, 1999. He was appointed as Managing Director w.e.f. 2nd September, 2005 for the term of 5 year in the EGM held on 12th September, 2005. His compensation is as follows: Salary of Rs.60,000/- to Rs.1,20,000/- per month Performance linked bonus equivalent to a minimum two months salary to be paid annually. Perquisites like house rent allowance, or accommodation, medical expenses, medical/ accident insurance to the tune of Rs.3,60,000/- per annum with the authority to Board to increase it upto a maximum of Rs.7,20,000/- per annum and leave with full pay and allowance as per the Company's rules. Provident Fund, Superannuation, Leave Travel Allowance and other statutory allowances Mr. Indermal P. Jain: Mr. Indermal P. Jain was appointed as the first director of the Company. He was appointed as Wholetime Director w.e.f. September 2, 2005 for the term of 5 year in the EGM held on September 12, 2005. His compensation is as follows: Salary of Rs.60,000/- per month Performance linked bonus equivalent to a minimum two months salary to be paid annually. Perquisites like house rent allowance, or accommodation, medical expenses, medical/ accident insurance to the tune of Rs.3,60,000/- per annum with the authority to Board to increase it upto a maximum of Rs.7,20,000/- per annum and leave with full pay and allowance as per the Company's rules. Provident Fund, Superannuation, Leave Travel Allowance and other statutory allowances. Commission to Part – time Directors: The shareholders of the Company in its meeting held on August 26, 2005 has authorised the Board to pay remuneration to the directors by way of commission not exceeding the limit of 1% or 3 %, as the case may be, of the net profit as per section 349 and 350 of the Companies Act, 1956. As of now the Company has not given any remuneration to any part-time directors. Corporate Governance The provisions of the listing agreement to be entered in to with the stock exchanges with respect to corporate governance will be applicable to the Company immediately upon listing of our Company’s equity shares on the stock exchanges. The Company has already initiated steps to comply with the requirements of Corporate Governance guidelines issued by SEBI.

54

The Board of Directors of the Company comprises of six (6) directors, of which two are executive directors and four are non-executive directors out of which three are Independent directors. The Company has also constituted the various committees viz. Audit Committee and Share Transfer & Investor Grievance Committee. Further, the Company undertakes to comply with all the other requirements of the SEBI Guidelines on Corporate Governance as may be applicable to the Company upon listing of its equity shares. Committees of the Board: Audit Committee Audit committee was constituted on September 12, 2005 with three members: Mr. R. D. Jain - Chairman & Member Mr. Janakraj R.Vakil - Member Mr. Prince H. Jain - Member The General objective of the Audit Committee is to establish a transparent and effective system of monitoring and control, to review annual plan of our Company, and any special examination by internal audit and implementation of internal audit recommendations, to review quarterly, half early and annual financial statement before submission to the board and to conduct limited review, together with coverage of scope of activity prescribed under section 292 A of Companies Act, 1956. The audit committee also considers and reviews ethical adherence and corporate governance principles. Share/Debenture Transfer & Investors’ Grievance Committee Share/Debenture Transfer & Investors’ Grievance Committee was constituted on October 6, 2005 with three members: Mr. R. D. Jain - Chairman Mr. Kamlesh Jain - Member Mr. Indermal Jain - Member The scope and function of this committee is to consider and review shareholders’ / investors’ grievances and complaints and to ensure that all shareholders’ / investors’ grievances and correspondence are attended to expeditiously and satisfactorily unless constrained by incomplete documentation and / or legal impediments. Shareholding of the Directors in the Company The present shareholding of Directors is detailed below: Name of the Director Designation No. of Shares held % of pre issue paid-up

share capital Mr. Kamlesh L. Jain Managing Director 33,91,324 43.95 Mr. Indermal P. Jain Whole – time Director 29,63,920 38.41 Mr. Prince Jain Director Nil Nil Mr. R. D. Jain Director Nil Nil Mr. Janakraj R. Vakil Director Nil Nil Mr. Arvind M. Mehta Director Nil Nil

55

Interest of Directors All Directors of the Company may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board or a Committee thereof as well as to the extent of other remuneration, commission, reimbursement of expenses payable to them under the Articles of Association of the Company. All our Directors may also be deemed to be interested to the extent of Equity Shares, if any, already held by them or their relatives in our Company or that may be subscribed for and allotted to them, out of present issue in terms of the Draft Prospectus and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares. The Directors may also be regarded as interested in the Equity Shares, if any, held by or that may be subscribed by and allotted to the Companies, firms and trust, in which they are interested as Directors, members, partners or trustees. Changes in our Board of Directors during the last three years Name

Date of Appointment Date of Cessation Reasons

Mrs. Nayana Jain First director October 6, 2005 Resigned from directorship of the Company

Mrs. Rekha Jain First director October 6, 2005 Resigned from directorship of the Company

Mr. Prince H. Jain August 10, 2005 - Appointed as a director Mr. Janakraj Vakil August 10, 2005 - Appointed as a director Mr. R. D. Jain August 10, 2005 - Appointed as a director Mr. Arvind M. Mehta October 6,2005 - Appointed as a director in

the casual vacancy of Mrs.Rekha Jain.

56

Organisation Structure

BOARD OF DIRECTORS

Managing Director

General Manager (Works) Purchase Manager Sales Manager Export Manager Accounts &

Finance Manager EDP Manager Company Secretary

Production Manager

Accounts Asst. Purchase Manager Asst. Sales

Manager Assistants Asst. Accounts & Finance Manager Secretarial

Assistance

57

Key Managerial Personnel The details of the key managerial personnel of the Company are as follows:

Name Date of Joining

Age (in

yrs.)

Experience

(in yrs.)

Designation Qualification Previous Employment

Mr. Vilas J. Dhumal 01.06.2005 41 15 General Manager-Works (Plant)

B.Sc,(Tech), Diploma in Plastic Engg., PGDMM/MBA, Plastic Mould Designing, MPM (admin), Labour law, Diploma in Production Engg.

M/s Eagle Flasks Ind. Ltd., M/s Prince Plastics Ltd., M/s Time Packaging Limited

Mr. Shashinand Nagori

14.05.2001 33 7 Manager-Accounts, Finance & HR

B.Com., A.C.A. M/s Rivona Industries Ltd.

Mr. Satish Kumar Shrivastava

16.01.2006 26 2 Company Secretary B.Com, ACS GE Motors India Pvt. Ltd.

Mr. Vasant H Purohit

01.06.2001 35 11 Manager-Administration (Plant)

B.Com. -

Mr. Mustan Boxwalla

01.04.2001 36 8 Manager-Purchase B.Com., Diploma in Computer Art, Diploma in General Travel knowledge

Max Rent-A-Car

Mr. Unmesh Karnik 01.07.2005 37 5 Manager-EDP B.Sc., Diploma in Computer Programming

-

Mr. Manoj Somani 11.01.2003 31 9 Manager-Sales B.Com, Post Graduate Diploma in Marketing Management

M/s Wim Plast Limited (Cello Group), M/s Synthetic Moulders Ltd.

Mr. Jitendra Solanki 01.04.2002 33 8 Manager-Exports B.Com., Diploma in Import Export Management

Simrone Phrama-eutical Ltd., Bhagyalaxmi Industries and Besto Industries.

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

58

Brief Profile of the Key Managerial Personnel Mr. Vilas J. Dhumal: Mr. Vilas J. Dhumal, aged 41 years is a B. Sc. (Tech) graduate from Pune. He has also done Diploma in Plastic Engg., PGDMM and Diploma in Production Engg. He joined the Company on June 1, 2005. He has experience in plastic industry for the last 15 years. He is presently working as General Manager-Works (Plant) and is overall in-charge of existing plant. His remuneration is Rs. 1,92,000 per annum. Mr. Shashinand Nagori: Mr. Shashinand Nagori aged 33 years, is a Commerce graduate from Ajmer University and is a Chartered Accountant. He joined the Company on May 14, 2001. He is presently working as Manager-Accounts, Finance & HR. His previous employment was with M/s Rivona Industries Ltd. He has more than 7 years of experience in accounting and financial works. His remuneration is Rs. 2,04,000 per annum. Mr. Satish Kumar Srivastava: Mr. Satish Kumar Srivastava aged 26 years, is a Commerce graduate. He is an Associate Member of Institute of Company Secretaries of India. He joined the Company on January 16, 2006. He is presently working as Company Secretary. Mr. Vasant H Purohit: Mr. Vasant H Purohit, aged 36 years, is a Commerce graduate. He joined the Company on June 1, 2001. He is presently working as Manager-Administration (Plant). He has been associated with the group Company for the last 11 year and gained experience in administration and coordination. His remuneration is Rs. 84,000 per annum. Mr. Mustan Boxwalla: Mr. Mustan Boxwalla, aged 37 years, is a Commerce graduate from Mumbai University. He has a Diploma in Computer Art, Diploma in General Travel knowledge. He joined the Company on April 1, 2001 He is presently working as Manager-Purchase. His previous employment was with Max Rent-A-Car. He has more than 5 years of experience in designing. His remuneration is Rs. 1,11,000 per annum. Mr. Unmesh Karnik: Mr. Unmesh Karnik, aged 38 years, a Science graduate from Mumbai University and has a Diploma in Computer Programming. He joined the Company on July 1, 2005. He is presently working as Manager-EDP. He has experience of more than 5 years. His remuneration is Rs. 1,32,000 per annum. Mr. Manoj Somani: Mr. Manoj Somani aged 32 years, is a Commerce graduate from Mumbai University. He has a Post Graduate Diploma in Marketing Management. He joined the Company on January 11, 2003. He is presently working as Manager-Sales. His previous employment was with M/s Wim Plast Limited (Cello Group), M/s Synthetic Moulders Ltd. He has more than 5 year experience in marketing in the plastic industry. His remuneration is Rs. 1,44,000 per annum. Mr. Jitendra Solanki: Mr. Jitendra Solanki aged 34, is a Commerce graduate from Mumbai University He joined the Company on April 1, 2002. He has a Diploma in Import-Export Management. He is presently working as Manager-Exports. His previous employments were with Simrone Pharmaceutical Ind. Ltd., Bhagyalaxmi Industries and Besto Industries. His remuneration is Rs. 90,000 per annum. None of the Key Managerial Personnel are related to each other. The Key Managerial Personnel do not hold any shares in the Company. Bonus and/or profit sharing plan for Key Managerial Personnel The Company does not have any bonus and/or profit sharing plans for Key Managerial Personnel.

59

Employees Stock Option Scheme The Company does not have any ESOP / ESOS. Payment or Benefits to the Officers of the Company (non-salary related) The Company has not offered any non-salary related payment or benefits to the Officers of the Company. Changes in Key Managerial Personnel during last three years Name Date of Appointment Date of Cessation Reasons

Mr. Nitin Shrivastava 1st September, 2005 - Appointed as the

Company Secretary Mr. Vilas J. Dhumal 1st June, 2005 - Appointed as GM,

Works (Plant) Mr. Manoj Somani

11th January, 2003 - Appointed as Manager, Sales

Mr. Umesh Karnik 1st July, 2005 - Appointed as EDP Manager

Mr. Nitin Shrivastava January 14, 2006 Resignation Mr. Satish Srivastava January 16, 2006 Appointed as Company

Secretary

60

PROMOTERS Mr. Kamlesh L. Jain

Voter ID Driving License number

Mr. Kamlesh Jain, aged 46 years, is the Managing Director of the Company. He is one of the promoter, originally hails from Rajasthan. He has about 20 years of experience in Plastic Industry. In the year 1978 he joined the Cello Group and gained experience in household plastic items. In the year 1985 he set up his own plastic household thermoware facilities under the firm name Bluplast Corporation He has been associated with the Company since inception and has been taking part in all the activities of the Company. He supervised the launchinhg of new productsintroduced by the company from time to time. MT / 09 / - 042 / 549295 MH/02/91/22937

Mr. Indermal Jain


Mr. Indermal Jain is younger brother of Shri Kamlesh Jain aged 43 years. He is a whole time director of the Company designated as Joint Managing Director. He joined Bluplast Corporation as a partner and gained considerable experience in plastic items. He was also one of the promoters of Thermoplast Industries Pvt. Ltd, which is currently known as Bluplast Industries Limited. He is involved in looking after the designing concepts of the plastic products for the Company. MT/09 – 042/066681 A – 9277

Mrs. Rekha Jain


Mrs. Rekha Jain, aged 42 years is presently she is Partner in Bluplast Corporation and handles the trading activities and export business of the firm. She has been actively involved in the administration and co-ordination work within the Company. MT/09/042/54922 MH-02-96-102

Mrs. Nayana Jain


Mrs. Nayana Jain aged 42 years is presently a partner in Bluplast Corporation. She has been actively involved in the administration and co-ordination work within the Company. MT/09/042/ 066680 29576

It is hereby confirmed that the permanent account number, bank account number and passport number wherever available of all the above Promoters were submitted to the Stock Exchanges at the time of filing the Draft Prospectus with the Stock Exchanges.

61

INFORMATION OF THE PROMOTER GROUP COMPANIES Bluplast Moulders Private Limited Date of Incorporation 13/08/1997 Nature of Activities Manufacturer of Plastic House Hold Articles Financial Performance (Rs. in lakhs except per share data)

Year ended March 31, 2005



Equity Share Capital (Face Value of Rs. 100/- per equity share)

1.00 1.00 1.00

Reserves (excluding revaluation reserves) 9.11 9.40 10.28 Sales 0.00 1.50 0.00 Profit After Tax (0.30) (0.87) (0.82) E.P.S. (Rs.) N.A N.A N.A N.A.V. (Rs.) 1011.00 1040.00 1128.00 Subsidiary Bluplast Moulders Private Limited does not have any subsidiaries. Shareholding Pattern of Bluplast Moulders Pvt. Ltd. Sr. No. Name of Members No. of Shares Percentage of share holding 1. Mr. Kamlesh L. Jain 275 27.5% 2. Mr. Indremal P. Jain 275 27.5% 3. Mrs. Rekha K. Jain 150 15% 4. Mrs. Nayana I. Jain 150 15% 5. Mr. Pannalal Jain 150 15% The shares of Bluplast Moulders Pvt. Ltd. are not listed on any Stock Exchange. Bluplast Moulders Pvt. Ltd. has not become sick Company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 nor is under winding up. Bluplast Corporation Bluplast Corporation, a partnership concern, having its principal office at 113, Vivek Industrial Estate, Uswala Road, Near Litolier, Cama Estate, Goregaon (E), Mumbai 400063 was formed in 1985 with the object of undertaking contract manufacturing and trading of plastic products. As on December 31, 2005, the concern has following partners:

S. No. Name of the Partner Interest (%) 1. Mr. Kamlesh L. Jain 19 2. Mr. Indermal P. Jain 19 3. Mrs. Rekha K. Jain 19 4. Mrs. Nayana I. Jain 19 5. Mr. Pannalal Jain 24

Financial Performance of the concern in the last three years (Rs. In Lakhs)

Particulars Year ended March 31, 2005



Income / Turnover 1.52 1.02 7.27 Profit Before Tax 0.75 (0.12) 0.06 Partner’s capital Mr. Kamlesh L. Jain 5.11 5.02 3.30 Mr. Indermal P. Jain 2.70 2.58 0.81 Mrs. Rekha K. Jain 0.29 0.23 1.23 Mrs. Nayana I. Jain 8.44 6.79 3.95 Mr. Pannalal Jain 2.79 2.70 2.67

62

Alaska Industries Alaska Industries, a partnership concern, having its principal office at 113, Vivek Industrial Estate, Uswala Rd., Near Litolier, Cama Estate, Goregaon (E), Mumbai 400063 was formed in 1994 with the object of carrying on the activity of manufacturing and trading of plastic products. It has an installed capacity of 1800 MTPA in Daman and manufactures insulated thermoware items such as Casseroles, Water Jugs & non- thermoware items meant for household & domestic consumption. As on December 31, 2005, the concern has following partners:

S. No. Name of the Partner Interest 1 Mr. Kamlesh Jain 50 2 Mr. Indermal Jain 50

Financial Performance of the concern in the last three years

(Rs. In Lakhs)




Income / Turnover 1546.86 1573.63 1269.44 Profit Before Tax 14.58 9.35 6.72 Partner’s capital Mr. Kamlesh L. Jain 68.09 70.97 59.54 Mr. Indermal P. Jain 65.40 76.90 76.20

Bluplast Utility Products Bluplast Utility Products, a partnership concern, having its principal office at 113, Vivek Industrial Estate, Uswala Rd., Near Litolier, Cama Estate, Goregaon (E), Mumbai 400063 was formed in November 1999 with the object of business of manufacturing of plastic novelties and gift articles. As on December31, 2005, the concern has following partners:



(Rs. In Lakhs) Particulars Year ended

March 31, 2005 Year ended


March 31, 2003 Income / Turnover 247.80 98.20 82.23 Profit Before Tax 12.86 5.59 15.04 Partner’s capital Mr. Kamlesh Jain 19.85 11.00 8.21 Mr. Indermal Jain 2.53 13.42 10.63

63

Bluplast Industries Bluplast Industries, a partnership concern, having its principal office at 113, Vivek Industrial Estate, Uswala Road, Near Litolier, Cama Estate, Goregaon (E), Mumbai 400063 was formed in April 2000 with the object of business of manufacturing of plastic novelties and gift articles. As on December 31, 2005, the concern has following partners:

S. No. Name of the Partner Interest 1. Mr. Kamlesh L. Jain 47 2. Mr. Indermal P. Jain 47 3. Mrs. Rekha K. Jain 3 4. Mrs. Nayana I. Jain 3





March 31, 2003 Income / Turnover 6.03 23.67 21.93 Profit Before Tax 0.30 0.00 0.09 Partner’s capital Mr. Kamlesh L. Jain 13.70 15.85 23.37 Mr. Indermal P. Jain 16.84 16.70 24.21 Mrs. Rekha K. Jain (2.13) (2.14) (2.18) Mrs. Nayana I. Jain (2.15) (2.16) (2.20)

Bluplast Pentech Bluplast Pentech, a partnership concern, having its principal office at 113, Vivek Industrial Estate, Uswala Road, Near Litolier, Cama Estate, Goregaon (E), Mumbai 400063 was formed in November 1999 with the object of business of manufacturing of plastic novelties and gift articles. As on December31, 2005, the concern has following partners:






March 31, 2003 Income / Turnover 176.87 9.50 4.68 Profit Before Tax 8.78 0.80 0.00 Partner’s capital Mr. Kamlesh Jain 4.84 1.06 0.67 Mr. Indermal Jain 10.51 6.11 5.72

64

Neelam Plastics Industries Neelam Plastics Industries, a partnership concern, having its principal office at 113, Vivek Industrial Estate, Uswala Road, Near Litolier, Cama Estate, Goregaon (E), Mumbai 400063 was formed in 1977 with the object of business of manufacturing of plastic novelties and gift articles. As on October 31, 2005, the concern has following partners:

S. No. Name of the Partner Interest 1. Mr. Pannalal Jain 30 2. Mrs. Rekha K. Jain 35 3. Mrs. Nayana I. Jain 35

Financial Performance of the concern in the last three years (Rs. In Lakhs)




Income / Turnover 0.00 1.08 1.08 Profit Before Tax (1.05) 0.00 0.00 Partner’s capital Mr. Pannalal Jain 1.02 1.33 1.04 Mrs. Rekha K. Jain (0.38) (0.01) (0.01) Mrs. Nayana I. Jain 3.56 3.93 (0.12)

65

CURRENCY OF PRESENTATION In this Draft Prospectus, all references to “Rupees” ,”Indian Rupees” and “Rs.” are to the legal currency of India. In this Draft Prospectus, throughout all figures have been expressed in lakhs. The word “lakhs” or “Lakh” or “Lacs” means “One hundred thousand”. Any percentage amounts, as set forth in “Risk Factors”, “Our Business”, “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” and elsewhere in this Draft Prospectus, unless otherwise indicated, have been calculated on the basis of our financial statements prepared in accordance with Indian GAAP.

66

RELATED PARTY TRANSACTION

Information on Related Party Disclosures as per AS-18. a) List of Related Parties and relationship Party Relationship Mr. Kamlesh L.Jain Promoter Mr. Indermal P.Jain Promoter Mrs. Rekha K. Jain Wife of Director Mrs. Nayana I. Jain Wife of Director Alaska Industries Associate Company Bluplast Corporation Associate Company Bluplast Industries Associate Company Bluplast Pentechs Associate Company Bluplast Utility Products Associate Company Bluplast Moulders Pvt.Ltd. Associate Company b) Related Party Transactions 1. For the period ended 30st September, 2005

(a). Key Management Pesonnel

(Rs. In lakhs)

Directors Remuneration

Unsecured Loans Taken

Repayment of Loans Taken

Loans Payable as on

30.09.05

Shares Allotment / Application

Mr. Kamlesh L.Jain 1.35 0 0 6.74 90.25 Mr. Indermal P.Jain 1.35 1.03 3 0.17 25 Mrs. Rekha K. Jain 0.6 2.6 0.6 3.2 1 Mrs. Nayana I. Jain 0.6 0.6 0.6 1.2 14 Total 3.9 4.23 4.2 11.31 130.25 (b) Name of the enterprises having same Key Management Personnel and / or their relatives as the reporting enterprise with whom the Company has entered into transactions during the year.

(Rs. In lakhs)

Purchases Other Liability as on

30.09.05

Rent Paid Job Charges Paid

Other Receivables

as on 30.09.05

Purchase of the

undertaking Alaska Industries 122.86 158.64 0.3 3.87 0 300.00 Bluplast Corporation 0 0 0 0 100.8 0 Bluplast Industries 0 0 0 0 0 0 Bluplast Pentechs 0 1.14 0 0 0 0 Bluplast Utility Products 0 1.38 0 0 0 0 Bluplast Moulders Pvt.Ltd. 0 0 0 0 0 0 Total 122.86 161.16 0.3 3.87 100.8 300

67

1. For the Previous year ended 31st March, 2005

(a). Key Management Pesonnel (Rs. In lakhs)

Directors

Remuneration Repayment of Loans Taken


Loans Payable as on 31.03.05

Mr. Kamlesh L.Jain 1.5 2 175.19 5.99 Mr. Indermal P.Jain 1.5 3.94 131.84 2.14 Mrs. Rekha K. Jain 1.5 0 0.01 1.2 Mrs. Nayana I. Jain 1.5 0 0.006 1.2 Total 6 5.94 307.046 10.53 (b). Name of the enterprises having same Key Management Personnel and / or their relatives as the reporting enterprise with whom the Company has entered into transactions during the year.

(Rs. In lakhs)

Purchases Sales Rent Paid

Job Charges

Paid

Repayment of Loans

Taken

Loan Received

Back

Deposits / Loans & Advances

as on 31.03.05

Shares Allotment /Application

Other Receivable

s as on 31.03.05

Alaska Industries 225.53 119.86 1.2 19.93 0 0 75 0 75Bluplast Corporation 0 0 0 0 0 0.8 100.8 0 100.8Bluplast Industries 0 5.59 0 0 12.67 0 0 0 0Bluplast Pentechs 0 0 0 0 0 1.88 0 0 0Bluplast Utility Products 0 0 0 4.5 0.45 0 0 1.85 0Bluplast Moulders Pvt.Ltd. 0 0 0 0 4.88 0 0 4.87 0Total 225.53 125.45 1.2 24.43 18 2.68 175.8 6.72 175.8

2. For the Previous year ended 31st March 2004


Directors

Remuneration Unsecured Loans

Taken Repayment of Loans Taken


Mr. Kamlesh L.Jain 1.2 0 0 7.99 Mr. Indermal P.Jain 1.2 1.1 0.14 6.08 Mrs. Rekha K. Jain 1.2 0 0 1.2 Mrs. Nayana I. Jain 1.2 0 0 1.2 Total 4.8 1.1 0.14 16.47

(b) Name of the enterprises having same Key Management Personnel and / or their relatives as the reporting enterprise with whom the Company has entered into transactions during the year.

(Rs. In lakhs)

Purchases Sales Job Charges

Paid

Unsecured

Loans Taken

Repayment of Loans

Taken

Loan Granted

Sundry Creditors

as on 31.03.04

Loans Payable as

on 31.03.04

Other Receivables as on 31.03.04

Alaska Industries 94.75 0 19.45 172.3 198.19 0 0.86 0 0Bluplast Corporation 0 0.1 0 0 1.24 0.8 0 0 0.8

68


Paid

Unsecured

Loans Taken

Repayment of Loans

Taken

Loan Granted

Sundry Creditors

as on 31.03.04

Loans Payable as

on 31.03.04

Other Receivables as on 31.03.04

Bluplast Industries 0 0 0 0.09 0 0 5.56 12.67 0Bluplast Pentechs 0 0 0 0 0 0 0 0 1.88Bluplast Utility Products 0 0.12 5.4 0.45 0 0 8.81 0.45 0Bluplast Moulders Pvt.Ltd. 0 0 0 0 5.08 0 0 4.88 0Total 94.75 0.22 24.85 172.84 204.51 0.8 15.23 18 2.68

3. For the Previous year ended 31st March 2003


Directors


Taken Loans Payable as

on 31.03.03 Mr. Kamlesh L.Jain 1.2 2.64 7.99 Mr. Indermal P.Jain 1.2 2.58 5.12 Mrs. Rekha K. Jain 1.2 0 1.2 Mrs. Nayana I. Jain 1.2 0 1.2 Total 4.8 5.22 15.51


(Rs. In lakhs)

Sales Job Charges

Paid



Sundry Debtors as

on 31.03.03

Sundry Creditors

as on 31.03.03

Loans Payable as

on 31.03.03

Other Receivables

as on 31.03.03

Alaska Industries 0 12.13 5.28 0 0 0.75 25.89 0Bluplast Corporation 5.73 0 0 0 0 0 0 1.24Bluplast Industries 0 0 8.25 0.1 0 5.56 12.58 0Bluplast Pentechs 0 0 0 0 0 0 0 1.88Bluplast Utility Products 19.62 3.56 0 0 0 3.41 0 0Bluplast Moulders Pvt.Ltd. 0 0 0 0.1 5.08 0 9.96 0Total 25.35 15.69 13.53 0.2 5.08 9.72 48.43 3.12 2. For the Previous year ended 31st March 2002 (a). Key Management Pesonnel

(Rs. In lakhs)

Directors


Taken Repayment of Loans Taken


Mr. Kamlesh L.Jain 1.2 1.83 0.14 5.35 Mr. Indermal P.Jain 1.2 1.58 0 2.54 Mrs. Rekha K. Jain 1.2 1.2 0 1.2 Mrs. Nayana I. Jain 1.2 1.2 0 1.2 Total 4.8 5.81 0.14 10.29

69


(Rs. In lakhs)


Paid


Repayment of Loans

Taken

Sundry Debtors as

on 31.03.02

Loans Payable

as on 31.03.02

Other Receivables

as on 31.03.02

Alaska Industries 108.31 0 10.25 35.38 21.6 0 20.61 0Bluplast Corporation 0 0.75 0 1.65 24.7 0.75 0 1.00Bluplast Industries 0 0 0 8.55 5.27 0 4.43 0Bluplast Pentechs 0 0 0 0 0 0 0 0Bluplast Utility Products 0 1.63 0 0 0 1.63 0 4.47Bluplast Moulders Pvt.Ltd. 0 0 0 1.77 4.35 0 10.06 0Total 108.31 2.38 10.25 47.35 55.92 2.38 35.1 5.47 2. For the Previous year ended 31st March 2001 (a). Key Management Pesonnel

(Rs. In lakhs)

Directors


Taken Loans Payable as

on 31.03.01 Mr. Kamlesh L.Jain 0.72 2.7 2.46 Mr. Indermal P.Jain 0.72 0 0 Mrs. Rekha K. Jain 0.72 0 0 Mrs. Nayana I. Jain 0.72 0 0 Total 2.88 2.7 2.46 (b) Name of the enterprises having same Key Management Personnel and / or their relatives as the reporting enterprise with whom the Company has entered into transactions during the year.

(Rs. In lakhs)

Purchases Sales Job Charges Paid


Repayment of Loans

Taken

Loans Payable as

on 31.03.01Alaska Industries 55.32 39.37 5.32 4.11 0 5.46 Bluplast Corporation 0 0 0 24.34 2.65 22.05 Bluplast Industries 0 0 0 0 6.96 1.15 Bluplast Pentechs 0 0 0 0 0 0 Bluplast Moulders Pvt.Ltd. 0 0 0 3.15 1.75 12.64 Total 55.32 39.37 5.32 31.6 11.36 41.3

70

DIVIDEND POLICY The declaration and payment of dividends will be recommended by the Board of Directors and approved by the shareholders of the Company, at their discretion, and will depend on a number of factors, including but not limited to the profits, capital requirements and overall financial condition. The Board may also from time to time pay interim dividend. The Summary of dividends declared by the Company during the last five financial years is as follows:-

F.Y. Ended March 31, 2001

March 31, 2002

March 31, 2003

March 31, 2004

March 31, 2005

Face value of Equity Share (Rs. Per share)

10 10 10 10 10

Dividend (Rs. In Lakhs)

3.23 7.12 8.68 13.01 18.68

Dividend Tax (Rs. In Lakhs)

0.33 - 1.11 1.70 2.62

Dividend per equity share (Rs.)

0.50 0.50 0.50 0.75 1.00

Dividend Rate (%) 5% 5% 5% 7.5% 10%

71

FINANCIAL INFORMATION

Auditors’ Report To, The Board of Directors, Bluplast Industries Limited, (Formerly known as Thermoplast Industries Private Limited), 113/114 Vivek Industrial Estate, Near Litolier, Uswala Road, Cama Estate, Goregaon (E), Mumbai - 400063. A. a) We have examined the annexed financial information of Bluplast Industries Limited (Formerly

known as Thermoplast Industries Private Limited), (“the Company”) for the five financial years ended March 31, 2001, 2002, 2003, 2004, 2005 and period ended September 30, 2005 being the last date to which the accounts of the Company have been made up and audited by us. The financial statements for the period ended September 30, 2005 is approved by the Board of Directors of the Company for the purpose of disclosure in the Offer Document being issued by the Company in connection with the Public Issue of Equity Shares in the Company (referred to as ‘the Issue’).

b) In accordance with the requirements of (i) of Part II of Schedule II to the Companies Act, 1956 (‘the Act’); (ii) The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000

(‘the SEBI Guidelines’) issued by the Securities and Exchange Board of India (‘SEBI’) on January 19, 2000 in pursuance to Section 11 of the Securities and Exchange Board of India Act, 1992 and related amendments thereto and

(iii) Our terms of reference with the Company Letter dated November 11, 2005 requesting us to carry

out work in connection with the Offer Document as aforesaid, We report that the restated assets and liabilities of the Company as at March 31, 2001, 2002, 2003, 2004, 2005 and period ended September 30, 2005 are as set out in Annexure 1 to this report after making such adjustments/restatements and regrouping as in our opinion are appropriate and are subject to the Significant Accounting Policies as appearing in Annexure 3 and Notes to the Statements appearing in Annexure 4 to this report. We report that the restated profits/losses of the Company for the financial years ended March 31, 2001, 2002, 2003, 2004, 2005 and period ended September 30, 2005 are as set out in Annexure 2 to this report. These profits/losses have been arrived at after charging all expenses including depreciation and after making such adjustments/restatements and regrouping as in our opinion are appropriate and are subject to the Significant Accounting Policies as appearing in Annexure 3 and Notes to the Statements appearing in Annexure 4 to this report. B. We have examined the following financial information relating to the Company proposed to be

included in the Offer Document, which has been approved by you and are annexed to this report:

I. Statement of Cash Flow as appearing in Annexure 5 to this report;

II. Statement of Operational Income as appearing in Annexure 6 to this report;

III. Statement of Other Income as appearing in Annexure 7 to this report;

IV. Accounting Ratios as appearing in Annexure 8 to this Report;

72

V. Statement of Unsecured Loans as appearing in Annexure 9 to this report;

VI. Statement of Debtors enclosed as Annexure 10 to this report;

VII. Details of loans and advances as appearing in Annexure 11 to this report;

VIII. Statement of Tax Shelters as appearing in Annexure 12 to this report;

IX. Statement of Dividends paid for the last five years as appearing in Annexure 13 to this report;

X. Capitalization Statement as at March 31, 2005 as appearing in Annexure 14 to this report;

XI. Statement of Secured Loans as appearing in Annexure 15 to this report.

XII. Details of Contingent Liabilities as appearing in Annexure 16 to this report;

XIII. Statement of Related Parties transactions enclosed as Annexure 17 to this report.

C. a) In our opinion the financial information of the Company as stated in Para A and B above read with

Significant Accounting Policies enclosed in Annexure 3 to this report, after making adjustments/restatements and regroupings as considered appropriate and subject to certain matters as stated in Notes to the Statements enclosed in Annexure IV to this report, has been prepared in accordance with Part II of Schedule II of the Act and the SEBI Guidelines.

b) This report is intended solely for your information and for inclusion in the Offer Document in

connection with the specific Public Offer of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent.

For Singrodia Goyal & Co. Chartered Accountants Suresh Murarka Partner Mem. No. F - 44739 Place : Mumbai Date : November 22, 2005

73

ANNEXURE - 1 ADJUSTED STATEMENT OF ASSETS AND LIABILITIES (AS RESTATED) Rs. In Lakhs

Particulars As at

30.09.2005 As at

31.03.2005 As at

31.3.2004 As at

31.3.2003 As at

31.3.2002 As at

31.3.2001 A. Fixed Assets: Gross Block 877.29 672.04 591.53 552.51 520.30 480.35 Less : Depreciation 360.70 325.70 262.82 202.39 137.60 66.77 Net Block 516.59 346.34 328.71 350.12 382.70 413.57 Capital Work in Progress 5.82 2.30 0.65 0.25 - - Total 522.40 348.64 329.36 350.37 382.70 413.57 B. Investments - - - - - - C. Current Assets, Loans &

Advances Inventories 790.49 707.14 470.93 330.48 235.06 177.38 Sundry Debtors 1,540.95 837.83 464.27 460.18 217.93 152.18 Cash and Bank Balances 129.60 71.82 57.56 54.57 33.71 18.92 Loans and Advances 192.99 233.95 144.50 106.05 58.44 64.76 Total 2,654.04 1,850.73 1,137.26 951.27 545.14 413.25 D. Liabilities& Provisions Share Application Money

received pending for allotment 84.00 65.00 - - - 21.00 Secured Loans 1150.50 800.37 502.75 587.25 427.46 416.69 Unsecured Loans 57.72 118.15 55.82 72.93 51.28 50.05 Current Liabilities and

Provisions 915.95 466.14 436.94 280.03 194.42 187.76 Deferred Tax Provisions 7.81 9.00 8.28 7.97 - - Total 2,215.97 1,458.65 1003.80 948.18 673.16 675.50 E.

Networth (A+B+C-D) 960.48 740.71 462.83 353.46 254.69 151.33 F. Represented by Share Capital 617.55 487.30 173.53 173.53 173.53 137.03 Reserves and Surplus 364.20 254.91 291.09 182.02 83.54 16.98

Less: Miscellaneous Expenses not written off/ adjusted 21.27 1.49 1.79 2.09 2.39 2.69

Net Worth 960.48 740.71 462.83 353.46 254.69 151.33

Note: With effect from July 01, 2005, the Company has takenover the manufacturing unit of Alaska Industries a partnership firm on a slump sale basis. Hence the figures for september '05 include the assets and liabilites of the said unit of Alaska Industries..

74

ANNEXURE - 2 STATEMENT OF ADJUSTED PROFIT & LOSS (AS RESTATED) (Rs. In lakhs)


30.09.2005 Year Ended 31.03.2005





INCOME

Operating Income 3075.78 4,194.57 3,882.83 3,397.26 2,296.52 789.71

Other Income 0.47 1.87 2.03 2.74 3.81 0.74 Increase (Decrease) in Stocks 82.23 152.72 93.39 58.85 45.88 115.26

Total 3158.49 4,349.16 3,978.25 3,458.85 2,346.21 905.71

EXPENDITURE

Raw Material Consumed 2604.50 3,524.29 3,170.86 2,720.56 1,845.87 637.74

Staff Costs 60.73 32.98 27.48 24.66 29.65 14.64 Other Manufacturing Expenses 161.18 310.31 371.29 348.46 211.89 82.79 Administrative, Selling and Other Expenses 99.15 148.92 140.72 97.00 65.06 23.90

Total 2,925.55 4,016.50 3,710.34 3,190.68 2,152.48 759.06 Profit Before Interest, Depreciation and Tax 232.93 332.66 267.91 268.16 193.73 146.64 Interest & Financial Charges 56.17 95.88 70.48 76.23 70.53 57.78

Depreciation 35.00 62.88 60.43 64.79 70.83 66.17

Net Profit before tax 141.76 173.90 137.00 127.14 52.37 22.69

Taxation

Current tax 34.00 14.60 11.10 12.50 4.00 1.90

Fringe Benefit Tax 0.62 - - - - -

Deferred tax (1.19) 0.71 0.31 0.85 - -

Net Profit after tax 108.33 158.59 125.59 113.79 48.37 20.79

Income Tax adjustment - - 0.06 (1.11) 0.49 0.24 Net Profit after tax adjustments 108.33 158.59 125.53 114.90 47.89 20.55

Dividend on Shares - 18.68 13.01 8.68 7.12 3.23

Tax on Dividend - 2.62 1.70 1.11 - 0.33

Net Profit 108.33 137.30 110.82 105.11 40.77 16.98

Note: (With effect from July 01, 2005, the Company has takenover the manufacturing unit of Alaska Industries a partnership firm on a slump sale basis. Hence the figures for september '05 include the assets and liabilites of the said unit of Alaska Industries.)

75

ANNEXURE- 3 SIGNIFICANT ACCOUNTING POLICIES: 1. Basis of Preparation of Financial Statements: a) The Financial Statements are prepared under the historical cost convention in accordance with the

generally accepted accounting principles and provisions of the Companies Act, 1956 and comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

b) Recognition of Income & Expenditure: The Company follows the accrual basis of accounting except in the following cases, where the

same are recorded on cash basis. i) Insurance Claim. ii) Excise Duty payable on uncleared finished goods. 2. Fixed Assets:

a) Fixed Assets are stated at cost net of Modvat less accumulated depreciation. All costs, including financing cost till commencement of commercial production, net charges on foreign exchange contract and adjustment arising from exchange rate variations attributable to the fixed assets are capitalised

b) Expenditure during construction period incurred on projects under implementation are treated as preoperative expenses pending allocation to the assets and are included under “Capital work in progress”.

3. Depreciation:

a) Depreciation on fixed assets is provided on the Written Down Value Method at the rates specified in Schedule XIV of the Companies Act, 1956.

b) Depreciation on additions of assets during the year/ period is provided on a pro-rata basis. 4. Inventories:

Inventories are valued as follows: a) Raw Materials, Packing Materials and Semi-Finished Goods are valued at cost.

b) Finished goods are valued at lower of cost or net realisable value. 5. Miscellaneous Expenditure:

i. Preliminary expenses incurred prior to 31st March, 2005 are amortised over a period of 10 years from the financial year in which it is incurred and Preliminary expenditure incurred after 31st March, 2005 are amortised over a period of 5 years from the financial in which it is incurred.

ii. IPO expenses incurred are adjusted with Securities Premium Account in the year of conclusion of IPO

6. Foreign Exchange Fluctuation:

a) The transactions in foreign currencies on revenue accounts are stated at the rate of exchange prevailing on the date of transaction.

b) The difference on account of fluctuation in the rate of exchange prevailing on the date of transaction and the date of realisation is treated as revenue.

c) Differences on translation of Current Assets and Current Liabilities remaining unsettled at the year-end are recognised in the Profit and Loss account (Except those relating to acquisition of fixed assets which are adjusted in the cost of the assets.)

d) The premium in respect of forward exchange contract is amortised over the life of contract. The net gain or loss on account of any exchange difference, cancellation or renewal of such forward exchange contracts are recognised in the profit & loss account in the reporting period

7. Contingent Liabilities: These are disclosed by way of Notes forming part of Accounts. Provision is made in the accounts in respect of those liabilities which are likely to materialise after the year end, till the finalisation of accounts and have material effect on the position stated in the Balance Sheet 8. Sales: Sales include excise duty, sales tax and adjusted for discounts.

76

9. Purchases: Purchases of raw material, packing material, accessories and store & spares are exclusive of excise duty (Modvat Credit) and adjusted for purchases return, discount, brokerage, commission, rebate and incentives 10. Deferred Taxation: Provision for tax is made by applying the applicable tax rates and the tax laws. Deferred tax assets and liabilities arising on account of timing differences, which are capable of reversal in one or more subsequent periods, are recognized using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred Tax Assets are not recognized unless there is sufficient assurance with respect to the reversal of the same in future years ANNEXURE-4 NOTES TO STATEMENT OF ASSETS & LIABILITIES AND PROFIT & LOSS ACCOUNT

1. Taxes on Income: In Terms of Accounting Standard on "Accounting for Taxes on Income" (AS 22) the company has recognised net Deffered Tax Liabilities/ Assets as on 31st March, 2003, 31st March, 2004, 31st March, 2005 and 30th September, 2005 as follows: (Rs. In lakhs) Deferred Tax Liability / Assets 30.09.2005 31.03.2005 31.03.2004 31.03.2003

On account of Depreciation 7.81 9.00 8.28 7.97 Deferred Tax Liability/(Assets) [Net] 7.81 9.00 8.28 7.97 2. Earning Per Share:

Particulars 30.09.2005 31.03.2005 31.03.2004 31.03.2003 31.03.2002 31.03.2001A) Weighted average number of equity shares of Rs. 10/- each

I) Number of shares at the beginning of the year

4873000 1735310 1735310 1735310 1370310 600310

II) Number of shares at the end of the year

6175500 4873000 1735310 1735310 1735310 1370310

III) Weighted average number of Equity Shares outstanding during the year

5356185 3493472 3470620 3470620 2840560 1246158

B) Net Profit after tax adjustments available for equity shareholders (In Lacs)

108.33

158.59

125.53

114.90

47.89

20.55

C) Basic and diluted earning per share (in rupees) {B/A (III)} annulised

4.04

4.54

3.62

3.31

1.69

1.65

Note :

1 The Company does not have any dilutive potential equity per shares. Consequently the basic and diluted profit / earning per share of the company remain the same. 2 Earning per share (EPS) is calculated after adjusting for 1735310 bonus shares issued, vide resolution passed at the extra ordinary general meeting held on 08.03.2005, with retrospective effect as provided in Accounting Standard (AS –20) – Earning Per Share, issued by the Institute of Chartered Accountant of India.

77

3. Authorised and Paid Up Capital At the date of signing of these accounts, the Company has an Authorised Capital of Rs. 20,00,00,000 (divided in 20,000,000 Equity Shares of Rs. 10 each) and Paid Up Capital of Rs. 6,17,55,000 (divided in 61,75,500 Equity Shares of Rs. 10 each) out of which a capital of Rs. 1,73,53,100 (17,35,310 Equity Shares of Rs. 10 each) were issued as fully paid up bonus shares by capitalisation of Reserves in the year 2004-05.

4. Change in Accounting Policy

The Company has not made any changes in its Accounting Policy in any of the reported periods/ years

5. Income Tax adjustments for earlier years Income Tax adjustments for earlier years include excess/ short provision for tax written back/ written off and are adjusted against the profit of the year to which they are related. Their effect on the Profit/ Reserve for the year/ period ended is as under:

Year/ Period ended on

Reserves lower/ (higher) by (Rs. In

Lakh)

Current Liabilities lower/ (higher) by (Rs. In Lakh)

31.3.2001 0.24 (0.24) 31.3.2002 0.48 (0.48) 31.3.2003 (1.75) 1.75 31.3.2004 0.06 (0.06) 31.3.2005 0.96 (0.96)

6. Change in status and name

Durimg the period the Company has changed its status from ‘Private Limited’ to ‘Public Limited’ by duly complying with the provisions of the Section 31 of the Companies Act, 1956 and the Registrar of Companies has issued certificate w.e.f 14th July, 2005 to this effect. The name of the Company now is “Bluplast Industries Ltd.”

7. Take over of business

The Company has taken over the manufacturing unit of Alaska Industries, a Partnership Firm in which the -directors are interested as partners, on a slump sale basis, whose business includes manufacturing of Thermoware plastic articles, w.e.f. 1st July, 2005 vide Business Transfer Agreement dated 1st July, 2005 on a consideration of Rs. 3.00 Crores.

In accordance with the said agreement: i) All immovable/ movable assets of the said unit of said firm stands transferred and vested in the Company as per

valuation report dated 1st July, 2005 of M/s Rajesh N. Agarwal & Co. Chartered Accountants. ii) Pending completion of the formalities of transfer of titles of assets and liabilities acquired, such assets and

liabilities are included in the books of the Company under the name of the said firm. iii) In view of the aforesaid agreement of acquisition w.e.f. 1st July, 2005 the figures of the current period are not

comparable with those of the previous period. iv) The secured loan as on 01.07.2005 of Rs. 191.86 lacs availed from Shamrao Vithal Co-op Bank by the said

manufacturing unit has been completely paid off by the Company on 31.10.2005. 8. Events occuring after Balance Sheet date i) Two of the directors of the Company Mrs. Rekha K. Jain and Mrs. Nayana I. Jain have resigned w.e.f. 6th

October, 2005 and Mr. Arvind M. Mehta was appointed as Director on the same date.

ii) The company has Further allotted : a) 7,47,250 Equity share at a premium of Rs. 10/-on 29.10.2005. b) 5,95,992 equity share at a premium of Rs. 15/- on 31.10.2005.

78

ANNEXURE- 5 STATEMENT OF CASH FLOWS FROM THE RESTATED FINANCIAL STATEMENTS

(Rs. In lakhs)


30.09.2005

Year Ended

31.03.2005

Year Ended

31.03.2004

Year Ended

31.03.2003

Year Ended

31.03.2002

Year Ended

31.03.2001

Cash Flow from Operating Activities: Net Profit before tax and before extraordinary items

141.76 173.90 137.00 127.14

52.37

22.69

Adjustments for :

Depreciation 35.00

62.88 60.43 64.79

70.83

66.17

Interest Expenses

56.17

95.88 70.48 76.23

70.53

57.78

Amortisation of Priliminary Expenses

2.26

0.30 0.30 0.30

0.30

0.30

Interest Income

(0.47)

(1.87)

(2.03)

(2.74)

(1.05)

(0.74)

Direct Tax Paid

(2.30)

(17.14)

(8.94)

(6.08)

(0.94)

(2.16) Operating profit before working capital changes

232.42 314.90 257.23 259.00

192.03

144.04

Adjustments for :

Trade and other receivables

(703.12)

(373.56)

(4.09) (242.25)

(65.75)

(152.18)

Inventories

(83.35)

(236.20) (140.45)

(95.42)

(57.68)

(176.82)

Trade Payables

416.15

30.72 139.08 78.58

(1.14)

155.54

Loans and Advances

43.25

(95.90)

(29.51)

(47.43)

7.27

43.33

Net Cash from operating activities

(94.66)

(360.05) 222.26

(47.51)

74.74

13.91

Cash Flow from Investing Activities:

Purchase of fixed assets

(205.25)

(80.51)

(39.02)

(32.21)

(39.96)

(238.40)

Capital Work in Progress

(3.52)

(1.65)

(0.40)

(0.25)

- -

Interest Received

0.47

1.87 2.03 2.74

1.05

0.74

Net Cash used in investment activities

(208.29)

(80.28)

(37.39)

(29.72)

(38.91)

(237.66)

(Rs. In lakhs)

79


30.09.2005

Year Ended

31.03.2005

Year Ended

31.03.2004

Year Ended

31.03.2003

Year Ended

31.03.2002

Year Ended

31.03.2001

Cash Flow from Financing Activities: Share Application Money received, pending for allotment

19.00

65.00 - -

-

21.00

Proceeds from issuing shares

130.25 140.24 - -

41.05

50.54

Public issue expenses

(11.48) - - -

- -

Priliminary Expenditured incurred

(10.56) - - -

- -

Proceeds from borrowings

289.70 359.94 (101.61) 181.44

12.00

225.07

Financing Charges

(56.17)

(95.88)

(70.48)

(76.23)

(70.53)

(57.78)

Dividend Paid including tax thereon

-

(14.72)

(9.79)

(7.12)

(3.56) - Net Cash used from financing activities

360.74 454.59 (181.87) 98.09

(21.04)

238.82

Net increase in cash and cash equivalents

57.79

14.26 2.99 20.85

14.79

15.07

Cash and Cash equivalents (Opening)

71.82

57.56 54.57 33.71

18.92

3.85

Cash and Cash equivalents (Closing)

129.60

71.82 57.56 54.57

33.71

18.92 Note : 1. The above cash flow statement has been prepared under the "indirect Method" as set out in the Accounting Standard - 3 on cash flow statement issued by the Institute of Chartered Accountants of India.

2. Cash and cash equivalent at the end of the year consist of cash in hand and balances with banks and are net of short term loans and advances from banks as follows:

(Rs. In lakhs)

Particulars As at As at As at As at As at As at

30.09.2005 31.03.2005 31.03.2004 31.03.2003 31.03.2002 31.03.2001

Cash in hand

33.66

32.40 20.82 19.28

13.40

7.72

Balances with Bank

95.94

39.41 36.74 35.28

20.32

11.20

Total

129.60

71.82 57.56 54.57

33.71

18.92

80

ANNEXURE - 6 DETAILS OF OPERATIONAL INCOME

(Rs. In lakhs) Particulars 30.09.2005 31.03.2005 31.03.2004 31.03.2003 31.03.2002 31.03.2001

Sales

3,255.45

4,610.22

4,347.31

3,653.55

2,511.95

849.95

Sales of Wastages

1.83

8.59

5.84

6.90

3.98

-

Export Incentive &

Others

4.44

8.94

28.59

30.48

4.08

5.06

Foreign Exchange Fluctuation (Net)

(0.08)

1.16

(4.96)

(0.17)

0.11

0.41

Job Work Income

-

-

-

-

-

5.33

3,261.64

4,628.91

4,376.78

3,690.76

2,520.12

860.76

Less: Excise duty &

Education Cess

185.85

434.34

493.95

293.50

223.61

71.05

Total

3,075.78

4,194.57

3,882.83

3,397.26

2,296.52

789.71 ANNEXURE - 7 DETAILS OF OTHER INCOME (Rs. In lakhs) Particulars 30.09.2005 31.03.2005 31.03.2004 31.03.2003 31.03.2002 31.03.2001 Remarks

Interest Received

0.47

1.87

2.03

2.74

1.05

0.74 Recurring

Insurance Claim Received

-

-

-

-

2.76

-

Non-recurring

Total

0.47

1.87

2.03

2.74

3.81

0.74 ANNEUXRE - 8 MANDATORY ACCOUNTING RATIOS Particulars 30.09.2005 31.03.2005 31.03.2004 31.03.2003 31.03.2002 31.03.2001

Earning Per Share (EPS) (Rs.) [a/b]

4.04

4.54

3.62

3.31

1.69

1.65

Cash Earning Per Share (Rs.) [d/b]

5.39

6.37

5.38

5.21

4.19

6.98

Return on Net Worth (%) [a/e %] 22.56% 21.41% 27.12% 32.51% 18.80% 13.58%

Net Asset Value Per Share (Rs.) [f/c]

15.55

15.20

26.67

20.37

14.68

11.04

81

Notes : (Rs. In lakhs) Particulars 30.09.2005 31.03.2005 31.03.2004 31.03.2003 31.03.2002 31.03.2001

1

Net Profit after tax adjustments [a]

108.33

158.59

125.53

114.90

47.89

20.55

Weighted Average No. of Equity Shares [b]

5,356,185

3,493,472

3,470,620

3,470,620

2,840,560

1,246,158

No. of Equity Shares [c]

6,175,500

4,873,000

1,735,310

1,735,310

1,735,310

1,370,310

Cash Earning [d]

144.40

222.48

186.57

180.84

119.01

87.01

Net Worth [e]

960.48

740.71

462.83

353.46

254.69

151.33

Net Asset [f]

960.48

740.71

462.83

353.46

254.69

151.33

2 Cash Earning = Net Profit after tax adjustments add Depreciation, Preliminary Expenses written off and Deferred Tax Liability

Net Worth = Equity Share Capital plus Reserves & Surplus less Miscellaneous Expenditure to the extent not written off

Net Asset = Equity Share Capital plus Reserves & Surplus less Miscellaneous Expenditure to the extent not written off

3 The Company does not have any dilutive potential equity per shares. Consequently the basic and diluted profit / earning per share of the company remain the same. Earning per share (EPS) is calculated after adjusting for 1735310 bonus shares issued, vide resolution passed at the extra ordinary general meeting held on 08.03.2005, with retrospective effect as provided in Accounting Standard (AS –20) – Earning Per Share, issued by the Institute of Chartered Accountant of India.

** The ratio are annulised except net Asset volue per share

ANNEXURE - 9 STATEMENT OF UNSECURED LOANS:


Trade Deposits (Note 1)

7.00

13.00

17.00

-

-

-

From Directors & Share Holders (Note 2)

22.27

70.05

33.94

62.98

41.23

37.42

Inter Corporate Deposits (Note 3)

-

-

4.88

9.96

10.06

12.64

Unsecured Loans from Banks

28.45

35.09

-

-

-

-

Total

57.72

118.15

55.82

72.93

51.28

50.05

82

Notes:

1. Interest free amount collected from C & F Agents as Security Deposit in respect of the Agencies given to them. The same is repayable as and when the Agency is terminated/cancelled after adjusting the amount receivable by the Company towards supply of goods.

2. Interest free loans taken are 'on call', there are no stipulation regarding their repayments.

3. Inter Corporate Deposits are interest free and shall be repayable on call basis. ANNEXURE - 10 AGE-WISE ANALYSIS OF SUNDRY DEBTORS

(Rs. In lakhs)

Particulars

Age wise Break-up 30.09.2005 31.03.2005 31.03.2004 31.03.2003 31.03.2002 31.03.2001

Less than six months

1,115

646.14

324.69

383.06

195.97

140.33

More than six months

426.07

191.69

139.58

77.12

21.97

11.85

Total

1,540.95

837.83

464.27

460.18

217.93

152.18

The above figures includes Rs. 5.08 lakhs and Rs. 2.38 lakhs due from companies in which directors are interested for the year ended 31.03.2003 and 31.03.2002 respectively.

ANNEXURE - 11 DETAILS OF LOANS AND ADVANCES


Advance recoverable in cash or in kind

32.22

190.34

17.26

38.20

34.28

21.22

Other Current Assets

51.34

37.53

114.78

64.45

21.11

41.58

Deposits

101.79

0.74

0.66

0.54

0.37

0.24

Advance tax and TDS

7.64

5.34

11.80

2.86

2.68

1.73

Total

192.99

233.95

144.50

106.05

58.44

64.76 Advance recoverable in cash or in kind or for value to be received:

i) for the year ended on 31.03.2005 and period ended 30.09.2005 includes deposit of Rs. 100.80 lacs for exclusive user rights of brand name “BLUPLAST” made to a firm “Bluplast Corporation” in which Directors are interested.

ii) includes Rs. 75.00 lacs, 2.68 lacs, 3.12 lacs and 5.47 lacs due from companies in which directors are interested for the year ended 31.03.2005, 31.03.2004, 31.03.2003 and 31.03.2002 respectively.

83

ANNEXURE-12 TAX SHELTER STATEMENT (Rs. In lakhs)

Year Ended March 31 Particulars 2005 2004 2003 2002 2001

Tax Rate 35% 35% 35% 35% 35%Surcharge 2.5% 2.5% 5% 2% 13%Educational Cess 2% - - - - Net Profit before Tax 173.90 137.00 127.14 52.37 22.69 Tax at Notional Rate 63.64 49.15 46.73 18.70 8.97 Adjustments :

Difference between Tax Depreciation and Book Depreciation 5.20 1.24 3.41 4.83 21.84 Deduction for Backward Area u/s 80IB 160.63 106.87 92.96 46.94 - Deduction for Export Profits u/s 80HHC - 2.39 2.90 - 1.31 Other Adjustments (0.86) 0.30 0.30 0.60 (0.08)Net Adjustments 164.97 110.80 99.57 52.37 23.07 Tax Saving thereon 60.37 39.75 36.59 18.70 9.13 Total Taxation 3.27 9.40 10.14 0.00 (0.15)Profit as per Income Tax Returns 8.93 26.20 27.58 0.00 (0.38)Brought Forward Losses Adjusted - - - - - Taxable Income/ (Loss) 8.93 26.20 27.58 0.00 (0.38)Taxable Income as per MAT 173.90 137.00 127.14 52.37 22.69 Tax as per Income Tax Returns 13.64 9.92 10.13 4.01 1.81

ANNEXURE-13 STATEMENT OF DIVIDENDS PAID FOR THE LAST FIVE YEARS

(Rs. In lakhs) YEAR ENDED

Equity Share Capital Dividend Amount Tax on Dividend Dividend %

31.03.2005 487.30 18.68 2.62 10.00 31.03.2004 173.53 13.01 1.70 7.50 31.03.2003 173.53 8.68 1.11 5.00 31.03.2002 173.53 7.12 - 5.00 31.03.2001 137.03 3.23 0.33 5.00

84

ANNEXURE-14 CAPITALISATION STATEMENT (Rs. In lakhs) Pre-offer as at

30/09/2005 Post-offer

Shareholders’ Funds: ***

-Share Capital 617.55 -

-Reserves 364.20 -

Less: Miscellaneous Expenditure to the extent not written off

21.27 -

Total Shareholders funds (A) 960.48 -

Borrowings:

Secured

- Short Term Debt 1,075.08 - - Long Term Debt 75.42 - Unsecured Debts 57.72 -

Total Debt (B) 1,208.22 -

Debt/Equity Ratio (B/A) 1.26 -

ANNEUXRE - 15 DETAILS OF SECURED LOANS OUTSTANDING AS ON SEPTEMBER 30, 2005

(Rs. in lakhs) Particulars of Loan

Bank Nature of Loan

Sanctioned Amount

Amount Outstanding

Rate of Interest P.A. (%)

Repayment ofTerms (period)

Securities Offered

1. Corporate Loans / Term Loans from Banks

UTI Bank Ltd.

Term Loan I 60 23.72 9.75% Upto December 2005. Equal monthly instalments of Rs. 6 lac (approx). Interest to be serviced separately.

Exclusive charge on assets created out of the existing term loan and corporate loan which were taken over. Exclusive charge on assets created out of the additional corporate loan

Corporate Loan I

39.00 20.84 9.75% Upto March 2006. Equal monthly instalments of Rs. 3 lac (approx.) Interest to be serviced separately.


85

Particulars of Loan

Bank Nature of Loan

Sanctioned Amount

Amount Outstanding

Rate of Interest P.A. (%)

Repayment ofTerms (period)

Securities Offered

Corporate Loan II

50.00 30.00 9.75% 15 months. Equal monthly instalments of Rs. 3.33 lac. Interest to be serviced separately.


2. Working Capital Facility

UTI Bank Ltd.

WCDL/FCL 800 (520) 520.00 9.75% 12 months, payable on demand.

Exclusive hypothecation on moveable assets including book debts both present & future.

Cash Credit 800 (280) 363.22 10.00% 12 months, payable on demand.

Exclusive hypothecation on moveable assets including book debts both present & future.

SVC Bank Ltd.

Cash Credit - 191.86 12.50% See note(i) below

Exclusive hypothecation on moveable assets including stocks, book debts both present & future & by first charge on all immovable properties of the firm including Plant & Machinery.

3. Car Loan HDFC

Bank Hire purchase and installment

5.62 0.86 8.36% Monthly installments of Rs. 17,350

Car itself

Note: i) The secured loan as on 01.07.2005 of Rs. 191.86 lacs availed from Shamrao Vithal Co-op Bank by the Alaska Industries has been completely paid off by the Company on 31.10.2005 ii) The Santioned amount of Working Capital Facility from UTI Bank includes sublimits of: Rs. 520 lacs for working capital demand loan(WCDL) and Rs. 280 lacs for cash credit facility.

86

Details of Secured Loans (Rs. in lakhs) Particulars of Loan

Period Ended

30.09.2005

Year Ended

31.03.2005

Year Ended

31.03.2004

Year Ended

31.03.2003

Year Ended

31.03.2002

Year Ended

31.03.2001

1. Corporate Loans / Term Loans from Banks

From Banks UTI Bank Ltd. 74.56 130.09 - - - - State Bank of India - - 171.36 264.72 224.72 284.72 HDFC Bank - - - - - - Sub Total 74.56 130.09 171.36 264.72 224.72 284.72 2. Working Capital/ Cash Credit Facility

UTI Bank Ltd. 883.22 644.96 - - - - State Bank of India - 23.44 327.53 322.52 201.52 128.82 SVC Bank Ltd. 191.86 - - - - - HDFC Bank - - - - - - Sub Total 1075.08 668.4 327.53 322.52 201.52 128.82 3. Demand Loan American Express Bank

- - - - 1.22 3.14

Sub Total - - - - 1.22 3.14 4. Car Loan HDFC Bank 0.86 1.88 3.86 - - - Sub Total 0.86 1.88 3.86 - - -

TOTAL SECURED LOANS

1150.50 800.37 502.75 587.25 427.46 416.69

ANNEUXRE - 16 DETAILS OF CONTINGENT LIABILITIES (Rs. In lakhs) Particulars 30.09.2005 31.03.2005 31.03.2004 31.03.2003 31.03.2002 31.03.2001

Bank Guarantee 33.05 33.05 33.05 33.05 33.05 33.05

Capital Contract remaining to be executed

14.14 17.82 3.26 7.71 13.32 -

Claim against the Company not acknowledged as Debts

- - 11.53 11.53 11.53 11.53

Deposit remaining to be paid for exclusive use of Licensed rights

49.20 49.20 - - - -

Export obligation under EPCG license

- 0.35 28.05 56.11 58.58 68.92

Total 96.39 100.42 75.90 108.41 116.48 113.50 Note : (1) Company has taken license under Export Promotion Capital Goods Scheme (EPCG) for import of capital goods on zero percent custom duty. Under the EPCG the Company needs to fulfill certain export obligations, failing which, it is liable for payment of custom duty.

87

ANNEXURE - 17 RELATED PARTY TRANSACTIONS For the period ended 30st September, 2005 (a). Key Management Pesonnel

(Rs. In lakhs)




Loans Payable


Mr. Kamlesh L.Jain 1.35 0 0 6.74 90.25 Mr. Indermal P.Jain 1.35 1.03 3.00 0.17 25 Mrs. Rekha K. Jain 0.6 2.6 0.6 3.2 1 Mrs. Nayana I. Jain 0.6 0.6 0.6 1.2 14 Total 3.9 4.23 4.2 11.31 130.25

(b). Name of the enterprises having same Key Management Personnel and / or their relatives as the reporting enterprise with whom the Company has entered into transactions during the year.

(Rs. In lakhs)

Purchases Other

Liability Rent Paid

Job Charges Paid

Other Receivables

Purchase of the undertaking

Alaska Industries 122.86 158.64 0.3 3.87 0 300.00Bluplast Corporation 0 0 0 0 100.8 0 Bluplast Industries 0 0 0 0 0 0 Bluplast Pentechs 0 1.14 0 0 0 0Bluplast Utility Products 0 1.38 0 0 0 0Bluplast Moulders Pvt.Ltd. 0 0 0 0 0 0Total 122.86 161.16 0.3 3.87 100.8 300

For the Previous year ended 31st March, 2005 (a). Key Management Pesonnel

(Rs. In lakhs)




Loans Payable

Mr. Kamlesh L.Jain 1.5 2 175.19 5.99Mr. Indermal P.Jain 1.5 3.94 131.84 2.14Mrs. Rekha K. Jain 1.5 0 0.01 1.2Mrs. Nayana I. Jain 1.5 0 0.006 1.2Total 6 5.94 307.046 10.53

88

(b). Name of the enterprises having same Key Management Personnel and / or their relatives as the reporting enterprise with whom the Company has entered into transactions during the year.

(Rs. In lakhs)

PurchasesSales Rent Paid

Job Charges Paid

Repayment of LoansTaken

Loan Received Back

Deposits /Loans &Advances

Shares Allotment /Application

Other Receivables

Alaska Industries 225.53 119.86 1.2 19.93 0 0 75 0 75Bluplast Corporation 0 0 0 0 0 0.8 100.8 0 100.8Bluplast Industries 0 5.59 0 0 12.67 0 0 0 0Bluplast Pentechs 0 0 0 0 0 1.88 0 0 0Bluplast Utility Products 0 0 0 4.5 0.45 0 0 1.85 0Bluplast Moulders Pvt.Ltd. 0 0 0 0 4.88 0 0 4.87 0Total 225.53 125.45 1.2 24.43 18 2.68 175.8 6.72 175.8

For the Previous year ended 31st March 2004 (a). Key Management Pesonnel

(Rs. In lakhs)




Loans Payable

Mr. Kamlesh L.Jain 1.2 0 0 7.99 Mr. Indermal P.Jain 1.2 1.1 0.14 6.08 Mrs. Rekha K. Jain 1.2 0 0 1.2 Mrs. Nayana I. Jain 1.2 0 0 1.2 Total 4.8 1.1 0.14 16.47


(Rs. In lakhs)


Paid


Repaymet of Loan

Taken

Loan Granted Sundry

CreditorsLoans

Payable Other

ReceivablesAlaska Industries 94.75 0 19.45 172.3

198.19 0 0.86 0 0

Bluplast Corporation 0 0.1 0 0 1.24 0.8 0 0 0.8 Bluplast Industries 0 0 0 0.09 0 0 5.56 12.67 0 Bluplast Pentechs 0 0 0 0 0 0 0 0 1.88

89


Paid


Repaymet of Loan

Taken

Loan Granted Sundry

CreditorsLoans

Payable Other

ReceivablesBluplast Utility Products 0 0.12 5.4 0.45 0 0 8.81 0.45 0 Bluplast Moulders Pvt.Ltd. 0 0 0 0 5.08 0 0 4.88 0 Total

94.75 0.22 24.85 172.84 204.51 0.8 15.23 18 2.68 For the Previous year ended 31st March, 2003 (a). Key Management Pesonnel

(Rs. In lakhs)

Directors

Remuneration Unsecured

Loans Taken Loans Payable

Mr. Kamlesh L.Jain 1.2 2.64 7.99 Mr. Indermal P.Jain 1.2 2.58 5.12 Mrs. Rekha K. Jain 1.2 0 1.2 Mrs. Nayana I. Jain 1.2 0 1.2 Total 4.8 5.22 15.51


(Rs. In lakhs) Sales Job

Charges Paid



Sundry Debtors

Sundry Creditors

Loans Payable

Other Receivables

Alaska Industries 0 12.13 5.28 0 0 0.75 25.89 0

Bluplast Corporation 5.73 0 0 0 0 0 0 1.24

Bluplast Industries 0 0 8.25 0.1 0 5.56 12.58 0

Bluplast Pentechs 0 0 0 0 0 0 0 1.88

Bluplast Utility Products 19.62 3.56 0 0 0 3.41 0 0Bluplast Moulders Pvt.Ltd. 0 0 0 0.1 5.08 0 9.96 0Total

25.35 15.69 13.53 0.2 5.08 9.72 48.43 3.12

90


(Rs. In lakhs)

Directors

Remuneration Unsecured

Loans Taken Repayment of Loans Taken

Loans Payable

Mr. Kamlesh L.Jain 1.2 1.83 0.14 5.35 Mr. Indermal P.Jain 1.2 1.58 0 2.54 Mrs. Rekha K. Jain 1.2 1.2 0 1.2 Mrs. Nayana I. Jain 1.2 1.2 0 1.2 Total 4.8 5.81 0.14 10.29


(Rs. In lakhs)

Purchases Sales Job

Charges Paid


Repayment of

Loans Taken

Sundry Debtors

Loans Payable

Other Receivab

les

Alaska Industries 108.31 0 10.25 35.38 21.6 0 20.61 0 Bluplast Corporation 0 0.75 0 1.65 24.7 0.75 0 1.00 Bluplast Industries 0 0 0 8.55 5.27 0 4.43 0

(Rs. In lakhs)

Purchases Sales Job

Charges Paid


Repayment of

Loans Taken

Sundry Debtors

Loans Payable

Other Receivab

les

Bluplast Pentechs 0 0 0 0 0 0 0 0 Bluplast Utility Products 0 1.63 0 0 0 1.63 0 4.47 Bluplast Moulders Pvt.Ltd. 0 0 0 1.77 4.35 0 10.06 0 Total

108.31 2.38 10.25 47.35 55.92 2.38 35.1 5.47

91


(Rs. In lakhs)

Directors


Taken Loans

Payable Mr. Kamlesh L.Jain

0.72 2.7 2.46 Mr. Indermal P.Jain

0.72 0 0 Mrs. Rekha K. Jain

0.72 0 0 Mrs. Nayana I. Jain

0.72 0 0 Total

2.88 2.7 2.46 (b) Name of the enterprises having same Key Management Personnel and / or their relatives as the reporting enterprise with whom the Company has entered into transactions during the year.

(Rs. In lakhs)


Paid


Repayment of Loans

Taken

Loans Payable

Alaska Industries 55.32 39.37 5.32 4.11 0 5.46

Bluplast Corporation 0 0 0 24.34 2.65 22.05

Bluplast Industries 0 0 0 0 6.96 1.15

Bluplast Pentechs 0 0 0 0 0 0

Bluplast Moulders Pvt.Ltd. 0 0 0 3.15 1.75 12.64Total

55.32 39.37 5.32 31.6 11.36 41.3

92

MANAGEMENT DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF THE OPERATIONS Investors should read the following discussion of the financial condition and result of operation together with the audited financial statement of the Company, for the period ended September, 2005 and the financial year 2005, 2004, 2003, 2002 and 2001 including the notes thereto and the report thereon, which appear in the section titled Financial Information of the Company beginning on the page no. 71 of this draft prospectus. The financial statements have been prepared in accordance with the Indian GAAP, the companies Act, and the SEBI Guidelines and restated as described in the report of our statutory auditor M/s Singrodia Goyal & Co, Chartered Accountants dated September 22, 2005. The financial year ends on 31st March of each year, so all references to a particular financial year are to the 12 month period ended 31st March of that year. Overview: The Company was incorporated in 1999 in the name of Thermoplast Industries Private Limited, to manufacture Thermoware, Household and other Plastic utility items. The Company set up its manufacturing unit at Daman (in Union Territory of Daman and Diu) with an initial installed capacity of 1,940 MTPA and commercial production started in May 2000. To cater to the growing demand for the Company’s product, the installed capacity was increased from 1,940 MTPA to 5,400 MTPA by the financial year 2005-06. The Company has been selling its products under the brand name “Bluplast” and in order to synergies the brand "Bluplast", with that of the Company, the name of the Company was changed to Bluplast Industries Private Limited on March 11, 2005. Subsequently, the Company was converted in to a public limited company and its name was changed to Bluplast Industries Limited on July 11, 2005. The Company has been promoted by first generation entrepreneurs Mr. Kamlesh Lalchand Jain and his brother Mr. Inder Mal Pannalal Jain. The Promoters of the Company have been operating in the plastic molded items industry for about two decades and the first entity was promoted by them in the year 1985 in the name of M/s. Bluplast Corporation with an objective to undertake contract manufacturing and trading of plastic products such as soap cases, plastic mugs, cups, trays, water bottles etc The Company manufactures about varieties of household products like casserole, vacuum flasks, lunch boxes, water bottles / jugs, pickle jars, trays, pet bottles, tea coasters, buckets, tumbler, bath stools, bath tubs, baskets, dust-bins etc. Over the years, the Company has developed a network of 98 Distributors, and countrywide network of Dealers / Sub-dealers and Retailers to maintain the National Presence of Brand Name ‘Bluplast’. Factors affecting Results of our Operations The following are the main factors affecting the results of our operations: Presence of large number of un organized players in the unorganised sector: In the Plastic Industry there are a number of unorganized sector producing the similar products at cheaper cost. Though, we have quality products we may face competition from low cost products in the market. Foreign Exchange Fluctuations: Export market of our product constitute around 3% of our total turnover. Their prices are dependent upon, and may fluctuate with, foreign exchange prices. Any adverse change in currency exchange rates may decrease the revenue from the export.

93

Key personnels: We have experienced key personnels in our organization responsible for various activities and the performance of the company largely dependent on their continuation and performance. Our performance may be affected in their absence. Increase in cost of Raw Material: Any abrupt or large scale in the prices of the raw materials can adversely affect our profits. Any delay or availability of required material or any other item of production in appropriate quantity and right quality at the right time may affect the results of our operation. Discussion on Results of Operations The Company’s Track Record: The Company’s Turnover has grown from Rs. 2,296.52 Lakhs in FY-2001-02 to Rs. 4,194.57 in FY 2004-05 and the net profit has increased from Rs.41.25 lakhs to Rs.138.25 lakhs in the corresponding period. Thus the Company due to its continuous focus on marketing strategy, has increased its turnover by 83% while the net profit increased by 235%. Taxation The Company’s manufacturing unit is situated at Daman which is a notified backward area as per section 80I (B) of Income Tax Act, 1962 therefore the Company has enjoyed a tax holiday on its profits up to end of FY 2004-05. In view of this, the Company has provided only Minimum Alternate Tax (MAT) on its profits. Comparison of the Financial Year ended March 31, 2005 with Financial Year ended March 31, 2004 Turnover & Net Profit In FY-2004-05 the company achieved a turnover of Rs. 4,194.57 lakhs as against Rs. 3,882.83 lakhs for the FY’s ended 2003-2004 and the net profit too has increased to Rs. 137.30 lakhs from Rs.110.82 lakhs in the corresponding period. This was mainly on account of continuos focus on marketing strategy. Raw Material Consumption The raw material consumption has increased from Rs.3170.86 lakhs in FY-2003-04 to Rs.3524.29 lakhs in FY-2004-05 showing an increase of 11.15% due to increase in activity level of the business of the company. Manufacturing Expenses The manufacturing expenses have decreased from Rs. 371.29 lakhs in FY 2004 to Rs. 310.31 lakhs in FY 2005 showing a decrease of 16.42% due to our efficient management, reduction in packing material cost as well as decrease in the out sourcing labour job works and other manufacturing Expenses. Administrative, Selling and Other Expenses In absolute terms the above expenses has grown by only 5.83% due to increase in activity level of the business of the Company,expenses incurred on establishment of two depot at Chandigarh and Gahizabad and in increase of insurance premium due to key man insurance policy taken by the company and further due to the increase in rates and taxes. Interest on Financial Charges Interest and financial charges comprise of interest payments of banks and financial institutions, others and bank charges. In absolute terms interest and financial charges have grown by 36.04% due to increase in banking exposure compare to last year and also on borrowal of unsecured loan from out siders.

94

Comparison of the Financial Year ended March 31, 2004 with Financial Year ended March 31,2003 Turnover & Net Profit In FY-2003-04 the companies turnover was Rs.3882.83 lakhs as against Rs. 3397.26 lakhs for the FY ended 2002-2003 while the net profit has increased to Rs.110.82 lakhs from Rs. 105.11 lakhs in the corresponding period. Thus the Company due to its continues focus on marketing strategy, it has increased its turnover over 14% while the net profit increased over 5.43%. Raw Material Consumption The raw material consumption has increased from Rs.2720.56 lakhs in FY-2002-03 to Rs.3170.86 lakhs in FY-2003-04 showing and increase of 16.55% due to increase in manufacturing activities of the Company. Manufacturing Expenses The manufacturing expenses have increased from Rs.348.46 lakhs in FY 2002-03 to Rs.371.29 lakhs in FY 2003-04 due to increased turnover. Administrative, Selling and Other Expenses In absolute terms the above expenses has grown by only 45.07% due to increase in activity level of the business of the Company, sales promotion and exploring the new market. Interest on Financial Charges Interest and financial charges comprise of interest payments of banks and financial institutions, others and bank charges. The interest and financial charges have decreased from Rs.76.23 lakhs in FY-2002-03 to Rs.70.48 lakhs in FY-2003-04 because of reduction of term loan and interest rate on borrowing. Comparison of the Financial Year ended March 31,2003 with Financial Year ended March 31,2002 Turnover & Net Profit In FY-2002-03 the companies turnover was Rs. 3397.26 lakhs as against Rs. 2296.52 lakhs for the FY ended 31st March 2002 and while the net profit has increased to Rs. 105.11 lakhs from Rs.40.77 lakhs in the corresponding period. The increased in turnover was achieved, as the company was able to outsource it production from others. Earlier due to production constraint the turnover of the company was affectd. Also during the FY 2003 their was a substantial increase in exports. Raw Material Consumption The raw material consumption has increased from Rs.1845.87 lakhs in FY-2001-02 to Rs.2720.56 lakhs in FY-2002-03 showing an increase of 47.38% due to increase in activity level of business. Manufacturing Expenses The manufacturing expenses have increased from Rs. 211.89 lakhs in FY 2001-02 to Rs. 348.46 lakhs in FY 2002-03 due to increase in activity level of business of the company. Administrative, Selling and Other Expenses In absolute terms the above expenses has grown by only 49.1% due to increase in activity level of the business of the Company, sales promotion and exploring the new market. Interest on Financial Charges Interest and financial charges comprise of interest payments of banks and financial institutions, others and bank charges. The interest and financial charges have increased from Rs.70.53 lakhs in FY-2001-02 to Rs.76.23 lakhs in FY-2002-03 because of increase in secured loan. Other Matters Unusual and Infrequent events of transactions There have been no unusual or infrequent transactions affecting our business.

95

Significant economic changes that materially affected or likely to affect income from continuing operation: There are no circumstances which have arisen since the date of last financial statement until the date of filling of Draft Prospectus with SEBI, which materially and adversely affect or likely to affect the turnover or the profitability of the Company or value of its assets, or its ability to pay its liability with in next 12 months. Future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known We have successfully developed about 200 varieties of plastic house hold and other utility items and we continue to improve on the new developed items and operation of the Company. Other than as described in this Draft Prospectus, to our knowledge, there are no known factors, which will affect the future relationship between cost and income, or which will have material impact on the operations and finances of our Company. The extent to which the business is seasonal The business of our company is not seasonal. Any significant dependence on a single or few suppliers or customers We are not significantly dependent on any single or few suppliers or customers. Known Trends or Uncertainties Other than as described in this Draft Prospectus, to our knowledge, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on revenue or income of our Company from continuing operations. New Products or Business Segments Other than as described in the section titled “Objects of the Issue” and “our Business” of this Draft Prospectus, we do not intend to produce or market any other products.

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DETAILS OF OUTSTANDING LITIGATION Except as described below, there are no outstanding litigations, suits or criminal or civil prosecutions or proceedings initiated for offence(s) (irrespective of whether specified in paragraph (I) of Part 1 of Schedule XIII of the Companies Act) or litigation for tax liabilities against the Company, its directors, Promoters or companies promoted by its promoters that would have a material impact on the business of the Company and there are no defaults, non payment or statutory dues, institutional/bank dues and dues payable to holders of debentures, bonds and fixed deposits and arrears of preference shares that would have a material adverse effect on the business other than unclaimed liabilities by the Company or its directors, its Promoters or companies promoted by its promoters. Further, the directors, promoters or companies promoted by the promoters have not been declared as willful defaulter by Reserve Bank of India, and also have not been debarred from dealing in securities and/or accessing the capital markets by SEBI and no disciplinary action has been taken against them by SEBI or any stock exchanges. Claims against the Promoter:

A criminal case being 1606 of 2004 has been filed in the Court at Palghar, District. Thane under Section 138 of the Negotiable Instruments Act, 1882 against M/s Plusmore Marketing Pvt. Ltd. and its directors on account of dishonour of certain cheques aggregating Rs.2,23,460/-. Mr. Kamlesh Jain has been made a party to the criminal case since he used to be a director of M/s Plusmore Marketing Pvt. Ltd. However, at the time of dishonour of the cheques and the subsequent initiation of the case against M/s Plusmore Marketing Pvt. Ltd., Mr. Kamlesh Jain had already resigned as a director and prior to his resignation was never involved in day to day operations of M/s Plusmore Marketing Pvt. Ltd. Accordingly, he has filed a reply stating that he had resigned from M/s Plusmore Marketing Pvt. Ltd. prior to dishonour of the said cheques and has also furnished Form No.32 in that regard. On his application, he has been exempted from personal appearance in the Court. The case is pending further hearing. Claims/ litigation filed against the Company:

Save and except for the cases cited below, there are no Sales Tax, Central Excise Tax, cases filed against the Company and there is no penalty or tax recovery proceedings initiated against the Company.

There has been search in June 2004 in the factory premises of the Company

by Central Excise Department to ascertain whether there is any unauthorized clearance of raw material involving any duty amount of Rs.25,71,500/-. On the day of the search itself, the Company has reversed the CENVAT amount of Rs.25,71,000 in its CENVAT account. However, the Central Excise department has not served any show cause notice to the Company till date.

Refund claim filed by the Company:

1. The Company filed a refund claim of Rs.11,33,735/-. In the Show cause Notice No. V/18-

16/2001-2001/R dated 13.8.2002 issued in this regard upon the Company filing the reply, an O.I.O. No.SD/02/AC/R/03-04 dated 28.10.03 was passed by the Assistant Commissioner whereby the refund claim was disallowed. The Company filed an appeal on 21.12.2003 against this OIO, which was decided in favour of the Company vide OIA No.NS/57/Daman/2005 dated 31.01.2005 passed by the Commissioner, Appeals. Commissioner Central Excise (Appeal) has filed an appeal in CESTAT against the said OIA. The matter is yet to be decided by CESTAT.

Sales Tax Appeals filed by the Company:

Date of Order

Disputed Amount (incl. penalty)

Details Status

19.1.2004 14,165/- Assistant Sales Tax Officer, Sales Tax Department, Daman had imposed differential tax liability of Rs. 14,165 for applying wrong rate of sales tax on sale of raw material and

Notice not served

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steel during the period 1/4/2000 to 31/3/2001. The company has made an appeal to the Asstt. Commissioner of Sales Tax, Daman against this order.

7.10.2004 65,034/- Assistant Sales Tax Officer, Sales Tax Department, Daman had imposed differential tax liability of Rs. 65,034 for applying wrong rate of sales tax on sale of raw material and steel during the period 1/4/2001 to 31/3/2002. The company has made an appeal to the Asstt. Commissioner of Sales Tax, Daman against this order

Notice not served

Outstanding Litigations against / by Alaska Industries ("Alaska") Excise matters:

Show Cause Notice Number

Claim Amount Status Remarks

V/15-33/OA/96/ 1761 dated 22.1.1997

Rs.2,09,974/-

Certain goods worth Rs.8,39,895/- were found to be in excess of the declared quantity and were seized. Custom duty of Rs.1,25,354/- imposed thereon. The Assistant Commissioner called upon Alaska to produce a Bank Guarantee for Rs.2,09,974/- which was produced by Alaska. Subsequently the seized goods were released.

The Bank Guarantee has been renewed upto 25.10.2005. The case is pending before the Assistant Commissioner for further hearing.

V(CH-39) 15-3/OA/97 dated 15.5.2000

Rs.3,98,306/- and interest on Rs.1,99,153/-

Alaska filed an appeal to the Commissioner against order of Assistant Commissioner’s order No.O.I.O. No.SD/AC/41/OA/04-05 dated 30.12.2004. Commissioner has passed order No. O.I.A. No.NS/161/Daman/ 2005 dated 28th March, 2005 and remanded the matter back to the adjudicating authority for fresh adjudication by allowing cross-examination of evidences.

The case is pending before the adjudicating authority for fresh adjudication.

V(CH-39)15-8/OA/97/3549 dated 9.5.2000

Rs.5,25,399/- towards excise duty, Rs.5,25,399/- towards penalty, the plant, machinery and building used by Alaska ordered to be confiscated with an option to Alaska to redeem the same on payment of redemption of Rs.1,00,000/- within 30 days of the Order. Interest on Rs.5,25,399/- till the date of payment, penalty of Rs.50,000/- on Mr. Kamlesh Jain,

Alaska filed an appeal and stay application against the Order of Additional Commissioner. A Stay Order No.5-6-7-8 dated 3.2.04 was passed for pre-deposit of Rs.5,25,399/-. Alaska filed a Miscellaneous Application on 19.2.2004 to stay the implementation of the Stay Order. The said Miscellaneous Application disposed of vide Stay Order No.39/stay/Daman/2004 dated 20.9.2004 by the Commissioner, Appeal. Alaska filed a Special Civil Application against the said Order in the High Court of Gujarat. The High Court of Gujarat passed an order dated 22.11.2004 upholding the pre-deposit of Rs.5,25,399/- within 4 weeks from the date therefrom. Mr. Kamlesh Jain, Mr. Ramesh Jain and

Alaska did not deposit the requisite amount of Rs.5,25,399 accordingly, the Commissioner passed an order No.O.I.A. No.NS/11-12-13-14/ Daman/2004 on 22.12.2004 whereby the appeals filed by Alaska, Mr. Kamlesh Jain, Mr. Ramesh Jain and Mr. Vasant Purohit were dismissed. An appeals lies form this order to the Commissioner (Appeal) within a period of 3 months from the date of the order. Note: Alaska has filed an

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Rs.10,000/- each on Mr. Ramesh Jain and Vasant Purohit.

Vasant Purohit have filed Appeals and Stay Applications against the imposition of penalty on each of them. The Company has paid Rs.5,25,399 as pre-deposit amount.

appeal with the Commissioner (Appeal) which was dismissed as bring time-barred. Alaska has filed a stay application in High Court of Gujarat at Ahmedabad and referred the case to Commissioner Appeals Daman at Vapi, The last hearing was fixed on 14.9.2005 which was adjourned. The next hearing date has not been fixed.

V(CH-39)15-75/OA/98/ 3556 dated 8.5.2000

Rs.5,02,700/- towards excise duty, penalty of Rs.5,02,700/-, the plant, machinery and building used by Alaska ordered to be confiscated with an option to Alaska to redeem the same on payment of redemption of Rs.1,00,000/- within 30 days of the Order, interest on Rs.5,02,700/- till the date of payment, penalty of Rs.1,50,000/- on Mr. Kamlesh Jain and Rs.25,000/- on Mr. Vasant Purohit.

Alaska filed an appeal against the O.I.O. No.30/OA/Adj/2003/ JC dated 14.5.2003. The Commissioner, Appeal passed an order being O.I.A.No.RKS/222-223-224/Daman/2004 dated 16.9.2004 whereby penalty of Rs.5,02,700/- was set aside, redemption value was reduced to Rs.50,000/- and penalty on Mr. Vasant Purohit was set aside while penalty on Mr. Kamlesh Jain was confirmed against which a Stay Application was filed. In the meanwhile the Central Excise Commissioner filed an appeal against the O.I.A.No.RKS/222-223-224/Daman/ 2004.

On 26.7.2005 the Stay Application came up for hearing and an Order was passed whereby penalty against Alaska was set aside and the other co-accused were absolved from penalty. 3. Redemption amount against confiscation order were reduced to Rs. 35,000/- and the amount has been paid.

V/15-27/OA/2000-01 dated 28.2.2001

Goods worth Rs.3,08,344/- seized and excise duty of Rs.49,335/- imposed. For the shortage of goods of Rs. 8,41,831 the duty of Rs.1,31,493 was imposed.

Certain goods worth Rs. 3,08,344/- were found to be in excess of the declared quantity and were seized. Excise duty of Rs.49,335/- imposed thereon which was paid by Alaska in RG-23(ii) entry no. 77 dated 12.08.2001. Certain goods worth Rs. 8,41,831 were found to be in Short of the declared quantity. Alaska has debited a duty amount of Rs.1,31,493/- in RG-23, Part – II, entry no. 292 dated 10/02/2001 towards the short quantity of the goods amount under this show cause notice and requested for release of the seized goods.

The case is pending for further hearing.

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Refund Claims:

Alaska has filed a Claim for refund of Rs.4,00,955/- paid under protest (S.H.No.3923) on 27.3.2001. Various reminders have been sent to the Assistant Commissioner in this regard. Sales Tax Appeals:

Date of Order

Disputed Amount (incl. penalty) in Rs.

Details Status

7.5.2004 14,000/- Assistant Sales Tax Officer, Sales Tax Department, Daman passed an assessment order for FY 2001-02 and imposed demand for central sales tax of Rs. 9,000 and penalty of Rs. 5,000. Alaska Industries had made an appeal to the Asstt. Commissioner of Sales Tax, Daman against this order.

Notice not served

7.5.2004 1,43,192/- Assistant Sales Tax Officer, Sales Tax Department, Daman passed an assessment order for FY 2001-02 and imposed demand for sales tax of Rs. 1,44,192. Alaska Industries had made an appeal to the Asstt. Commissioner of Sales Tax, Daman for the disputed amount of Rs. 1,43,192 against this order.

Notice not served

7.5.2004 45,172/- Assistant Sales Tax Officer, Sales Tax Department, Daman passed an assessment order for FY 2000-01 and imposed demand for central sales tax of Rs. 40,172 and penalty of Rs. 5,000. Alaska Industries had made an appeal to the Asstt. Commissioner of Sales Tax, Daman against this order.

Notice not served

7.5.2004 60,394 Assistant Sales Tax Officer, Sales Tax Department, Daman passed an assessment order for FY 2000-01 and imposed demand for sales tax of Rs. 61,394. Alaska Industries had made an appeal to the Asstt. Commissioner of Sales Tax, Daman for the dispuated amount of Rs. 60,394 against this order.

Notice not served

Note: Pursuant to the Business Transfer Agreement dated 1.7.2005 made between Alaska on the one hand and the Company on the other hand, Alaska has transferred and the Company has assumed all the assets and liabilities of Alaska for the consideration and on the terms and conditions contained therein. Accordingly, all references to Alaska must be read to mean references to the Company and the cases pertaining to Alaska as referred to above are now assumed by the Company therefore any adverse outcome in any of the cases above shall deem to mean the liability of the Company w.e.f. 1.7.2005.

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MATERIAL DEVELOPMENTS

Significant development since the last audited balance sheet as on September 30, 2005 till the date of Draft Prospectus No circumstances have arisen since the date of last financial statement until the date of filing of this draft Prospectus with SEBI, which materially and adversely affect or is likely to affect the operations or profitability of our Company, or value of its assets, or its ability to pay its liability within next twelve months. There is no subsequent development after the date of the Auditor’s Report, which will have a material impact on the reserves, profits, earnings per share and book value of the Equity Shares of our Company.

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GOVERNMENT APPROVALS Industrial Entrepreneurs Memorandum ("IEM") For the purpose of manufacturing the new product ‘PVC Wood Composite Profiles / Sheet', the Company has filed an IEM dated August 28, 2005 with the Secretariat of Industrial Assistance ("SIA") which is duly acknowledged by SIA on September 2, 2005 vide No.4228/SIA/IMO/2005 for the purpose of establishing a 'New Undertaking' at Daman.

For the existing manufacturing unit of the Company, the Company was registered as a permanent SSI vide Registration certificate dated December 15, 2000 from Director of Industries, Daman bearing registration No.6001001648 category of unit (S.No.6) U1 granting permanent Small Scale Industry status for manufacturing insulated wares of plastic, tableware/ kitchenware of plastic, vacuum ware of plastic and mould and dies of plastic articles to Company. The Company has filed an IEM to the SIA which is duly acknowledged by SIA on October 31, 2005 vide No. 5111/SIA/IMO/2005 for manufacture of existing product i.e. table ware, kitchen ware, other household articles, toilet articles including manufacturing of vacuum flask and other vacuum vessels for enhanced capacity upto 9000 MTPA. Local Licenses Sales Tax No.: DA/5540 Registration certificate dated 24.3.2004 under section 11 of the Goa, Daman and Diu (Sales Tax) Act, 1964 w.e.f. 20.5.2000. Central Sales Tax No.:DA/CST/5008 Registration certificate dated 30.3.1999 under section 7(2) of the Central Sales Tax Act, 1956 w.e.f. 19.3.1999. Factory Registration: Registration certificate under Factories Act, 1948 dated 28.7.2004 bearing registration No.2567. This certificate has been renewed from time to time and is in force till 31.12.2005. License to work a factory: The Company has been granted a license No.1589 on 27.4.2000 by the Chief Inspector of Factories, Daman. This license has been renewed from time to time and is in force till 31.12.2005. Shops and Establishments Registration: The business of the Company is registered under the Shops and Establishments Act under Registration No. PS-II/010915 and the registration is valid upto October 31, 2007 Consent from Pollution Control Committee: The Company has renewed the certificate from Pollution Control Committee up to December 31, 2006. The certificate is in the name of Thermoplast Industries Pvt. Limited and the Company has made an application for change of name on the certificate. Fresh certificate is yet to be received by the Company. ISO 9001:2000 Certified Company The Company has received the certificate from UKAS Quality Management, An Accreditation Body, dated November 17,2005 and become ISO 9001:2000 certified company from that date.

Tax Registration Service tax registration No.: AABCT0420FST001. PAN number: AABCT0420F. TAN number: MUMT10891G. EPFO No.: GJ /VP/45623 Central Excise registration No.: AABCT0420F XM 001.

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OTHER REGULATORY AND STATUTORY DISCLOSURES Authority for the Issue Our Board of Directors has pursuant to a resolution dated August 17, 2005 authorized the Issue subject to approval by the shareholders under section 81 (1A) of the Companies Act. The shareholders of our Company have, pursuant to a special resolution passed at the EGM of the Company held on September 20, 2005 authorized the Issue. Prohibition by SEBI Our Company, Directors, any of our Associates or Group Companies, and Companies with which the Directors of Issuer are associated, as Directors or Promoters, have not been prohibited from accessing the capital market under any order or directions passed by SEBI. None of the Promoters, their relatives, the Company or the Promoter Group Companies are declared as willful defaulters by RBI/ Government authorities and there are no proceedings relating to violations of securities laws pending against them and there are no violations of securities laws committed by them in the past. Eligibility for the Issue The Company is eligible for this Issue as per Clause 2.2.1 of SEBI (Disclosure & Investor Protection Guidelines, 2000 as explained under: • The Company has net tangible asset of atleast Rs. 300.00 Lakhs in each of the 3 preceding full years

(of 12 months each) of which not more than 50% is held in monetary assets. • The Company has a track record of Distributable Profits as per Section 205 of the Companies Act,

1956 for at least three out of immediately preceding five years. • We have a pre-issue Net Worth of not less than Rs. 100 Lakhs in each of the preceding three years (of

12 months each). • The proposed issue size would not exceed five times the pre-issue net worth as per the audited

accounts for the year ended March 31, 2005. (Rs. In Lakhs)

Financial Year Year ended 31st March, 2005

Year ended 31st March, 2004

Year ended 31st March, 2003

Net Tangible Assets 749.71 471.11 361.43 Monetary Assets 71.82 57.56 54.57 Distributable Profit After Tax 158.59 125.53 114.90 Net Worth 740.71 462.83 353.86

(1) Net Tangible Assets are defined as the sum of fixed assets (including capital work in progress and

excluding revaluation reserves, if any), trade investments, current assets (excluding deferred tax assets) less current liabilities (excluding deferred tax liabilities) and secured as well as unsecured long term liabilities and non-trade investments.

(2) Monetary Assets are defined as the sum of cash on hand, Non Trade Investments, Balance with

Scheduled Bank in Current accounts and Fixed Deposits and balance with Post Office Savings account.

(3) Net Worth includes equity share capital and reserves (net off miscellaneous expenditure not

written off)

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SEBI DISCLAIMER CLAUSE AS REQUIRED, A COPY OF THIS DRAFT PROSPECTUS HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF DRAFT PROSPECTUS TO SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE OFFER DOCUMENT. LEAD MANAGERS VIZ. ALLIANZ SECURITIES LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (DISCLOSURES AND INVESTOR PROTECTION) GUIDELINES IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT PROSPECTUS, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGERS VIZ. ALLIANZ SECURITIES LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED JANUARY 21, 2006 IN ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATIONS 1992 WHICH READS AS FOLLOWS : i) 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 OFFER DOCUMENT PERTAINING TO THE SAID ISSUE; ii) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY. WE CONFIRM THAT: (a) THE DRAFT PROSPECTUS FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPER 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) THE DISCLOSURES MADE IN THE DRAFT PROSPECTUS ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE. (d) WE CONFIRM THAT BESIDE OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT PROSPECTUS ARE REGISTERED WITH SEBI AND TILL DATE SUCH REGISTRATION IS VALID. (e) WE HAVE SATISFIED OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS TO FULFILL THEIR UNDERWRITING COMMITMENTS. THE SECURITIES PROPOSED TO FORM PART OF THE PROMOTERS CONTRIBUTION SUCJECT TO LOCK IN , WILL NOT BE DISPOSED / SOLD/ TRANSFERRED BY THE

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PROMOTERS DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT PROSPECTUS WITH SEBI TILL THE DATE OF COMMENCEMENT OF LOCK IN PERIOD AS STATED IN THE DRAFT PROSPECTUS. ALL THE LEGAL REQUIREMENTS PERTAINING TO THE ISSUE WILL BE COMPLIED WITH AT THE TIME OF FILING THE DRAFT PROSPECTUS WITH THE DESIGNATED STOCK EXCHANGE IN ACCORDANCE WITH APPLICABLE LAW, AS ALSO ANY GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY SEBI, GOI AND ANY OTHER COMPETENT AUTHORITY. ALL LEGAL REQUIREMNETS PERTAINING TO THE ISSUE WILL BE COMPLIED WITH AT THE TIME OF REGISTRATION OF THE DRAFT PROSPECTUS WITH DESIGNATED STOCK EXCHANGE IN ACCORDANCE WITH THE APPLICABLE LAW, AS ALSO ANY GUIDELINES, INSTRUCTIONS, ETC., ISSUED BY SEBI, GOI AND ANY OTHER COMPETENT AUTHORITY. THE FILING OF DRAFT PROSPECTUS DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR 68 OF THE COMPANIES ACT, 1956 OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI, FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD MANAGER ANY IRREGULARITIES OR LAPSES IN THIS DRAFT PROSPECTUS. DISCLAIMER FROM THE ISSUER AND THE LEAD MANAGER The Company, its Directors and the Lead Manager accepts no responsibility for statements made otherwise than in this Draft Prospectus or in the advertisement or any other material issued by or at instance of the Company and that anyone placing reliance on any other source of information, including our website, www.bluplast.com , would be doing so at his or her own risk. CAUTION The Lead Managers accepts no responsibility, save to the limited extent as provided in the Memorandum of Understanding entered into between the Lead Managers and the Company. All information shall be made available by the Lead Managers and the Company to the public and investors at large and no selective or additional information would be available for a section of investors in any manner whatsoever including road show presentations, research or sales reports or at collection centres or elsewhere. We shall not be liable to the bidders for any failure in downloading the bids due to the faults in any software/ hardware system or otherwise. DISCLAIMER IN RESPECT OF JURISDICTION This Issue is being made in India to persons resident in India, including Indian nationals resident in India, who are majors, Hindu Undivided Families, Companies, Corporate Bodies and Societies registered under the applicable laws in India and authorized to invest in shares, Indian Mutual Funds registered with SEBI, Indian Financial Institutions, Commercial Banks, Regional Rural Banks, Co-operative Banks (subject to RBI permission) or Trusts registered under the applicable Trust law and who are authorized under their constitution to hold and invest in shares, permitted insurance companies and pension funds and to permitted non residents including NRIs , FIIs and other eligible Foreign Investors (viz.Foreign Venture Capital Funds registered with SEBI, multilateral and bilateral Development Financial Institutions). The Draft Prospectus does not, however, constitute an invitation to subscribe to equity shares issued hereby in any other jurisdiction to any person to whom it is unlawful to make an invitation in such jurisdiction. Any person into whose possession this Draft Prospectus comes is required to inform himself or herself, about and to observe, any such restrictions. Any dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in Mumbai (India) only.

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No action has been or will be taken to permit a public offering in any jurisdiction where action would be required for that purpose, except that this Draft Prospectus 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 Draft Prospectus may not be distributed, in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Draft Prospectus nor any sale hereunder shall, under any circumstances, create any implication that there has been no change in the our affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date. DISCLAIMER CLAUSE OF BOMBAY STOCK EXCHANGE LIMITED (BSE, the Designated Stock Exchange) [•] DISCLAIMER CLAUSE OF NATIONAL STOCK EXCHANGE OF INDIA LIMITED [•] FILING A copy of this Draft Prospectus has been filed with SEBI at Corporation Finance Department, Ground Floor, Mittal Court, “A” Wing, Nariman Point, Mumbai - 400021. A copy of the Draft Prospectus, along with the material contracts and documents required to be filed under section 60 and section 60 B of the Companies Act, 1956 having being attached thereto, will be delivered for registration to the Registrar of Companies, Mumbai, Maharashtra IMPERSONATION As a matter abundant caution, attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of the Companies Act, 1956 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.” LISTING This is an unlisted company. Initial listing applications have been made to Bombay Stock exchange (Designated Stock Exchange) and National Stock Exchange of India for permission to list equity shares and for an official Quotation of the equity shares of the company. In case, the permission for listing and or dealing & official quotation of the Equity Shares is not granted by any of the above mentioned Stock Exchanges, the Company shall forthwith repay, without interest, all moneys received from the applicants in pursuance of this Draft Prospectus. If such money is not repaid within 8 days after the day from which we become liable to repay it, i.e from the date of refusal or within 70 days from the bid /issue closing date, which ever is earlier, then we and every director ours, be jointly and severallyshall, on and from such expiry of 8 days be liable to repay that money with interest as prescribed under Section 73 of the Companies Act, 1956.

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The Company together with the Lead Managers shall ensure that all the steps for the completion of the necessary requirements for Listing and Commencement of trading at all the Stock Exchanges mentioned above are taken within 7 working days of finalisation and adoption of the Basis of Allotment for the Issue. CONSENTS Consents in writing of: (a) our Directors, the Company Secretary, Compliance Officer, the Auditors, Bankers to the Company; and (b) Lead Managers to the Issue and Bankers to the Issue/ escrow collection, banker, Syndicate members, monitoring agency, Registrars to the Issue and Legal advisors to the Issue, to act in their respective capacities, have been obtained and such consents have not been withdrawn upto the delivery of this Draft Prospectus. M/s Singrodia Goyal & Co., Statutory Auditors, have also given their consent to the inclusion of their report as appearing hereinafter in the form and context in which it appears in this Draft Prospectus and also tax benefits accruing to the Company and to the members of the Company and such consent and report have not been withdrawn up to the time of delivery of this Draft Prospectus EXPERT OPINION Except as stated in the section titled “Statement of Tax Benefits” And “Financial Statements” we have not obtained any expert opinion. PUBLIC ISSUE EXPENSES The expenses for this Issue includes issue management fees, selling commission, distribution expenses, legal fees, fees to advisors, stationery costs, advertising expenses and listing fees payable to the Stock Exchanges, among others. The total expenses for this Issue are estimated at approximately Rs. [*] Lakhs, details of which are as under:

(Rs. In Lakhs) Activity Amount (Rs. in lakhs) % of Total Issue

Size Issue Management, Brokerage & Selling commission

80.00 [*]

Registrars fees 25.00 [*] Printing & Distribution of Issue Stationery 70.00 [*] Advertising and Marketing expenses 50.00 [*] Other expenses 25.00 [*] Total 250.00 [*]

Fees Payable to Lead Managers to the Issue The total fees payable to the Lead Manager for the issue will be as per the Memorandum of Understanding executed between the Company and the LMs dated September 29, 2005, copy of which is available for inspection at the Registered Office of the Company. Fees Payable to Registrar to the Issue The total fees payable to the Registrar to the Issue will be as per the Memorandum of Understanding dated October 27, 2005, copy of which is available for inspection at the Registered Office of the Company. Adequate funds will be provided to the Registrar to the Issue for making refunds to unscessful applicants as per the mode disclosed which is appearing on page no. 118. Previous Public or Rights Issues (during the last five years) Bluplast Industries Limited has not made any public or rights Issue during last five years. Companies under the same management There are no companies within the meaning of Section 370 (1B) of the Companies Act, 1956.

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PROMISE VIS-A-VIS PERFORMANCE (A) LAST THREE ISSUES MADE BY BLUPLAST INDUSTRIES LTD.

The company has not made any issue of equity shares to the public prior to the present Public Issue.

(B) LAST ISSUE OF THE LISTED VENTURES OF PROMOTER GROUP There is no listed venture of the Promoter Group. Outstanding Debentures, Bonds, Redeemable Preference Shares or other Instruments The Company, since its incorporation has not issued any Redeemable Preference shares and debentures, bonds or other instruments. Stock Market Data for our Equity Shares This being the first Public Issue of the Company, no Stock Market Data is available. Mechanism evolved for Redressal of Investor Grievances The Company has appointed Bigshare Services Pvt. Ltd. as the Registrar o the Issue, to handle the investor grievances in co-ordination with Compliance Officer of the Company. All grievances relating to the present issue may be addressed to the registrar with a copy to the Compliance Officer, giving full details such as name, address of the applicant, number of Equity Shares applied for, amount paid on application and Bank branch where the application was submitted. The Company will monitor the work of the Registrar to ensure that the grievances are settled expeditiously and satisfactorily. Disposal of Investor Grievances M/s.Bigshare services Pvt. Ltd., the Registrar to the Issue, will handle investor grievances pertaining to the Issue. A fortnightly status report of the complaints received and redressed by them would be forwarded to the Company. The Company would also be coordinating with Registrar to the Issue in attending to the grievances of the investors. The Company assures that the Board of Directors, in respect of the complaints, if any, to be received shall adhere to the following schedules:

Sr. No.

Nature of Complaint Time Taken

1. Non-receipt of refunds Within 7 days of receipt of complaint, subject to production of satisfactory evidence.

2. Change of Address notification Within 7 days of receipt of Information 3. Any other complaint in relation to Public

Issue Within 7 days of receipt of complaint with all relevant details

The Company has appointed Mr. Shashinand Nagori, as Compliance Officer who would directly deal with SEBI with respect to implementation /compliance of various laws, regulations and other directives issued by SEBI and matters related to investor Complaints. The investor may contact the Compliance Officer in case of any pre issue/post issue related problems. The Compliance Officer can be contacted at the following address: Bluplast Industries limited, 113/114, Vivek Industrial Estate, Uswala Road, Near Litotier Cama Estate, Goregaon (East), Mumbai 400 063 Tel : (022) 26851631 Fax : (022) 26851151 Email: [email protected]

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Changes in Auditors during the Last Three Years and Reasons thereof There is no change in the auditors in the last three years. Capitalization of Reserves or Profits (during last five years) The Company has not capitalized its profits or reserves at any time except as stated in the section titled “Financial Information of the Company” on page no. 71 of this Draft Prospectus. Revaluation of Assets, if any (during last five years) None of the assets of the Company have been revalued during last five years.

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TERMS OF THE ISSUE Ranking of Equity Shares The Equity Shares to be issued shall be subject to the provisions of the Companies Act, our Memorandum and Articles of Association and shall rank pari passu in all respects with the existing Equity Shares of the Company including rights in respect of dividends. The persons in receipt of Allotment will be entitled to dividend or any other corporate benefits, if any, declared by the Company after the date of Allotment. Mode of payment of Dividend The declaration and payment of dividend will be recommended by the Board of Directors of the Company and its shareholders, in their discretion, and will depend on a number of factors, including but not limited to the Company’s earnings, capital requirements and overall financial condition. Face Value and Issue Price The Equity Shares with a face value of Rs. 10/- each are being issued at the Price Band of Rs. 28 – 32 per Equity Share. The Issue price is 2.8 times of the face value at the lower end of the price band and 3.2 times of the face value at the higher end of the price band (The Company shall determine the final price before filing the prospectus with ROC) minimum issue price of Rs. 28/- and the maximum issue price of rs. 32/- in terms of this draft prospectus. At any given point of time there shall be only one denomination for the Equity Shares. Rights of the Equity Shareholder Subject to applicable laws, the equity shareholders shall have the following rights: • Right to receive dividend, if declared; • Right to attend general meetings and exercise voting powers, unless prohibited by law; • Right to vote on a poll either in person or by proxy; • Right to receive offers for right shares and be allotted bonus shares, if announced; • Right to receive surplus on liquidation; • Right of free transferability; • Such other rights, as may be available to a shareholder of a listed Public Company under the

Companies Act and the Memorandum and Articles of Association of the Company. 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, refer to the section on “Main Provisions of Articles of Association of the Company” on page 121 of this Draft Prospectus. Market Lot and Trading Lot In terms of Section 68B of the Companies Act, the Equity Shares of the Company shall be allotted only in dematerialised form. As per existing SEBI Guidelines, the trading of our Equity Shares shall only be in dematerialised form for all investors. Since trading of our Equity Shares is compulsorily in dematerialized mode, the tradable lot is One Equity Share. Allotment through this Issue will be done only in electronic form in multiples of one (1) Equity Shares subject to a minimum allotment of 200 Equity Shares.

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Nomination Facility to the Investor In accordance with Section 109A of the Act, the sole or first applicant, along with other joint applicants may nominate any one person with whom, in the event of the death of the sole applicant or in case of joint applicants, death of all applicants as the case may be, the Equity Shares allotted, if any, shall vest. A person, being a nominee, becoming entitled to the Equity Shares by reason of death of the original holder(s), shall in accordance with Section 109A of the Act, be entitled to the same advantage to which he/she would be entitled if he/she were the registered holder of the Equity Shares. 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 Shares in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale of equity shares by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made on a prescribed form available on request at the Registered Office of the Company or the Registrar. In accordance with Section 109B of the Act, any person who becomes a nominee by virtue of the provisions of the Section 109A of the Act, shall upon production of such evidence as may be required by the Board, elect either: a) To register himself or herself as holder of Equity Shares or b) 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 elect either to be registered himself or herself or to transfer the Equity Shares, and if the notice is not complied within a period of 90 days, Board may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the equity shares, until the requirement of the notice have been complied with. Minimum Subscription If the Company does not receive the minimum subscription of 90% of the issued amount on the date of closure of the issue, or if the subscription level falls below 90% after the closure of the issue on account of cheques having been returned unpaid or withdrawal of applications, the Company shall forthwith refund the entire subscription amount received. If there is a delay beyond eight (8) days after the Company becomes liable to pay the amount, the Company shall pay interest as per Section 73 of the Companies Act, 1956. Arrangement for Disposal of Odd Lots The Company’s share will be traded in dematerialized form only and therefore marketable lot is one (1) share. Therefore, there is no possibility of odd lots. Restrictions, if any, on Transfer and Transmission of Shares and on their Consolidation/Splitting For the description in respect of restrictions, if any, on transfer and transmission of shares and on their consolidation/splitting, please refer sub-heading “Main Provisions of the Articles of Association of Bluplast Industries Limited” of this Draft Prospectus.

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ISSUE PROCEDURE

Principal Terms and Conditions of the Issue The Equity Shares, now being issued, are subject to the terms and conditions of this Draft Prospectus, the Application Form, the Memorandum & Articles of Association of the Company, the guidelines for listing of securities issued by Government of India and guidelines issued by SEBI from time to time, the Depositories Act and the provisions of the Act. In addition, the Equity Shares shall also be subject to such other terms and conditions as may be incorporated in the letter of allotment, Share Certificates, as per guidelines, notifications and other regulations for the issue of capital and listing of securities laid down from time to time by the Government of India and/or other authorities and other documents that may be executed in respect of the Equity Shares. HOW TO APPLY Availability of Prospectus and Application Forms The Memorandum, Form 2A containing the salient features of the Prospectus together with Application Forms and copies of the Prospectus may be obtained from the Registered Office of the Company, Lead Managers to the Issue, Registrar to the Issue and the Bankers to the Issue named herein or from their branches as mentioned on the reverse of the Application Form. The prescribed colour of the application form for various categories, is as follows:

Category Colour of Application Form For General Public White For Permanent Employees of the Company Pink

Terms of Payment for All Categories The application must be for a minimum of 200 equity shares and thereafter in multiples of 200 shares. The equity shares of Rs. 10/- each are issued at a price band of Rs. 28/- to Rs.32/- per equity share. In case of allotment of lesser number of Equity Shares than the number applied, the excess amount paid on application shall be adjusted against the amount payable on allotment and the balance, if any, shall be refunded by the Company to the applicant. Reservation Reservation on the Competitive basis have been made in the Public Issue for: Employees of the company – reservation on the competitive basis of 10,00,000 Equity Shares out of the Public Issue is made for the permanent employees of the Company aggregating to 10% of the Public Issue made by the Company. Unsubscribed portion in the reserved category may be added back to the net offer to the public. Option to Subscribe Except as otherwise stated in this Draft Prospectus, the Company has not entered into, nor does it at present propose to enter into any contract or arrangements whereby any option or preferential right of any kind has been or is proposed to be, given to any person to subscribe for any Equity Shares of the Company. The Investor shall have an option either to hold the security certificates or to hold the securities in dematerialized form with the depository. WHO CAN APPLY Applications to be made by

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a. Indian Nationals resident of India who are majors in single or joint names (not more than three); b. Hindu Undivided Families through the Karta of the Hindu Undivided Family; c. Companies, Bodies Corporate and Societies registered under the applicable laws in India and

authorised to invest in Equity Shares; d. Indian Mutual Funds registered with SEBI; e. Indian Financial Institutions & Banks; f. Regional Rural Banks and Commercial Banks. Co-operative Banks may also apply subject to

permission from Reserve Bank of India; g. Venture Capital Funds registered with SEBI; h. Foreign Venture Capital investors registered with SEBI; i. State Industrial Development Corporations; j. Insurance Companies registered with Insurance Regulatory and Development Authority; k. Provident Funds with minimum corpus of Rs. 2500 Lakhs and who are authorized under their

constitution to invest in Equity Shares; l. Pension Funds with minimum corpus of Rs. 2500 Lakhs and who are authorized under their

constitution to invest in Equity Shares; m. Trusts/Societies who are registered under the Societies Registration Act, 1860, as amended, or any

other Trust law and are authorized under its constitution to hold and invest in shares; n. Permanent and Regular employees of the Company; o. Non-Resident Indians (NRIs) on a non-repatriable basis; p. Foreign Institutional Investors (FIIs) registered with SEBI; Applications not to be made by a. Minors b. Overseas Corporate Bodies (OCBs)

c. Foreign Nationals (except NRIs on non-repatriation basis)

d. Partnership firms or their nominees Minimum and Maximum Application Size 1) For Retail Individual Investors: Application should be for a minimum of 200 Equity Shares and in

multiples of 200 Equity Shares thereafter, so as to ensure that the amount payable by the applicant does not exceed Rs. 1,00,000.

2) For Other Investors: Application should be for a minimum of such number of Equity Shares so that the amount payable by the applicant exceeds Rs. 100,000 and in multiples of 200 Equity Shares thereafter. An applicant in the net offer to public category cannot make an application for that number of Equity Shares exceeding the number of Equity Shares offered to the public.

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3) For Employees of the Company: Application should be for a minimum of 200 Equity Shares and in multiples of 200 Equity Shares thereafter, with a maximum number of Equity Shares applied for not exceeding 10,00,000 Equity Shares.

Subscription by NRIs/ FIIs As per the extant policy of the Government of India, OCBs cannot participate in this Issue. Investments made by NRIs / FIIs are governed by the regulations contained in FEMA 20/2000-RB dated May 3, 2000 read with AP (DIR Series) Circular No. 38 dated December 2, 2003 shall be applicable. It is to be distinctly understood that there is no reservation and separate Application Form for NRIs on non-repatriation basis and FIIs registered with SEBI and all NRI (on non-repatriation basis) and FII applicants will be treated on the same basis with other categories for the purpose of allotment. PROCEDURE FOR APPLICATION Application by Permanent Employees Reservation on competitive basis has been made in the public issue to the permanent employees. Reservation on competitive basis shall mean reservation wherein allotment of shares is made in proportion to the shares applied for. 1. Application by Permanent Employees shall be made only in the prescribed Application Form (i.e. Pink

colour form marked “Employees”). 2. The sole/first applicant should be a Permanent Employee of the Company. 3. Only Permanent Employees and Directors of the Company as on the cut-off date i.e. December 31st ,

2005 would be eligible to apply in this Issue under reservation for Permanent Employees of the Company on competitive basis.

4. The Application must be for minimum of 200 Equity Shares and shall be in multiples of 200 Equity

Shares thereafter. 5. The maximum application size in this category can be of 10,00,000 Equity Shares. 6. If the number of shares applied for in this category is less than or equal to 10,00,000 Equity Shares,

full allotment shall be made to the Permanent Employees of the Company to the extent of their demand.

7. If the number of shares applied for in this category is greater than 10,00,000 Equity Shares, the

allotment shall be made on a proportionate basis subject to a minimum of 200 Equity Shares. For the method of proportionate basis of allotment, please refer paragraph “Basis of Allotment” on page 117 of this Draft Prospectus.

A. GENERAL INSTRUCTIONS 1. Applications must be made in the prescribed Application Form and completed in Full in BLOCK

LETTERS in English as per the instructions contained herein and in the Application Forms and are liable to be rejected if not so made.

2. The application for Equity Shares should be for a minimum of 200 equity shares and in multiples of

200 shares thereafter. 3. Thumb impressions and signatures other than in English/ Hindi or any other language specified in the

8th Schedule to the Constitution of India, must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate under his/ her official seal.

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4. Bank Account Details of Applicant: The name of the Applicant, Depository Participant’s Identification (DPID) number and Beneficiary number provided by the Depository participant must be correctly mentioned in the Application Form at the appropriate place. The Registrar will obtain the Demographic details such as address, applicant’s Bank Account Details and occupation from the depository participants. The refund orders, if any, will be printed with the Bank details as given by the Depository Participant.

5. Applications under Power of Attorney:

In case of applications under Powers of Attorney or by Companies, Bodies Corporate, Societies registered under the applicable laws, trustees of trusts, Provident Funds, Superannuation Funds, Gratuity Funds, a certified copy of the Power of Attorney or the relevant authority, as the case may be, must be lodged separately at the office of the Registrars to the Issue simultaneously with the submission of the Application Form, indicating the serial number of the Application Form and the name of the Bank and the branch office where the application is submitted. The Company in its absolute discretion, reserves the right to relax the above condition of simultaneous lodging of the power of attorney along with the Application Form subject to such terms and conditions as it may deem fit.

6. PAN/ GIR Number

Where an application is for a total value of Rs. 50,000/- or more, the applicant or in case of applications in joint names, each of the applicants should mention his/ her/ their Permanent Account number (PAN) allotted under Income Tax Act, 1961 or where the same has not been allotted, the GIR Number and the IT Circle/ Ward/ District should be mentioned. The copy of the PAN Card or PAN Allotment Letter is required to be submitted with application form. In case, where neither the PAN nor the GIR Number has been allotted, or the applicant is not assessed to Income Tax, the appropriate box provided for the purpose in the application form must be ticked. Applications without this will be considered incomplete and are liable to be rejected.

7. Joint Applications in the case of individuals

Applications can be in single or joint names (not more than three). In the case of joint applications, all payments will be made out in favour of the first applicant. All communications will be addressed to the first named applicant whose name appears in the Application form at the address mentioned therein.

8. Applications by Hindu Undivided Families

Applications may be made by Hindu Undivided Families (HUF) through the Karta of the HUF and will be treated at par with individual applications.

9. Multiple Applications

An applicant should submit only one Application Form (and not more than one) for the total number of Equity Shares applied for. Two or more applications in single or joint names will be deemed to be multiple applications if the sole and/or first applicant is one and the same. The Company reserves the right to accept or reject, in its absolute discretion, any or all multiple applications. A separate single cheque/draft must accompany each Application Form.

10. Application By Mutual Funds In case of application by Mutual Funds, a separate application can be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and such applications will not be treated as multiple applications provided that the application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the scheme for which the application has been made.

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11. Stockinvest Investors will not have facility of applying through stockinvest instrument in the issue as RBI has withdrawn the stockinvest scheme vide notification No.DBOD.NO.FSC.BC.42/24.47.001/2033-04 dated November 5, 2003.

Note: • Applicants are requested to write their names and serial number of the Application Form, on the

reverse of the instruments by which the payments are being made to avoid misuse of instruments submitted along with the applications for Equity Shares.

• Applications by NRIs on non-repatriation basis can be made using the Form meant for Public out of

the funds held in Non Resident (Ordinary) Account (NRO). The relevant Bank Certificate must accompany such forms. Such applications will be treated on par with the applications made by the public.

B. PAYMENT INSTRUCTIONS 1. Payment shall be made only by way of cash or cheque/ demand draft (money/ postal orders will not be

accepted) drawn on any Bank, including a co-operative Bank which is situated at and is a member or sub-member of the Banker’s clearing-house located at the place where the application form is submitted, i.e. at designated collection centers.

2. Outstation cheques/demand drafts drawn on Banks not participating in the clearing process will not be

accepted. 3. All cheques/ demand drafts accompanying the Application Form :

i. For Indian Public: should be payable in the “Name of the Bank - A/c Bluplast– Public Issue” and crossed “Account payee only”. For e.g. “ Bank - A/c Bluplast– IPO”.

ii. For Permanent Employees of the Company under the reserved category: should be payable in

the “Name of Bank - A/c Bluplast– IPO - Employees" and crossed "Account payee only". For e.g. “ Bank - A/c Bluplast - IPO –Employees”.

4. If the amount payable on application is Rs. 20,000 or more, such payment must be effected only by

way of an account payee cheque or Bank draft in terms of section 269SS of the Income-Tax Act, 1961. Otherwise the applications may be rejected and application money refunded without any interest.

APPLICATIONS WHICH ARE NOT COMPLETE IN EVERY RESPECT OR ARE IN CONTRAVENTION OF ANY PROVISIONS/INSTRUCTIONS CONTAINED IN THIS PROSPECTUS OR IN THE MEMORANDUM CONTAINING SALIENT FEATURES OF PROSPECTUS ARE LIABLE TO BE REJECTED. Grounds for Technical Rejections Applicants are advised to note that applications are liable to be rejected on technical grounds, including the following: a. Age is not mentioned. b. Applications by minors. c. PAN or GIR no. is not given, if the value of the application is for Rs. 50,000/- or more. d. A copy of PAN Card or PAN Allotment letter is not submitted alongwith application form having

value for Rs. 50,000/- or more. e. Multiple Applications.

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f. In case of applications under power of attorney or by limited companies, corporate, trust etc., relevant documents are not submitted.

g. An application accompanied by Stock invests. h. Applications by OCBs. i. Applications by NRIs on repatriation basis j. Applications not duly signed by the sole/joint applicants. k. Application forms do not have the applicant’s depository account details. l. Application not for a minimum of 200 shares or multiples of 200 thereafter. m. Application size exceeding the maximum size for the respective category. n. Applications by any entity other than the retail individual investor mentioned under the para

“Applications to be made by” on page no. 111 of this Draft Prospectus applying for the Equity Shares of the value of Rs. 1,00,000 or less.

FOR FURTHER INSTRUCTIONS REGARDING THE APPLICATIONS FOR THE EQUITY SHARES, INVESTORS ARE REQUESTED TO READ THE APPLICATION FORM CAREFULLY. SUBMISSION OF COMPLETED APPLICATION FORMS All applications duly completed and accompanied by cash/ cheques/ demand drafts shall be submitted at any of the branches of the Bankers to the Issue (listed in the Application Form) before the closure of the Issue. Applications should NOT be sent to the Office of the Company or to the Lead Managers to the Issue. The investors from the places other than from the places where the collection centers are located can also be send their Application Forms alongwith bank Drafts payable at Mumbai by registered post with acknowledgement due to the Registrar to the Issue, Bigshare Services Private Limited so that the same can be received before the closure of the subscription list. The envelope should be superscribed with the word “Bluplast IPO”. No separate receipts will be issued for the application money. However, the Bankers to the Issue or their approved collecting branches receiving the duly completed Application Form will acknowledge receipt of the application by stamping and returning to the applicant the acknowledgement slip at the bottom of each Application form. Applications shall be deemed to have been received by the Company only when submitted to the Bankers to the Issue at their designated branches or on receipt by the Registrars as detailed above and not otherwise. For further instructions, please read the application form carefully. ACCEPTANCE OF APPLICATIONS The Company reserves the rights to accept or reject, any application, in whole or in part, without assigning any reasons thereof. If the application is rejected in full, the whole of the application money received will be refunded by Electronic transfer of funds or through Registered Post, Speed Post or UPC, as the case may be, to the applicant. If the Application Form is accepted in part, the excess application money will be refunded to the Applicant. Such refund if any will carry interest @ 15% p.a. after 30 days from the closure of the Issue for the period of delay beyond 30 days. BASIS OF ALLOTMENT In the event of public issue of equity shares being over-subscribed, the allotment will be on a proportionate basis subject minimum allotment being equal to the minimum application size, i.e. 200 shares as explained below:

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1. A minimum 50% of the Net Issue to the public will be made available for allotment in favour of those individual applicants who have applied for equity shares of or for a value not more than Rs. 100,000/-. This percentage may be increased in consultation with the Designated Stock Exchange depending on the extent of response to the Issue from investors in this category. In case allotments are made to a lesser extent than 50% because of lower subscription in the above category, the balance Equity Shares would be added to the higher category and allotment made on a proportionate basis as per relevant SEBI Guidelines. The Executive Director/Managing Director of the Designated Stock Exchange (BSE) along with the Lead Managers and the Registrars to the issue shall be responsible to ensure that the basis of allotment is finalised in a fair and proper manner in accordance with the guidelines.

2. The balance of the Net Issue to the Public shall be made available to investors including corporate

bodies/ institutions and individual applicants who have applied for allotment of equity shares of or for a value of more than Rs. 1,00,000/-.

3. The unsubscribed portion of the net issue to any of the categories specified in (1) or (2) shall/may be

made available for allotment to applicants in the other category, if so required. 4. Applicants will be categorized according to the number of Equity Shares applied for. 5. The total number of shares to be allotted to each category as a whole shall be arrived at on a

proportionate basis i.e. the total number of shares applied for in that category (number of applicants in the category multiplied by the number of shares applied for) multiplied by the inverse of the over subscription ratio.

6. All the Application Forms where the proportionate allotment works out to less than 200 shares per

applicant, the allotment shall be made as follows:

i. Each successful applicant shall be allotted a minimum of 200 shares; and ii. The successful applicants out of the total applicants for that category shall be determined by draw

of lots in such a manner that the total number of shares allotted in that category is equal to the number of shares worked out as per (5) above.

7 If the proportionate allotment to an applicant works out to a number that is more than 200 but is a

fraction, then the fraction equal to or higher than 0.50 shall be rounded off to the next integer and if that fraction is lower than 0.50, the fraction shall be ignored. All applicants in such categories shall be allotted shares arrived at after such rounding off.

8. If the shares allotted on a proportionate basis to any category is more than the shares allotted to the

applicants in that category, the balance available shares for allotment shall be first adjusted against any other category, where the allocated shares are not sufficient for proportionate allotment to the successful applicants in that category. The balance shares if any, remaining after such adjustment shall be added to the category comprising applicants applying for minimum number of shares.

9. An Over -Subscription to the extent of 10% of the net offer to the Public can be retained for the

purpose of rounding off to the nearest integer to a minimum allotment being equal to 200 which is the minimum application size in the issue, while finalizing the allotment.

LETTERS OF ALLOTMENT OR REFUND ORDERS In accordance with the Companies Act, the requirements of the Stock Exchange and the SEBI Guidelines, the Company undertakes that: • Allotment of Equity Shares will be made within 30 days from the Issue closing date. • Dispatch of refund orders or refund instructions to the clearing system will be done within 30 days

from the Issue closing date

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• The Company shall pay interest at 15% per annum (for delay beyond 30 day time as mentioned above),

if refund orders are not dispatched and/or demat credit are not made to investors or refund instructions have not been given to the clearing system in the disclosed manner within the 30 day time prescribed above.

The Company will provide adequate funds required for making refunds to unscessful applicants as per the mode disclosed under “Dispatch of Refund Order” appearing on page no. 118 to the Registrar to the Issue. Refunds will be made through electronic transfer of funds or by cheques or pay-orders drawn on the bank(s) appointed by the Company, as refund banker(s). Such instruments will be payable at par at the places where applications are accepted. Bank charges, if any, for encashing such cheques or pay orders will be payable by the applicant. DESPATCH OF REFUND ORDERS The Company shall ensure dispatch of refund orders by following mode:

a) In case of applicants residing at Ahmedabad, Bangalore, Bhubnehwar, Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna and Thiruvananthapuram – refunds shall be credited through electronic transfer of funds by using ECS (Electronic Clearing Service), Direct Credit, RTGS (Real Time Gross Settlement) or NEFT (National Electronic Funds Transfer);

b) In case of applicants residing at places other than those specified in (a) above and where the value of refund order is Rs 1500/- or more, refund orders will be dispatched to the applicants by registered post;

c) In case of applicants residing at places other than those specified in (a) above and where the value of refund order is less than Rs. 1500/-, refund orders will be dispatched under certificate of posting.

INTEREST IN CASE OF DELAY IN DISPATCH OF ALLOTMENT LETTERS / REFUND ORDERS The Company agrees that as far as possible allotment of Equity Shares offered to the public shall be made within 30 days of the closure of Public Issue. The Company further agrees that it shall pay interest @15% per annum if the allotment letters/ refund orders have not been dispatched to the applicants or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given to the clearing system in the disclosed manner appearing on page no. 118 within 30 days from the date of the closure of the Issue. However, applications received after the closure of Issue in fulfillment of underwriting obligations to meet the minimum subscription requirement, shall not be entitled for the said interest. EQUITY SHARE IN DEMATERIALISED FORM WITH NSDL OR CDSL As per the provisions of Section 68B of the Companies Act, the Equity Shares of the Company can be held in a dematerialized form, (i.e. not in the form of physical certificates but be fungible and be represented by the statement issued through electronic mode). In this context, two tripartite agreements have been signed between the company, the Registrar to the Issue and the Depositories: 1. an agreement dated [•], 2005 between the Company, NSDL and Bigshare Services Private Limited and 2. an agreement dated [•], 2005 between the Company, CDSL and Bigshare Services Private Limited All investors can seek allotment only in dematerialised mode. However, an investor will have an option to hold the shares in physical from or dmat form. After the allotment in the proposed issue, allottees may

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request their respective DPs for re-materialisation of shares, if they wish to hold shares in physical form. Applications without relevant details of his or her depository account are liable to be rejected. 1. An applicant applying for shares must have at least one beneficiary account with any of the Depository

Participants (DPs) of NSDL or of CDSL, registered with SEBI, prior to making the application. 2. The applicant must necessarily fill in the details (including the beneficiary account no. and Depository

Participant’s ID no.) in the application form. 3. Equity Shares allotted to an applicant in the electronic account will be credited directly to the

respective beneficiary accounts (with the DP). 4. Names in the share application form should be identical to those appearing in the account details in the

depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details in the depository.

5. Non-transferable allocation letters/ refund orders will be directly sent to the applicant by the Registrar

to this issue. 6. If incomplete/incorrect details are given under the heading ‘Applicants Depository Account Details’ in

the application form, it is liable to rejected. 7. The applicant is responsible for the correctness of the applicant’s demographic details given in the

application form vis-à-vis those with his/ her DP. 8. It may be noted that Equity Shares in electronic shares can be traded only on the Stock Exchanges

having electronic connectivity with NSDL and CDSL. Both the Stock Exchanges where the Equity Shares of the Company are proposed to be listed are connected to NSDL and CDSL.

9. Trading in the Equity Shares of the Company would be only in dematerialised form for all investors. UNDERTAKING BY THE COMPANY The Company undertakes: a. that the complaints received in respect of the Issue shall be attended to by the Company expeditiously

and satisfactorily; b. that all steps for completion of the necessary formalities for listing and commencement of trading at all

stock exchanges where the securities issued are to be listed, are taken within 7 working days of finalisation of basis of allotment.

c. that the funds required for making refunds to unscessful applicants as per the mode(s) disclosed shall

be made available to the Registrar to the Issue by the Company. d. that where refunds are made through electronic transfer of funds, a suitable communication shall be

sent to the applicant within 30 days of closure of the issue, giving details of the bank where refunds shall be credited along with the amount and expected date of electronic credit of refund.

e. that the Certificates of the Equity Shares/Refund Orders to the NRI applicants shall be dispatched

within specified time. f. that no further issue of securities shall be made till the Equity Shares offered through this Draft

Prospectus are listed or till the application moneys are refunded on account of non-listing , undersubscription etc.

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UTILISATION OF ISSUE PROCEEDS The Board certifies that: a. All monies received out of the issue of Equity Shares to the public shall be transferred to a separate

Bank Account other than the Bank Account referred to in Sub-section (3) of section 73 of the Act, 1956;

b. Details of all monies utilized out of this issue referred to in item (a) shall be disclosed under an

appropriate separate head in the Balance Sheet of the Company indicating the purpose for which such monies had been utilized;

c. Details of all unutilized monies out of this Issue of shares, if any referred to in item (a) shall be

disclosed under an appropriate head in the balance sheet of the Company indicating the manner in which such unutilized monies have been invested.

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Main Provisions of the Articles of Association

Pursuant to Schedule II of the Companies Act, 1956 and the SEBI Guidelines, the main provisions of our Articles of Association are detailed below. Please note that each provision below is numbered as per the corresponding Article number in our Articles of Association.

CAPITAL 3. A. The minimum Authorised Share Capital of the Company is Rs. 5,00,000 (Rupees

Five Lakh only) divided into 50,000 (Fifty Thousand) Equity Shares of Rs. 10/- (Rupees Ten Only) each. The authorized share capital of the company shall be the capital as specified in Clause V of the Memorandum of Association, with power to increase or reduce the share capital of the Company and to divide the shares in the capital for the time being into several classes as permissible in law and to attach thereto respectively such preferential, deferred, qualified or special rights, privileges or conditions as may be determined by or in accordance with the Articles of Association of the Company and to vary, modify, amalgamate or abrotage any of such rights, privileges or conditions in such manner as may for the time being be provided in the Articles of Association.

Authorised Capital

4. Subject to the applicable provision of the Companies Act, 1956 and all other

applicable provisions of law (including any statutory modifications or re-enactment thereof for the time being in force or as may be enacted from time to time) and subject to such other approvals/permissions or sanctions as may be necessary, the Company may issue shares with non-voting rights upon such terms and conditions and with such rights and privileges (including with regard to dividend) as may be permitted by law or guidelines issued by the statutory authorities and/or listing requirements and that the provisions of these Articles of Association, to the extent they are concerning or relating to voting rights of shares shall not be applicable to the aforesaid non-voting shares, if any, issued by the Company.

Non Voting Shares

5. The Company in General Meeting may from time to time by Ordinary Resolution

increase the capital by the creation of new shares, the increases to be of such aggregate amount and to be divided into Shares of such respective amounts as the Resolution shall prescribe, subject to the provisions of the Act, any shares of the original or increased capital shall be issued upon such terms and conditions and with such rights and privileges annexed thereto as the General Meeting resolving upon the creation thereof, shall direct, and if no direction be given, as the Directors shall determine, and in particular, such shares may be issued with a preferential or a qualified right to dividends, and in the distribution of the assets of the Company in conformity with Section 87 and 88 of the Act. Whenever the capital of the Company has been increased under the provisions of this Article, the Directors shall comply with the provisions of Section 97 of the Act.

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7. Subject to the provisions of Sections 80 and 80A of the Act, the Company shall have the power to issue Preference Shares, which are at the option of the Company liable to the redeemed, and the resolution authorising such issue shall prescribe the manner, terms and conditions of redemption.

Redeemable preference Shares

8. The holder of Preference Shares shall have a right to vote only on

Resolutions, which directly affect the rights attached to his Preference Shares.

Voting rights of preference shares

10. The Company may from time to time by Special Resolution, subject to

the provisions of Section 78, 80, 100 to 104 inclusive of the Act, reduce its Share Capital and any Capital Redemption Reserve Account or Share Premium Account in any manner for the time being authorised by law.

Reduction of Capital

11. A. The Company in general meeting may subject to the provisions of

Section 94 of the Act by Ordinary Resolution alter the conditions of its Memorandum.

Sub-division, consolidation and cancellation of shares

12. B. Subject to and in accordance with the applicable provisions of the

Companies Act, 1956 and all other applicable provisions of law (including any statutory modification or re-enactment thereof for the time being in force or as may be enacted from time to time) and subject to such other approvals/permissions or sanctions as may be required, the Company shall have power to acquire, purchase, sell, dispose off, provide finance for the purchase of any of its own fully/ partly paid shares whether or no they are redeemable and to make the payment out of Capital Reserves or otherwise in respect of such acquisition, purchase, financing.

SHARES AND CERTIFICATES 14. The Company shall cause to be kept a Register and Index of Members in

accordance with all applicable provisions of the Act and the Depositories Act, 1996 with details of shares held in material and dematerialized forms in any medias may be permitted by law including in any form of electronic media. The Company shall be entitled to keep in any State or Country outside India a branch Register of Members resident in the State or country.

Register and Index of Members

21. Any application signed by or on behalf of a applicant for shares in the

Company, followed by an allotment of any share therein, shall be an acceptance of shares within the meaning of these Articles, and every person who thus or otherwise accepts any shares and whose name is on the Register shall, for the purposes of these Articles, be a Member.

Acceptance of shares

23. Every Member, or his heirs, executors or administrators, shall pay to the

Company the portion of the capital represented by his share or shares which may for the time being, remain unpaid thereon, in such amounts at such time or times in such manner as the Board shall from time to time in accordance with the Company’s regulations, require or fix for the payment thereof.

Liability of members

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24. a) Every Member of allottee of shares shall be entitled without payment, to receive one certificate specifying the name of the person in whose favour it is issued, the shares to which it relates and the amount paid-up thereon. Provided however, that no share certificate (s) shall be issued in respect of the shares held in Depository.

Share Certificate

c) If a share certificate is lost or destroyed, a new certificate in lieu

thereof shall be issued only with the prior consent of the Board and on such terms, if any, as to evidence and indemnity as to the payment of out-of pocket expenses incurred by the Company in investigating evidence, as the Board thinks fit.

27. B. The Company shall be entitled to dematerialise its existing shares,

debentures and other securities, rematerialise its shares, debentures and other securities held in the Depositories and/or to issue its fresh shares, debentures and other securities, in a dematerialised form pursuant to the Depositories Act, 1996 and the rules framed there under, if any.

Dematerialisation and Rematerialisation of Securities

31. Except as provided in these Articles, none of the funds of the

Company shall be applied in the purchase of, or land on the security of shares of the Company and the Company shall not, except as permitted by Section 77 of the Act, give any financial assistance for the purpose of or in connection with any purchase of shares in the Company. Nothing in this Article shall affect the right of the Company to redeem any shares issued under Section 80 of the Act.

Funds of Company may not be applied in purchase of the shares of Company

33. DEMATERIALISATION OF SECURITIES b) Notwithstanding anything contained in these Articles, the

Company shall be entitled to dematerialise its securities and to offer securities in a Company in a dematerialised form pursuant to the Depositories Act, 1996.

Dematerialisation of Securities

c) Every person subscribing to securities offered by the Company

shall have the option to receive security certificate or to hold the securities with a depository. Such a person who is the beneficial owner of the securities can at any time opt out of a depository, if permitted by the law, in respect of any security in the manner provided by the Depositories Act, and the Company shall, in the manner and within the time prescribed, issue to the beneficial owner the required Certificate of Securities. If a person opts to hold his security with a depository, the Company shall intimate such depository the details of allotment of the security, and on receipt of the information, the depository shall enter in its record the name of the allottees as the beneficial owner of the security.

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d) All securities held by a depository shall be dematerialised and be in fungible form. Nothing contained in Section 153, 153A, 153B, 187B, 187C and 372 of the Act shall apply to a depository in respect of the securities held by it on behalf of the beneficial owners.

Securities to be in Fungible Form

e) (c) Every person holding securities of the Company and whose

name is entered as the beneficial owner in the records of the depository shall be deemed to be a member of the Company. The beneficial owner of securities shall be entitled to all the rights and benefits and be subject to all the liabilities in respect of his securities which are held by a depository.

Rights of the Depositories and the Beneficial Owners

g) Nothing contained in section 108 of the Act or these Articles shall

apply to a transfer of securities effected by a transferor and transferee both of whom are entered as beneficial owners in the records of a depository.

Transfer of Securities

h) Notwithstanding anything in the Act or these Articles, where

securities dealt with by a depository, the Company shall intimate the details thereof to the depository immediately on allotment of such securities.

Allotment of Securities dealt with a Depository

34. In the event it is permitted by law to issue shares without voting rights attached to them, the Directors may issue such share upon such terms and conditions and with such rights and privileges annexed thereto as thought fit and as may be permitted by law.

Issue of Shares without Voting Rights

35. Notwithstanding anything contained in these articles, in the event it

is permitted by law for a Company to purchase its own shares or securities, the Board of Directors may, when and if thought fit, buy back, such of the Company’s own shares or securities as it may think necessary, subject to such limits, upon such terms and conditions, and subject to such approvals, as may be permitted by law.

Buy-Back of Shares and Securities

CALLS 42. The Board may, from time to time, subject to the terms on which

any shares may have been issued and subject to the conditions of allotment, by a resolution passed at a meeting to the condition of allotment by a resolution passed at a meeting of the Board (and not by circular resolution) make such call as it thinks fit upon the Members in respect of all moneys unpaid on the shares held by them respectively and such Member shall pay the amount of every call so made on him to the person or persons and at the time and places appointed by the Board. A call may be made payable by installments.

Directors may make calls

44. A call shall be deemed to have been made at the time when the resolution authorizing such call was passed at the meeting of the Board.

Calls to date from resolution

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45. A call may be revoked or postponed at the discretion of the Board. Call may be revoked or postponed

46. The joint-holders of any share shall be jointly and severally liable

in respect of all calls or installments and other payment, which ought to me made in respect of such shares.

Liability of joint holders

47. The Board may from time to time at its discretion, extend the time

fixed for the payment of any call and may extend such time as to all or any of the Members who from residence at a distance or other cause, the Board may deem fairly entitled to such extension but no Member shall be entitled to such extension save as a matter of grace and favor.

Directors may extend time

49. Any sum, which by the terms of issue of a share becomes payable

on allotment or at any time fixed date, whether on account of the nominal value of the share or by way of premium shall for the purposes of these Articles be deemed to be a call duly made and payable on the date on which by the terms of issue the same becomes payable, and in case of non-payment of such sum all the relevant provisions of these Articles as to payment of interest and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of call duly made and notified.

Sums deemed to be calls

51. Neither a judgment nor a decree in favor of the Company for calls

or other moneys due in respect of any shares nor any payment or satisfaction thereof nor the receipt by the Company of a portion of any which shall from time to time be due from any member in respect of any shares either by way of principal of interest nor any indulgence granted by the Company in respect of payment of any such money shall preclude the forfeiture of such shares as herein provided.

Partial payment not to preclude forfeiture

52. a) The Board may, if it thinks fit, agree to and receive from any

Member willing to advance the same, all or any part of the amount of his shares beyond the sums, actually called up and upon the moneys so paid in advance or upon so much thereof 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 advances are made the Board may pay or allow interest at such rate (not exceeding without the sanction of the Company in General Meeting up to fourteen per cent per annum) as the member paying the sum in advance and the Board agree to repay at any time any amount so advanced or may at any time repay the same upon giving to the Member three months notice in writing provided that moneys paid in advance of calls shall not confer the right to dividend/s or to participate in profits.

Payment in anticipation of calls may carry interest

b) No Member paying any such sum in advance shall be entitled to

voting rights in respect of the moneys so paid by him until the same would but for such payments become presently payable.

c) Advance payment made against future calls shall not be

constructed deposits within the meaning of Companies (Acceptance of deposits) Rules, 1975.

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d) Payment made in advance against calls shall be credited in the member’s account and it shall carry interest at the rate, which may be prescribed by the Board from the date of payment up to the date of calls, or call, which may be made by the Board from time to time.

53. A. Any calls for future share capital are made on shares such calls

shall be made on a uniform basis on all shares falling under the same class. For the purpose of this Article, shares of the same nominal value on which different amount have been paid up shall not be deemed to fall under the same class.

Calls on shares of same class to be made on uniform basis

B. If by the condition of allotment for any shares the whole or part of

the amount of issue price thereof shall be payable by installments every such installment shall, when due be paid to the Company by the person who, for the time being and from time to time shall be registered holder of the share or his legal representative.

Installment on shares to be duly paid

LIEN

54. The Company shall have a first and paramount lien upon all the shares (other than fully paid up shares) registered in the name of each Member (whether solely or jointly with others) and upon the proceeds of sale thereof, for all moneys (Whether presently payable or not) called or payable at a fixed time in respect of such shares, and no equitable interest in any shares shall be created except upon the footing and upon the condition that Article 30 hereof is to have full effect. Any such lien shall extend to all dividends from time to time declared in respect of such shares. Unless otherwise agreed the registration of a transfer of shares shall operate as a waiver of the Company’s lien, if any, on such shares. Provided that the Board Directors may at any time declare any shares wholly or in part to be exempt from the provisions of this clause.

Company to have lien on shares

56. For the purpose of enforcing such lien the Board may sell the

shares subject hereto in such manner as they shall think fit, and for that purpose may cause to be issued a duplicate certificate in respect of such shares and may authorize one of their members to execute a transfer thereof on behalf of and in the name of such Member. 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 or them in payment, fulfillment, or discharge of such debts, liabilities or engagements for fourteen days after such notice.

As to enforcing lien by sale.

57. (a) To give effect to any such sale, the Board may authorize some

person to transfer the shares sold to the purchase thereof. Transfer of share sold under lien

(b) The purchaser shall be registered as the holder of the shares

comprised in any such transfer.

(c) The purchaser shall not be bound to see to the application of the

purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the same

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58. The net proceeds of any such sale shall be received by the

Company and applied in or towards payment of such part of the amount in respect of which the lien exists as is presently payable and the residue, if any, shall (subject to a like for sums not presently payable as existed upon the shares before the sale) be paid to person entitled to the shares at the date of the sale.

Application of proceeds of sales

FORFEITURE AND SURRENDER OF SHARE 59. If any Member fails to pay the whole or any part of any call or

installments or any money due in respect of any shares either by way of principal or interest on or before the day appointed for the payment of the same or any such extension thereof as aforesaid, the Directors may at any time thereafter, during such time as the call or installment or any part thereof or the other moneys remain unpaid or a judgment or decree in respect thereof remains unsatisfied in whole or in part, send a notice on such Member or on the person (if any) entitled to the share by transmission, requiring him to pay such call or installment or such part thereof or other moneys as remain unpaid together with any interest that may have accrued and all expenses that may have been incurred by the Company by reason of such non-payment.

If money payable on shares not paid notice to be given to member

60. The notice shall name a day (not being less that fourteen days from

the date of the notice) and a place or places on and at which such calls or installments and such interest thereon at such rate not exceeding 18 percent per annum as the Directors shall determine from the day on which such call or installment ought to have been paid and expenses as aforesaid are to the paid. The notice shall also state that, in the event of the non-payment at or before the time and at the place appointed, the shares in respect of which the calls was made or installment is payable, will be liable to be forfeited.

Form of Notice

61. 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 installments, Interest and expenses due in respect thereof be forfeited by a ordinary resolution of the Board to that effect. Such forfeiture shall include all dividends declared or any other moneys payable in respect of the forfeited shares and not actually paid before the date of forfeiture which shall be the date on which the ordinary resolution of the Directors is passed forfeiting the shares.

In default of payment shares to be forfeited

62. 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 of Members, but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or to make any such entry as aforesaid.

Notice of Forfeiture to Member

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63. Any share so forfeited shall be deemed to be the property of the

Company, and may be sold, re-allotted, or otherwise disposed of, either to the original holder thereof or to any other person, upon such terms and in such manner as the Board shall think fit and at any time before a sale or disposal as aforesaid the board may cancel the forfeiture on such terms as it thinks fit.

Forfeited share to be property of the Company and may be sold etc.

64. Upon forfeiture of shares, the member shall forthwith forfeit the shares

to the Company. Surrender of forfeited shares

65. Any member whose shares have been forfeited shall cease to be a

member in respect of those shares but shall notwithstanding the forfeiture be liable to pay and shall forthwith pay to the Company, on demand all calls, installments, interest and expenses owing upon or in respect f such shares at the time of the forfeiture together with interest thereon from the time of the forfeiture until payment, at such rate not exceeding eighteen percent per annum or as the Board may determine and the Board may enforce the payment thereof, if it thinks fit.

Liability on forfeiture

66. The forfeiture of a share shall involve extinction, at the time of the

forfeiture, of all interest in and all claims and demand 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.

Effect of forfeiture

67. A declaration in writing that the declarant is a Director or Secretary of

the Company and that a share in the Company has been duly forfeited in accordance with these Articles on a date state in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the shares.

Evidence of forfeiture

68. Upon any sale after forfeiture or for enforcing a lien in purported

exercise of the powers therein before given, the Board may appoint some person to execute an instrument of transfer of the shares sold and cause the Purchaser’s name to be entered in the Register in respect of the shares sold, and the purchaser shall not be bound to see to the regularity of the proceedings, or to the application of the purchase money, and after his name has been entered in the Register in respect of such shares, the validity of the sale shall not be impeached by any person and the remedy of any person aggrieved by the sale shall be in damages only and against the Company exclusively.

Validity of Sale under these Articles

69. Upon any sale, re-allotment or other disposal under the provisions of the

preceding Articles, the certificate or certificates originally issued in respect of the relative shares shall (unless the same shall on demand by the Company have been previously surrendered to it by the defaulting Member) stand cancelled and become null and void and of no effect, and the Directors shall be entitled to issue a duplicate certificate or certificates in respect of the said shares to the person or persons entitled thereto distinguishing it on them in such manner as they think fit from the certificates not so delivered.

Cancellation of share certificate in respect of forfeited shares

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70. The Board 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 it thinks fit.

Power to annul forfeiture

71. The Directors may subject to the provisions of the Act, accept a

surrender of any share or by any member desirous of surrendering on such terms as the Directors may think fit.

Surrender of shares

72. The provisions of the Articles under this chapter to the extent

applicable, shall mutates mutandis apply to debentures of the Company. Provisions to apply to debentures also

TRANSFER AND TRANSMISSION OF SHARES 73. The Company shall keep a book to be called “Register of Transfer”, and

therein shall be fairly and distinctly entered particulars of every transfer or transmission of any share held in material form.

Register of Transfer

74. Shares in the Company may be transferred by instrument in writing in

such form and by such procedure as may from time to time be prescribed by law. Subject thereto the directors may prescribe a common form of for instruments of transfer which may from time to time be altered by the Directors.

Instrument of Transfer

75. In the case of transfer of shares/debentures held by joint holders, the

transfer will be effective only if it is made by all the joint holders. Transfer by Joint Holders

76. The Instrument of Transfer duly stamped and executed by the transferor

and the transferee shall be delivered to the Company in accordance with the provisions of the Act.

Transfer form to be completed and Presented to the Company

81. Subject to Article 30 hereof in the case of the death of any one or more

of the persons named in the Register of Members as the joint-holders of any shares, the survivor or survivors shall be the only persons recognised by the Company as having any title to or interest in such shares, but nothing herein contained shall be taken to release the estate of a deceased joint-holder from any liabilities on shares held by him jointly with any other person.

Death of one or more Joint holders of shares

83. A holder or joint holders of shares in or debentures of the Company

may nominate, in accordance with the provisions of Section 109A of the Companies Act, 1956 (including any amendment thereto or any re-enactment thereof) and in the manner prescribed there under, any person to whom all the rights in the shares in or debentures of the Company shall vest in the event of death of such holder (s). Any nomination so made shall be dealt with by the Company in accordance Act,1956 or any statutory modification or re-enactment thereof for the time being in force.

Nomination

93. In the case of transfer or transmission of shares or other marketable

securities where the Company has not issued any certificates and where such shares or securities are being held in an electronic and fungible form in a Depository, the provisions of the Depositories Act,1996 shall apply.

Transfer of shares in Dematerialised form

COPIES OF MEMORANDUM AND ARTICLES TO BE SENT

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TO MEMBERS 95. Copies of the Memorandum and Articles of Association of the

Company and other documents referred to in Section 39 of the Act as in force for the time being, shall be sent/furnished to every Member at his request within seven days of the request on payment of prescribed fees.

Copies of Memorandum and Articles to be sent by the Company

BORROWING POWER 96. Subject to the provisions of Section 58A, 292 and 293 of the Act and of

the Companies (Acceptance of Deposits) Rules, 1975 and of these Articles or any statutory modification thereof for the time being in force the Board may, from time to time at its discretion by a 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 purpose of the Company. Provided the payment of any sum or sums of money for the purpose of the Company. Provided however where the moneys to be borrowed together with the moneys already borrowed (apart from temporary loans to be obtained from the Company’s bankers in the ordinary course of business) exceed the aggregate of the paid up capital of the Company and its, free reserves (not being reserves set apart for any specific purpose) the Board of Directors shall not borrow such money without the sanction of the Company in General Meeting. No Debt incurred by the Company in excess of the limit imposed by these Articles shall be valid or effectual unless the lender proves that he advances the loan in good faith and without knowledge that the limit imposed by this Article had been exceeded.

Powers to borrow

101. The Board shall cause a proper Register to be kept in accordance with

the provisions of Section 143 of the Act of all mortgages, debentures and charged specifically affecting the property of the Company and shall cause the requirements of Section 118, 125 and 127 to 144 of the Act in that behalf to be duly complied with, (within the time prescribed by the said section or such extension thereof as may be permitted by the Company Law Board or the Court or the Registrar of Companies as the case may be) so far as they feel to be complied with by the Board.

Register of mortgage etc. to be kept

102. If any uncalled up capital of the Company is included in or charged by

any mortgage or other security, the Directors shall, subject to the provisions of the Act and these Articles, make calls on the Members in respect of such uncalled up capital in trust for the person in whose favor such mortgage or security is executed or if permitted by the Act, may by instrument under the seal authorize the person in whose favor such mortgage or security is executed or any other person in trust for him to make calls on the Members in respect of such uncalled up capital and the provisions hereinbefore contained in regard to calls shall mutants mutandis apply to calls made under such authority and such authority may be made exercisable either conditionally or unconditionally and either to the exclusion or the Director’s power or otherwise and shall be assignable if expressed so to be.

Mortgage of un called up capital

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MEETING OF MEMBERS 113. The Statutory Meeting of the Company, shall as required by Section

165 of the Act, be held at such time not being less than one month and not more than six months from the date at which the Company shall be entitled to commence business and at such place as the Board may determine, and the Board shall comply with the requirements of that Section, as to the report to be submitted and otherwise.

The Statutory Meeting

114. The Company shall in each year hold a General Meeting as its

Annual General Meeting in addition to any other meetings in that year. All General Meetings other than Annual General Meeting and the Statutory Meeting shall be called Extraordinary General Meetings. The First Annual General Meeting 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 was held and thereafter an Annual General Meeting of the Company shall be held within six months after the expiry of each financial year.

Annual General Meeting

115. a) Section 171 to 175 and Sections 177 to 186 of the Act with such

adaptations and modifications, if any, as may be prescribed shall apply with respect to meetings of any class of members or of debenture holders or any class of debenture holders of the Company in like manner as they apply with respect to General Meeting of the Company.

Section 171 to 186 of the Act shall apply to Meeting

b) Section 176 of the Act with such adaptations and modifications if

any, as may be prescribed shall apply with respect to meetings of any class of members or of debenture holders of the Company in like manner as it applies with respect to General Meeting.

118. Every notice of a meeting of the Company shall specify the place,

day and hour of the meeting and shall contain a statement of the business to be transacted therat.

Contents of Notice

119. Where by any provision contained in this Act or in these Articles,

special notice is required of any resolution, notice in respect of the same shall be given as provided in Section 190 of the Act.

Resolutions requiring Special Notice

121. When a meeting is adjourned for thirty days or more, notice of the

adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of the adjournment or of the business to be transacted at an adjourned meeting.

Notice to be given where a Meeting is adjourned for 30 days or more

123. Any valid 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.

Requisition of Members to state object of Meeting

126. The Directors shall on the requisition of members representing not

less than one-twentieth of the voting rights of members having a Circulation of Member’s Resolution

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right to vote at any Annual General Meeting or being not less than one hundred members holding shares on which there has been paid up an aggregate sum of not less than one lakh of rupees in all, give notice to the members of any resolution which can properly be moved and intended to be moved a the meeting and circulate any statement supplied by the requisitionsists in accordance with the requirements of Section 188 of the Act with which the Company shall also comply.

130. At least Twenty-one days notice of every General Meeting, Annual

or Extraordinary General Meeting, and by whomsoever called specifying the day, place and hour of meeting and the general nature of the business to be transacted threat, shall be given in the manner hereinafter provided, to such persons as are under these Articles entitled to receive notice from the Company. Provided that in the case of an Annual General Meeting with the consent in writing of all the Members entitled to vote thereat and in case of any other meetings, with the consent of Members holding not less than 95 percent of such part of the paid-up share capital of the Company as gives a right to vote at the meeting, a meeting may be convened by a shorter notice.

Twenty-one days notice of meeting to be given

131. The accidental omission to give any such notice as aforesaid to any

of the members, or the non-receipt thereof, shall not invalidate any resolution passed at or the proceedings of any such meeting.

Omission to give notice not to invalidate a resolution passed

132. No General Meeting, Annual or Extraordinary General Meeting,

shall be competent to enter upon, discuss or transact any business which has not been mentioned in the notice or notices upon which it was convened.

Meeting not to transact business not mentioned in notice

134. The Directors may in their absolute discretion on giving not less than

seven clear days notice in accordance with these Articles, postpone or cancel any meeting of members, except a meeting called pursuant to a member’s requisition.

Postponement or cancellation of meeting

135. Five Members present in person shall be the quorum for a General

Meeting. Quorum at General Meeting

143. a) Before or on the declaration of the result of the voting on any

resolution on a show of hands, a poll may be ordered to be taken by the Chairman of the meeting of his own motion and shall be ordered to be taken by him on a demand made in that behalf in the manner mentioned in Section 179 of the Act.

Poll to be taken if demanded

b) The demand for a poll may be withdrawn at any time by the person

or persons who made the demand.

c) A poll demand on a question of adjournment and on the question

relation to the election of the Chairman which is provided in Section 175 of the Act, shall be taken forthwith.

d) A poll demanded on a question shall be taken at such time not being

later than 48 (Forty-eight) hours from the time when the demand was made, as the Chairman may direct.

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e) Subject to the provisions of the Act, the Chairman of the Meeting shall have powers to regulate the manner in which a poll shall be taken.

f) The result of the poll shall be deemed to be decision of the meeting

on the resolution on which poll was taken.

144. Where a poll is to be taken, the Chairman of the meeting shall

appoint two scrutineers to scrutinse the votes cast at the poll and to report thereon to him. One of the scrutineers so appointed shall always be a Member (not being an officer or employee of the Company) present at the meeting, provided such a member is available and willing to be appointed. The Chairman shall have power at any time before the result of the poll is declared to remove a scrutineer from office and fill vacancies in the office of scrutineer arising from such removal or from any other cause.

Scrutineers at Poll

145. Any poll duly demanded on the election of a Chairman of a meeting

or on any question of adjournment shall be taken at the meeting forthwith.

In what case poll taken without adjournment

146. The demand for a poll, except on the question of the election of the

Chairman and of an adjournment, shall not prevent the continuance of meeting for the transaction of any business other than the question on which the poll has been demanded.

Demand for poll not to prevent, continuance of business

VOTES OF MEMBERS 147. No Member shall be entitled in respect of any shares registered in his

name to be present or to exercise any voting right on any question at any General Meeting or be reckoned in a quorum whilst any call or other sum presently payable to the Company in respect of such shares, shall remain unpaid or in regard to which the Company has exercised any right of lien; and no member shall be entitled to be present or to vote in respect of any shares that he has acquired by transfer at any meeting unless his name has been entered as the registered holder of such share in respect of which he claims to vote.

Restrictions on Voting

148. Any shareholder whose name is entered in the Register of Members

of the Company shall enjoy the same rights and be subject to the same liabilities as all other shareholders of the same class.

Equal Rights of Shareholders

149. Subject to the provisions of these Articles and without prejudice to

any special privileges or restrictions as to voting for the time being attached to any class of shares for the time being forming part of the capital of the Company, every member, not disqualified by the last preceding Article shall be entitled to be present and to speak and vote at such meeting, and on a show of hands every Member present in person or by proxy shall have one vote and upon a poll the voting right of every Member present in person or by proxy shall be in proportion to his share of the paid-up equity share capital of the Company. Provided, however if any preference Shareholder be present at any meeting of the Company, save as provided in clause (b) of sub-section (2) of Section 87, he shall have a right to vote only on resolutions placed before the meeting which directly affect the rights attached to his preference shares.

Number of votes to which a member is entitled

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150. On a poll taken at a meeting of the Company a Member entitled to

more than one vote or his proxy or other person entitled to vote for him, as the case may be, need not, if he votes, use all his votes or cast in the same way all the votes he uses.

Casting of votes by a Member entitled to more than one vote

152. If there be joint registered holders of any shares, any one of such

persons may vote at any meeting either personally or may appoint another person (whether a Member or not) as his proxy in respect of such shares, as if he were solely entitled thereto but the proxy so appointed shall not have any right to speak at the meeting that one of the said person so present whose name stands higher on the register shall alone be entitled to speak and to vote in respect of such shares, but the other or others of the joint holders shall be entitled to be present at the meeting. Several executors or administrators of a deceased Member in whose names shares stand for the purpose of these Articles be deemed as joint holders thereof.

Votes of joint members

153. Any member of the Company entitled to attend and vote at a meeting

of the Company shall be entitled to appoint any other person (whether a member or not) as his proxy to attend and vote instead of himself. A member (and in case of joint holders all holders) shall not appoint more than one person as proxy.

Voting in person or by proxy

154. Any person entitled under the Transmission Article (Article 87) to

transfer any share may vote at any General Meeting in respect thereof in the same manner as if he were the registered holder of such shares, provided that forty-eight hours at least before the time of the holding the meeting or adjourned meeting, as the case may be, at which he proposes to vote he shall satisfy the Director of his right to transfer of such shares and give such indemnity (if any) as the Directors may require or the Directors shall have previously admitted his right to vote at such meeting in respect thereof. For the purpose of the Article, the Directors shall have same powers either to recognise or to refuse to recognise such right to transfer, as they have to reject or accept, a transfer or transmission of shares under these Articles.

Votes in respect of shares of deceased and insolvent Member

155. Every proxy (whether a Member or not) shall be appointed in writing

under the hand of the appointer or his attorney, duly authorized in writing, or if such appointer is a body corporate under the common seal of such corporation, or be signed by an officer or any attorney duly authorised by it, and any Committee or guardian may appoint such proxy. The proxy so appointed shall not have any right to speak at the meeting.

Appointment of proxy

158. A Member present by proxy shall be entitled to vote only on a poll. Proxy to vote only on

a poll MINUTES OF MEETINGS 165. a) The Company shall cause minutes of all proceedings of every

General Meeting to be kept in accordance with the provisions of Section 193 of the Act.

Minutes of General Meeting and inspection thereof by members

h) The book containing the Minutes of the proceedings of any General

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Meeting of the Company shall: i) be kept at the Registered Office of the Company, and ii) be open, during the business hours to the inspection of any members

without charge, subject, to such reasonable restrictions as the Company may, in General Meeting impose so however that not less than two hours in each day are allowed for inspection.

iii) Any Member shall be entitled to be furnished within seven days after

he has made a request in that behalf to the Company, with a copy of any minutes referred to in Clause (h) above, on payment of such fees as prescribed under Section 196 of the Act.

DIRECTORS 167. Until otherwise determined in a General Meeting of the Company

and subject to the provisions of Section 252 of the Act, the number of Directors of the Company (excluding Alternate Directors) shall not be less than three or more than twelve.

Number of Directors

169. Two thirds of the total number of Directors of the Company shall: Directors of the

Company a) be persons whose period of office is liable to determination by

retirement of Directors by rotation and

b) save as otherwise expressly provided in the Act; be appointed by the

Company in General Meeting.

170. One third of the total number of Directors shall be non-retiring and

the Managing Director of the Company shall not be liable to retire by rotation.

Appointment of non-retiring Directors

176. The Board may, in accordance with and subject to the provision of

Section 313 of the Act, appoint an Alternate Director during the letter’s absence for a period of not less than three months from the state in which the meeting of the Board is ordinarily held. An Alternate Director appointed under this Article shall not hold office for a period longer than that permissible to the original director in whose place he has been appointed and shall vacate office if and when the original director returns to that State. If the term of office of the original Director is determined before so returns to that State, any provisions in the Act or in these Articles for the automatic reappointment of a retiring Director in default of another appointment shall apply to the Original Director and not the Alternate Director.

Appointment of Alternate Director

177. Subject to the provisions of Section 260, 261 and 264 of the Act and

further subject to Articles 174, the Board shall have power at any time and from time to time to appoint any person to be an Additional Director, but so that the total number of Directors shall not at any time exceed the maximum fixed under Article 169. Any such Additional Director shall hold office only up to the date of next Annual General Meeting.

Additional Director

189. A Director of the Company who is in any way, whether directly of Disclosure of Interest

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indirectly concerned or interested in a contract or arrangement, or proposed contract or arrangement entered into or to be entered into by or on behalf of the Company, shall disclose the nature of his concern or interest at a meeting of the Board in the manner provided in section 299(2) of the Act; provided that it shall not be necessary for a Director to disclose his concern or interest in any contract or arrangement entered into or to be entered into with any other Company where any of the Directors of the Company or two or more of them together hold or holds not more than two percent of the paid-up share capital in any such other Company or the Company.

201. Subject to Sections 259 of the Act, the Company may by ordinary

resolution, from time to time, increase or reduce the number of Directors, within the limits fixed in that behalf by these Articles, and may alter their qualifications and the Company may (subject to the provisions of Section 284 of the Act) remove any Director before the expiration of his period of office and appoint another qualified person in his place. The person so appointed shall hold office during such time as the Director in whose place he is appointed would have held the same if he had not been removed.

Company may increase or reduce the number of Directors

202. a) A person who is not a retiring Director shall, in accordance with and

subject to the compliance of provisions of Section 257 of the Act and Article 205 of this Articles of Association, be eligible for appointment to the office of Director at any General Meeting.

Right of persons other than retiring Directors to stand for Directorship

205. a) The Company shall keep at its Office a Registrar containing the

particulars of its Directors, Secretary and other persons mentioned in Section 303 of the Act, and shall otherwise comply with the provisions of the said section in all respects.

Register of Directors etc. and notifications of change, to Registrar

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MANAGING DIRECTOR 207. Subject to the provisions of the Act and these Articles, the Board shall have

the power to appoint from time to time any of its members as Managing Director or Managing Directors and/or Whole time Director/s and/or Special Directors like Technical Director, Financial Director etc. of the Company for a fixed term not exceeding five years at a time and upon such terms and conditions as the Board thinks fit, and the Board may by resolution vest in such Managing Director or Managing Directors/Whole time Director(s) and Special Directors such of the powers hereby vested in the Board generally as it thinks fit, and such powers may be made exercisable for such period or periods, and upon such conditions and subject to such restrictions as it may determine.

The Board to appoint Managing Director/s

WHOLE TIME DIRECTOR 211. Subject to the provisions of the Act and of these Articles, the Board may

from time to time with such sanction of the Central Government as may be required by law appoint one or more of its Director/s or other person/s as Whole-Time Director or Whole-Time Directors of the Company out of the Directors/ persons nominated under Article only either for a fixed term that the Board may determine or permanently for life time upon such terms and conditions as the Board may determine or permanently for life time upon such terms and conditions as the Board thinks fit. The Board may by ordinary resolution and / or an agreement/s vest in such Whole-Time Director or Whole Time Directors such of the powers authorities and functions hereby vested in the Board generally as it thinks fit.

Power to appoint Whole Time Director and/or Whole-time Directors

PROCEEDINGS OF THE BOARD OF DIRECTORS 214. 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 months and at least four such meetings shall be held in every year. The Directors may adjourn or otherwise regulate their meeting as they think fit.

Meeting of Directors

216. Subject to the Section 287 of the Act, the quorum for a meeting of the

Board shall be one-third of its total strength (excluding Director, if any, whose places may be vacant at the time) 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 equal to two-third of the total strength the number of the remaining Directors, that is to say, the number of Directors who are not interested present at the meeting being not less than two, shall be the quorum during such time.

Quorum

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POWERS OF DIRECTORS 228. The Board may exercise all such powers of the Company and

do all such acts and things as are not, by the Act, or any other Act or by the Memorandum or by the Articles of the Company required to be exercised by the Company in General Meeting, but subject nevertheless to these Articles, to the provisions of the Act, or any other Act and to such regulations being not inconsistent with the aforesaid regulations or provisions, as may be prescribed by the Company in General Meeting, but no regulation made by the Company in General Meeting shall invalidate any prior act of the Board which would have been valid if that regulation had not been made.

Power of Directors

REGISTERS, BOOKS AND DOCU MENTS

231.

a) (i) The Company shall maintain registers, books, and documents as required by the Act or these Articles.

Registers, Books and Documents

THE SEAL

234. a) The Board shall provide a Common Seal for the purposes of the Company, shall have powers from time to time to destroy the same and substitute a new Seal in lieu thereof, and the Board shall provide for the safe custody of the Seal for the time being, and the Seal shall never be used except by the authority of the Board of Committee of the Board, previously given.

The Seal, its custody and use

DIVIDEND

237. The Company in General Meeting may declare dividends to be paid to Members according to their respective rights but no dividends shall exceed the amount recommended by the Board, but the Company in General Meeting may declare a smaller dividend.

The Company in General Meeting may declare a dividend

238. No dividend shall be declared or paid except in accordance with Section 205 and Section 205 A of the Act and no dividend shall carry interest as against the Company. The declaration of the Board as the amount of profits of the Company shall be conclusive. Where a dividend has been declared, either the dividend shall be paid or the warrant in respect thereof shall be posted to the shareholder entitled to the payment of the dividend within time prescribed under Section 207 of the Act.

Dividends only not to be paid out of profit

239. No dividend shall be paid by the Company in respect of any share except to the registered holder of such share or to his order or to his banker.

Dividend payable to Registered holders

240.

Subject to the provision of the Act, the Board may, from time to time pay to the Members such interim dividend as in their judgment the position of the Company justifies.

Interim Dividend

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244. A transfer of shares shall not pass the right to any dividend declared thereon before the registration of the transfer.

Transfer of shares must be registered

246.

No member shall be entitled to receive payment of any interest or dividend in respect of his share or shares, whilst any money may be due or owing from him to the Company in respect of such share or shares or otherwise on any other account whatsoever, either alone or jointly with any other person or persons, and the Board may deduct from the interest or dividend payable to any Member all sums of money so due from him to the Company.

No member to receive dividend whilst indebted to the Company and Company’s right of reimbursement there out

248. The Company shall not forfeit any unpaid or unclaimed dividend and such dividends shall be dealt with according to the provisions of Section 205A, 205B, 205C and 205D of the Companies Act, 1956.

Unclaimed dividend

251. Where a dividend has been declared by a Company but has not been paid, or the warrant in respect thereof has not been posted, within 42 days from the date of the declaration to any shareholder entitled to the payment of the dividend, the Company shall, within 7 days from the date of expiry of the said period of 42 days transfer the total amount of dividend which remains unpaid or in relation to which no dividend warrant has been posted within the said period of 42 days, to special account to be opened by the Company in that behalf in any scheduled Bank to be called “Unpaid dividend account of BLUPLAST INDUSTRIES LIMITED.

Unpaid dividend

ACCOUNTS

256. The Company shall keep at the Office or at such other place in India as the Board thins fit, proper Books of Accounts in accordance with Section 209 of the Act.

Directors to keep true accounts

AUDIT

262. a) Every Balance Sheet and Profit & Loss Account shall be audited by one or more Auditors, as may be appointed from time to time.

Accounts to be audited

b) The Company will comply with all the provisions prescribed in Section 224 to Section 233 (both inclusive) of the Act, as amended from time to time.

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DOCUMENTS AND NOTICES

266. a) A document or notice may be served or given by the Company on any Member either personally or be sending it by post to him to his registered address or (if he has no registered address in India) to the address, if any, in India supplied by him to the Company for serving documents or notices on him

.

Service of documents or notice on Members by Company

b) Where a document or notice is sent by post, service of the document or notice shall be deemed to be effected by properly addressing, preparing and posting a letter containing the document or notice, serving shall be deemed to have been effected in the case of a notice of a meeting, at the expiry of forty-eight hours after the letter containing the document or notice is posted and in any other case, at the time at which the letter would be delivered in the ordinary course of post.

c) Where a member has intimated to the Company in advance that documents should be sent to him under a certificate of posting or by Registered Post with or without acknowledgement due, and has deposited with the Company a sum sufficient to defray the expenses of doing so, service of the documents shall not be deemed to be effected unless it is sent in the manner intimated by the member.

268. A document or notice may be served or given by the Company on or to the joint-holders of a share of serving or giving the document or notice to the joint-holder named first in the Register of Members in respect of the shares.

On joint holders

WINDING UP

275. A. Subject to the provisions of the Act, if the Company shall be wound up and the assets available for distribution among the members as such be less than sufficient 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 winding up, on the shares held by them respectively. And if in winding up, the assets available for distribution amongst the members shall be more than sufficient to repay the whole of the Capital paid up at the commencement of 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.

Winding up

B. But this clause will not prejudice the rights of the holders of shares issued upon special terms and conditions.

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INDEMNITY AND RESPONSIBILITY

277. a) Subject to the provisions of Section 201 of the Act, every Director, Manager, Auditor and other Officer or Servant of the Company shall be indemnified by the Company against, and it shall be the duty of the Directors out of the Funds of the Company to pay all costs, losses and expenses which any such Director, Manager, Auditor or other Officer of Servant may incur or become liable to by reason of any contract entered into, or act or thing done by him as such Director, Manager, Auditor of other Officer or servant or in any way in the discharge of his duties including travelling, expenses and in particular and so as not to limit the generality of the forgoing provisions against all liabilities incurred by him as such Director, Manager, Auditor or other Officer in defending any proceedings, whether civil or criminal, in which judgment is given in his favor or he is acquitted, or in connection with any application under Section 633 of the Act in which relief is provided shall immediately attach as a lien on the property of the Company and have priority as between the members over all other claims.

Director’s and other’s right of indemnity

b) Subject to the provision of Section 201 of the Act, no Director, Manager, or other Officer of the Company shall be liable for the acts, receipts neglects or defaults of any other Director or Officer or for joining in any receipt or other Act for conformity or for any loss or for joining in any receipt or other Act for conformity or for any loss or expenses happening to the Company through the insufficiency or deficiency of title to any property acquired by order of the Directors for and on behalf of the Company or for the insufficiency or deficiency of any security in or upon which any of the moneys of the Company shall be invested or for any loss or damage arising from the bankruptcy, insolvency or tortuous act of any person with whom any moneys, securities or effect shall be deposited or for any loss occasioned by an error of judgment or oversight on his part, or for any other loss, damage or misfortune whatever which shall happen in the execution of the duties of his office or in relation thereto unless the same happen through his own dishonest.

GENERAL POWER

279. Wherever in the Companies Act, it has been provided that the Company shall have any right, privilege or authority or that the Company could carry out any transaction only if the Company is so authorized by its Articles, than and in that case this Clause hereto authorizes and empowers the Company to have such right, privilege or authority and to carry such transactions as have been permitted by the Act, without there being any specific Regulation in that behalf herein provided.

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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts (not being contracts entered into in the ordinary course of business carried on by the Company) which are or may be deemed material have been entered or to be entered into by the Company. These contracts, copies of which have been attached to the copy of the Draft Prospectus, have been delivered to the Registrar of Companies, Delhi & Haryana, for registration and also the documents for inspection referred to hereunder, may be inspected at the Registered Office of the Company, from 10.00 a.m. to 4.00 p.m. on any working day from the date of the Draft Prospectus until the date of closing of the Issue. Material Contracts

1. Memorandum of Understanding, dated September 29, 2005 signed between the Company and Allianz Securities Limited, the Lead Managers to the Issue.

2. Memorandum of Understanding, dated October 27, 2005 signed between the Company and Bigshare Services Private Limited, the Registrar to the Issue.

3. Copy of the Tri-partite Agreement dated [●] between NSDL, the Company and Bigshare Services Private Limited.

4. Copy of the Tri-partite Agreement dated [●] between CDSL, the Company and Bigshare Services Private Limited.

5. Agreement with Bluplast Corporation for the Mark User License for use of brand “Bluplast”.

6. Agreement with Bluplast Corporation for the exclusive user license of brand “Bluplast”.

7. Business Transfer Agreement with Alaska Industries for take over of its business. Documents for Inspection

1. Memorandum and Articles of Association of Bluplast Industries Ltd., as amended from time to time.

2. Copy of special resolution passed at EGM dated September 20, 2005 u/s 81 (1A) authorizing the Issue of Equity Shares.

3. Copies of letters to BSE & NSE regarding In-principle approval for Listing.

4. Copies of In-principle approvals from BSE & NSE dated [●] and dated [●] respectively.

5. Copy of Auditor Report issued by Statutory Auditors of the Company M/s Shingrodia Goyal & Co., Chartered Accountants, dated November 22, 2005.

6. Certificate from Statutory Auditor dated January 13, 2006 regarding the deployment of funds in relation to the expansion programme till date.

7. Copy of Tax Benefits Certificate issued by Statutory Auditors of the Company M/s Shingrodia Goyal & Co., Chartered Accountants, dated November 22, 2005.

8. Copy of letter dated January 21, 2006 from Legal Advisors for the vetting and approval of the Draft Prospectus.

9. Copy of Appraisal Note of BOB Capital Markets Ltd.

10. Copies of quotation obtained and purchase orders placed for plant and machinery.

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11. Consent letters from Promoters, Directors, Lead Managers to the Issue, Bankers to the Issue, Bankers to the Company, Auditors, Legal Advisors to the Issue, Registrar to the Issue, Company Secretary & Compliance Officer to act in their respective capacities and for inclusion of their names in the Prospectus.

12. Copies of Annual Reports of the Company for the last 5 accounting periods i.e. FY 2001, FY 2002, FY 2003, FY 2004, FY 2005 and for six months ended on September 30, 2005.

13. Copies of Annual Reports of the Promoter Group Companies.

14. Due Diligence Certificate dated January 21, 2006 issued by Lead Managers to the Issue, Allianz Securities Limited.

15. A copy of the SEBI Final observation letter no. [●] dated [●], 2005 received from SEBI in respect of the Public Issue of Bluplast Industries Ltd.

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DECLARATION

All the relevant provisions of the Companies Act, 1956, and the guidelines issued by the Government of India or the guidelines issued by Securities and Exchange Board of India, established under Section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with and no statement made in this Draft Prospectus is contrary to the provisions of the Companies Act, the Securities and Exchange Board of India Act, 1992 or rules made thereunder or guidelines issued, as the case may be. We further certify that all statements in this Draft Prospectus are true and fair. SIGNED BY ALL THE DIRECTORS OF BLUPLAST INDUSTRIES LIMITED Kamlesh L. Jain Indermal P. Jain Managing Director Director Arvind M. Mehta Prince H. Jain Director Director R. D. Jain Janakraj R. Vakil Director Director Shashi Nand Nagori Manager (Finance & Accounts) Date: January 21, 2006 Place: Mumbai

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