Draft Letter of OfferJanuary 14, 2013

For Eligible Equity Shareholders only

Shivalik Bimetal Controls Limited(Our Company was originally incorporated as Shivalik Bimetal Controls Private Limited on June 18, 1984 under the Companies Act, 1956 with the Registrar of Companies Punjab, Chandigarh and Himachal Pradesh. Our Company was converted into public limited company on February 14, 1985 and the name of

our Company was changed to Shivalik Bimetal Controls Limited). The Corporate Identification Number of the Company is L27101HP1984PLC005862.Registered Office: 16-18, New Electronics Complex, Chambaghat, Dist. Solan, Himachal Pradesh - 173 213

Tel No: +91 1792 230175, 230578; Fax No: +91 1792 230475Corporate Office: H-2, Suneja Chambers, 2nd Floor, Alaknanda Commercial Complex, New Delhi - 110 019

Tel No: +91 11 2602 7174, 2602 8175; Fax No: +91 11 2602 6776Compliance Officer: Mr. Ram Parvesh, Company Secretary

E-mail: shivalik@shivalikbimetals.com; Website: www.shivalikbimetals.com

FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF SHIVALIK BIMETAL CONTROLS LIMITED ONLYDRAFT LETTER OF OFFER

ISSUE OF [●] EQUITY SHARES OF FACE VALUE OF ` 2 EACH (“EQUITY SHARES”) OF SHIVALIK BIMETAL CONTROLS LIMITED (“SHIVALIK” OR THE “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF ` [●] (INCLUDING SHARE PREMIUM OF ` [●]) PER EQUITY SHARE (“ISSUE PRICE”) FOR AN AGGREGATE AMOUNT NOT EXCEEDING ` 1,500 LAKHS TO THE ELIGIBLE EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF [●] EQUITY SHARES FOR EVERY [●] EQUITY SHARES HELD BY THE ELIGIBLE EQUITY SHAREHOLDERS ON THE RECORD DATE, I.E. [●], ALONGWITH ONE DETACHABLE WARRANT (REFERRED TO AS THE “WARRANT(S)”) FOR EVERY ONE EQUITY SHARE OFFERED IN THE ISSUE (THE “ISSUE”). THE ISSUE PRICE IS [●] TIMES THE FACE VALUE OF THE EQUITY SHARES.ON EXERCISE, EACH WARRANT SHALL BE ENTITLED TO ISSUE AND ALLOTMENT OF ONE EQUITY SHARE OF FACE VALUE ` 2 EACH AT A PREMIUM. FOR FURTHER DETAILS, PLEASE REFER TO “OFFERING INFORMATION” ON PAGE 122 OF THE DRAFT LETTER OF OFFER.

PAYMENT TERMS FOR EQUITY SHARESAmount payable per Equity Share Face Value (`) Premium (`) Total (`)On application 1/- [●] [●]On first and final call 1/- [●] [●]Total 2/- [●] [●]No amount is payable for the warrants at the time of allotment of equity shares under the Rights Issue.For more information on the payment terms and Warrants, refer to the Chapter titled “Offering Information” on page 122 of the Draft Letter of Offer.

GENERAL RISKSInvestments 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 relation to this Issue. For taking an investment decision, investors must rely on their own examination of the Company and the Issue including the risks involved. The securities being offered in 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 the Draft Letter of Offer. Investors are advised to refer to the section titled “Risk Factors” given on page 7 before making an investment in this Issue.

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

LISTINGThe existing Equity Shares of the Company are listed on BSE Limited (BSE). We have received “in-principle” approval from BSE for listing the Equity Shares to be Allotted in the Issue vide its letter dated [●]. For the purpose of this Issue, the Designated Stock Exchange is BSE.

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUESPA Capital Advisors LimitedSEBI Reg. No.: INM 00001082525, C - Block Community Center,Janak Puri, New Delhi - 110 058Tel.: +91 11 4567 5500, 2551 7371Fax: +91 11 2553 2644E-mail: shivalik.rights@spagroupindia.comInvestor Grievance e-mail id: grievances.mb@spagroupindia.comWebsite: www.spacapital.comContact Person: Mr. NitiN Somani / Mr. Abhishek Jain

MAS Services LimitedSEBI Regn. No.: INR 000000049T - 34, IInd Floor, Okhla Industrial Area, Phase IINew Delhi - 110 020Tel.: +91 11 2638 7281 - 83Fax: +91 11 2638 7384E-mail: info@masserv.comInvestor Grievance e-mail id: sblr@masserv.comWebsite: www.masserv.comContact Person: Mr. N C Pal

ISSUE PROGRAMMEISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT

APPLICATION FORMSISSUE CLOSES ON

[●] [●] [●]

INDEX

TITLE PAGE NO.

DEFINITION AND ABBREVIATIONS…………………………………………………………………….. 1 CURRENCY OF FINANCIAL REPRESENTATION AND USE OF MARKET DATA…………………... 5 FORWARD LOOKING STATEMENT……………………………………………………………………… 6 RISK FACTORS……………………………………………………………………………………………… 7 THE ISSUE…………………………………………………………………………………………………… 18 SUMMARY OF FINANCIAL INFORMATION…………………………………………………………….. 19 GENERAL INFORMATION………………………………………………………………………………… 25 CAPITAL STRUCTURE……………………………………………………………………………………... 28 OBJECTS OF THE ISSUE…………………………………………………………………………………… 32 STATEMENT OF TAX BENEFITS…………………………………………………………………………. 39 SUMMARY OF OUR BUSINESS…………………………………………………………………………… 48 HISTORY AND CERTAIN CORPORATE MATTERS…………………………………………………….. 51 OUR MANAGEMENT. ……………………………………………………………………………………… 55 OUR PROMOTERS…………………………………………………………………………………………... 59 FINANCIAL STATEMENTS………………………………………………………………………………... 60 UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS FOR 6 MONTHS PERIOD ENDED SEPTEMBER 30, 2012……………………………………………………………………………... 85CAPITALIZATION STATEMENT………………………………………………………………………….. 103 STATEMENT OF ACCOUNTING RATIOS………………………………………………………………... 104 CERTAIN OTHER FINANCIAL INFORMATION (WORKING RESULTS)……………………………... 105 STOCK MARKET DATA……………………………………………………………………………………. 106 FINANCIAL INDEBTEDNESS……………………………………………………………………………… 108 OUTSTANDING LITIGATIONS……………………………………………………………………………. 110 GOVERNMENT AND OTHER APPROVALS……………………………………………………………… 112 OTHER REGULATORY AND STATUTORY INFORMATION…………………………………………... 114 OFFERING INFORMATION…………..……………………………………………………………………. 122 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION…………………………………….. 151 DECLARATION……………………………………………………………………………………………… 152

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DEFINITIONS AND ABBREVIATIONS

In this Draft Letter of Offer, unless the context otherwise requires, the terms defined and abbreviations expanded below shall have the same meaning as stated in this section. References to statutes, rules, regulations, guidelines and policies will be deemed to include all amendments and modifications notified thereto. Company Related Terms

Term Description “Shivalik” / “Company” / “Issuer” / we / us / our

Unless the context otherwise requires, refers to, Shivalik Bimetal Controls Limited, a public limited company incorporated under the Companies Act, 1956

Articles of Association The Articles of Association of our Company, as amended from time to time Statutory Auditors / Auditors

The Statutory Auditors of our Company, M/s Malik S & Co., Chartered Accountants, 1/101, (LGF), Old Rajinder Nagar, Sir Ganga Ram Hospital Marg, New Delhi - 110 060

Board of Directors / Board The Board of Directors of our Company, unless specified otherwise Directors / our Directors The Director(s) on the Board of our Company, unless otherwise specified Group Companies Companies, firms, ventures, etc. promoted by the Promoters of our Company, including

such entities which are covered under section 370 (1)(B) of the Companies Act. Memorandum of Association

The Memorandum of Association of our Company, as amended from time to time

Promoter(s) The promoters of our Company namely, Mr. Narinder Singh Ghumman and Mr. Satinder Jeet Singh Sandhu.

Promoter Group

Promoter group shall mean the persons and entities forming part of our promoter group in accordance with the SEBI ICDR Regulations and such persons and entities disclosed as Promoter Group in filings made by the Company with the Stock Exchange pursuant to Clause 35 of the Listing Agreement.

Registered Office Registered Office of our Company situated at 16-18, New Electronics Complex, Chambaghat, Dist. Solan, Himachal Pradesh - 173 213

Issue Related Terms

Term Description Abridged Letter of Offer

The Abridged Letter of Offer sent to Eligible Equity Shareholders of our Company with respect to this Issue in accordance with the provisions of the SEBI ICDR Regulations and the Companies Act.

Allotment / Allotted Unless the context otherwise requires, the allotment of Equity Shares pursuant to the Issue Allottee(s) Persons to whom our Equity Shares will be issued pursuant to the Issue Applicant(s) / Investor(s) Eligible Equity Shareholders and / or Renouncees who are entitled to apply or have

applied for Equity Shares under the Issue, as the case may be ASBA / Application Supported by Blocked Amount

The application (whether physical or electronic) used by an ASBA Investor to make an application authorizing the SCSB to block the amount payable on application in the ASBA Account.

ASBA Account Account maintained with an SCSB and specified in the CAF or plain paper application, as the case may be, for blocking the amount mentioned in the CAF, or the plain paper application, as the case may be.

ASBA Investor(s) Eligible Equity Shareholders proposing to subscribe to the Issue through ASBA process and who (i) are holding our Equity Shares in dematerialized form as on the Record Date and

have applied for their Rights Entitlements and / or additional Equity Shares in dematerialized form;

(ii) have not renounced their Rights Entitlements in full or in part; (iii) are not Renouncees; and (iv) are applying through blocking of funds in a bank account maintained with SCSBs.

All QIBs, Non-Institutional Investors and other Investors whose application value exceeds ` 2,00,000 complying with the above conditions must participate in this Issue through the ASBA Process only.

Banker(s) to the Issue [●]

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Term Description Composite Application Form / CAF

The form used by an Investor to make an application for the Allotment of Equity Shares in the Issue

Consolidated Certificate The single certificate issued by the Company to each Allotee per folio to whom Equity Shares are allotted in physical form pursuant to the Issue.

Controlling Branches of the SCSBs

Such branches of the SCSBs which coordinate with the Lead Manager, the Registrar to the Issue and the Stock Exchange, a list of which is available on http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries

Designated Branches Such branches of the SCSBs which shall collect application forms used by ASBA Investors and a list of which is available on http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries

Designated Stock Exchange

The Designated Stock Exchange for this Issue shall be BSE Limited

Draft Letter of Offer The Draft Letter of Offer dated January 14, 2013, filed with SEBI for its observations, which does not contain complete particulars of the Issue.

Eligible Equity Shareholder(s)

Equity Shareholders of the Company as on the Record Date

Equity Shares Fully paid up equity shares of our Company having a face value of ` 2 each Issue / Rights Issue Issue of [●] Equity Shares of face value of ` 2 each (“Equity Shares”) of Shivalik Bimetal

Controls Limited (“Shivalik” or the “Company” or the “Issuer”) for cash at a price of ` [●] (including share premium of ` [●]) per Equity Share (“Issue Price”) for an aggregate amount not exceeding ` 1,500 lakhs to the Eligible Equity Shareholders on rights basis in the ratio of [●] Equity Shares for every [●] Equity Shares held by the Eligible Equity Shareholders on the record date, i.e. [●], alongwith one Detachable Warrant (referred to as the “Warrant(s)”) for every one Equity Share offered in the issue.

Issue Closing Date [●] Issue Opening Date [●] Issue Price ` [●] per Equity Share. Issue Proceeds The monies received by our Company pursuant to the issue of Equity Shares on Rights

basis which are allotted pursuant to the Issue Issue Size The issue of [●] Equity Shares aggregating to ` 1,500 lakhs Lead Manager SPA Capital Advisors Limited Letter of Offer The Letter of Offer dated [●] filed with the Stock Exchange after incorporating the

observations received from the SEBI on the Draft Letter of Offer, which will contain complete particulars of the Issue.

Listing Agreement The listing agreement entered into between us and the Stock Exchange Non Institutional Investor(s)

Non institutional investor as defined under Regulation 2(1)(w) of the SEBI ICDR Regulations.

“Qualified Foreign Investor(s)” / “QFI(s)”

Non-resident investors, other than SEBI registered FIIs or sub-accounts or SEBI registered FVCIs, who meet ‘know your client’ requirements prescribed by SEBI and are resident in a country which is (i) a member of Financial Action Task Force or a member of a group which is a member of Financial Action Task Force; and (ii) a signatory to the International Organisation of Securities Commission’s Multilateral Memorandum of Understanding or a signatory of a bilateral memorandum of understanding with SEBI. Provided that such non-resident investor shall not be resident in a country which is listed in the public statements issued by Financial Action Task Force from time to time on: (i) jurisdictions having a strategic anti-money laundering/combating the financing of terrorism deficiencies to which counter measures apply; and (ii) jurisdictions that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the Financial Action Task Force to address the deficiencies.

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Term Description Qualified Institutional Buyer(s) / QIB(s)

Public financial institutions as specified in Section 4A of the Companies Act, scheduled commercial banks, mutual fund registered with SEBI, FIIs and sub-account registered with SEBI, other than a sub-account which is a foreign corporate or foreign individual, multilateral and bilateral development financial institution, venture capital fund registered with SEBI, foreign venture capital investor registered with SEBI, state industrial development corporation, insurance company registered with IRDA, provident fund with minimum corpus of ` 2,500 lakhs, pension fund with minimum corpus of ` 2,500 lakhs, National Investment Fund set up by the Government of India and insurance funds set up and managed by the army, navy or air force of the Union of India and insurance funds set up and managed by the Department of Posts, India

Record Date [●] Registrar / Registrar to the Issue

MAS Services Limited

Renouncees Any person(s) who has / have acquired Rights Entitlements from the Eligible Equity Shareholders

Rights Entitlement The number of Equity Shares that an Eligible Equity Shareholder is entitled, that is determined as a proportion to the number of Equity Shares held by such Eligible Equity Shareholder on the Record Date, i.e., [●] Equity Shares for [●] Equity Shares held on [●]

Self Certified Syndicate Bank / SCSB

Self Certified Syndicate Bank(s), registered with SEBI, which acts as a Banker to the Issue and which offers the facility of ASBA. A list of all SCSBs is available at http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries.

Share Certificate The certificate in respect of the Equity Shares allotted to a folio Stock Exchange BSE Limited, where our Equity Shares are presently listed Warrant(s) Detachable warrants (optionally convertible) being issued to every person whom Equity

Shares shall be allotted pursuant to the Issue in the ratio of one Warrant per Equity Share offered in accordance with the terms and conditions as mentioned in the Chapter “Offering Information” on page 122 of the Draft Letter of Offer. Each such detachable Warrant shall be listed and tradable on the Stock Exchange.

Warrant Exercise Period The exercise period of Warrant shall be from February 01, 2014 to February 15, 2014. Warrant Exercise Price The warrant exercise price shall be an amount that is at a discount of 25% to the then

prevailing market price of the equity shares of the Company at the time of exercise of warrants. Since the warrant exercise price is based on the then prevailing market price of the equity shares, there is no adjustment required to be made in the warrant exercise price in case of any corporate event like bonus, split or consolidation of equity shares. Provided, however, the Warrant Exercise Price, shall at no time be lower than the face value of the underlying equity shares. The “then prevailing market price” shall be the average of the daily closing prices of the equity shares on the stock exchange during the two weeks period immediately preceding the date of commencement of the Warrant Exercise Period. The Warrant exercise price would be advertised by us in an English National Daily and one Hindi National Daily with wide circulation (including the place where our Registered Office is situated). The said warrant exercise price shall be advertised within three working days of the beginning of warrant exercise period.

Working Day Any day, other than Saturday or Sunday or public holidays, on which commercial banks in India are open for business.

Conventional and General Terms

Term Description BIFR Board for Industrial and Financial Reconstruction BSE BSE Limited Companies Act The Companies Act, 1956, as amended CDSL Central Depository Services (India) Limited

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Term Description Depositories Act The Depositories Act, 1996, as amended from time to time Depository / Depositories A depository registered with SEBI under the SEBI (Depositories and Participant)

Regulations, 1996, as amended from time to time, in this case being NSDL and CDSL

Depository Participant / DP A depository participant as defined under the Depositories Act ECS Electronic Clearing System EGM Extra Ordinary General Meeting EPS Earnings per Equity Share Foreign Institutional Investor / FII

Foreign institutional investor (as defined under SEBI (Foreign Institutional Investors) Regulations, 1995) registered with SEBI under applicable laws in India

Financial Year / Fiscal Year / FY Twelve months ending on March 31 of a particular year FIs Financial Institutions FVCI Foreign venture capital investor, registered with SEBI under the SEBI (Foreign

Venture Capital Investor) Regulations, 2000 HUF Hindu Undivided Family Indian GAAP The generally accepted accounting principles in India Listing Agreement The equity listing agreement signed between our Company and the Stock Exchange Non Residents All Bidders who are not NRIs or FIIs and are not persons resident in India NSDL National Securities Depository Limited RBI Reserve Bank of India RONW Return on Net Worth RTGS Real Time Gross Settlement SEBI The Securities and Exchange Board of India constituted under the SEBI Act, 1992,

as amended SEBI ICDR Regulations The Securities and Exchange Board of India (Issue of Capital and Disclosure

Requirements) Regulations, 2009, as amended SEBI Takeover Regulations The Securities and Exchange Board of India (Substantial Acquisition of Shares and

Takeovers) Regulations, 2011, as amended

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CURRENCY OF FINANCIAL PRESENTATION

In the Draft Letter of Offer, unless the context otherwise requires, all references to one gender also refers to another gender and the word “Lac / Lakh” means “one hundred thousand”, the word “million (mn)” means “ten lac / lakh”, the word “Crore” means “ten million” and the word “billion (bn)” means “one hundred crore”. In the Draft Letter of Offer, any discrepancies in any table between total and the sum of the amounts listed are due to rounding-off. Throughout the Draft Letter of Offer, unless otherwise stated, all figures have been expressed in thousands (’000) and / or lakhs. Unless indicated otherwise, the financial data in the Draft Letter of Offer is derived from our Company’s audited financial statements as on March 31, 2012 prepared in accordance with Indian GAAP, applicable accounting standards and guidance notes issued by the ICAI, the applicable provisions of the Companies Act and other statutory and / or regulatory requirements, and the unaudited financial statements as at and for the six months period ended September 30, 2012 which have been subject to limited review in accordance with the “Accounting Standard 25 - Interim Financial Reporting” issued pursuant to the Companies (Accounting Standard) Rules, 2006 and are included in the Draft Letter of Offer as required under the SEBI ICDR Regulations. Unless indicated otherwise, the operational data in the Draft Letter of Offer is presented on a basis and refers to the operations of our Company. In the Draft Letter of Offer, 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 the Draft Letter of Offer will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practice and Indian GAAP. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in the Draft Letter of Offer should accordingly be limited. We have not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own advisors regarding such differences and their impact on our financial data. For additional definitions used in the Draft Letter of Offer, see the section ‘Definitions and Abbreviations’ on page 1 of the Draft Letter of Offer.

USE OF MARKET DATA Unless stated otherwise, market data used throughout the Draft Letter of Offer was obtained from internal Company reports, data, websites and industry publications. Industry publication data and website data generally state that the information contained therein has been obtained from sources believed to be reliable, but that their accuracy and completeness and underlying assumptions are not guaranteed and their reliability cannot be assured.

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FORWARD LOOKING STATEMENTS

Certain statements in the Draft Letter of Offer are not historical facts but are “forward-looking” in nature. Forward looking statements appear throughout the Draft Letter of Offer, including, without limitation, under the chapters “Risk Factors”. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or financial performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, our competitive strengths and weaknesses, our business strategy and the trends we anticipate in the industry and the political and legal environment, and geographical locations, in which we operate, and other information that is not historical information. Words such as “aims”, “anticipate”, “believe”, “could”, “continue”, “estimate”, “expect”, “future”, “goal”, “intend”, “is likely to”, “may”, “plan”, “predict”, “project”, “seek”, “should”, “targets”, “would” and similar expressions, or variations of such expressions, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. By their nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved. These risks, uncertainties and other factors include, among other things, those listed under “Risk Factors”, as well as those included elsewhere in the Draft Letter of Offer. Prospective investors should be aware that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited, to: General economic and business conditions in the markets in which we operate and in the local, regional and

national economies; Increasing competition in or other factors affecting the industry segments in which our Company operates; Changes in laws and regulations relating to the industries in which we operate; Our ability to meet our capital expenditure requirements and/or increase in capital expenditure; Fluctuations in operating costs and impact on the financial results; Our ability to attract and retain qualified personnel; Changes in technology in future; Changes in political and social conditions in India or in countries that we may enter, the monetary policies of

India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

The performance of the financial markets in India and globally; and Any adverse outcome in the legal proceedings in which we are involved. For a further discussion of factors that could cause our actual results to differ, please refer to “Risk Factors” on page 7 of the Draft Letter of Offer. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Neither we nor the Lead Manager make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved, and such forward-looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario. Neither we nor the Lead Manager nor any of their respective affiliates or advisors have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI / Stock Exchange requirements, we and Lead Manager will ensure that the Eligible Equity Shareholders are informed of material developments until the time of the grant of listing and trading permissions by the Stock Exchange.

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RISK FACTORS

An investment in equity shares involves a high degree of risk. You should carefully consider all the information in the Draft Letter of Offer, including the risks and uncertainties described below, before making an investment in our Equity Shares. The risks and uncertainties described in this section are not the only risk we may face. If any of the following risks actually occur, our business, financial condition and results of operations could suffer, the trading price of our Equity Shares could decline, and you may lose all or part of your investment. Unless otherwise stated in the relevant risk factors set below, we are not in a position to specify or quantify the financial or other implications of any risk mentioned herein. In making an investment in this Issue, prospective investors must rely on their own examination of our Company and terms of the Issue. The numbering of the Risk Factors has been done to facilitate ease of reading and reference and does not in any manner indicate the importance of one risk factor over another. INTERNAL RISK FACTORS 1. There are certain legal proceedings involving us that, if determined against us, could have a material

adverse impact on our financial condition and results of operations. There are outstanding material legal proceedings involving our Company that, if determined against us, could have a material adverse impact on our financial condition and results of operations. These material legal proceedings are pending at different levels of adjudication before various courts and tribunals. Should any new developments arise, such as a change in law or rulings against us by courts or tribunals, we may need to make provisions in our financial statements, which could adversely impact our reported financial condition and results of operations. Furthermore, if significant claims are determined against us and we are required to pay all or a portion of the disputed amounts, there could be a material adverse effect on our business and profitability. A summary of the material litigations involving our Company is as under:

Nature of litigation No. of cases Amount (` in lakhs) Civil matters 4 949.72 Income Tax Notice 1 1 - Service Tax Show Cause Notice 2 13 438.10

1 The amount cannot be ascertained. 2 The said amount is excluding interest and penalty, if any.

In addition to aforesaid, we have also filed a compounding application with the Registrar of Companies, Punjab, Chandigarh and Himachal Pradesh with respect to the transactions undertaken by us with our Joint Venture and Associate companies without prior approval under section 297 of the Companies Act. We cannot provide any assurance that these matters will be decided in our favour. Further, there is no assurance that similar proceedings will not be initiated against us in the future. For further details of the cases mentioned above, please see “Outstanding Litigations” on page 110 of the Draft Letter of Offer.

2. The funding requirements and the deployment of the proceeds of the Issue are based on management

estimates and have not been independently appraised. Further, the deployment of the Issue proceeds is entirely at our discretion and is not subject to any monitoring by an independent agency.

Our funding requirements and the deployment of the proceeds of the Issue are based on management estimates and have not been appraised by any bank or financial institution. Further, such estimates are based on market conditions and management expectations as of the date they were made. In view of the nature of the industry in which we operate, we may have to revise our management estimates from time to time and consequently our funding requirements may also change. Significant revisions to our funding requirements or the deployment of Issue proceeds may result in the rescheduling of our resource raising programs and an increase or decrease in our proposed expenditure for a particular object.

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Further we have not appointed any independent monitoring agency to monitor the utilization of the proceeds raised from this Issue. The Issue proceeds will be utilized at the sole discretion of the Board of Directors of our Company. For further details please refer to section titled “Objects of the Issue” on page 32 of the Draft Letter of Offer.

3. We have not yet entered into definitive agreements to utilize the entire proceeds of the Issue. Any delay in

finalization and placement of order for machinery, equipments and other assets, for which orders have not been placed, may have cost over run and impact our future probability.

We have not entered into any definitive agreement or placed orders for purchase of machinery and other assets aggregating ` 694.20 lakhs out of the total requirement of machinery for ` 1,806.24 lakhs for setting up of the unit for which funds are proposed to be raised through this Issue. Whilst the quotations obtained by us for equipment, installations and building work in connection with such projects are described in “Objects of the Issue” on page 32 of the Draft Letter of Offer, such costs are subject to change in the light of various factors beyond our control, including delays or increase in quoted prices by identified vendors. Further, plant & machinery imported for the project and kept at rented premises in Roz ka Meo, Dist. Mewat, Haryana has to be shifted and erected at the site on development and construction of factory building as per layout plans. Our inability to complete the identified projects as per the stated schedules of implementation may lead to cost overruns and may impact our future profitability.

Also the requirement of Computers, Furniture & Fixtures and Clearing & Shifting expenses relating to imported machinery aggregating to ` 63.61 lakhs are purely management estimates and not based on quotations from vendors.

4. We may face difficulties in executing our strategy including our expansion cum modernisation plans for

our manufacturing facilities, and there can be no assurance that our planned capital expenditures will result in growth and / or additional profitability for our Company.

Our proposed expansion and modernisation of operations requires capital expenditures for ` 3,313.15 lakhs. Further, we may make substantial investments in the future for establishing new manufacturing facilities and upgrading our existing manufacturing facilities. so that they comply with the international standards. Delays in the construction and equipping or expansion of our facilities could result in loss or delayed receipt of earnings, increase in financing and construction costs, and our failure to meet profit and earnings budgets may require us to reschedule or reconsider our planned capacity expansions and accordingly would have an adverse effect on our financial condition and results of operations.

For further information, see “Objects of the Issue” on page 32 of the Draft Letter of Offer.

5. We operate in a competitive business environment, both globally and domestically. Competition from

existing overseas players and new entrants and consequent pricing pressures may adversely affect our business, financial condition and results of operations.

The Bimetal industry is highly competitive. Growing competition may subject us to pricing pressures and require us to reduce the prices of our products and services in order to retain or attract customers, which may have a material adverse effect on our revenues and margins. Further, several of our competitors are large international companies. and have access to greater resources or may be able to develop or acquire technology or partner with innovators or customers at terms which are not presently feasible for us. Any failure to keep abreast with technological advancements might place our competitors at an advantageous position in terms of cost, efficiency and timely delivery of final products. while we undertake research and development (“R & D”) to develop cost and time efficiencies and to broaden our product range, in particular in certain niche segment, In the event our competitors develop better process technology or improved process yield or are able to source raw materials at competitive prices, and are therefore able to create new products or substitutes for our products at competitive prices, we may not be able to maintain our growth rate and revenues and our profitability may decline. Any of these factors may have a material adverse effect on our business and prospects.

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6. We have not applied for certain regulatory approval required for setting up of the unit for which the funds are proposed to be raised through this Issue. Failure to apply for such approval in time or rejection of our application may adversely affect our expansion plans. Further, our Company requires a number of approvals, licenses, registrations and permits for its business(es) and the failure to obtain or renew them in a timely manner may adversely affect its operations.

Our Company has received single window clearance for setting proposed manufacturing unit and approval for purchase of land, subsequent to which the land has been purchased. We have not applied for further regulatory approvals required for setting up of unit for which the funds are proposed to be raised through this Issue. The applications for such approvals will be made after placing the complete orders for plant & machineries or on receipt of the same.

We require a number of approvals, licenses, registrations and permits for our business(s). Additionally, we may need to apply for renewal of approvals which expire, from time to time, as and when required in the ordinary course. In absence of grant of such renewal, we may not be able to carry on our manufacturing operations.

For more information, please refer section titled “Government and Other Approvals” on page 112 of the Draft Letter of Offer. Furthermore, the government approvals and licenses are subject to various conditions. If we fail to comply, or a regulator claims that our Company has not complied with these conditions, our business, financial position and operations would be materially adversely affected.

7. We may be subject to restrictive covenants, including restriction on raising of further capital, under term

loans and working capital facilities provided to us by our Banker.

We have availed of several loans and financial facilities from Indian Bank. In respect of various agreements entered into by our Company with our Lender and sanction letters issued by them to us, we are bound by certain restrictive covenants regarding capital structure and other general restrictive covenants. The major restrictive covenants as imposed by the lenders on our Company are as under: Our Company shall not, during the continuance of this loan, without written consent of the Bank: Change or in any way alter the capital structure of the Company Effect any scheme of amalgamation or reconstruction Revalue the assets of the Company Declare a dividend or distributable profits after deduction of taxes, except where the installment of

principal and interest payable to the Bank are being paid regularly Enlarge the scope of other manufacturing / trading activities Borrow or obtain credit facilities of any description from any other bank Any material changes in the project

Further, our immovable properties and plant and machinery are charged to lenders / Bank as per the terms and conditions of the term loan agreement. For details of the loans availed and assets charged, please refer to section titled "Financial Indebtedness" on page 108 of the Draft Letter of Offer. In compliance with such restrictive covenants, we have obtained the consent from our Banker, Indian Bank vide their letter dated December 28, 2012 for the proposed issue.

8. Any downgrade of our Company’s credit ratings would increase borrowing costs and constrain its access

to capital and, as a result, would negatively affect its business operations and profitability.

The cost and availability of capital is inter alia dependent on our Company’s short-term and long-term credit ratings. Ratings reflect a rating agency's opinion of our Company’s financial strength, operating performance, strategic position, and ability to meet our Company’s obligations. Our Company holds ratings from CARE of BBB- (indicating moderate safety) for its long term bank facilities and BBB- / A3 (indicating moderate safety) for its fund based facilities from Indian Bank. In relation to the non fund based facilities, our Company holds the rating of A3 (indicating moderate safety) from CARE. The ratings have been modified from BBB+ to BBB- and downgraded from A2 to A3 in the past as a result of falling profitability,

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stretched operating cycle, declining revenue contribution from its color picture tube segment and exposure to foreign exchange fluctuation risk. Any further downgrade of our Company’s credit ratings may increase borrowing costs and constrain its access to capital and debt markets, and, as a result, would negatively affect its business operations and profitability. In addition, downgrades of its credit ratings could increase the possibility of additional terms and conditions being added to any additional financing or refinancing arrangements in the future. Any such adverse development could adversely affect our Company’s business, future financial performance and results of operations.

9. We may face a risk on account of not meeting our export obligations.

We have obtained Advance License and licences under Export Promotion Capital Goods (EPCG) scheme. As per the licencing requirement under the said scheme, we are required to fulfill the export obligation of 6 times of the duty saved on the EPCG Licenses, over the next 6 years from the date of import of the Capital Goods. The total duty forgone on all EPCG Licenses is to the tune of ` 456 lakhs. Further, we also have to export goods under Advance License against the goods imported by us. Any failure to meet our export obligations will make us liable to pay to the Government of India, an amount equivalent to the duty benefit enjoyed by our Company under the said scheme along with interest. As on September 30, 2012, we have an aggregate export obligation of ` 703.04 lakhs.

10. We have entered into a number of related party transactions. There can be no assurance that entering

into such transaction with related parties will be the most beneficial option for our Company.

We have entered into a number of related party transactions with our Promoter, Promoter Group entities, Directors / Key managerial Personnel and relatives of Key Managerial Personnel. Such transactions or any future transactions with related parties may potentially involve conflicts of interest and impose certain liabilities on our Company. The summary details of the related party transactions entered by us during the financial year ended March 31, 2012 and six months period ended September 30, 2012 are as under:

(` in ‘000) Sr. No.

Particulars September 30, 2012

March 31, 2012

1 Purchase of equity shares - 47,128 2 Rent received 202 397 3 Job work expense 360 - 4 Job work income - 446 5 Goods sold 12 537 6 Goods purchased 1773 6,296 7 Other expenses 34 517 8 Managerial Remuneration 11512 14,723 9 Professional Fees paid 375 875

10 Remuneration paid pursuant to Section 314 of the Companies Act for holding an office or place of profit

1708 3,138

11 Rent paid 240 4,91212 Security Deposit - 1,350

Total 80,319 For further details on related party transactions, see the chapter titled “Financial Statements” on page 60 and “Unaudited Condensed Interim Financial Statements for 6 months period ended September 30, 2012” on page 85 of the Draft Letter of Offer. Our Company’s policy on transactions with related parties is that such transactions are conducted on normal commercial terms in the ordinary and normal course of business. Our Company may enter into additional transactions with its related parties in the future. Although regulations in India do require disclosure of related party transactions in a listed company’s financial statements, such regulations do not require shareholders’ approval or an independent assessment of connected or related party transactions. As a result, there is no independent verification that the terms of such transactions or that any of our Company’s transactions with its related parties will benefit our Company.

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11. We have certain contingent liabilities, and our financial condition may be adversely affected if such

contingent liabilities materialize.

The table below sets forth our contingent liabilities not provided for as at September 30, 2012 and March 31, 2012, as per our audited restated consolidated financial statements:

(` in ‘000) Nature of Contingent Liability September 30, 2012 March 31, 2012

A. Contingent liabilities Bank Guarantee(s) submitted 15,742 11,211 Letters of credit established by the bank - 18,033 Bills discounted 16,879 17,843 Customs duty on material imported against Advance License / EPCG Scheme, for pending export obligation

70,304 62,350

Corporate Guarantee on behalf of JV / Associate Company

55,800 55,800

Surety with Sales Tax Department 500 500 B. Commitments Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for

10,100 14,517

Total 1,69,325 1,80,254

To the extent that any such contingent liabilities materialize, our financial condition may be adversely affected. For further information, see the chapter titled “Financial Statements” on page 60 and “Unaudited Condensed Interim Financial Statements for 6 months period ended September 30, 2012” on page 85 of the Draft Letter of Offer.

12. Our Company have availed unsecured loans from Ultra Portfolio Private Limited, one of our Promoter

Group Entity, aggregating to ` 294.05 lakhs as on November 30, 2012 of which an amount of ` 178.57 lakhs is repayable on demand. Re-payment of such loan, if called at short notice, may affect our cash flows adversely to such extent.

As on November 30, 2012, we have availed unsecured loans from Ultra Portfolio Private Limited, one of our Promoter Group Entity, aggregating to ` 294.05 lakhs, of which ` 178.57 lakhs is repayable on demand. If such loan which is repayable on demand is called at short notice, it may adversely affect our cash flows to such extent. For further details, refer to the section titled “Financial Indebtedness” on page 108 of the Draft Letter of Offer.

13. We are susceptible to volatility of prices of our raw material mainly Copper Strips / Brass Strips & Alloys,

various Nickel, Ferrous and Magnesium based alloys and stainless steel. Fluctuation in the prices of the same may adversely affect our results of operations.

A significant proportion (94%) of raw material we consume is imported. Our raw material includes Copper Strips / Brass Strips & Alloys, various Nickel, Ferrous and Magnesium based alloys and stainless steel. Raw material costs are dependent on global commodity prices which are subject to fluctuations. Also prices of stainless steel are subject to fluctuation, depending on, among other factors, the number of producers and their production volumes and changes in demand in the markets. Volatility in prices of raw material may adversely affect our profitability.

14. We have historically been dependent on a relatively small number of suppliers for a significant portion of

our purchases, and there is no assurance that we will be able to broaden our supplier base in any future periods. We do not currently have long term contracts or exclusive supply arrangements with any of our suppliers, and any major disruption to the timely and adequate supplies of our raw materials could adversely affect our business, results of operations and financial condition.

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In the past, we have been dependent on a relatively small number of suppliers for a significant portion of our purchases. During the financial year 2011-12, we have procured 90.64% of the requirement of our material from 5 suppliers. We do not have long term contracts or exclusive supply arrangements with any of our suppliers. We are therefore dependent on adequate and timely deliveries by our suppliers of necessary raw materials or equipment. In the event of a delay, inadequacy or default in deliveries by any of our suppliers, we may not be able to obtain substitutes on an adequate and timely basis or on commercially acceptable terms. Furthermore, it is possible that some of our existing suppliers may choose to discontinue operations, or offer more viable terms or enter into exclusive arrangements with our competitors. A major disruption to the timely and adequate supplies of our raw materials could adversely affect our business, results of operations and financial condition.

15. We may experience difficulties in expanding our business into new regions and markets in India and

abroad and introducing our complete range of products.

As part of our growth strategy, we continue to evaluate attractive growth opportunities to expand our business into new regions and markets in India and beyond. Factors such as competition, culture, regulatory regimes, business practices and customs and customer requirements in these new markets may differ from those in our current markets and our experience in our current markets may not be applicable to these new markets. In addition, as we enter new markets and geographical regions, we are likely to compete with other manufacturers who already have a presence in those geographies and markets and are therefore more familiar with local regulations, business practices and customs and have stronger relationships with customers.

Our business may be exposed to various additional challenges including obtaining necessary governmental approvals, identifying and collaborating with local business and partners with whom we may have no previous working relationship; successfully gauging market conditions in local markets with which we have no previous familiarity; attracting potential customers in a market in which we do not have significant experience or visibility; being susceptible to local taxation in additional geographical areas and adapting our marketing strategy and operations to different regions. Our inability to expand the acceptability of our products and markets may adversely affect our business prospects, financial conditions and results of operations.

16. The risk of non-payment or default by our customers may adversely affect our Company’s financial

condition and results of operations.

Our Company cannot be certain, and cannot assure you, that it will be able to maintain its recoveries in relation to its debtors in the future. Moreover, as our Company’s business expands, it may experience increase in delay or defaults in payments by its debtors. Thus, if our Company is not able to managing its bad debts, the overall revenue realization will fall and its results of operations may be adversely affected. We have already filed three cases against our customers for recovery of the amount due, details of which are given under “Outstanding Litigations” on page 110 of the Draft Letter of Offer.

17. We are susceptible to product liability claims that may not be covered by warranties and assurances from

our suppliers or by insurance, and which, if successful, could require us to pay substantial sums.

Any defects in our products, including as a result of defective materials supplied to us, can adversely affect our business and could result in customer claims for damages or require us to undertake product recalls. Defects in our products that arise from defective materials or other inputs supplied by external suppliers may or may not be covered by warranties. An unusual number or amount of warranty claims against a supplier could adversely affect us as we depend on a limited number of suppliers for our materials.

We have not obtained any product liability coverage with respect to our products. If any product liability claim is decided against us, it could adversely affect our business and financial condition. We also face the risk of loss resulting from, and the adverse publicity associated with, product liability lawsuits. Even unsuccessful product liability claims would likely require us to spend money on litigation, divert management’s time, adversely affect our goodwill and impair the marketability of our products.

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18. Changes in technology may render our current technologies obsolete or require us to make substantial capital investments. The cost of implementing new technologies or expanding capacity or change in our customer technologies could be significant and could adversely affect our revenues and results of operations.

Our businesses are subject to rapid and significant changes in technology. Although we strive to keep our technology in accordance with the latest standards, the technologies currently employed may become obsolete or may be subject to competition from new technologies in the future. The cost of implementing new technologies or expanding capacity could be significant and could adversely affect our results of operations. We are also impacted by the change in the technologies used by our customers for their products. During the last five financial years, our sales revenue from parts of color picture tube segment was as under:

Year %age of revenue from parts for color picture tube segment March 31, 2012 13.35% March 31, 2011 29.06% March 31, 2010 38.24% March 31, 2009 36.53% March 31, 2008 37.27%

With reduced overall demand for television sets with picture tubes, the demand for our products have declined resulting in adverse impact on our business and results of operations. Any such change in technologies and reduced demand from our customer may adversely impact our revenues and results of operations.

19. Our Corporate Office has been taken on lease from five persons / entities, including one Promoter Group

Company. Any termination of the lease(s) or the other relevant agreements / mutual understanding in connection with such properties or our failure to renew the same in a favourable, timely manner, or at all, could adversely affect our activities.

Our Corporate office premises have been taken on lease by us from five different persons / entities, including one Promoter Group Company. Termination of the lease or other relevant agreements / mutual understanding in connection with such properties or our failure to renew the same, on favourable conditions, in a timely manner, or at all, could require us to vacate such premises at short notice and may adversely affect our operations, financial condition and profitability.

20. Our success depends in large part upon our management team and key personnel and our ability to

attract, train and retain such persons.

Our ability to sustain our rate of growth depends significantly upon our ability to manage key issues such as selecting and retaining key operations personnel, developing managerial experience to address emerging challenges and ensuring a high standard of client service. In order to be successful, we must attract, train, motivate and retain highly skilled employees. If we cannot hire additional qualified personnel or retain them, our ability to expand our business will be impaired and our revenue could decline. We will need to recruit new employees, who will have to be trained and integrated into our operations. We will also have to train existing employees to adhere properly to internal controls and risk management procedures. Failure to train and motivate our employees properly may result in an increase in employee attrition rates, divert management resources and subject us to incurring additional human resource related expenditure. Our inability to attract and retain talented professionals, or the resignation or loss of key operations personnel, may have an adverse impact on our business and future financial performance.

21. We could face currency exchange risks as a portion of our revenues are from exports and major raw

materials consumed by us are imported. Further we have also availed Buyers Credit for import of plant and machinery. Fluctuation in currency rates may adversely impact our results of operations.

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The exchange rate of foreign currency vis-à-vis Indian Rupee has changed substantially in recent years and may continue to fluctuate significantly in the future. In the financial year ended March 31, 2012, we derived 43.70% of our revenues from exports and 94% of the materials consumed were imported. Further, we have also availed Buyers Credit for purchase of second hand plant and machinery from Sandvik Heating Technology AB, Sweden. Accordingly, our operating results have been and will continue to be impacted by fluctuations in the exchange rate between the Indian Rupee and foreign currency. To hedge the exposure to movement in Foreign Exchange Rates, we enter into Foreign Exchange Forward Contracts. The use of these foreign exchange forward contracts reduces the risk or cost to the Company and the company does not use those for trading or speculation purposes.

22. Any future equity offerings or issue of options under future employee stock option scheme may lead to dilution of investor’s shareholding in our company.

Purchasers of Equity Shares in this Issue may experience dilution of their shareholding to the extent we make future equity offerings and to the extent we decide to grant options to be issued under an employee stock option scheme. We do not have any ESOP scheme currently.

23. Our ability to pay dividends in the future will depend upon future earnings, financial condition, cash

flows, working capital requirements and capital expenditures.

Out of the last five financial years ended March 31, 2012, 2011, 2010, 2009 and 2008, our Company has declared dividend during the four financial years except for that ending March 31, 2012. The amount of our future dividend payments, if any, will depend upon our future earnings, financial condition, cash flows, working capital requirements and capital expenditures. There can be no assurance that we will be able to pay dividends.

24. We have not registered our corporate logo and have applied for registration of the same in the name of

our Company. If our application for such registration is not approved our brand building exercise could be affected.

Our intellectual properties consist of the logo being used by us. We have applied for registration of the same and our application is pending with the Registrar of Trademarks. We cannot give guarantee that our pending applications will be approved by the appropriate authorities. If our application for such registration is not approved our brand building exercise could be affected. For details of our trademark registration please refer to section titled “Government and Other Approvals” on page 112 of the Draft Letter of Offer.

25. Our Promoters may have the ability to determine the outcome of any shareholder resolution.

Our Promoter Group will continue to be the largest shareholders, holding 61.34% of equity capital of our company after the Issue, assuming full subscription by all the shareholders. As significant shareholder, our Promoters may have interests which may affect the interests of shareholders and /or our interests and may have the ability to determine the outcome of any shareholder resolution.

EXTERNAL RISK FACTORS 26. Any changes in the regulatory framework could adversely affect our operations and growth prospects.

We are subject to various regulations and policies including Excise, Customs, Service Tax, Income Tax, Labour acts, etc. Our business and prospects could be materially adversely affected by changes in any of these regulations and policies, including the introduction of new laws, policies or regulations or changes in the interpretation or application of existing laws, policies and regulations. There can be no assurance that we will succeed in obtaining all requisite regulatory approvals in the future for our operations or that compliance issues will not be raised in respect of our operations, either of which could have a material adverse affect on our business, financial condition and results of operations.

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27. A slowdown in economic growth in the markets in which we operate could cause our business to suffer.

Our performance and growth are dependent on the health of the economy of the markets in which we operate. The economy could be adversely affected by various factors such as political or regulatory action, including adverse changes in liberalization policies, social disturbances, terrorist attacks and other acts of violence or war, natural calamities, interest rates, commodity and energy prices and various other factors. Any slowdown in the economy of the markets in which we operate may adversely affect our business and financial performance and the price of our Equity Shares.

28. Civil disturbances, extremities of weather, regional conflicts and other political instability may have

adverse affects on our operations and financial performance.

Certain events that are beyond our control such as earthquake, fire, floods and similar natural calamities may cause interruption in the business undertaken by us. Our operations and financial results and the market price and liquidity of our equity shares may be affected by changes in Indian Government policy or taxation or social, ethnic, political, economic or other adverse developments in or affecting India.

29. Any downgrading of India’s debt rating by a domestic or international rating agency could adversely

affect our business.

Any adverse revisions to India’s credit ratings for domestic and international debt by domestic or international rating agencies may adversely affect our ability to raise additional financing, and the interest rates and other commercial terms. This could impact our profitability and ability to obtain financing for capital expenditures and the price of our Equity Shares.

30. Regional or International hostilities, terrorist attack or other acts of violence of war could have a

significant adverse impact on international or Indian financial markets or economic conditions or on Government Policy. Such incidents could also create a greater perception that investment in Indian Companies involves a higher degree of risk and could have an adverse impact on our business and on the market price of our company’s equity shares.

31. Investors will not receive the Equity shares and Warrants subscribed and allotted in this issue until

several days after they have paid for them, which will subject them to market risk.

The Equity Shares and the attached Warrants subscribed and allotted in this issue will not be credited to investor’s demat account with depository participants or share certificates / letter of allotment will not be dispatched until approximately 15 days from the Issue closing date. Investors can start trading only after receipt of listing and trading approvals in respect of these Equity Shares which will require additional time after the allotment. Further, there can be no assurance that the equity Shares allocated will be credited to investor’s demat account, or that the trading in the equity shares will commence, within the time periods specified above.

32. The market value of the Equity Shares and Warrants may fluctuate due to the volatility of the securities

markets.

The securities markets are volatile and stock exchanges have in the past, experienced substantial fluctuations in the prices of listed securities. The stock exchanges have experienced problems, which, if these were to continue or recur, could affect the market price and liquidity of the securities of Indian Companies, including the Equity Shares. The governing bodies of the various Indian stock exchanges have from time to time imposed restrictions on trading in certain securities, limitations on price movements and margin requirements. Furthermore, time to time disputes have occurred between listed companies and stock exchanges and other regulatory bodies, which in some cases may have had a negative effect on the market sentiment.

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33. Future issues or sales of equity Shares of our company may significantly affect the trading price of the Equity Shares and Warrants.

Future issue of Equity Shares / convertible instruments by our company or the disposal of Equity Shares by any of the major shareholders or the perception that such issues or sales may occur may significantly affect trading price of the Equity Shares and Warrants. None of the shareholders are subject to any lock-in restricting their ability to dispose off their Equity Shares, and there can be no assurance that any shareholder will not dispose of, encumber, or pledge, his Equity Shares.

34. The Rights Issue is of Equity Shares aggregating to ` 1,500 lakhs along with one Detachable Warrant per

Equity Share. If the warrant holder does not exercise his option to convert the warrant into Equity Share during the warrant exercise period, the same will lapse and our Company may not be able to raise funds on such lapsed warrants. This may adversely affect the cash flows and growth of our business.

For each Equity Share offered and allotted under this Issue, the allottee will receive one Detachable Warrant convertible into one Equity Share of our Company upon exercise. The Warrant holder can apply for allotment of Equity Shares of our Company within the Warrant Exercise Period. The Warrants can be freely and separately traded till the same are tendered for exercise. The warrant exercise price shall be an amount that is at a discount of 25% to the then prevailing market price of the Equity Shares of our Company at the time of exercise of Warrants. If the warrant holder does not exercise his option to convert the Warrant into Equity Share during the Warrant Exercise Period, the same will lapse and our Company may not be able to raise funds on such lapsed Warrants. This may adversely affect the cash flows and growth of our business.

35. There will not be any adjustment in the number of Equity Shares to be issued upon exercise of Warrants

in the event of further rights issue by our Company during the tenure of Warrants and this may result in dilution of your shareholding after such rights issue.

In case our Company decides to raise funds through a rights issue of Equity Shares during the tenure of the Warrants, no adjustment would be made in the share entitlement on Warrants and there would also not be any reservations for warrant holders in the rights issue which may result in dilution of the holding of warrant holders.

36. The Warrants will bear the risk of fluctuation in the price of the Equity Shares.

Stock markets have experienced extreme volatility in the recent past that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of the Equity Shares. There may be significant volatility in the market price of the Equity Shares. The market price of the Warrants is expected to be affected by fluctuations in the market price of the Equity Shares and it is impossible to predict whether the price of the Equity Shares will rise or fall. Any decline in the price of the Equity Shares may have an adverse effect on the market price of the Warrants.

PROMINENT NOTES: 1. Issue of [●] equity shares of face value of ` 2 each (“equity shares”) of Shivalik Bimetal Controls Limited

(“shivalik” or the “company” or the “issuer”) for cash at a price of ` [●] (including share premium of ` [●]) per equity share (“issue price”) for an aggregate amount not exceeding ` 1,500 lakhs to the eligible equity shareholders on rights basis in the ratio of [●] equity shares for every [●] equity shares held by the eligible equity shareholders on the record date, i.e. [●], alongwith one detachable warrant (referred to as the “warrant(s)”) for every one equity share offered in the issue (the “issue”). The issue price is [●] times the face value of the equity shares. On exercise, each warrant shall be entitled to issue and allotment of one equity share of face value ` 2 each at a premium. For further details, refer to “Offering Information” on page 122 of the Draft Letter of Offer.

2. The average cost of acquisition of our Equity Shares by our Promoters, Mr. Narinder Singh Ghumman and Mr. Satinder Jeet Singh Sandhu is ` 1.34 and ` 1.61 per equity share respectively. The average cost of acquisition of Equity Shares by our Promoters has been calculated by taking the average of the amounts paid by them to acquire the Equity Shares currently held by them.

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3. The Net Worth of our Company as per Audited Accounts as on March 31, 2012 and Unaudited condensed

Interim Financial Statements as on September 30, 2012 is ` 5,148.47 lakhs and ` 5,170.93 lakhs respectively.

4. The Book Value per Equity Share of our Company as per Audited Accounts as on March 31, 2012 and Unaudited condensed Interim Financial Statements as on September 30, 2012 is ` 26.81 and ` 26.93 respectively.

5. No part of the issue proceeds will be paid as consideration to our Promoter, our Directors, our key managerial employees or our promoter group companies or ventures except as mentioned in section “Objects of the Issue” on page 32 of the Draft Letter of Offer.

6. Our Company has entered into certain related party transactions as disclosed in the “Financial Statements” on page 60 and “Unaudited Condensed Interim Financial Statements for 6 months period ended September 30, 2012” on page 85 of the Draft Letter of Offer.

7. Our Promoter Group, Directors and their relatives have not financed the purchase by any other person of the equity shares of our Company during the period of six months immediately preceding the date of filing of Draft Letter of Offer with the SEBI.

8. Trading in the Equity Shares of our Company for all investors shall be in dematerialized form only. For further details, see the section titled “Offering Information” on page 122 of the Draft Letter of Offer.

9. There has been no change in the name of our Company in the last twelve months.

10. Our Company and the BRLM will update the offer document in accordance with the Companies Act and the SEBI ICDR Regulations and our Company and the BRLM will keep the public informed of any material changes relating to our company till the listing of our shares on the Stock Exchanges. No selective or additional information would be made available to a section of investors in any manner whatsoever.

11. Investors may contact the BRLM, the Registrar to the Issue or the Compliance Officer for any complaints, clarifications, etc. pertaining to the Issue.

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THE ISSUE

The details of this Issue are set out below: Equity Shares proposed to be issued by the Company [●] Equity Shares Rights Entitlement [●] Equity Shares for every [●] Equity Shares held on

the Record Date alongwith one Warrant for every one Equity Share offered in the Issue

Record Date [●] Issue Price per Equity Share ` [●] Equity Shares outstanding prior to the issue 1,92,01,400 Equity Shares of ` 2/- each Equity Shares outstanding after the Issue but before exercise of Warrants, assuming full subscription

[●] Equity Shares of ` 2/- each

Equity Shares outstanding after the Issue and assuming full exercise of Warrants

[●] Equity Shares of ` 2/- each

Objects of the Issue Please refer to section “Objects of the Issue” on page 32 of the Draft Letter of Offer

Payment terms for Equity Shares

Amount payable per Equity Share Face Value (`) Premium (`) Total (`) On application 1/- [●] [●] On first and final call 1/- [●] [●] Total 2/- [●] [●]

No amount is payable for the warrants at the time of allotment of equity shares under the Rights Issue. For more information on the payment terms and Warrants, refer to the Chapter titled “Offering Information” on page 122 of the Draft Letter of Offer.

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SUMMARY OF FINANCIAL INFORMATION

The following tables set forth the summary financial information derived from our audited financial statements as on and for financial year ended March 31, 2012 prepared in accordance with Indian GAAP and the Companies Act and the Unaudited condensed Interim Financial Statements for the period ended September 30, 2012 prepared in accordance with Indian GAAP and should be read in conjunction with the financial statements and the notes (including the significant accounting principles) thereto included in the chapter “Financial Statements” on page 60 and “Unaudited Condensed Interim Financial Statements for 6 months period ended September 30, 2012” on page 85 of the Draft Letter of Offer. For the financial year ended March 31, 2012, based on the audited financial statements BALANCE SHEET AS AT 31ST MARCH 2012

(` in ‘000) Particulars Note

No. As at March 31,

2012 As at March 31,

2011 I. EQUITY AND LIABILITIES Shareholders’ funds (a) Share capital 3 38,403 38,403 (b) Reserves and surplus 4 476,443 450,098 Non-current liabilities (a) Long-term borrowings 5 115,451 25,407 (b) Deferred tax liabilities (Net) 6 15,789 22,698 (c) Other Long term liabilities 7 4,207 3,332 (d) Long-term provisions 8 1,882 2,116 Current liabilities (a) Short-term borrowings 9 332,372 251,184 (b) Trade payables 10 59,306 138,341 (c) Other current liabilities 11 95,658 47,614 (d) Short-term provisions 12 46,198 48,156 TOTAL 1,185,709 1,027,349

II. ASSETS Non-current assets (a) Fixed assets (i) Tangible assets 13 212,657 198,042 (ii) Intangible assets 13 1,159 50 (iii)Capital work-in-progress 13 134,936 929 (b) Non-current investments 14 165,523 119,523 (c) Long-term loans and advances 15 11,965 28,371 (d) Other non-current assets 16 79,998 59,337 Current assets (a) Current Investments 17 2,930 1,984 (b) Inventories 18 319,522 282,465 (c) Trade receivables 19 160,222 227,340 (d) Cash and cash equivalents 20 7,888 16,724 (e) Short-term loans and advances 21 87,064 90,331 (f) Other current assets 22 1,845 2,253 TOTAL 1,185,709 1,027,349

III. Notes forming part of the Financial Statements 1 to 40

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STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2012

(` in '000 except per share data)

Particulars Note No. Year ended

March 31, 2012 Year ended

March 31, 2011 I Revenue from operations 23 794,708 887,942 II Other income 24 4,596 6,509 III Total Revenue (I + II) 799,304 894,451 IV Expenses

(a) Cost of materials consumed 25 473,054 525,536 (b) Decrease/(Increase) in Stock 26 13,386 (12,557) (c) Employee benefits expense 27 74,406 60,500 (d) Finance costs 28 37,316 31,047 (e) Manufacturing and other expense 29 172,719 183,903 (f) Depreciation expense 13 21,621 18,975 Total expenses 792,502 807,404

V Profit before exceptional and extraordinary items and tax (III-IV)

6,802 87,047

VI Exceptional items (Income)/Expenses 30 (30,685) (41) VII Profit before extraordinary items and tax (V

- VI) 37,487 87,088

VIII Extraordinary Items - - IX Profit before tax (VII - VIII) 37,487 87,088 X Tax expense (a) Current tax 17,200 20,500 (b) Current tax related to previous years 851 5 (b) Deferred tax (6,909) 2,265 11,142 22,770

XI Profit (Loss) for the year (IX-X) 26,345 64,318 XII Earnings per equity share

(a) Basic 31 1.37 3.35 (b) Diluted 31 1.37 3.35

XIII Notes forming part of the Financial Statements 1 to 40

21

CASH FLOW STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

(` in '000)

Particulars Year ended

March 31, 2012 Year ended March

31, 2011 A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax and extraordinary items 37,487 87,088 Adjustments for: Depreciation 21,621 18,975 Interest Paid 31,916 30,885 Interest Received (246) (73) Amount Written Back - (5) Debtors/ Unrecoverable Amount Written Off 14,887 111 Exchange Difference on translation of foreign currency cash & cash equivalent-

Loss (16) (13)

(Profit)/Loss on sale of Fixed Asset 5,531 164 Operating Profit before Working Capital change 111,180 137,132 Adjustment for : Trade and other receivables 14,317 (16,772) Inventories (14,030) (110,463) Trade Payables (62,089) (8,062) Loans and Advances 2,992 54,473 Cash generated from operations 52,370 56,308 Direct taxes paid (14,130) (17,740) Cash flow from Ordinary items 38,240 38,568 Net Cash flow from operating Activities 38,240 38,568

B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets (56,759) (41,873) Sale of Fixed Assets 13,883 2,068 Capital Work In Progress (126,614) 1,623 Capital Advance 5,681 (11,757) Interest Received 246 73 Long Term Investment (46,000) (24,177) Other Investment (946) (401) Net cash (used ) in / from investing activities (210,509) (74,444)

C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Bank Borrowings 157,675 66,143 Term Loan - - Vehicle Loan (2,502) 10,729 Term Loan Paid 33,012 (6,403) Unsecured Loan 16,446 12,872 Interest Paid (31,916) (30,885) Dividend including Dividend Tax paid (9,004) (14,477) Net Cash (used) in from financing activities 163,711 37,979 Net Increase/(Decrease) In Cash And Cash Equivalents (8,558) 2,103 Cash and Cash equivalents as on 1st April, 2011 (Opening Balance) 15,830 13,714 Exchange Difference on translation of foreign currency cash & cash equivalent 16 13 Cash and Cash equivalents as on 31st March, 2012 (Closing Balance) 7,288 15,830 Cash and Cash equivalents as on 31st March, 2012 as per book 7,288 15,830

22

For the six months period ended September 30, 2012, based on the Unaudited condensed Interim Financial Statements Condensed Balance Sheet as at 30th September 2012 (` in ‘000)

Balance Sheet as at Note No. 30th September 2012 31st March 2012 Unaudited Audited

I. EQUITY AND LIABILITIES Shareholders’ funds (a) Share capital 3 38,403 38,403 (b) Reserves and surplus 4 478,690 476,444 Non-current liabilities (a) Long-term borrowings 5 109,101 115,451 (b) Deferred tax liabilities (Net) 6 15,124 15,789 (c) Other Long term liabilities 3,371 4,207 (d) Long-term provisions 1,950 1,883 Current liabilities (a) Short-term borrowings 7 270,992 332,372 (b) Trade payables 8 74,862 59,304 (c) Other current liabilities 9 180,338 95,658 (d) Short-term provisions 10 47,884 46,198 TOTAL 1,220,715 1,185,709

II. ASSETS Non-current assets (a) Fixed assets (i) Tangible assets 11 215,946 212,657 (ii) Intangible assets 11 1,045 1,159 (iii)Capital work-in-progress 11 143,555 134,936 (b) Non-current investments 12 165,523 165,523 (c) Long-term loans and advances 6,923 11,965 (d) Other non-current assets 13 77,570 79,998 Current assets (a) Current Investments 3,232 2,930 (b) Inventories 14 246,869 319,522 (c) Trade receivables 15 173,728 160,222 (d) Cash and cash equivalents 8,359 7,888 (e) Short-term loans and advances 16 176,126 87,064 (f) Other current assets 1,839 1,845 TOTAL 1,220,715 1,185,709

23

Condensed Statement of Profit & Loss for the period from 01st April 2012 to 30th September 2012

(` in ‘000) Statement of Profit & Loss for the Note No.September 2012September 2011 Unaudited Unaudited

I Revenue from operations 17 406,042 436,499

II Other income 616 2,754

III Total Revenue (I + II) 406,658 439,253

IV Expenses

(a) Cost of materials consumed 18 255,706 278,476 (b) Decrease/(Increase) in Stock 19 (11,590) (28,935) (c) Employee benefits expense 20 41,087 33,859 (d) Finance costs 21 16,341 17,670 (e) Manufacturing and other expense 22 89,882 90,441 (f) Depreciation expense 11 11,321 10,665 Total expenses 402,747 402,176 402,747 402,176

V Profit before exceptional and extraordinary items and tax (III-IV)

3,911 37,077

VI Exceptional items (Income)/Expenses 1,000 (23,213)

VII Profit before extraordinary items and tax (V - VI) 2,911 60,290 VIIIExtraordinary Items - - IX Profit before tax (VII - VIII) 2,911 60,290

X Tax expense

(a) Current tax 1,330 9,000 (b) Current tax related to previous years - - (b) Deferred tax (665) - 665 9,000 XI Profit (Loss) for the year (IX-X) 2,246 51,290

XII Earnings per equity share (a) Basic 23 0.12 2.67 (b) Diluted 23 0.12 2.67

24

Condensed Cash Flow Statement for the period ended September 30, 2012

(` in ‘000) Cash Flow statement for the period ended September 2012 September 2011

Cash Flow From Operating Activities 104,281 59,027 Cash Flow From Investing Activities (19,328) (185,286)Cash Flow From Financing Activities (84,071) 115,112 Net Increase/(Decrease)In Cash And Cash Equivalents 882 (11,147)Cash And Cash Equivalents At The Begining Of The 7,288 15,830 Cash And Cash Equivalents At The End Of The Year * 8,170 4,683

*Excludes earmarked balance with banks as Margin Money Deposits of ` 188 thousands (previous year of ` 600 thousands

25

GENERAL INFORMATION

Pursuant to a resolution passed under Section 81(1) of the Companies Act by our Board in its meeting held on December 10, 2012 and the member of the Company in their Extra Ordinary General Meeting of the Company held on January 07, 2013, it has been decided to make the following Offer to the Eligible Equity Shareholders, with a right to renounce: ISSUE OF [●] EQUITY SHARES OF FACE VALUE OF ` 2 EACH (“EQUITY SHARES”) OF SHIVALIK BIMETAL CONTROLS LIMITED (“SHIVALIK” OR THE “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF ` [●] (INCLUDING SHARE PREMIUM OF ` [●]) PER EQUITY SHARE (“ISSUE PRICE”) FOR AN AGGREGATE AMOUNT NOT EXCEEDING ` 1,500 LAKHS TO THE ELIGIBLE EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF [●] EQUITY SHARES FOR EVERY [●] EQUITY SHARES HELD BY THE ELIGIBLE EQUITY SHAREHOLDERS ON THE RECORD DATE, I.E. [●], ALONGWITH ONE DETACHABLE WARRANT (REFERRED TO AS THE “WARRANT(S)”) FOR EVERY ONE EQUITY SHARE OFFERED IN THE ISSUE (THE “ISSUE”). THE ISSUE PRICE IS [●] TIMES THE FACE VALUE OF THE EQUITY SHARES. ON EXERCISE, EACH WARRANT SHALL BE ENTITLED TO ISSUE AND ALLOTMENT OF ONE EQUITY SHARE OF FACE VALUE ` 2 EACH AT A PREMIUM. FOR FURTHER DETAILS, PLEASE REFER TO “OFFERING INFORMATION” ON PAGE 122 OF THE DRAFT LETTER OF OFFER.

Registered Office & Factory Corporate Office 16-18, New Electronics Complex Chambaghat, Dist. Solan Himachal Pradesh - 173 213 Tel No: +91 1792 230175, 230578; Fax No: +91 1792 230475

H-2, Suneja Chambers, 2nd Floor, Alaknanda Commercial Complex, New Delhi - 110 019 Tel No: +91 11 2602 7174, 2602 8175; Fax No: +91 11 2602 6776

Corporate Identity Number: L27101HP1984PLC005862 Address of the Registrar of Companies Registrar of Companies, Punjab, Chandigarh and Himachal Pradesh Corporate Bhawan Plot No. 4B, Sector 27B Madhya Marg Chandigarh - 160 019 Tel. No.: +91 172 263 9415 - 16 Fax No: +91 172 263 9416 e-mail: roc.chandigarh@mca.gov.in Company Secretary and Compliance Officer Mr. Ram Parvesh Company Secretary and Compliance Officer H-2, Suneja Chambers, 2nd Floor, Alaknanda Commercial Complex, New Delhi - 110 019 Tel No: +91 11 2602 7174, 2602 8175 Fax No: +91 11 2602 6776 E-mail: shivalik@shivalikbimetals.com Note: All grievances relating to the Issue may be addressed to the Registrar to the Issue or the SCSB in case of ASBA Applicants giving full details such as folio no. / demat account no. / name and address, contact telephone / cell numbers, email id of the first applicant, number of Equity Shares applied for, CAF serial number, amount paid on application and the name of the bank / SCSB and the branch where the CAF, or the plain paper

26

Application, as the case may be, was deposited, alongwith a photocopy of the acknowledgement slip. In case of renunciation, the same details of the Renouncee should be furnished. Lead Manager to the Issue SPA Capital Advisors Limited SEBI Regn. No.: INM 000010825 25, C - Block, Community Center, Janak Puri, New Delhi - 110 058 Tel.: +91 11 2551 7371, 4567 5500 Fax: +91 11 2553 2644 E-mail: shivalik.rights@spagroupindia.com Investor Grievance e-mail id: grievances.mb@spagroupindia.com Website: www.spacapital.com Contact Person: Mr. NitiN Somani / Mr. Abhishek Jain Registrar to the Issue MAS Services Limited SEBI Regn. No.: INR 000000049 T - 34, IInd Floor Okhla Industrial Area, Phase II New Delhi - 110 020 Tel.: +91 11 2638 7281 - 83 Fax: +91 11 2638 7384 E-mail: info@masserv.com Investor Grievance e-mail id: sblr@masserv.com Website: www.masserv.com Contact Person: Mr. N C Pal Legal Advisor to the Issue Link Legal Thapar House, Central Wing First Floor, 124 Janpath New Delhi - 110 001 Tel.: +91 11 4651 1000 Fax: +91 11 4651 1099 Email: raj@linklegal.in Contact Person: Mrs. Raj Rani Bhalla Bankers to the Issue [●] Self Certified Syndicate Banks The list of banks that have been notified by SEBI to act as SCSB for the ASBA process is provided on SEBI website at http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries. Banker to the Company Indian Bank 47-48, Pragati House Nehru Place New Delhi - 110 019 Tel.: +91 11 2643 2991 Fax: +91 11 2622 2397 E-mail: nehruplace@indianbank.co.in

27

Auditors of the Company M/s Malik S & Co. Chartered Accountants 1/101, (LGF), Old Rajinder Nagar Sir, Ganga Ram Hospital Marg New Delhi - 110 060 Tel.: +91 11 2586 2423 Telefax: +91 11 2578 0911 E-mail: sm@mscompany.in Firm Registration No.: 000383N Peer Review Certificate No.: 003482 Credit Rating This being a right issue of equity shares, no credit rating is required. IPO Grading This being a right issue of equity shares, no IPO Grading is required. Trustees This being a Rights Issue of Equity Shares, appointment of Trustees is not required. Appraising Agency The issue has not been appraised. Monitoring Agency There is no requirement for a monitoring agency in terms of Regulation 16(1) of the SEBI ICDR Regulations. The Audit Committee of our Board would monitor the utilization of the proceeds of the Issue. For details please refer to section titled ‘Objects of the Issue’ on page 32 of Draft Letter of Offer. Underwriting Our Company has not currently entered into any underwriting agreements. However, it may enter into such an agreement for the purpose of the Issue at an appropriate time and on such terms and conditions as it may deem fit. In the event our Company enters into such an arrangement, it shall be done prior to the filing of the Letter of Offer with the Designated Stock Exchange and the Letter of Offer will be updated to reflect the same. Issue Schedule

Issue Opens on [●]Last date for requests for Split Application Forms [●]Issue Closes on [●]

Principal Terms of Loans and Assets charged as security For details of the principal terms of loans and assets charged as security, please refer to “Financial Indebtedness” on page 108 of the Draft Letter of Offer. Minimum Subscription If we do not receive the minimum subscription of 90% in this Issue or if the Promoters and Promoter Group fails to subscribe for unsubscribed portion in the Issue after the Issue Closing Date or the subscription level falls below 90% after the Issue Closing Date on the account of cheques being returned unpaid or withdrawal of applications, we shall refund the entire subscription amount received within 15 days from the Issue Closing Date. If there is delay in the refund of the subscription amount by more than eight days after we become liable to pay the subscription amount (i.e., 15 days after the Issue Closing Date), we and every officer in default shall be jointly and severally liable to pay interest for the delayed period, as prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act.

28

CAPITAL STRUCTURE

Our capital structure and related information as on date of the Draft Letter of Offer is set forth below.

(in ` unless otherwise stated)

Share Capital Aggregate value at face value

Aggregate Value at Issue Price

A. Authorised Share Capital 7,50,00,000 Equity Shares of ` 2/- each 15,00,00,000 B. Issued, Subscribed and Paid-up Capital 1,92,01,400 Equity Shares of ` 2/- each 3,84,02,800 C. Present Issue in terms of the Draft Letter of Offer* [●] Equity Shares at an Issue Price of ` [●] per Equity Share [●] [●] [●] Warrant each convertible into one Equity Share of face value ` 2 each [●] E. Issued, Subscribed and Paid-up capital after the Issue After the Issue assuming full subscription for and allotment of the Rights

Entitlement but before exercise of Warrants:

[●] Equity Shares of ` 2 each fully paid-up [●] Assuming full exercise of Warrants after Warrant Exercise Period: [●] Equity Shares of ` 2 each fully paid-up [●] F. Share Premium Account: Before the Issue Nil After the Issue (assuming full exercise of warrants at the face value of

equity shares) [●]

* The Issue has been authorized under Section 81(1) through resolution passed by the Board of Directors in their meeting held on December 10, 2012 and the member of the Company in their Extra Ordinary General Meeting of the Company held on January 07, 2013. Pursuant to the resolution passed at the Extra Ordinary General Meeting of the Company held on January 07, 2013, our authorized share capital has been increased from ` 500 lakhs consisting of 2,50,00,000 Equity Shares of face value ` 2 each to ` 1,500 lakhs consisting of 7,50,00,000 Equity Shares of face value ` 2 each. Notes to the Capital Structure 1. Subscription to the Issue by the Promoters and Promoter Group

Mr. Narinder Singh Ghumman and Mr. Satinder Jeet Singh Sandhu, Promoters of our Company, have confirmed, on behalf of the Promoter Group, vide their letter dated January 12, 2013 that they intend to subscribe to the full extent of their Rights Entitlement in the Issue, in compliance with regulation 10(4) of the SEBI Takeover Regulations. Mr. Narinder Singh Ghumman and Mr. Satinder Jeet Singh Sandhu, Promoters of our Company, on their behalf and on behalf of the Promoter Group, have further confirmed vide their letter dated January 12, 2013 that, they intend to (i) subscribe for additional Equity Shares and (ii) subscribe for unsubscribed portion in the Issue, if any. Such subscription to additional Equity Shares and the unsubscribed portion, if any, to be made by the Promoter Group, shall be in accordance with regulation 10(4) of the SEBI Takeover Regulations. Further, such subscription shall not result in breach of the minimum public shareholding of 25%, as stipulated in the Clause 40A of the Listing Agreement.

29

2. There are no outstanding warrants, options or rights to convert debentures, loans or other instruments into Equity Shares as on the date of the Draft Letter of Offer. We have no partly paid up equity shares or call in arrears. The Company has not offered any Employees Stock Option Scheme or Employees Stock Purchase Scheme.

3. None of the Equity Shares of our Company are locked-in as on the date of the Letter of Offer.

4. None of the Equity Shares of our Company held by the Promoters and Promoter Group entities are subject to

pledge or encumbrance as on the date of the Draft Letter of Offer. 5. Our shareholding pattern as on December 31, 2012 is as follows:

Cate-gory Code

Category of Shareholders Number of Share holder

Total Number of

Shares

Number of Shares held

in dematerializ

ed form

Total shareholding as a percentage of total number of shares

Shares Pledged or otherwise

encumbered

As a percentage of (A+B)

As a percentage of (A+B+C)

Number of

shares

As a percentage

(A) Shareholding of Promoters and Promoter Group(1) Indian Individuals / Hindu

Undivided Family 16 39,48,000 39,37,000 20.56 20.56 - -

Bodies Corporate 6 78,30,370 78,30,370 40.78 40.78 - - Sub Total 22 1,17,78,370 1,17,67,370 61.34 61.34 - - (2) Foreign Total Shareholding of

Promoters and Promoter Group (A)

22 1,17,78,370 1,17,67,370 61.34 61.34 - -

(B) Public Shareholding (1) Institutions Financial Institutions / Banks 1 1,000 1,000 0.01 0.01 - - Sub Total 1 1,000 1,000 0.01 0.01 - - (2) Non-Institutions Bodies Corporate 102 4,56,392 4,50,391 2.38 2.38 - - Individuals Individual shareholders

holding nominal share capital up to ` 1 lakh

4,676 61,74,954 51,90,654 32.16 32.160 - -

Individual shareholders holding nominal share capital in excess of ` 1 lakh

4 5,78,236 5,78,236 3.01 3.01 - -

Any Other (Specify) Non Resident Indians 35 1,08,660 1,08,660 0.57 0.57 - - Clearing Members 22 1,03,788 1,03,788 0.54 0.54 - - Sub Total 4,839 74,22,030 64,31,729 38.65 38.65 - - Total Public Shareholding

(B) 4,840 74,23,030 64,32,729 38.66 38.66 - -

Total (A) + (B) 4,862 1,92,01,400 1,82,00,099 100.00 100.00 - - (C) Shares held by Custodian

and against which Depository Receipts have been issued

(1) Promoters and Promoter Group

- - - - - - -

(2) Public - - - - - - - Sub Total - - - - - - - Total (A) + (B) + (C) 4,862 1,92,01,400 1,82,00,099 100.00 100.00 - -

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6. The list of Equity Shareholders belonging to the category “Promoters and Promoter Group” as on December 31, 2012 is detailed in the table below:

Sr. No.

Name of the Shareholders

Details of Shares held Encumbered shares Details of Warrants Details of convertible securities

Total shares (including

shares assuming

full conversion of warrants

and convertible

securities) as a % of

diluted share capital

No. of Shares held

As a % of grand total (A) + (B) + (C)

No. As a %

As a % of grand total (A) + (B) + (C) of sub-

clause (I)(a)

Number of

warrants held

As a % total

number of warrants

of the same class

Number of

convert-ible

securities held

Asa % total

number of

convert-ible

securities of the same class

1 Narinder Singh Ghumman

14,65,000 7.63 - - - - - - - 7.63

2 Satinder Jeet Singh Sandhu

2,88,000 1.50 - - - - - - - 1.50

3 Devinder Jeet Singh Sandhu

1,01,000 0.53 - - - - - - - 0.53

4 Shana Ghumman

12,000 0.06 - - - - - - - 0.06

5 Sumer Ghumman

1,000 0.01 - - - - - - - 0.01

6 Jit Mohindar Singh

6,000 0.03 - - - - - - - 0.03

7 Angad Sandhu 1,52,000 0.79 - - - - - - - 0.79 8 Gurdial Kaur 32,000 0.17 - - - - - - - 0.17 9 Harjit Singh

Sidhu 8,000 0.04 - - - - - - - 0.04

10 Manjit Kaur 5,85,000 3.05 - - - - - - - 3.05 11 Jaspal Singh

Dhillon 2,000 0.01 - - - - - - - 0.01

12 Tejinderjeet Kaur Ghumman

2,96,000 1.54 - - - - - - - 1.54

13 Sarita Sandhu 6,66,000 3.47 - - - - - - - 3.47 14 Gurbir Sandhu 3,23,000 1.68 - - - - - - - 1.68 15 Sumati Sood 10,000 0.05 - - - - - - - 0.05 16 Subhash C.

Verma 1,000 0.01 - - - - - - - 0.01

17 B S Sandhu and Associates Private Limited

2,85,200 1.49 - - - - - - - 1.49

18 Amar Engineering Company Limited

7,03,000 3.66 - - - - - - - 3.66

19 Angad Estates Private Limited

16,55,000 8.62 - - - - - - - 8.62

20 O D Finance and Investments Private Limited

14,19,590 7.39 - - - - - - - 7.39

21 TSL Holdings Limited

27,90,200 14.53 - - - - - - - 14.53

22 Ultra Portfolio Management Private Limited

9,77,380 5.09 - - - - - - - 5.09

Total 1,17,78,370 61.34 - - - - - - - 61.34

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7. The list of Equity Shareholders, other than the Equity Shareholders belonging to the category

“Promoters and Promoter Group”, holding more than 1% of our paid-up capital as on December 31, 2012 is detailed in the table below:

Sr. No.

Name of Shareholder Details of shares held Details of warrants Details of convertible securities

Total shares (including shares assuming full

conversion of warrants and convertible

securities) as % of diluted share capital

No. of shares

held

Shares as % of total

no. of shares

No. of warrants

held

As a % of total no. of

warrants

No. of convertible securities

held

% w.r.t. number of convertible securities

1 Govindbhai Baldev Desai

2,17,500 1.13 - - - - 1.13

2 Linclon P Coelho 2,00,000 1.04 - - - - 1.04 Total 4,17,500 2.18 - - - - 2.18

8. There have been no acquisition of Equity Shares by the Promoters and the members of the Promoter Group

within the last one year preceding the date of the Draft Letter of Offer.

9. The present Issue being a rights issue, pursuant to regulation 34(c) of the SEBI ICDR Regulations, the requirements of Promoters’ contribution and lock-in are not applicable.

10. We undertake that there will be no further issue of capital whether by way of issue of bonus shares, preferential allotment, rights issue or in any other manner during the period commencing from submission of the Draft Letter of Offer with the Stock Exchange until the Equity Shares to be issued pursuant to the Issue have been listed.

11. If we do not receive the minimum subscription of 90% in this Issue or if the Promoters and Promoter Group fails to subscribe for unsubscribed portion in the Issue after the Issue Closing Date or the subscription level falls below 90% after the Issue Closing Date on the account of cheques being returned unpaid or withdrawal of applications, we shall refund the entire subscription amount received within 15 days from the Issue Closing Date. If there is delay in the refund of the subscription amount by more than eight days after we become liable to pay the subscription amount (i.e., 15 days after the Issue Closing Date), we will pay interest for the delayed period, as prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act.

12. The ex-rights price of the Equity Shares as per Regulation 10(4)(b) of the SEBI Takeover Regulations is ` [●].

32

OBJECTS OF THE ISSUE

The proceeds of the Issue are proposed to be utilized by us for financing the following objects: Setting up of manufacturing unit for additional product range of bimetal / tri-metal strip through cold

bonding process General Corporate Purpose Expenses for the Issue The main object clause and objects incidental or ancillary to the main object clause of the Memorandum of Association of the Company enables us to undertake the existing activities and the activities for which the funds are being raised through the present issue. Requirement of Funds The total estimated funds requirement is given below:

Sr. No. Particulars Amount (in ` Lakhs) 1 Setting up of manufacturing unit for additional product range of bimetal / tri-

metal strip through cold bonding process 3,313.15

2 General Corporate purpose* [●] 3 Expenses for the Issue* [●]

Total [●] * will be incorporated at the time of filing of Letter of Offer with the Stock Exchange. The fund requirement and deployment is based on our Management estimates and vendor quotations and has not been appraised by any bank or financial institution or any other independent agencies. The fund requirement above is based on our current business plan. We operate in a highly competitive, dynamic market condition, and may have to revise our business plan from time to time. Consequently, our fund requirements and utilization of proceeds may also change accordingly. Any such change in our plans may require rescheduling of our expenditure programs, at the discretion of our Management, subject to the necessary approvals, and such rescheduling, if any, shall be within the Objects of the Issue. Means of Finance

Sr. No. Particulars Amount (in ` Lakhs) 1 Proceeds from Rights Issue 1,500.00 2 Foreign Loan (Buyers Credit) 614.58 3 Term Loan 502.84 4 Internal Accruals* [●] Total [●]

* will be incorporated at the time of filing of Letter of Offer with the Stock Exchange. In the event of any shortfall in raising the requisite funds from the proceeds of the Issue for the objects or cost overrun, such shortfall will be met by way of such means available to our company including internal accruals. In case of any surplus after utilization of the proceeds of the issue for the stated objects, we may use such surplus towards general corporate purposes. In case of variations in the actual utilization of funds earmarked for the purposes mentioned above, increase fund requirements for a particular purpose may be financed by surplus funds, if any, available in respect of the other purposes for which funds are being raised in this issue. For financing import of Plant & Machinery, we have been sanctioned Foreign Loan (Buyer Credit facility) of USD 13.75 Lakh (` 614.58 Lakh @ ` 44.6969 per USD) and disbursed by Bank of Baroda, London which is backed by a letter of undertaking / Comfort by Indian Bank, New Delhi. Further for the expansion project we have also been sanctioned term loan by Indian Bank, Nehru Place, New Delhi, vide its sanction letter dated March 12, 2011. The total amount sanctioned for term loan is ` 560 lakhs out of which ` 502.84 lakhs has been utilized for the expansion project. The term loan has since been disbursed and fully utilized.

33

We meet the requirement of firm arrangements of finance through verifiable means for 75% of the stated means of finance excluding the Issue Proceeds. Till November 30, 2012, we have deployed an amount aggregating ` 1665.63 which includes ` 713.67 through internal accruals. Details of use of Issue Proceeds: 1. Setting up of manufacturing unit for additional product range of bimetal / tri-metal strip through cold

bonding process We manufacture various grades of Thermostatic Bimetal, Clad Metal, Spring Rolled Stainless Steels, Electron Beam Welded materials with Multi-gauge and Multi materials strips and Thermostatic Edge-welded strip for a broad spectrum of Industries. We manufacture products by joining of materials through various methods such as Diffusion Bonding / Cladding, Electron Beam Welding, Solder Reflow and Resistance Welding. At present we are manufacturing precision components by using Hot Bonding Cladding Processes. Our present manufacturing facilities is located at New Electronics Complex, Chambaghat, District Solan, Himachal Pradesh at an area of 4,000 square meters with constructed area of approx. 60,000 square feet. We are in the process of setting up a facility for manufacture of Cold Bonded Strips & parts at Kandaghat, Himachal Pradesh. We intend to diversify into a much wider range and variety of products requiring high precision and produce wider width bimetals which could not be produced with the present equipment and plan to introduce Cold Bonded Technology from the Plant and Machinery purchased from Sandvik Heating Technology, AB, Sweden. Under the proposed expansion program, we propose to manufacture Cold Bonded Clad Strips consisting of Linear Bimetal and Snap Action Bimetal. The proposed facility will increase our current capacity of manufacturing bimetal / tri-metals from 740 Tons to 1,240 Tons per annum. The additional manufacturing unit is proposed at Mauja Damyari, Pargana Baghri Khurd, Tehsil Kandaghat, District Solan, Himachal Pradesh on an area of 10,040 square meters To develop the product and the Customers / Market for the same, we decided to set up a facility initially at Chambaghat in rented premises by shifting part of the machineries imported and stored at Roz ka Meo, Mewat, Haryana and shifting some machines from existing unit. The said unit commenced commercial production in February, 2012. This unit is proposed to be shifted to the premises of the proposed expansion project on development and construction of the factory building. We are entitled for Income Tax exemption under section 80IC for our expansion project. After implementation of the project the small production unit operating at the rented premises will be shifted to the above mentioned premises. The estimated cost of the proposed project is ` 3,313.15 Lakhs as per details given under:

(` in lakhs) Particulars Amount Land 100.75 Civil Work & Building 700.92 Plant& Machinery and shifting & erection charges 1,549.52 Electrical, Furniture & Fixtures and Miscellaneous Fixed Assets 318.54 Preliminary & Pre - Operative Expenses 593.42 Contingencies 50.00 Total Cost 3,313.15

Land The Company has already acquired Land of Area 10,040 Square Meters at Mauja Damyari, Pargana Baghri Khurd, Tehsil Kandaghat, District Solan, Himachal Pradesh for the construction of the manufacturing unit for ` 100.75 Lakhs.

Civil Work & Building The approximate cost of construction of factory building having total covered area of 4,825 square meter and site development work including hill cutting and road work, under ground storage and fire fighting etc. is estimated

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at ` 700.92 Lakhs as per estimate dated January 04, 2013 from Progressive Consulting Architects & Engineers, Chandigarh. The building will come up in different levels since the land is on the hill. As already stated the necessary leveling / site cutting of three levels has already been done. We have applied for the approvals of the Building plans from Town and Country planning department. Plant and Machinery The cost of plant & Machinery is estimated at ` 1,549.52 Lakhs including imported machinery and is based on the invoices and quotations received from various vendors. I. Plant and Machinery - Imported We have purchased used Plant & Machinery for Cold Bonding Process from Sandvik Heating Technology AB, Sweden which have been imported from Sweden. The plant was purchased in auction and got dismantled and subsequently packed at Sweden for shipment to India. For dismantling and packaging the plant, we engaged services of Maskin & Tunghantering AB, Sweden and for disconnecting, leveling and securing of electrical equipment, the services of Hallsta Installations Byra AB and Bergstorms, Sweden were engaged. A detailed breakup of the cost of imported Plant & Machinery is given below:

Sr. No.

Details Date of Invoice Amount (USD)

Amount (In ` Lakhs) *

1 Rolling Mill, Nobs, Arkus April 04, 2011 3,83,333.00 171.34 2 Leveling & Inspection Lines(2), Nobag & Ternick Slitting

Line (2), Straightening & Spool Winding Line (1) April 17, 2011 2,27,289.50 101.59

3 Etching& Degreasing Lines (2), Skin Pass Rolling Mills (2), Packaging (Strapping) Machine (1)

April 20, 2011 1,33,125.00 59.50

4 Straightening Flattening Lines (2), RWF 4-Hi Cold Rolling Mill (1)

April 29, 2011 2,30,939.50 103.22

5 Ungerer Strip Stretching &Leveling Machine (1) May 17, 2011 1,45,937.50 65.23 6 Hi Cold Rolling Mill – Hydraulic (1) May 17, 2011 1,70,000.00 75.98 7 Degreasing Unit(for Etching Lines) May 05, 2011 32,000.00 14.30 8 Bell Annealing Heat Treatment Furnace System (1), Faudi

Oil Filtration Unit (1), Demag Cranes (13), 73 Barrels (10,834 Litres) of used Rolling Mill Lubrication, Hydraulic & Gearbox Oil

May 17, 2011 1,80,798.50 80.81

Total Amount 15,03,423.00 671.98 Duty Paid on Imported Machinery 0.16 Dismantling and packing of the main plant and machinery March 23, 2011

May 27, 2011 196.26

Disconnecting and securing of Electrical Equipment March 21, 2011, May 09, 2011, May 26, 2011

13.37

Freight and Clearing Charges 230.28 Total Cost (I)* 1112.04

* 1USD = 44.6969 The Plant & Machinery has been imported in April / May 2011 and is stored at a leased premises at Roz ka Meo, District Mewat, Haryana. Out of above imported Plant & Machinery worth ` 68.94 Lakhs has already been shifted and installed at rented premises at Chambaghat, H. P. The same will be shifted to the proposed site on development and construction of factory premises. In view of exchange rate fluctuation till 30 November 2012 we have provided for ` 131.63 Lakhs as additional cost of imported Plant & Machinery in our Books of Accounts as Capital Work in Progress.

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II. Plant and Machinery - Domestic

The following new equipment, Machinery and Miscellaneous Fixed Assets are proposed to be purchased by the Domestic suppliers

Sr. No.

Name of Machine Name of Supplier Date of Quotation Amount (In ` Lakhs)

1 Dry Type Coil Grinding Line Jatinder Engineering Corporation, Delhi

December 20, 2012 123.67

2 Wide Coil Scrubbing Line Jatinder Engineering Corporation, Delhi

December 20, 2012 97.10

3 Ammonia Cracker with Purification Dryer

Adsorbtech Engineers Pvt. Ltd, Greater Noida

December 19, 2012 11.76

4 PSA Nitrogen Plant with mixing station

Gastek Engineering (P) Ltd. New Delhi

September 21, 2012 35.40

5 Twin Muffle Continuous Annealing Furnace

Wellmake Engineering Company Pvt. Ltd., New Delhi

January 04, 2013 34.38

6 Electrical Control Panels M/s Hydro Engineers Enterprises, Chandigarh

January 04, 2013

2.84

7 Recoiler Drum & De-coiler Manual M/s Imperial Machine Tools, Chandigarh

November 30, 2012 2.78

8 Overhead Cranes Sprint Engineering Pvt. Ltd., New Delhi

December 20, 2012 26.31

9 Freight Elevator – 2 Ton Capacity Sprint Engineering Pvt. Ltd., New Delhi

December 20, 2012 15.85

10 Refurbishing of Bell Furnace Well Make Engineering Company Pvt. Ltd., New Delhi

January 04, 2013 17.19

11 Atlas Copco Screw Air Compressor with In built Air Dryer

New Transcon Engineers, Chandigarh

December 01, 2012 8.38

Total (C) 375.66

III. Shifting and Erection of Imported Machinery*

Sr. No

Name of Machine Name of Supplier Date of Quotation Amount (In ` Lakhs)

1 Clearing & Transportation and related miscellaneous expenditure

Management Estimates - 28.86

2 Erection of Hi Mill Slitter, Alignment and Over-hauling Of Imported Machine

KAR Construction Pvt. Ltd., Rourkela, Orissa

December 12, 2012 32.96

Total 61.82 *The movement of Imported Plant and Machines for the proposed Kandaghat facility from premises at Roz ka Meo, Dist. Mewat, Haryana to the site at Kandaghat will be started as per the lay out plans finalized along with the building plans. Few machines are to be moved during construction as they require heavy foundations. Further, we shall also shift the entire machineries which are presently operating from the rented location at Chambaghat once the new factory building is complete.

Electrical, Furniture & Fixtures and Miscellaneous Fixed Assets

Sr. No

Name of Machine Name of Supplier Date of Quotation Amount (In ` Lakhs)

1 Supply & Installation of KV Line and Electrical Fittings

Royal Engineering Works, Solan

December 17, 2012 95.18

2 Supply & Installation of Transformers & Panels

Emco Switchgears Pvt. Ltd., Chandigarh

December 17, 2012 56.72

3 DG Set 725 & 250 KVA RAI Industrial Power Private Limited, New Delhi

October 15, 2012 60.39

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Sr. No

Name of Machine Name of Supplier Date of Quotation Amount (In ` Lakhs)

4 Effluent Treatment Plant Praneet Enviroequips Pvt. Ltd., Mohali

December 01, 2012 12.73

5 Water Tank and Pipeline Om Metals, Zirakpur (Punjab) December 04, 2012 25.49 6 5HP Water Pump with Complete

Suction Pipe & Fittings Royal Engineering Works, Solan

December 17, 2012 2.97

7 UPS 20 KVA SNA Power Engineering Pvt. Ltd., Chandigarh

December 1, 2012 2.61

8 Vehicles - Staff Buses (Eicher Model) & Staff Car (Tata Model)

M/s Swami Auto Care, M/s J.P. Motors, Solan

December 21,2012 December 21,2012

21.90 5.80

9 Furniture & Fixtures Management Estimates 15.00 10 Computers, Servers and related items Management Estimates 14.75 11 Oil & Lubricants Management Estimates 5.00

Total 318.54 Preliminary & Pre - Operative Expenses and Contingencies It is assumed that the preliminary and pre-operative expenses till implementation of the project would be ` 593.42 lakhs including consultancy services, legal expenses, service tax on foreign technical services of dismantling, foreign travelling, electricity, water, watch and ward expenses & rent at the rented site in Himachal Pradesh and Haryana. Such expenses also include bank commission for buyers credit, buyers credit interest, interest on term loan, warehousing expenses at Roz ka Meo, Haryana, staff cost etc. Out of estimated ` 593.42 lakhs preoperative expenses, we have till November 30, 2012 incurred an amount of ` 378.08 lakhs towards such expenses out of which ` 24.23 lakhs have been capitalized with the imported machinery. Further a provision of ` 50.00 lakhs have been made for contingencies on capital cost of indigenous Plant & Machinery.

Implementation Schedule for expansion and Modernization

Activities Commencement Completion Acquisition of Land Acquired in June 2012 Civil construction & Building March 2013 December 2013 Placement of order for Imported Machinery April 2011 May 2011 Placement of order for Indigenous Machinery July 2013 November 2013 Imported Machinery - Delivery May 2011 October 2011 Imported Machinery - shifting to site July 2013 December 2013 Indigenous Machinery - Delivery at site July 2013 December 2013 Erection & Installation November 2013 December 2013 Trial Runs December 2013 - Commencement of Commercial Operations February 2014 -

2. General Corporate Purposes The Proceeds of the Issue will be first utilized towards proposed expansion and capacity enhancement by setting up of manufacturing unit at Kandaghat, District Solan, Himachal Pradesh. We intend to deploy the balance Issue proceeds aggregating to ` [●] lakhs, towards the general corporate purposes, including but not restricted to strengthening our marketing capabilities, research and development, entering into brand building exercises or contingencies in ordinary course of business which may not be foreseen or any other purposes as approved by our Board of Directors. Our management, in accordance with the policies of our Board, will have flexibility in utilizing the proceeds earmarked for general corporate purposes. However, not more than 10% of the proceeds of issue would be deployed for the General Corporate purposes.

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3. Expenses for the Issue The Issue related expenses consist, underwriting fees, selling commission, fees payable to the Lead Manager, Legal counsel and Registrar to the Issue, stationery printing and distribution expenses, legal fees, statutory advertisement expenses, NSDL / CDSL connectivity charges, fees payable to SEBI and listing fees etc. The total expenses of the Issue are estimated to be approximately ` [●] Lakhs.

(` in lakhs) Particulars Estimated

Expenses % of

Estimated Issue size

% of Estimated

Issue expenses Fees payable to intermediaries including Lead Manager and Registrar to the Issue

[●] [●] [●]

Advertising, travelling and marketing expenses [●] [●] [●]Printing and stationery expenses [●] [●] [●] Other expenses (including but not limited to legal fees, SEBI fees, listing charges, depository fees, auditor fees, commission, brokerage, out of pocket reimbursements, etc.)

[●] [●] [●]

Total [●] [●] [●] * Will be incorporated at the time of filing of the Final Letter of Offer. Estimated Schedule of Deployment of Funds As estimated by our management, the entire proceeds received from the issue would be utilized a under:

(` in lakhs) Particulars Funds already deployed

(upto November 30, 2012) 2012-13 2013-14 Total

Expansion and capacity enhancement by setting up of manufacturing unit

1,665.63 180.00 1,467.52 3,313.15

General Corporate purpose - - [●] [●]Expenses of the Issue* [●] [●] [●] [●] Total 1,665.63 [●] [●] [●] Deployment of Funds towards the Objects of the Issue We have incurred ` 1,665.63 Lakhs upto November 30, 2012 towards the Objects of the Issue which has been certified by Mr. Suresh Malik (Membership No. 080493), Proprietor, Malik S & Co., Chartered Accountants, vide their certificate dated January 14, 2013. The same has been incurred towards cost of land, site development, imported Plant & Machinery and Pre-operative expenses and have been financed from Foreign Loan (Buyers Credit Facility), Term Loan from Indian Bank and Internal Accruals. Interim Use of Proceeds Pending utilization of the proceeds out of the Issue for the purposes described above, we intend to temporarily invest the funds in high quality interest bearing liquid instruments including money market mutual funds, deposits with banks and other investment grade interest bearing securities as may be approved by the Board. Such investments would be in accordance with the investment policies approved by the Board from time to time. Bridge Financing Facilities We have not raised any bridge loan against the Proceeds of the Issue. Proceeds from the Warrants Our Company will also issue detachable warrants (optionally convertible) to every person to whom Equity Shares shall be allotted pursuant to the Issue in the ratio of one Warrant per Equity Share offered in accordance with the terms and conditions as mentioned in the Chapter “Offering Information” on page 122 of the Draft

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Letter of Offer. The exercise period of Warrant shall be from February 01, 2014 to February 15, 2014. The warrant holder shall be entitled to subscribe for one Equity Share of the Company for every Warrant held by them. The warrant exercise price shall be an amount that is at a discount of 25% to the then prevailing market price of the equity shares of the Company at the time of exercise of warrants. Hence the exercise price for Warrants cannot be determined presently. Further if the warrant holder does not exercise his option to convert the warrant into Equity Share during the warrant exercise period, the same will lapse and our Company may not be able to raise funds on such lapsed warrants. Therefore the funds to be raised from Warrants cannot be ascertained presently. Our Company intends to utilise the proceeds received on conversion of Warrants towards repayment of the credit facilities availed by our Company and balance amount, if any, will be utilised towards our long term working capital requirement. For more information on the Warrants and payment terms, refer to the Chapter titled “Offering Information” on page 122 of the Draft Letter of Offer. Monitoring of Utilization of Funds There is no requirement for appointment of an independent monitoring agency in terms of Regulation 16(1) of the SEBI ICDR Regulations. Pursuant to Clause 49 of the listing agreement, the Audit Committee of our Board will monitor the utilization of the Net Proceeds. We shall, on a quarterly basis disclose to the Audit Committee the uses and application of the proceeds of the Issue and further disclose the same a part of the quarterly declaration of financial results. We will disclose the utilization of the proceeds of the Issue under a separate head in our balance sheet till such time the proceeds of the Issue have been utilised, clearly specifying the purpose for which such proceeds have been utilized. We will also, in our balance sheet till such time the proceeds of the Issue have been utilised, provide details, if any, in relation to all such proceeds of the Issue that have not been utilized thereby also indicating investments, if any, of such unutilized proceeds of the Issue. The said annual disclosure shall also be certified by the Statutory Auditors of our Company. No part of the proceeds from the Issue will be paid by us as consideration to our Promoters, our Directors, Key Management Personnel or Promoter Group entities, except: - Rent payable to Amar Engineering Company Private Limited, a Promoter Group Company, from whom we

have taken industrial shed on lease for keeping the imported machinery till it is shifted to proposed unit at Kandaghat. The monthly rent payable to Amar Engineering Company Private Limited is ` 2,47,500.

Neither our Promoters nor any Directors and / or entities comprising the Promoter Group have any interest either in the proposed procurement of any equipment indicated under the Section “Objects of the Issue” or any of the entities from whom quotations have been obtained for the proposed procurement.

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STATEMENT OF TAX BENEFITS

To The Board of Directors, Shivalik Bimetal Controls Ltd., H-2, Suneja Chambers, Alaknanda Commercial Complex, Alaknanda, New Delhi-110019 Dear Sir, We hereby report that the enclosed statement states the possible tax benefits available to the Company and to the shareholders of the Company under the Direct and Indirect Tax Laws, presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant provisions of the statute. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon their fulfilling such conditions, which based on business imperatives the Company faces in the future, the Company may or may not choose to fulfil. The benefits discussed in the enclosed statement are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue. We do not express any opinion or provide any assurance as to whether: i. whether the company is currently availing any of these benefits or will avail these benefits in future or, ii. The Company or its shareholders will avail these benefits in future; or iii. The conditions prescribed for availing the benefits have been / would be met with. The contents of the enclosed statement are based on information, explanations and representations obtained from the Company and on the basis of their understanding of the business activities and operations of the Company. For Malik S & Co. Chartered Accountants Firm Registration No: 000383N Suresh Malik FCA M.No.080493 Place: Delhi Date: January 11, 2013

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SHIVALIK BIMETAL CONTROLS LTD. TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS This statement sets out below the possible tax benefits available to the Company and to the shareholders

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

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

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

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

STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS UNDER THE INCOME TAX ACT, 1961 AND OTHER DIRECT TAX LAWS PRESENTLY IN FORCE IN INDIA TAX BENEFIT ARISING OUT OF THE PRESENT ISSUE - NIL SPECIAL TAX BENEFITS TO THE COMPANY AND ITS SHAREHOLDERS A. List of Special Tax Benefits available to the company

Tax benefits are available to the following units set up in notified tax exempted area. Shivalik Bimetal Controls Ltd. Unit-IV, Khasra no1806/1397/13/1, Sood Building, Chambaghat Distt. Solan, to be shifted to Khasra no. 306/261/1, Mauja Damyari, Pragana Baghri Khurd, Kandaghat, Distt. Solan. The benefits available to Unit IV are as under:

1. Under Central Excise Act 1944: NIL 2. Under Income Tax Act 1961 (IT Act): 2.1 Deduction under section 80-IC of the IT Act: As per Section 80IC of the IT Act, the company is entitled

for claiming deduction of 100% of the profits generated by its manufacturing undertakings at Himachal Pradesh for five assessment years commencing with the year in which the undertaking begins to manufacture and thereafter @ 30% of the profits for the next five years. Such claim of deduction can only be made out of the net taxable income of the company available after adjusting brought forward losses/ un-absorbed depreciation (if any). The initial Assessment year in the case of Unit-IV, is A.Y. 2012-13.

3. Under Central Sales Tax Act: 1% CST against Form “C” up to 31st March, 2013, reference to Himachal

Pradesh Excise and Taxation Notification No. EXN-F(5)-6-2006-I dated 18 June 2009. 4. Under Customs Tariff: The company has imported major part of the Plant & Machinery of the project

under EPCG license subjected to fulfilment of export obligation, of 6 times of the duty saved on the EPCG Licenses, over the next 6 years from the date of import of the Capital Goods. The total duty foregone on all EPCG Licenses is to the tune of Rs 4.56 Crores and the export obligation of Rs. 27.35 Crores is to be completed by Aug.2017 (50% of the export obligation of Rs. 13.67 Crores is to be fulfilled up to Aug.2015 and balance 50% of Rs.13.67 Crores up to Aug.2017.)

5. Under EXIM Policy: NIL

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6. Central Capital Investment Subsidy: The company is entitled to Central Capital Investment subsidy @15% on the total Capital Investment in Plant & Machinery subjected to maximum amount of Rs.30 lacs subjected to fulfilment of conditions of the Central Capital Investment subsidy Scheme announced vide No.1(10)/2001-NER Government of India, Ministry of Commerce & Industry,(Department of Industrial Policy & Promotion)New Delhi, dated 7th January, 2003.

7. Electricity Duty: No electricity duty will be charged from any New Industrial unit or Existing Industrial Unit, on the power generated from their captive power generation sets from the appointed day as per the Industrial Policy announced for the Units set up in the state of Himachal Pradesh.

B. List of Special Tax Benefits available to shareholders

Special Tax Benefits available to shareholders -NIL GENERAL TAX BENEFITS: I. BENEFITS TO THE COMPANY UNDER INCOME TAX ACT, 1961. 1. Deductions/exemptions/benefits available while computing business income 1.1. Depreciation

The company is entitled to claim depreciation on specific tangible and intangible assets owned by it and used for the purpose of its business under Section 32 of the IT Act.

In case of any new plant and machinery (other than ships and aircraft) that will be acquired by the manufacturing units/ undertakings of the company and is put to use for 180 days or more, the company is entitled to a additional depreciation equal to twenty percent of the actual cost of such machinery or plant subject to conditions specified in Section 32 of the IT Act in the year in which it is first put to use. Unabsorbed depreciation, if any, for an Assessment Year (AY) can be carried forward without any time limit and set off against any source of income in the subsequent AYs.

1.2. Preliminary expenses

As per Section 35D, the company is eligible for deduction in respect of specified preliminary expenses incurred by the company in connection with extension of its industrial undertaking or in connection with setting up a new industrial unit. The eligible expenses inter-alia include those incurred in connection with the issue for public subscription of shares, being underwriting commission, brokerage and charges for drafting, typing, printing and advertisement of prospectus of an amount equal to 1/5th of such expenses over 5 successive AYs subject to conditions and limits specified in the said section.

1.3. Expenditure on Scientific Research

As per Section 35, the company is eligible for deduction in respect of any expenditure (not being expenditure on the acquisition of any land) on scientific research related to the business subject to conditions specified in that section.

A weighted deduction of a sum equal to two times of expenditure is provided for in-house research & development (excluding expenditure land and building) for companies engaged in any business of manufacture or production of any article or thing except those provided in the Eleventh Schedule of the IT Act and is applicable w.e.f 1st April 2011.

1.4. Carry forward of business loss:

Business losses, if any, for any AY can be carried forward and set off against business profits for eight subsequent AYs.

1.5. Minimum Alternative Tax and credit thereof

Where the amount of tax payable by the company under the normal provisions of the IT Act is less than 18.5% of the book profits (as worked out as per the relevant provisions), the company would be required to pay tax @ 18.5% of such book profits, including any applicable surcharge and cess. Such tax is referred to as Minimum Alternate Tax (MAT.)

42

The difference between the MAT payable under section 115JB of the IT Act and the tax on its total income payable for that assessment year shall be allowed to be carried forward as “MAT credit” upto 10 assessment years succeeding the assessment year in which such MAT was paid in accordance with the provisions of section 115JAA of the IT Act as amended by the Finance Act, 2010 w.e.f. 1st April 2010 and shall apply to AY 2010-11 and subsequent years (for earlier assessment years, carry forward is allowed up-to 7 assessment years). The MAT credit can be utilized to be set off against taxes payable on the total income computed under the provisions of the IT Act other than 115JB thereof if any, in the subsequent assessment years in accordance with the provisions of section 115JAA of the IT Act.

2. Deductions/exemptions/benefits available while computing capital gains 2.1. As per section 10(38) of the IT Act, the Company would be entitled to an exemption from tax in respect of

long-term capital gains arising from sale of equity shares or units of equity oriented mutual fund (equity oriented mutual funds are those funds where more than sixty five percent of the investible funds are invested in equity shares of domestic companies), provided that the transaction of sale of such equity shares or units has happened on Recognized Stock Exchange in India and is chargeable to Securities Transaction Tax (“STT”)1. The shares/units would be considered as long term capital assets provided they are held for a period exceeding 12 months.

However, such income shall be taken into account while computing the book profits under section 115JB of the IT Act.

2.2. As per section 111A of the IT Act, short-term capital gains on sale of equity shares or units of an equity

oriented fund, where the transaction of such sale is subject to STT (as explained in para 2.1 above), would be chargeable to income-tax at a concessional rate of 15% (plus applicable surcharge and education cess).

2.3. As per section 112 of the IT Act and other relevant provisions of the IT Act, long term capital gains arising

on transfer of listed securities (other than those covered in para 2.1 above)/units or zero coupon bonds (shares/units/ bonds would be considered as long term capital assets provided they are held for a period exceeding 12 months), would be taxed at a rate of 20% (plus applicable surcharge and education cess) after indexation, as provided in the second proviso to section 48 of the IT Act, or at 10% (plus applicable surcharge and education cess) without indexation, at the option of the Company.

2.4. As per section 112 of the IT Act and other relevant provisions of the IT Act, long term capital gains arising

on transfer of unlisted securities would be taxed at a rate of 20% (plus applicable surcharge and education cess) subject to indexation benefit.

2.5. As per section 54EC of the IT Act and subject to the conditions specified therein, long-term capital gains

[not exempt under section 10(38)], can be claimed as exempt from tax to the extent such capital gains are invested in certain notified bonds (currently bonds issued by National Highways Authority of India and Rural Electrification Corporation Limited have been notified for this purpose) within six months from the date of transfer. If only part of the capital gains is so reinvested, the exemption shall be allowed proportionately. However, it is also provided under section 54EC that investments made on or after 1st April 2007 in such bonds, should not exceed Indian Rupees five million during any financial year. Further, it may be noted that if such bonds are transferred or converted into money (availing loan or advance on the security of such bonds would be considered as conversion into money for this purpose), within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier, would become chargeable to tax as long-term capital gains in the year in which the bonds are so transferred or converted into money.

3. Deductions/exemptions/benefits available in respect of Dividend income 3.1. As per section 10(34) of the IT Act, the Company would be eligible for an exemption in respect of income

by way of dividend (interim or final) referred to in section 115-O of the IT Act, received from a domestic company. Further, any expenditure incurred in/attributable to earning such dividend income is disallowable under section 14A of the IT Act read with Rule 8D of the Rules.

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3.2. As per section 115-O(1) of the IT Act, the Company is required to pay Dividend Distribution Tax at a rate of 15% (plus applicable surcharge and education cess) on any amount declared, distributed or paid by way of dividends (whether interim or otherwise).

Further, as per Section 115-O(1A) of the IT Act, for the purposes of computing DDT, the Company would be eligible to reduce from such dividend, the amount of dividend received from its subsidiary companies, subject to fulfilment of specified conditions.

3.3. As per section 10(35) of the IT Act, the Company will be eligible for an exemption in respect of the

following income (other than capital gain referred to in para (A)(2) above): Income received from units of mutual funds specified under section 10(23D) of the IT Act; Income received in respect of units from the Administrator of specified undertaking; and Income received in respect of units from the specified company.

4. Other deductions/exemptions/benefits 4.1. As per section 70 of the IT Act, the Company is entitled to intra-head set-off of loss in an assessment year in

the following manner: Loss from a source against income from another source within the same head of income (except loss

under the head ‘capital gain’) Short term capital loss against capital gain (whether short term or long term) Long term capital loss against Long term capital gain

4.2. As per section 71(1) and 71(2) of the IT Act, the Company is entitled to inter-head ‘set-off’ of loss (other

than capital gains) under any other head of income for that assessment year. As per section 71(3), the Company is not entitled to ‘set-off’ loss under the head ‘Capital Gains’ against income under any other head.

4.3. As per section 72(1) of the IT Act, the Company is entitled to ‘set-off’ brought forward business loss, not

being loss sustained in a speculation business, against business income in subsequent years. In accordance with the provisions of section 72(3), such losses can be carried forward for eight years.

4.4. As per the conditions of section 32(2) read with section 72(2) of the IT Act, the Company is entitled to ‘set-

off’ brought forward unabsorbed depreciation against income in subsequent years. Further, subject to provisions of section 32(2) including all amendments therein vide Finance Act (No.2) of 1996 and Finance Act 2001, unabsorbed depreciation can be carried forward for unlimited period.

4.5. As per section 74(1)(a) of the IT Act, the Company is entitled to ‘set-off’ brought forward short term capital

loss against income under the head ‘Capital gains’. Further, as per the provisions of section 74(1)(b), the Company is entitled to set-off long term capital loss against long term capital gains only. As per section 74(2), such capital losses can be carried forward for eight years.

4.6. As per section 80G of the IT Act, the Company will be entitled for a deduction of qualifying amount in

respect of specified donations. For donations exceeding rupees ten thousand, the same is required to be paid in cheque as prescribed by Finance Act 2012.

4.7. In accordance with the provisions of section 90 of the IT Act, the Company may choose to apply the

provisions of IT Act or the provisions of tax treaty entered into by India with other foreign countries, whichever are more beneficial. Also, subject to the provisions of IT Act and the treaty, the Company can claim foreign tax credit in India in respect of doubly taxed income (i.e. where taxes are paid on same income in India as well as outside India).

II. II. TAX BENEFITS TO THE SHAREHOLDERS OF THE COMPANY Under the IT Act A. SPECIAL TAX BENEFITS

There are no special tax benefits available to the shareholders of the Company.

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B. GENERAL TAX BENEFITS 1. To all shareholders 1.1. As per section 10(34) of the IT Act, the shareholders will be eligible for an exemption in respect of income

by way of dividend (interim or final) referred to in section 115-O of the IT Act, received on shares from a domestic company. Further, any expenditure incurred in/attributable to earning such dividend income is disallowable under section 14A of the IT Act read with Rule 8D of the Rules.

1.2. As per section 10(38) of the IT Act, long-term capital gains arising from sale of equity shares or units of

equity oriented mutual fund (equity oriented mutual funds are those funds where more than sixty five percent of the investible funds are invested in equity shares of domestic companies), are exempt provided that the transaction of sale of such equity shares or units has happened on Recognized Stock Exchange in India and is chargeable to Securities Transaction Tax (“STT”). The shares/units would be considered as long term capital assets provided they are held for a period exceeding 12 months.

However, such income shall be taken into account while computing the book profits under section 115JB for corporate assesses.

1.3. As per section 111A of the IT Act, short-term capital gains on sale of equity shares or units of an equity

oriented mutual fund, where the transaction of such sales is subject to STT, shall be chargeable to income-tax at a concessional rate of 15% (plus applicable surcharge and education cess). Relevant slabs for basic exemption, as applicable to the assesses, will need to be taken into consideration as per relevant Finance Act.

2. To resident shareholders

In addition to the tax benefits specified in para II(A)(1) above, following are the exemptions/deductions available to the resident shareholder:

2.1. As per section 112 of the IT Act and other relevant provisions of the IT Act, long term capital gains arising

on transfer of listed securities (other than those covered in para 1.2 above)/units or zero coupon bonds (shares/units/ bonds would be considered as long term capital assets provided they are held for a period exceeding 12 months), would be taxed at a rate of 20% (plus applicable surcharge and education cess) after indexation, as provided in the second proviso to section 48 of the IT Act, or at 10% (plus applicable surcharge and education cess) without indexation, at the option of the shareholder.

2.2. As per section 112 of the IT Act and other relevant provisions of the IT Act, long term capital gains arising

on transfer of unlisted securities would be taxed at a rate of 20% (plus applicable surcharge and education cess) subject to indexation benefit.

2.3. As per section 54EC of the IT Act and subject to the conditions specified therein, long-term capital gains

[not exempt under section 10(38)], can be claimed as exempt from tax to the extent such capital gains are invested in certain notified bonds (currently bonds issued by National Highways Authority of India and Rural Electrification Corporation Limited have been notified for this purpose) within six months from the date of transfer. If only part of the capital gains is so reinvested, the exemption shall be allowed proportionately. However, it is also provided under section 54EC that investments made on or after 1st April 2007 in such bonds, should not exceed Indian Rupees five million during any financial year. Further, it may be noted that if such bonds are transferred or converted into money (availing loan or advance on the security of such bonds would be considered as conversion into money for this purpose), within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier, would become chargeable to tax as long-term capital gains in the year in which the bonds are so transferred or converted into money.

2.4. As per section 54F of the IT Act and subject to the conditions specified therein, long term capital gains

arising to an individual or Hindu Undivided Family (HUF), for instance, on transfer of shares of the Company, will be exempt from capital gain tax, if the net consideration from sale of shares is used for

45

purchase of residential house property within a period of one year before or two years after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer. Other conditions such as ownership of not more than one house property etc needs to be fulfilled. Further, it may be noted that if such house property is transferred within a period of three years from the date of its purchase, or as the case may be its construction, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the new house property is transferred.

3. To non-resident shareholders (other than Foreign Institutional Investors and Foreign Venture Capital

Investors) In addition to the tax benefits specified in para II(A)(1) above following are the exemptions/deductions available to the non-resident shareholder:

3.1. As per section 90 of the IT Act, the non-resident shareholders, who are eligible to claim treaty benefits

(subject to furnishing of Tax Residency Certificate in the format as may be specified), will be entitled to choose the provisions of the IT Act or the provisions of tax treaty entered into by India with other foreign countries, whichever are more beneficial, while deciding taxability in India.

3.2. A non-resident Indian (i.e. an individual being a citizen of India or person of Indian origin) has an option of

being governed by the provisions of Chapter XII-A of the IT Act, which inter-alia entitles them to the following benefits in respect of income from shares of an Indian company acquired, purchased or subscribed in convertible foreign exchange. a) As per section 115D read with section 115E of the IT Act and subject to the conditions specified

therein, long-term capital gains arising on transfer of shares in an Indian company not exempt under section 10(38), will be subject to income-tax at the rate of 10% (plus applicable surcharge and education cess) without indexation benefit.

b) As per section 115F of the IT Act and subject to the conditions specified therein, gains arising on transfer of a long-term capital asset being shares in an Indian company (shares would be considered as long term capital assets provided they are held for a period exceeding 12 months) shall not be chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period of six months in any specified asset or specified savings certificates. If part of such net consideration is invested within the prescribed period of six months in any specified asset (for instance, shares in Indian company) or specified savings certificate, the exemption will be allowed on a proportionate basis. The amount so exempted shall be chargeable to tax subsequently, if the specified assets or any such savings certificates are transferred or converted into money within three years from the date of their acquisition.

c) As per section 115G of the IT Act, non-resident Indians are not obliged to file a return of income under section 139(1) of the IT Act, if their source of income is only investment income and/or long-term capital gains defined in section 115C of the IT Act, provided income-tax has been deducted at source from such income as per the provisions of chapter XVII-B of the IT Act.

d) As per section 115-I of the IT Act, a non-resident Indian may elect not to be governed by the provisions of Chapter XII-A for any assessment year by furnishing his return of income for that assessment year under section 139 of the IT Act, declaring therein that the provisions of Chapter XII-A shall not apply to him for that assessment year and accordingly his total income for that assessment year will be computed in accordance with the other provisions of the IT Act.

3.3. As per the first proviso to section 48 of the IT Act, in case of a non-resident, in computing the capital gains

arising from transfer of shares of the Company acquired in convertible foreign exchange (as per exchange control regulations) protection is provided from fluctuations in the value of rupee in terms of foreign currency in which the original investment was made. However, cost indexation benefit will not be available in such a case while computing the capital gain.

3.4. As per section 112 of the IT Act and other relevant provisions of the IT Act, long term capital gains arising

on transfer of listed securities (other than those covered in para 1.2 above)/units or zero coupon bonds (shares/units/ bonds would be considered as long term capital assets provided they are held for a period exceeding 12 months), would be taxed at a rate of 20% (plus applicable surcharge and education cess) after indexation, as provided in the second proviso to section 48 of the IT Act, or at 10% (plus applicable

46

surcharge and education cess) without indexation, at the option of the Company. However, in view of the divergent judicial precedents on this aspect, the applicability of this section needs to be evaluated on a case to case basis.

3.5. As per section 112 of the IT Act and other relevant provisions of the IT Act, long term capital gains arising

on transfer of unlisted securities (being shares in a private Limited Company) would be taxed at a rate of 20% (plus applicable surcharge and education cess) subject to indexation benefit. The tax payable on long-term capital gains arising on sale of shares in a Publicly held un-listed company would be @10% (plus applicable surcharge and education cess).

3.6. As per section 54EC of the IT Act and subject to the conditions specified therein, long-term capital gains

[not exempt under section 10(38)], can be claimed as exempt from tax to the extent such capital gains are invested in certain notified bonds (currently bonds issued by National Highways Authority of India and Rural Electrification Corporation Limited have been notified for this purpose) within six months from the date of transfer. If only part of the capital gains is so reinvested, the exemption shall be allowed proportionately. However, it is also provided under section 54EC that investments made on or after 1st April 2007 in such bonds, should not exceed Indian Rupees five million during any financial year. Further, it may be noted that if such bonds are transferred or converted into money (availing loan or advance on the security of such bonds would be considered as conversion into money for this purpose), within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier, would become chargeable to tax as long-term capital gains in the year in which the bonds are so transferred or converted into money.

3.7. As per section 54F of the IT Act and subject to the conditions specified therein, long term capital gains

arising to an individual or Hindu Undivided Family (HUF), for instance, on transfer of shares of the Company, will be exempt from capital gain tax, if the net consideration from sale of shares is used for purchase of residential house property within a period of one year before or two years after the date on which the transfer took place or for construction of residential house property within a period of three years after the date of transfer. Other conditions such as ownership of not more than one house property etc needs to be fulfilled. Further, it may be noted that if such house property is transferred within a period of three years from the date of its purchase, or as the case may be its construction, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the new house property is transferred.

4. To mutual funds 4.1. As per section 10(23D) of the IT Act, mutual funds registered under the Securities and Exchange Board of

India Act 1992 and such other mutual funds set up by public sector banks or public financial institutions authorized by the Reserve Bank of India and subject to the conditions specified therein, are eligible for exemption from income tax on their entire income, including income from investment in the shares of the Company.

5. To venture capital companies / funds

In terms of section 10(23FB) of the IT Act, venture capital companies/ funds registered with Securities and Exchange Board of India, subject to the conditions specified, are eligible for exemption from income tax on their entire income, including income from investment in the shares of the Company.

6. To foreign institutional investors (‘FIIs’)

In addition to the tax benefits specified in para 1 above, following are the exemptions/deductions available to FIIs:

6.1. As per section 90 of the IT Act, FIIs being non residents, who are eligible to claim treaty benefits (subject to

furnishing of Tax Residency Certificate in the format as may be specified), will be entitled to choose the provisions of IT Act or the provisions of tax treaty entered into by India with other foreign countries, whichever are more beneficial, while deciding taxability in India.

47

6.2. The income by way of long-term capital gains [not exempt under section 10(38) of the IT Act] or short term capital gains realized by FIIs on sale of such securities of the Company would be taxed at the following rates as per section 115AD of the IT Act- Short-term capital gains, other than those referred to under section 111A of the IT Act shall be taxed @

30% (plus applicable surcharge and education cess). Short-term capital gains, referred to under section 111A of the IT Act shall be taxed @ 15% (plus

applicable surcharge and education cess). Long-term capital gains shall be taxed @10% (plus applicable surcharge and education cess) without

any cost indexation. It may be noted that first proviso to section 48, which provides protection against exchange rate

fluctuations (where shares are subscribed in convertible foreign exchange) would not be available to FII’s.

6.3. As per section 54EC of the IT Act and subject to the conditions specified therein, long-term capital gains

[not exempt under section 10(38)], can be claimed as exempt from tax to the extent such capital gains are invested in certain notified bonds (currently bonds issued by National Highways Authority of India and Rural Electrification Corporation Limited have been notified for this purpose) within six months from the date of transfer. If only part of the capital gains is so reinvested, the exemption shall be allowed proportionately. However, it is also provided under section 54EC that investments made on or after 1st April 2007 in such bonds, should not exceed Indian Rupees five million during any financial year. Further, it may be noted that if such bonds are transferred or converted into money (availing loan or advance on the security of such bonds would be considered as conversion into money for this purpose), within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier, would become chargeable to tax as long-term capital gains in the year in which the bonds are so transferred or converted into money.

A. Under the Wealth Tax Act, 1957

Shares of the Company held by the shareholder will not be treated as an asset within the meaning of section 2(ea) of Wealth Tax Act, 1957 and therefore no wealth tax is payable on shares.

B. Security Transaction Tax (STT) as per Chapter VII of Finance (No.2) Act 2004, as amended by

Finance Act 2012 STT in respect of any taxable securities transaction shall be collected from the seller or the buyer, on the value of such transaction, by every recognized stock exchange or the prescribed person in case of any Mutual Fund, at the rate specified in section 98 of the Finance Act.

Notes: 1. All the above benefits are as per the provisions of the Income-tax Act, 1961, Income-tax Rules, circulars,

notifications as amended by Finance Act, 2012 and the Wealth Tax Act, 1957, presently in force in India. 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.

2. The current IT Act is proposed to be replaced by New Direct Tax Code 2010 (DTC) likely date of which is not certain. The tax implications on account of proposed DTC have not been examined by us.

3. In respect of non-residents, the tax rates and the consequent taxation mentioned above will be further subject to any benefits available under the relevant Double Tax Avoidance Agreement (DTAA), if any, between India and the country in which the non-resident has fiscal domicile. The Finance Act 2012 has prescribed that beneficial provisions of the DTAA cannot be claimed unless the non-resident obtains a certificate of residency from the Government of its country.

4. Wherever applicable, the benefits mentioned hereinabove are subject to fulfilment of the specified conditions and up to the limits as mentioned in the relevant provisions.

5. 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.

The above Statement of Tax Benefits sets out the provisions of law in a summary manner only and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and disposal of shares.

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SUMMARY OF OUR BUSINESS

We are engaged in the manufacturing of different grades of thermostatic bimetal / tri-metal strips and parts. We manufacture products by joining of materials through various methods such as diffusion bonding / Cladding, Electron Beam Welded materials with Multi-gauge and Multi materials strips, Solder Reflow, electron guns, shunt material, snap action disc and thermostatic Edge-welded strip with applications across various Industries. The products manufactured by the Company are used for Industrial, Automotive, Aviation, Electronics, Medical and Domestic Appliances. At present we are manufacturing precision components by using Hot Bonding Cladding Processes. The present manufacturing capacity of the Company is 740 tons per annum for manufacture of bimetal / tri-metals, 170 million units for parts of color picture tube and electron guns and 50 tons per annum for reflow solder components. We are an ISO 9001:2008 certified Company for manufacture and supply of strips and components of Thermostatic bimetals and other alloys by International Standards Certifications Pty. Ltd. The Company had established its first unit in the year 1986 for manufacturing of bimetals. The second unit was set up in 1996 for production of part of other alloys and stainless steels for Color Picture Tubes & Electron guns. In the year 2003, third unit was commissioned for manufacturing of products and was established as 100% Export Oriented Unit. We have applied for debonding of the said third unit on January 23, 2012 with Noida Special Economic Zone and the same is pending before the authorities. The Company also has a recognized in-house Research & Development unit recognized by Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India. Recently we have acquired the equipments of Sandvik Heating Technology, AB, Sweden, for manufacturing bimetals / tri-metals through cold bonding process for our proposed fourth unit. Under the proposed expansion program, we propose to manufacture Cold Bonded Clad Strips consisting of Linear Bimetal and Snap Action Bimetal. Cold bonding process will enable our Company to manufacture cold bonded clad strips and parts of larger width with a capacity of 500 Tons per annum. The proposed facility will increase our current capacity of manufacturing bimetal / tri-metals from 740 Tons to 1,240 Tons per annum. The additional manufacturing unit is proposed at Mauja Damyari, Pargana Baghri Khurd, Tehsil Kandaghat, District Solan, Himachal Pradesh on an area of 10,040 square meters with an estimated cost of ` 3,313.15 lakhs. For details, refer to the Chapter “Objects of the Issue” on page 32 of the Draft Letter of Offer. Products manufactured by our Company Thermostatic Bimetal / Tri-metal / Clad material with Hot Bonding Technology(strip and components) Electron Beam Welded Materials (Strip and components) Electron Beam Welded Shunt materials (For Energy Meters) Solder Reflow Materials Snap Action Disc and other components of Bimetal/Tri-metals/stainless steel/other alloys such as springs,

coils. Precision rolled stainless steel strips for spring/clip applications Clad materials. The major customers of our Company are GEA Srl, Italy, Havells India Limited, Schneider Electric India Private Limited, Coils & Transformers India Private Limited and JCT Electronics Limited. Our Company has also received an order from Ordinance Factory, Ambajhari, Nagpur, Ministry of Defence, Government of India for Rotary Electron Beam Welding Job on conversion basis. Infrastructure Facilities The utilities required for running of our units are power and water. We meet our electricity requirement by purchasing electricity from Himachal Pradesh State Electricity board for the manufacturing unit at Chambaghat, Solan. The sanctioned power supply is 950 KW. Besides we have generator sets for the units for power backup. The requirement of water for the manufacturing units is met through water tankers. Technology The existing units are manufacturing products through hot bonding process with width ranging from 1 mm to 72 mm and thickness ranging from 0.1 mm to 2.00 mm. However with the setting up of proposed unit, we will be

49

manufacturing cold bonded clad strips and parts with greater width of upto 300 mm to cater to the larger section of customers. Export Obligation We have obtained Advance License and licences under Export Promotion Capital Goods (EPCG) scheme. As per the licencing requirement under the said scheme, we are required to fulfill the export obligation of 6 times of the duty saved on the EPCG Licenses, over the next 6 years from the date of import of the Capital Goods. The total duty forgone on all EPCG Licenses is to the tune of ` 456 lakhs. Further, we also have to export goods under Advance License against the goods imported by us. Any failure to meet our export obligations will make us liable to pay to the Government of India, an amount equivalent to the duty benefit enjoyed by our Company under the said scheme along with interest. As on September 30, 2012, we have an aggregate export obligation of ` 703.04 lakhs. Insurance Our operations are subject to risk inherent in the manufacturing such as work accidents, fire or explosion, including hazards that may cause injury and loss of life, severe damage to and destruction of property and equipment and environmental damage. We maintain insurance for a variety of risk including standard fire and special perils policy, burglary policy, vehicle insurance and import export transit policy which covers insurance of building including stocks, machinery and equipments used in our factory. Intellectual Property Rights

We have filed an application for registration of our logo under the Trademark Act 1999 on May 02, 2011 and the same is pending. Properties The following table sets forth the significant properties owned by us:

Address of Property Names of seller

Date of Deed Consideration (in ` Lakhs)*

Nature of property

Use of property

Status

Industrial Plot No. 16, 17 & 18 New Electronics Complex, Chambaghat, District Solan, Himachal Pradesh

Governor of Himachal Pradesh

Lease Deed Dated July 06, 1985 valid for a period of 95 years commencing from March 19, 1985. Total area measuring 4,000 sq. mtr.

3.20 Industrial Land

Registered Office and existing factory

Equitable Mortgage is created in favour of Indian Bank

Khata / Khautani no. 27 min / 39 min, Khasra no. 306/265/1, Mauja Damyari, Pargana Baghri Khurd, Tehsil Kandaghat, District Solan, Himachal Pradesh.

Sh. Mohinder Sharma Village Ghatti, Tehsil & District Solan, Himachal Pradesh.

Sale Deed dated June 15, 2012. Total area measuring 14 bighas and 1 biswa (approx. 10,039.671 sq. mtr.).

85.00 Industrial Land

Setting up of factory for which funds are

proposed to be raised through

rights issue

Free hold

* Excluding stamp duty and other charges. The following properties have been taken on lease by us:

Location Area Name of Lessor Term of lease Flat No. 201, 2nd Floor Suneja Chambers, H-2, Alaknanda Commercial Complex, New Delhi - 110 019

257 sq. ft Mrs. Pushpa Lata Mehta House No. 486,Sector No. 7, Block – B, Faridabad

The Lessor and Lessee by means of a mutual consent vide letter no. SBCL/AC/2011-12/4360 dated February 23, 2012 have extended the term of lease of said premises up to January 31, 2015 for a monthly rent of ` 14,375.

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Location Area Name of Lessor Term of lease Flat No. 202, 2nd Floor Suneja Chambers, H-2, Alaknanda Commercial Complex, New Delhi - 110 019

400 sq. ft. Mrs. Punita Singh D-2, 2209 DDA Flats, Vasant Kunj, New Delhi - 110070

Lease Deed dated 26.03.2012 for three years effective from March 01, 2012 till February 28, 2015 for a monthly rent of ` 22,080.

Flat No. 203, 2nd Floor Suneja Chambers, H-2, Alaknanda Commercial Complex, New Delhi - 110 019

460 sq. ft. Mr. Balbir Singh Ahuja C-353, Defence Colony, New Delhi - 110024

The Lessor and Lessee by means of a mutual consent vide letter no. SBCL/AC/2011-12/4361 dated February 23, 2012 have extended the term of lease of said premises up to January 31, 2015 for a monthly rent of ` 18,274.

Flat No. 204, 2nd Floor Suneja Chambers, H-2, Alaknanda Commercial Complex, New Delhi - 110 019

286 sq. ft. TSL Holdings Limited H-3, First Floor, Alaknanda Shopping Complex, New Delhi – 110019

Rent Deed dated October 01, 2010 for a period of three years for a monthly rent of ` 13,169 and shall be renewable for a further period of 3 years on 20% increase in the last paid rent.

Flat No. 205, 2nd Floor Suneja Chambers, H-2, Alaknanda Commercial Complex, New Delhi - 110 019

373 sq. ft. Mr. Sumit Kumar Sehgal Mrs. Sumiti Sehgal Shop No. 12, S.B. Sarafa Market, Chandni Chowk, Delhi - 11006

The Lessor and Lessee by means of a mutual consent vide letter no. SBCL/AC/2011-12/4362 dated February 23, 2012 have extended the term of lease of said premises up to January 31, 2015 for a monthly rent of ` 20,864.

H-3, IInd Floor, Alaknanda Shopping Complex, New Delhi - 110019

1,450 sq. ft TSL Holdings Limited H-3, First Floor, Alaknanda Shopping Complex, New Delhi - 110019

Rent Deed dated October 01, 2010 for a period of three years for a monthly rent of ` 1,00,000 and shall be renewable for a further period of 3 years on 20% increase in the last paid rent.

Flat No. 4G, 4H at 4th Floor, Mauza Dehu, District Solan, Himachal Pradesh.

2,238 sq. ft. M/s Vishesh Credits (P) Ltd. 204, Raj Tower – II Alaknanda Commercial Complex, New Delhi - 110019

The Lessor and Lessee by means of a mutual consent vide letter no. SBCL/AC/2011-13/1056 dated April 30, 2012 have extended the term of lease of said premises for a period of three years up to March 31, 2015 for a monthly rent of ` 20,000.

Industrial Shed at Khasra No. 36/8/2/2, 12/2, 13/1, 13/3/1, 18/2, Revenue Estate of Roz Ka Meo, District Mewat, Haryana

22,500 sq. ft. (approx.)

M/s Amar Engineering Company Pvt. Ltd. 204, Raj Tower – II Alaknanda Commercial Complex, New Delhi - 110019

Rent Deed dated April 15, 2012 for a period of one year at a monthly rent of ` 2,47,500 and shall be renewable for a further period of 1 year on 10% increase in the last paid rent.

Sood Building, Ground Floor, Chambaghat, Solan Himachal Pradesh

2,000 sq. ft. Mr. Anil Sood Chambaghat, District Solan Himachal Pradesh

Rent Deed dated October 01, 2012 for a period of 11 months i.e. up to August 31, 2013 at a monthly rent of ` 40,000.

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HISTORY AND CERTAIN CORPORATE MATTERS

Our Company was originally incorporated as Shivalik Bimetal Controls Private Limited on June 18, 1984 under the Companies Act, 1956 with the Registrar of Companies Punjab, Chandigarh and Himachal Pradesh. Our Company was converted into public limited company on February 14, 1985 and the name of our Company was changed to Shivalik Bimetal Controls Limited. The Corporate Identification Number of the Company is L27101HP1984PLC005862. The Company came out with its Initial Public Offering in 1986 and the Equity Shares were listed on BSE Limited, Delhi Stock Exchange and Ludhiana Stock Exchange. The Company later came out with a rights issue of Equity Shares in May 1995 in the ratio of 1:1 for its expansion program. The Company declared a bonus issue of Equity Shares in the ratio of 1:1 in 2005. The Equity Shares of our Company were delisted from Delhi Stock Exchange and Ludhiana Stock Exchange w.e.f. March 31, 2004 and March 26, 2004 respectively. The Equity Shares of our Company are presently listed on BSE Limited only. At the time of incorporation, registered office of our Company was situated at Kalima Plastics Premises, Parwanoo, Dist. Solan, Himachal Pradesh. The registered office was shifted to 16-18, New Electronics Complex, Chambaghat, Dist. Solan, Himachal Pradesh - 173 213 w.e.f. May 25, 1985. Mr. Parkash Singh Gill and Mr. Narinder Singh Ghumman were the Promoters of the Company on incorporation and Mr. Satinder Jeet Singh Sandhu was part of the Promoter Group. Later Mr. Parkash Singh Gill resigned from the Board w.e.f. March 14, 2000 and since then Mr. Satinder Jeet Singh Sandhu and Mr. Narinder Singh Ghumman are the Promoters of the Company. Major events in the history of Our Company since inception

Year Key events, milestones and achievements 1986 Initial Public Offer of the Company

Commencement of commercial production 1995 Rights issue of Equity Shares for setting up of second unit 1996 Commencement of commercial production in second unit of the Company 2003 Commenced production of third unit as 100% Export Oriented Unit 2005 Joint Venture Agreement with Checon Corporation, USA and set up joint venture “Checon

Shivalik Contact Solutions Private Limited” 2007 Received Udyog Ratna Award from the Institute of Economic Studies 2008 Received ‘CNBC TV18 Emerging India Award’ for the year 2007-08 in the category

‘Automobiles, Auto ancillaries and Engineering’ Joint Venture Agreement with M/s Dnick Holding Plc and M/s Aperam Alloys Imphy (formerly Arcelor Mittal Stainless & Nickel Alloys) and commenced operations in the name of “Innovative Clad Solutions Private Limited”

2009 Best supplier award from Siemens Limited 2010 Best supplier award from Siemens Limited and Preferred vendor award from Schneider

Electric 2011 Acquired the equipments of Sandvik Heating Technology, AB, Sweden, for manufacturing

bimetals / tri-metals through cold bonding process. Preferred vendor award from Schneider Electric

Main Objects The Main objects as per the Memorandum of Association of our Company are as under: 1. To buy, sell, manufacture, design, supply, import, distribute, produce and otherwise deal in clad ferrous and

non ferrous metals in form of bimetal, trimetal or multi metal overlays, inlays and top lays by bonding together two or more metals including precious metals or alloys there of in form of ingots, sheets, rools, flats or strips.

2. To buy, sell, manufacture, produce, process, design, supply, import, export and otherwise deal in parts and components made from overlays, to-plays, inlay clad materials and other ferrous and non ferrous metals.

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Subsidiary Company We do not have any Subsidiary Company. Joint Venture / Associate Company As on the date of the Draft Letter of Offer, our Company has one Joint Venture, namely Checon Shivalik Contact Solutions Private Limited and two Associate Companies, namely Innovative Clad Solutions Private Limited and Shivalik Bimetal Engineers Private Limited. The brief summary of the said companies are as under: 1. Checon Shivalik Contact Solutions Private Limited Checon Shivalik Contact Solutions Private Limited (“CSCS”) was incorporated on December 01, 2005 under the Companies Act, 1956. Corporate Identification Number of the Company is U31909DL2005PTC143154. The Registered Office of the company is situated at H2, Suneja Chambers, Alaknanda Commercial Complex, New Delhi - 110 019, India. The main object of the company is to buy, sell, manufacture, process, design, supply, import, export and otherwise deal in Silver Contact Materials, Clad ferrous and non-ferrous metals in the form of bimetal, trimetal or multi-metal overlays, inlays and top lays by bonding together two or more metals including precious metals or alloys. CSCS is a 50:50 joint venture between Shivalik and Checon Corporation, a corporation established under the laws of the Commonwealth of Massachusetts and having its registered office at 84, Dunham Street, Attleboro, Massachusetts, USA. The joint venture agreement has been entered into on November 10, 2005 to manufacture electrical contact products using silver and other base alloys for various industrial applications. Board of Directors as on December 31, 2012 Mr. Narinder Singh Ghumman Managing Director Mr. Satinder Jeet Singh Sindhu Director Mr. Devinder Jeet Singh Sandhu Director Mr. Donald Allen Conaway Director Mr. Michael Rene Degrange Director Mr. William Harold Balme Director Ms. Manjit Kaur Alternate Director Mr. Jaspal Singh Dhillon Alternate Director Shareholding Pattern as on December 31, 2012

Name No. of equity shares % of shareholding Shivalik Bimetal Controls Limited 6,85,900 50.00 Checon Corporation 6,85,900 50.00 Total 13,71,800 100.00

Financial performance The audited financial results of Checon Shivalik Contact Solutions Private Limited for the financial years ended March 31, 2012, 2011 and 2010 are set forth below.

(` in lakhs) Particulars March 31,

2012 March 31,

2011 March 31,

2010 Total Income 909.78 1,162.56 586.40Profit after Tax 25.49 152.14 50.58 Equity share capital (including share forfeiture) 137.18 137.18 137.18Reserves & Surplus (net of miscellaneous expenditure) 471.06 445.57 293.42 Net Worth 608.24 582.75 430.60Book Value per share of face value ` 10/- each (in `) 44.34 42.48 3Earnings per share of face value ` 10/- each (in `) 1.86 11.09 3.69

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2. Innovative Clad Solutions Private Limited

Innovative Clad Solutions Private Limited (“ICS”) was incorporated on February 12, 2008 under the Companies Act, 1956. Corporate Identification Number of the Company is U27310DL2008PTC173950. The Registered Office of the company is situated at H2, Suneja Chambers, Alaknanda Commercial Complex, New Delhi - 110 019, India. The main object of the company is to manufacture, process, design, supply, import, export, buy, sell, distribute, produce and otherwise deal in all types of Clad Materials including ferrous and non-ferrous metals and providing solutions thereto. A Joint Venture Agreement dated February 15, 2008 was entered into between M/s. Shivalik Bimetal Controls Limited, M/s Dnick Holding Plc and M/s Aperam Alloys Imphy (formerly Arcelor Mittal Stainless & Nickel Alloys) in to order to work in cooperation with each other for setting up, managing and operating ICS for the purpose of manufacturing, marketing and selling industrial clad materials by setting up a new manufacturing line in India. Each party to the Joint Venture Agreement agreed to hold 33.33% of the Equity Shares in the Joint Venture Company. However, the holding of M/s Dnick Holding Plc was purchased by M/s Aperam Alloys Imphy. Further, with modified terms between Shivalik and M/s Aperam Alloys Imphy, the holding of our Company was reduced to 23.21% of the total paid up share capital of ICS and our Company’s interest in ICS stands modified to an Associate Company from that of a Joint Venture Company. Board of Directors as on December 31, 2012 Mr. Arijit Das Managing Director Mr. Narinder Singh Ghumman Director Mr. Satinder Jeet Singh Sindhu Director Mr. Claude Henri Pierret Director Mr. Julien Mathieu Francois Burdeau Director Mr. Pierre Christophe Caille Alternate Director Shareholding Pattern as on December 31, 2012

Name No. of equity shares % of shareholding Shivalik Bimetal Controls Limited 1,51,20,000 23.21 Aperam Alloys Imphy (formerly Arcelor Mittal Stainless & Nickel Alloys)

5,00,27,570 76.79

Total 6,51,47,570 100.00 Financial performance The audited financial results of Innovative Clad Solutions Private Limited for the financial years ended March 31, 2012, 2011 and 2010 are set forth below.

(` in lakhs) Particulars March 31,

2012 March 31,

2011 March 31,

2010 Total Income 474.97 136.01 13.96 Profit after Tax (1,512.60) (1,344.87) (184.15) Equity share capital (including share forfeiture) 5,645.29 3,156.00 2,256.00 Reserves & Surplus (net of miscellaneous expenditure) (3,041.63) (1,529.03) (218.94) Net Worth 2603.66 1626.97 2037.06 Share Application Money - 500.00 500.00 Book Value per share of face value ` 10/- each (in `) 4.61 5.15 9.02 Earnings per share of face value ` 10/- each (in `) (3.64) (5.04) (0.88)

3. Shivalik Bimetal Engineers Private Limited

Shivalik Bimetal Engineers Private Limited was incorporated on February 27, 2008 under the Companies Act, 1956. Corporate Identification Number of the Company is U29220DL2008PTC174607. The Registered Office of the company is situated at H2, Suneja Chambers, Alaknanda Commercial Complex, New Delhi - 110 019, India. The main object of the company is to manufacture, process, produce, develop, design, import, export, buy, sell, distribute, supply and otherwise deals in all types of engineering goods and articles for domestic, industrial,

54

commercial or agricultural use and to carry on the business as distributors, agents, brokers, stockiest, commission agent, commissioning contractors etc. Board of Directors as on December 31, 2012 Mr. Devinder Jeet Singh Sindhu Director Mr. Jaspal Singh Dhillon Director Mr. Mukesh Kumar Verma Director Shareholding Pattern as on December 31, 2012

Name No. of equity shares % of shareholding Shivalik Bimetal Controls Limited 2,22,750 45.00 Ultra Portfolio Management Private Limited 1,36,125 27.50 OD Finance & Investment Private Limited 1,36,125 27.50 Total 4,95,000 100.00

Financial performance The audited financial results of Shivalik Bimetal Engineers Private Limited for the financial years ended March 31, 2012, 2011 and 2010 are set forth below.

(` in lakhs) Particulars March 31,

2012 March 31,

2011 March 31,

2010 Total Income 60.26 8.00 7.03 Profit after Tax (2.52) 0.37 0.35 Equity share capital (including share forfeiture) 49.50 24.45 5.50 Reserves & Surplus (net of miscellaneous expenditure) 0.49 3.01 2.52 Net Worth 49.99 27.46 8.02 Share Application Money - 11.27 - Book Value per share of face value ` 10/- each (in `) 10.10 11.23 14.57 Earnings per share of face value ` 10/- each (in `) (0.63) 0.36 0.94

Strategic & Financial Partners We do not have any strategic and / or financial partners Shareholders Agreement We have not entered into any shareholders agreement Other Agreements Except as above and “Material Contracts and Documents for Inspection” mentioned on page 151 of the Draft Letter of Offer, there are no other material agreements or contracts, which have been entered into by us within a period of 2 years prior to the date of the Draft Letter of Offer, and which are subsisting as on date.

55

OUR MANAGEMENT

As per the Articles of Association of our Company, we shall not have less than three or more than 12 Directors on our Board of Directors. The following table sets forth certain details regarding the Board of Directors as on the date of the Draft Letter of Offer:

Sr. No

Name, Father’s Name, Designation, Address, Occupation, Date of Appointment, Tenure and DIN

Age (in years)

Nation-ality

Directorship / Partnership in other entities

1. Mr. Satinder Jeet Singh Sandhu Chairman & Whole Time Director S/o Sh. Bachitta Singh Sandhu 302, Kings I, Royal Retreat, Charmswood Village, Surajkund, Faridabad - 121 009, Haryana Occupation: Entrepreneur DIN: 00002312 Date of appointment: September 01, 1992 Term: Re-appointed for 5 years from August 01, 2008 to July 31, 2013

58 Indian Checon Shivalik Contact Solutions Private Limited

Innovative Clad Solutions Private Limited TSL Holdings Limited Solan Estates Private Limted Angad Estates Private Limited Vishesh Credit Private Limited Morning Side Hotels Private Limited The Parwanoo Urban Co-operative Bank

Limited

2. Mr. Narinder Singh Ghumman Whole Time Director S/o Sh. Diwan Singh Village Basal, Chambaghat, Dist. Solan - 173 213, Himachal Pradesh Occupation: Entrepreneur DIN: 00002052 Date of appointment: June 18, 1984 Term: Re-appointed for 5 years from April 01, 2011 to March 31, 2016

62 Indian Checon Shivalik Contact Solutions Private Limited

Innovative Clad Solutions Private Limited O D Finance and Investment Private Limited Solan Hotels Private Limited Ghumman Estates Private Limited S A Solar Solutions Private Limited

3. Mr. Devinder Jeet Singh Sandhu Deputy Managing Director S/o Sh. Bachitta Singh Sandhu C - 3107-3108, Green Field Colony, Faridabad - 121 003, Haryana Occupation: Entrepreneur DIN: 00002039 Date of appointment: April 04, 1996 Term: Re-appointed as Deputy Managing Director w.e.f. April 01, 2011 to March 31, 2016

54 Indian Shivalik Bimetal Engineers Private Limited Checon Shivalik Contact Solutions Private

Limited TSL Holdings Limited Sahiba Ruhani Estates Private Limited Axioma Packaging Private Limited

4. Mr. Rohit Kapur Independent, Non Executive Director S/o Sh. Trilok Chand Kapur Kapur Lodge, The Mall, Solan-173 212, Himachal Pradesh Occupation: Business DIN: 00007721 Date of Appointment: April 26, 2000 Term: Liable to retire by rotation

57 Indian Nil

5. Mr. Nirmaljeet Singh Gill Independent, Non Executive Director S/o Sh. Gurdev Singh Gill 1847, Sector 34D, Chandigarh - 160 021 Occupation: Business DIN: 00007425 Date of appointment: May 28, 2003 Term: Liable to retire by rotation

62 Indian Papyrus Enterprises Private Limited Four Seasons Retail Private Limited

56

Sr. No

Name, Father’s Name, Designation, Address, Occupation, Date of Appointment, Tenure and DIN

Age (in years)

Nation-ality

Directorship / Partnership in other entities

6. Mr. Gurmeet Singh Gill Independent, Non Executive Director S/o Sh. Lachhman Singh Gill 8, Sector 4, Chandigarh - 160 001 Occupation: Business DIN: 00007393 Date of appointment: September 28, 1998 Term: Liable to retire by rotation

62 Indian Nobel Marketing Private Limited Four Seasons Retail Private Limited

Brief Biography of our Directors: Mr. Satinder Jeet Singh Sandhu, aged 58 years, our Promoter and Executive Chairman of the Company, has completed two years of BA (Pass) from Delhi University. Prior to promoting our Company, he has extensive work experience in construction industry. He was appointed a Director of our Company on July 11, 1984 but later resigned in March 28, 1988. He was again appointed as Director on the Board w.e.f. September 01, 1992 and was later designated as Chairman & Whole Time Director. He has over 40 years experience in construction and electronics industry. He is responsible for the commercial (domestic and international), financial and administrative functions of our Company as well as our Joint Venture. Mr. Narinder Singh Ghumman, aged 62 years, our Managing Director, is Bachelor of Engineering (Hons.) from The Birla Institute of Technology & Science, Pilani and has an experience of over 40 years. He has been the force behind the growth of the Company. Prior to incorporation our Company, he was Chief Engineer in M/s Tradex Gestion SA General of Switzerland. He is responsible for overall manufacturing operations, Plant, Research & Development, Product Development, etc. Over the period, under his stewardship, our Company has diversified into high precession products, components, clad products, having new applications. He is also looking after the project of setting up cold bonded facilities as part of expansion plan. Mr. Devinder Jeet Singh Sandhu, aged 54 years, our Deputy Managing Director, is Bachelor of Science (Honours) from Delhi University. He had joined our Company in the year 1992 as an employee and was appointed as Director on September 27, 1996. He has an experience of over 35 years in the field of Sales, Marketing and Customer Relations. He has been intensively working on the international marketing efforts of our Company and responsible for the complete supervision of marketing and sales operations of the Company. Mr. Rohit Kapur, aged 57 years is Independent Non Executive Director of the Company. He holds the degree of B.Com. (Hons.) and has rich experience in processing industry. Mr. Nirmaljeet Singh Gill, aged 62 years is Independent Non Executive Director of the Company. He is holder of membership of The Association of Accounting Technicians, London and has an experience of over 40 years. In the past also served as Finance Director, M/s Amita Affiliates Ltd., London for 5 years. Mr. Gurmeet Singh Gill, aged 62 years is Independent Non Executive Director of the Company. He is MBA from Delhi University with experience of over 38 years in various commercial aspects related to business. He provides useful guidance to our Company on critical commercial issues. Relationship between Directors None of our Directors are related to each other, except Mr. Satinder Jeet Singh Sandhu and Mr. Devinder Jeet Singh Sandhu, who are brothers and Mr. Satinder Jeet Singh Sandhu and Mr. Devinder Jeet Singh Sandhu are brother in law of Mr. Narinder Singh Ghumman. We further confirm that: we have not entered into any arrangement or understanding with our major shareholders, customers,

suppliers or others, pursuant to which our Director were selected as Director or member of Senior Management.

There are no service contracts executed between our Company and any of our Directors providing for benefits upon termination of employment.

57

Further none of our Directors were either director on board of listed companies that have been delisted from any Stock Exchange or hold any current and past directorship(s) during the preceding five years in listed companies whose shares have been or were suspended from being traded on BSE Limited or National Stock Exchange of India Limited. Borrowing Powers of our Board of Directors Our Company has passed the resolution in the Annual General Meeting of the members of the Company held on September 28, 2011, authorizing the Board of Directors of the Company to borrow from time to time all such monies as they may deem necessary for the purpose of business of the company notwithstanding that money borrowed by the company together with the monies already borrowed by our company may exceed the aggregate of the paid up capital and its free reserves provided that the total amount upto which monies be borrowed by the Board of Directors shall not exceed the sum of ` 10,000 lakhs. Remuneration of the Directors The significant terms of Mr. Satinder Jeet Singh Sandhu’s employment as the Executive Chairman, as per the Resolution passed at the Annual General Meeting of our Company held on September 28, 2011 and as approved by the Central Government vide its letter No. B24043804/1/2011-CL. VII dated May 01, 2012 are as follows: Tenure of Appointment Re-appointed as Whole Time Director upto July 31, 2013 Total Remuneration ` 84.00 lakhs for the period from April 01, 2012 to March 31, 2014, as approved

by the Central Government Perquisites and Benefits House Rent Allowance subject to ceiling of 60% of basic salary or Company to

provide rent free accommodation Medical reimbursement for self and family subject to a ceiling of one month salary in a year or three months salary over a period of three years Leave travel concession for self an family once in a year Club Fees (other than life membership of admission fees), subject to a maximum of two clubs Personal accident insurance as per the rules of the Company Contribution towards Provident Fund / Superannuation fund as per the rules of the Company Gratuity, not exceeding half months salary for each completed year of service Facility of telephone and Car with Driver for the business of the Company Earned / Privilege Leave: One month’s leave with full pay and allorances, for every 11 months of service as per the rules of the Company

The significant terms of Mr. Narinder Singh Ghumman’s employment as the Managing Director, as per the Resolution passed at the Annual General Meeting of our Company held on September 28, 2011 and as approved by the Central Government vide its letter No. B24038796/1/2011-CL. VII dated May 01, 2012 are as follows: Tenure of Appointment Re-appointed as Managing Director upto March 31, 2016 Total Remuneration ` 84.00 lakhs for the period from April 01, 2012 to March 31, 2014, as approved

by the Central Government Perquisites and Benefits House Rent Allowance subject to ceiling of 60% of basic salary or Company to

provide rent free accommodation Medical reimbursement for self and family subject to a ceiling of one month salary in a year or three months salary over a period of three years Leave travel concession for self an family once in a year Club Fees (other than life membership of admission fees), subject to a maximum of two clubs Personal accident insurance as per the rules of the Company Contribution towards Provident Fund / Superannuation fund as per the rules of the Company Gratuity, not exceeding half months salary for each completed year of service Facility of telephone and Car with Driver for the business of the Company Earned / Privilege Leave: One month’s leave with full pay and allorances, for every 11 months of service as per the rules of the Company

58

The significant terms of Mr. Devinder Jeet Singh Sandhu’s employment as the Whole Time Director (Designated as Deputy Managing Director), as per the Resolution passed at the Annual General Meeting of our Company held on September 28, 2011 and as approved by the Central Government vide its letter No. B24042707/1/2011-CL. VII dated May 01, 2012 are as follows: Tenure of Appointment Re-appointed as Whole Time Director upto March 31, 2016 Total Remuneration ` 77.90 lakhs for the period from April 01, 2012 to March 31, 2013 and ` 84.00

lakhs for the period from April 01, 2013 to March 31, 2014, as approved by the Central Government

Perquisites and Benefits House Rent Allowance subject to ceiling of 60% of basic salary or Company to provide rent free accommodation Medical reimbursement for self and family subject to a ceiling of one month salary in a year or three months salary over a period of three years Leave travel concession for self an family once in a year Club Fees (other than life membership of admission fees), subject to a maximum of two clubs Personal accident insurance as per the rules of the Company Contribution towards Provident Fund / Superannuation fund as per the rules of the Company Gratuity, not exceeding half months salary for each completed year of service Facility of telephone and Car with Driver for the business of the Company Earned / Privilege Leave: One month’s leave with full pay and allorances, for every 11 months of service as per the rules of the Company

In view of the depressed operating results of our Company and on going expansion programme, the Directors have foregone 70% of their entitlement aggregating to ` 62.64 lakhs as Directors remuneration and opted to avail only 30% of increased remuneration as approved by the Central Government for the financial year ended March 31, 2012. Sitting Fees The Non executive Directors of our Company are eligible for payment of sitting fees of ` 2,000 (Rupees two thousand only) for every meeting of the Board attended by them. Interest of Directors All of our directors 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 paid in their professional capacity and / or reimbursement of expenses, if any, payable to them and the shares held by them in the Company. Further, the Directors, who are also part of the Promoters Group, namely, Mr. Satinder Jeet Singh Sandhu, Mr. Narinder Singh Ghumman and Mr. Devinder Jeet Singh Sandhu shall be deemed to be interested to the extent of the related party transactions entered into by the Company with the said Directors or their relatives or entities on which such Directors directly or indirectly exercise control. For details of related party transactions, refer to the para titled “Related Party Transactions” under the chapter “Financial Statements” on page 60 and “Unaudited Condensed Interim Financial Statements for 6 months period ended September 30, 2012” on page 85 of the Draft Letter of Offer. Except as stated above our Directors do not have any other interest in our business.

59

OUR PROMOTERS

The Promoters of our company are Mr. Narinder Singh Ghumman and Mr. Satinder Jeet Singh Sandhu. 1. Mr. Narinder Singh Ghumman

Mr. Narinder Singh Ghumman, aged 62 years, our Managing Director, is Bachelor of Engineering (Hons.) from The Birla Institute of Technology & Science, Pilani and has an experience of over 40 years. He has been the force behind the growth of the Company. Prior to incorporation our Company, he was Chief Engineer in M/s Tradex Gestion SA General of Switzerland. He is responsible for overall manufacturing operations, Plant, Research & Development, Product Development, etc. Over the period, under his stewardship, our Company has diversified into high precession products, components, clad products, having new applications. He is also looking after the project of setting up cold bonded facilities as part of expansion plan. 2. Mr. Satinder Jeet Singh Sandhu

Mr. Satinder Jeet Singh Sandhu, aged 58 years, our Promoter and Executive Chairman of the Company, has completed two years of BA (Pass) from Delhi University. Prior to promoting our Company, he has extensive work experience in construction industry. He was appointed a Director of our Company on July 11, 1984 but later resigned in March 28, 1988. He was again appointed as Director on the Board w.e.f. September 01, 1992 and was later designated as Chairman & Whole Time Director. He has over 40 years experience in construction and electronics industry. He is responsible for the commercial (domestic and international), financial and administrative functions of our Company as well as our Joint Venture. There has been no change in the control / management of our Company since incorporation.

Passport No. : F8779592 PAN : AAAPG0769L Bank a/c No. : 03871050002711 with HDFC Bank

Passport No. : G4581239 PAN : ABJPS2763G Bank a/c No. : 0993000100131357 with Punjab

National Bank

60

FINANCIAL STATEMENTS

To The Members of Shivalik Bimetal Controls Limited 1. We have audited the attached Balance Sheet of Shivalik Bimetal Controls Limited as at 31st March, 2012,

the Profit and Loss Account and also the Cash flow statement for the year ended on that date annexed thereto. These Financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that: i. we have obtained all the information and explanations, which to the best of our knowledge and belief

were necessary for the purposes of our audit; ii. in our opinion, proper books of account as required by law have been kept by the Company so far as

appears from our examination of those books; iii. the Balance Sheet, Profit and Loss Account and Cash flow statement dealt with by this report are in

agreement with the books of account; iv. in our opinion, the Balance Sheet, Profit and Loss Account and Cash flow statement dealt with by this

report comply with the accounting standards referred to in sub-section (3C) of section 211 of The Companies Act, 1956;

v. on the basis of the written representations received from the directors as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of The Companies Act, 1956;

vi. in our opinion and to the best of our information and according to the explanations given to us, the said account give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; b. in the case of the Profit and Loss account, of the profit for the year ended on that date; and c. in the case of Cash flow statement, of the Cash flows for the year ended on that date.

For Malik S & Co. Chartered Accountants Firm Registration no: 000383N Suresh Malik Proprietor M. No. 080493 Place: New Delhi Date: May 28, 2012

61

Annexure to Auditors’ Report (Referred to in paragraph 3 of our report of even date on the Statements of Account of Shivalik Bimetal Controls Limited, as at and for the year ended 31st March 2012) (i) a. The Company is maintaining proper records showing full particulars, including quantitative details and

situation of fixed assets. b. According to information and explanations given to us, the assets have been physically verified by the management during the year as per the regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification. c. There was no substantial disposal of fixed assets during the year.

(ii) A. The management has conducted physical verification of inventory at reasonable intervals during the year except inventory comprising of work-in progress. According to the information and explanations given to us, and also keeping in view the nature of the operations of the company, the inventory of work-in-progress can not be verified periodically. b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. c. In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory. No material discrepancies were noticed on verification between the physical stocks and the book records.

(iii) As informed, the Company has neither granted nor taken any loans , secured or unsecured to/from companies ,firms or other parties covered in the register maintained under section 301 0f the Companies Act , 1956.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, with regards to the purchase of inventory, fixed assets and sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the company.

(v) a. In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act 1956, have been entered in the register maintained under that section. b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party during the period have been made at prices which are reasonable, having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from public during the year under the provisions of section 58A, 58AA or any other relevant provisions of the Companies Act 1956.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act 1956 for the products of the Company.

(ix) a. According to the records of the Company and information and explanation given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and other material statutory dues applicable to it, with the appropriate authorities. b. According to the information and explanations given to us, there were no undisputed amounts payable in respect of Income tax, wealth tax, sales tax, service tax, customs duty and excise duty which have remained outstanding as at 31st March 2012 for a period of more than six months from the date they became payable, except for a sum of ` 2518 Thousands payable on account of Service Tax, which has since been deposited on 26th May 2012. c. According to the information and explanation given to us, there are no dues outstanding of Sales Tax, Income Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty or Cess on account of any dispute.

62

(x) The Company does not have accumulated losses at the end of the financial year and it has not incurred any cash losses in the current financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution, banks and debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans and the advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The company is not a Chit Fund or Nidhi/ mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor’s Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) The company has furnished Corporate Guarantee to the tune of ` 5.58 Crores for loans taken by the Joint Venture Company (in which company holds 50% of issued share capital) and Associate Company (in which the company holds 45% of issued share capital) from bank. The terms and conditions whereof are not prima-facia prejudicial to the interest of the company.

(xvi) In our opinion, the term loans have been applied for the purpose for which they were raised. (xvii) According to the information and explanations given to us and on an overall examination of Balance Sheet

of the Company, we report that no funds raised on short term basis have been used for long-term investment by the company.

(xviii) The Company has not made any preferential allotment of shares to parties and Companies covered in register maintained under Section 301 of the Companies Act, 1956.

(xix) Since the debentures have not been issued during the year, question of creating securities does not arise. (xx) The Company has not raised any money through a public issue during the year. (xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the

financial statements and as per the information and explanations given to us, we report that no fraud on or by the company has been noticed or reported during the year ended 31st March 2012.

For Malik S & Co. Chartered Accountants Firm Registration no: 000383N Suresh Malik Proprietor M. No. 080493 Place: New Delhi Date: May 28, 2012

63

BALANCE SHEET AS AT 31ST MARCH 2012

(` in ‘000) Particulars Note

No. As at March 31,

2012 As at March 31,

2011 I. EQUITY AND LIABILITIES Shareholders’ funds (a) Share capital 3 38,403 38,403 (b) Reserves and surplus 4 476,443 450,098 Non-current liabilities (a) Long-term borrowings 5 115,451 25,407 (b) Deferred tax liabilities (Net) 6 15,789 22,698 (c) Other Long term liabilities 7 4,207 3,332 (d) Long-term provisions 8 1,882 2,116 Current liabilities (a) Short-term borrowings 9 332,372 251,184 (b) Trade payables 10 59,306 138,341 (c) Other current liabilities 11 95,658 47,614 (d) Short-term provisions 12 46,198 48,156 TOTAL 1,185,709 1,027,349

II. ASSETS Non-current assets (a) Fixed assets (i) Tangible assets 13 212,657 198,042 (ii) Intangible assets 13 1,159 50 (iii)Capital work-in-progress 13 134,936 929 (b) Non-current investments 14 165,523 119,523 (c) Long-term loans and advances 15 11,965 28,371 (d) Other non-current assets 16 79,998 59,337 Current assets (a) Current Investments 17 2,930 1,984 (b) Inventories 18 319,522 282,465 (c) Trade receivables 19 160,222 227,340 (d) Cash and cash equivalents 20 7,888 16,724 (e) Short-term loans and advances 21 87,064 90,331 (f) Other current assets 22 1,845 2,253 TOTAL 1,185,709 1,027,349

III. Notes forming part of the Financial Statements 1 to 40 As per our report of even date For Malik S & Co. Chartered Accountants Suresh Malik Proprietor

For and on behalf of the Board

(N S Ghumman) Managing Director

(K S Negi) CFO Corporate

(S S Sandhu)

Chairman

(Pooja Hiranandani) Company Secretary

Place: New Delhi Date: May 28, 2012

64

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2012

(` in '000 except per share data)

Particulars Note No. Year ended

March 31, 2012 Year ended

March 31, 2011 I Revenue from operations 23 794,708 887,942II Other income 24 4,596 6,509 III Total Revenue (I + II) 799,304 894,451 IV Expenses

(a) Cost of materials consumed 25 473,054 525,536 (b) Decrease/(Increase) in Stock 26 13,386 (12,557) (c) Employee benefits expense 27 74,406 60,500 (d) Finance costs 28 37,316 31,047 (e) Manufacturing and other expense 29 172,719 183,903 (f) Depreciation expense 13 21,621 18,975 Total expenses 792,502 807,404

V Profit before exceptional and extraordinary items and tax (III-IV)

6,802 87,047

VI Exceptional items (Income)/Expenses 30 (30,685) (41) VII Profit before extraordinary items and tax (V

- VI) 37,487 87,088

VIII Extraordinary Items - - IX Profit before tax (VII - VIII) 37,487 87,088 X Tax expense (a) Current tax 17,200 20,500 (b) Current tax related to previous years 851 5 (b) Deferred tax (6,909) 2,265 11,142 22,770

XI Profit (Loss) for the year (IX-X) 26,345 64,318 XII Earnings per equity share

(a) Basic 31 1.37 3.35 (b) Diluted 31 1.37 3.35

XIII Notes forming part of the Financial Statements 1 to 40 As per our report of even date For Malik S & Co. Chartered Accountants Suresh Malik Proprietor

For and on behalf of the Board

(N S Ghumman) Managing Director

(K S Negi) CFO Corporate

(S S Sandhu)

Chairman

(Pooja Hiranandani) Company Secretary

Place: New Delhi Date: May 28, 2012

65

CASH FLOW STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2012

(` in '000)

Particulars Year ended

March 31, 2012 Year ended

March 31, 2011 A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit before tax and extraordinary items 37,487 87,088 Adjustments for: Depreciation 21,621 18,975 Interest Paid 31,916 30,885 Interest Received (246) (73) Amount Written Back - (5) Debtors/ Unrecoverable Amount Written Off 14,887 111 Exchange Difference on translation of foreign currency cash & cash equivalent-Loss (16) (13) (Profit)/Loss on sale of Fixed Asset 5,531 164 Operating Profit before Working Capital change 111,180 137,132 Adjustment for : Trade and other receivables 14,317 (16,772) Inventories (14,030) (110,463) Trade Payables (62,089) (8,062) Loans and Advances 2,992 54,473 Cash generated from operations 52,370 56,308 Direct taxes paid (14,130) (17,740) Cash flow from Ordinary items 38,240 38,568 Net Cash flow from operating Activities 38,240 38,568

B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets (56,759) (41,873) Sale of Fixed Assets 13,883 2,068 Capital Work In Progress (126,614) 1,623 Capital Advance 5,681 (11,757) Interest Received 246 73 Long Term Investment (46,000) (24,177) Other Investment (946) (401) Net cash (used ) in / from investing activities (210,509) (74,444)

C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Bank Borrowings 157,675 66,143 Term Loan - - Vehicle Loan (2,502) 10,729 Term Loan Paid 33,012 (6,403) Unsecured Loan 16,446 12,872 Interest Paid (31,916) (30,885) Dividend including Dividend Tax paid (9,004) (14,477) Net Cash (used) in from financing activities 163,711 37,979 Net Increase/(Decrease) In Cash And Cash Equivalents (8,558) 2,103 Cash and Cash equivalents as on 1st April, 2011 (Opening Balance) 15,830 13,714 Exchange Difference on translation of foreign currency cash & cash equivalent 16 13 Cash and Cash equivalents as on 31st March, 2012 (Closing Balance) 7,288 15,830 Cash and Cash equivalents as on 31st March, 2012 as per book 7,288 15,830

As per our report of even date For Malik S & Co. Chartered Accountants Suresh Malik Proprietor

For and on behalf of the Board (N S Ghumman)

Managing Director

(K S Negi) CFO Corporate

(S S Sandhu) Chairman

(Pooja Hiranandani) Company Secretary

Place: New Delhi Date: May 28, 2012

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Significant Accounting Policies (Forming part of Financial Statements for the year ended 31st March, 2012) 1. COMPANY’S OVERVIEW

Shivalik Bimetal Controls Limited referred to as “Shivalik” is a widely-held public limited Company which was incorporated in the year 1984 and has been in commercial production since October 1986. “Shivalik’s” manufacturing Units are located in Distt. Solan, in the state of Himachal Pradesh, India. The Company’s shares are listed on Bombay Stock Exchange.

“Shivalik” is engaged in the business of manufacturing & sales of Thermostatic Bimetal / Trimetal strips, components and other clad materials, EB welded products, Cold Bonded Clad Strips and Parts etc., The application of “Shivalik”s Products are mainly in Switchgears, Circuit Breakers and various other Electrical and Electronic devices. The Company’s products are exported to over 35 Countries around the world.

2. SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of Preparation of Financial Statements

These financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

2.2 Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period.

Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Accounting estimates could change from period to period.

2.3 Use of Estimates

Inventories are valued at the lower of cost and net realizable value, after providing for obsolescence, wherever considered necessary as under: a. Raw materials, stores and spares: At cost, on “FIFO” basis; b. Work-in-progress /Semi-Finished: At cost plus related cost of conversion including appropriate

overheads; c. Finished goods: At cost plus related cost of conversion including appropriate overheads and excise duty

paid/ payable on such goods; and d. Saleable Scrap is valued at estimated realizable value

2.4 Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

2.5 Cash Flow Statements Cash flows are reported using the indirect method, whereby Profit before tax is adjusted for the effects of transactions of a non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing and investing activities of the company are segregated.

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2.6 Depreciation

Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner specified in Schedule-XIV of the Companies Act, 1956 except for following: a. Dies & Tools included under the head “Plant & Machinery” after being put to use, are depreciated over

its estimated life of two years. b. Assets costing less than ` 5,000/- each are fully depreciated in the year of acquisition.

2.7 Research & Development Expenditure Expenditure in the nature of revenue, incurred for Research & Development relating to business, is charged to profit & loss account.

2.8 Revenue Recognition a. Sales are recognized, net of returns and trade discount, on transfer of significant risks and rewards of

ownership to the buyer, that coincides with the reliability and reasonableness to expect ultimate collection , which is generally on dispatch of goods. Sales include excise duty but excludes sales tax and value added tax.

b. For other incomes, the Company follows the accrual basis of accounting except interest on delayed payment from customers where there is no reasonable certainty regarding the amount and / or its Collectability.

2.9 Export Benefits

a. Imports entitlements/Export obligations under Advance Licenses are accounted for at the time of purchase of Raw Materials/ Export sales.

b. Other export incentives are accounted for as and when the claims thereof have been admitted by the authorities.

2.10 Fixed Assets, Intangible Assets and Capital Work-in-Progress

a. Tangible Assets are stated at cost (Net of CENVAT/Value added tax, wherever applicable) less accumulated depreciation/amortization. Cost comprises the purchase price, freight, foreign exchange adjustments arising from exchange rate variations, borrowing cost attributable to the Qualifying Asset and any other directly attributable cost of bringing the asset to working condition for its intended use.

b. Intangible assets are recorded at consideration paid for acquisition of such assets and are carried at cost less accumulated depreciation or amortization and impairment, if any.

c. Capital work-in-progress represents the cost of tangible assets that are not yet ready for their intended use at the reporting date.

2.11 Capital Commitments

Estimated amount of contracts remaining to be executed exceeding ` 1.00 lacs in each case are disclosed in the “Notes to Accounts”.

2.12 Foreign Currency Transactions a. Foreign currency transactions are accounted for at the exchange rate prevailing on the transaction date. b. Foreign currency denominated monetary assets and liabilities are converted at the exchange rate

prevailing on the Balance Sheet date and the resultant difference is charged/ credited to Profit & Loss account.

c. Non-monetary assets and non-monetary liabilities denominated in a foreign currency, measured at historical cost are translated at the exchange rate prevalent at the date of transaction and any translation gain or losses are adjusted to the costs of the relevant assets according to newly inserted para 46A of Accounting Standard -11 vide notification issued by the Ministry of Corporate Affairs.

2.13 Forward Contracts a. The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign

exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the Company and the company does not use those for trading or speculation purposes.

b. Forward contracts are fair valued at each reporting date. The resultant gain or loss from these transactions is recognized in the statement of profit and loss. The company records the gain or loss on

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effective hedges, if any, in the foreign currency fluctuation reserve until the transactions are completed. On completion, the gain or loss is transferred to the statement of profit and loss of that period. To designate a forward contract as an effective hedge, the Management objectively evaluates and evidences with appropriate supporting documents at the inception of each contact whether the contract is effective in achieving offsetting cash flows attributable to the hedged risk. Any profit & loss arising on the cancellation or renewal of forward contracts is recognized as income or as expense for the year.

c. The company records the gain or loss on effective hedges, if any, in Hedge Reserve until the transaction is complete. In respect of Commodity Hedging transactions, gain/ losses on settlement are recognized in the profit & loss account.

2.14 Investments Current investments are carried at lower of cost and fair value, computed category wise. Long -term Investments are stated at cost, unless there is a decline, other than temporary in the value of Investments.

2.15 Employees' Benefits a. Defined Contribution Plans:

The Company has contributed to State Governed Provident Fund scheme, Employees State Insurance scheme and Employee Pension Scheme which are defined contribution plans. Contribution paid or payable under the scheme is recognized as expense during the period in which employee renders the related service.

b. Defined Benefit Plans: The employees’ gratuity is a defined benefit plan. The present value of the obligation under such plan is determined based on the Actuarial Valuation using the projected unit credit method which recognizes each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the financial obligation. The Company has an employee gratuity fund managed by Life Insurance Corporation of India (LIC). The gains or losses are charged to Profit and Loss Account.

c. Liability in respect of leave encashment is provided for based on Actuarial Valuation basis using the same projected unit credit method as above.

2.16 Borrowing Costs

a. Borrowing Costs that are attributable to the acquisition or construction of qualifying assets as defined in Accounting Standard-16 are capitalized as part of the cost of such asset till such time as the asset is ready for its intended use. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expenses in the period in which they are incurred.

b. Borrowing costs include interest and exchange difference arising from currency borrowing to the extent they are regarded as an adjustment to the interest cost.

2.17 Inter unit Transactions The Inter unit sale / purchase of materials/Job work transactions are accounted for at the prevailing market prices. Annual Accounts are reported excluding inter-unit transfers/transactions.

2.18 Earnings Per share

Basic Earnings per Share is computed by dividing net profit or loss for the period attributable to equity shareholders by the weighted average number of Equity Shares outstanding during the period.

2.19 Taxes on Income

Tax on income for the current period is determined on the basis of taxable income and tax credits/ benefits computed in accordance with the provisions of the Income Tax Act 1961.

Deferred tax charge/ credit is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

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Deferred tax assets and liabilities are measured at the tax rates that has been enacted or substantively enacted at the balance sheet date.

2.20 Impairment

The Carrying amounts of assets are reviewed at each Balance Sheet date and if there is any indication to the effect that the recoverable amount of the Asset/ CGU (Cash Generating Unit) is less than its carrying amount, the difference is treated as “Impairment Loss”. The recoverable amount is greater of the asset's net selling price and value in use.

2.21 Provision, Contingent Liabilities and Contingent Assets

Provisions are recognized for liabilities that can be measured only by using substantial degree of estimation, if a. the company has a present obligation as a result of past event, b. a probable outflow of resources is expected to settle the obligation; and c. the amount of the obligation can be reliably estimated.

Contingent liability is disclosed in case of i. a present obligation arising from past events, when it is not probable that an outflow of resources will be

required to settle the obligation; ii. a present obligation arising from past events, when no reliable estimate is possible; and iii. a possible obligation arising from past events where the probability of outflow of resources is not

remote. Contingent assets are neither recognized nor disclosed. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

Notes on Financial Statements for the year ended 31st March, 2012 The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current year's presentation. 3. Share Capital

(` in '000, except per share data) Particulars As at 31st March

2012 As at 31st March

2011 Authorised Equity Shares of ` 2/- each 2,50,00,000 (Previous Year 2,50,00,000) equity shares

50,000 50,000

Issued, Subscribed and Paid up Equity Shares of ` 2/- each 1,92,01,400 (Previous Year 1,92,01,400) equity shares

38,403 38,403

Total 38,403 38,403

3.1 Reconciliation of Number of Shares Particulars Equity Shares (Numbers)

As at 31st March 2012

As at 31st March 2011

Shares as at beginning of the year 19,201,400 19,201,400 Shares issued during the year - - Shares bought back during the year - - Shares as at end of the year 19,201,400 19,201,400

3.2 The Company has only one class of shares referred to as Equity shares having par value of ` 2/-. The holder

of Equity Share is entitled to one vote per share. 3.3 In the event of liquidation of the Company, the residual interest in the company's assets shall be distributed

to the share holders in the proportion to the equity shares held.

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3.4 Shareholders holding more than 5% shares Name of Shareholders As at 31 March 2012 As at 31 March 2011

No. of Shares held

% of Holding

No. of Shares held

% of Holding

Mr. N. S. Ghumman 1,465,000 7.63 1,465,000 7.63 O D Finance and Investment Pvt. Ltd. 1,419,590 7.39 1,419,590 7.39 Ultra Portfolio Management Pvt. Ltd. 977,380 5.09 977,380 5.09 TSL Holdings Limited 2,790,200 14.53 2,790,200 14.53 Angad Estates Pvt. Ltd. 1,655,000 8.62 1,655,000 8.62

4. Reserves and Surplus

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 (a) Capital Reserve Opening Balance 6,420 6,420 Add: Transferred during the year - - Less: Transferred to General reserve(i) 6,363 - 57 6,420 (b) General Reserve Opening Balance 200,000 190,000 Add: Transferred from Profit & Loss Account 10,000 10,000 Add: Transferred from Capital Reserve 6,363 - 216,363 200,000 (c ) Profit & Loss Account Opening balance 243,678 202,765 Add: Profit for the year 26,345 64,318 Amount available for Appropriations 270,023 267,083 Less: Appropriations (i) Interim Dividend - 7,681 (ii) Proposed Final Dividend - 3,840 (iii) Tax on Dividend - 1,884 (iv) General Reserve 10,000 10,000 260,023 243,678 476,443 450,098

(i) The company had received Central Capital Investment Subsidy of ` 6,363 thousand for undertaking substantial expansion of its units for which a pari passu charge was created on the plant & machinery of the company. The charge created has since been satisfed after completion of 5 years as such the said amount has become part of free reserves available to the company. 5. Long Term Borrowings

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 Secured (a) From Banks(ii) Foreign Currency Loan-Buyers' Credit 76,740 - Rupee Loan 31,722 14,216 (b) From Others(iii) 2,898 - Unsecured From Others 4,091 11,191

115,451 25,407

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(ii) ` 1,04,553 thousands availed as Term Loan is secured by first charge on Plant & Machinery, both present and future And equitable mortgage of company's Factory Land and Building, situtated at Chambaghat, Solan, H.P.) and ` 3,908 thousands is secured by hypothecation of vehicles. (iii) ` 2,898 thousands availed as Vehicle Loan is secured by hypothecation of vehicles. 6. Deferred Taxes

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 Deferred Tax Liabilities 22,698 20,433 Depreciation - 1,727 22,698 22,160 Deferred Tax Assets Depreciation 755 - Provision for Doubtful Debts 4,830 - Employee Benefits 168 (538) Others 1,156 - 6,909 (538) Deferred Tax Liabilities (Net) 15,789 22,698

7. Other Long term Liabilities

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 (a) Trade Payables 3,747 3,332 (b) Others Liabilities 460 - 4,207 3,332

8. Long Term Provisions

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 (a) Provision for employee benefits -Unavailed Leave (refer note no.-27.1) 1,882 1,588 b) Other Provisions -Excise duty on Finished goods - 528 1,882 2,116

9. Short Term Borrowings

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 Secured Working Capital Loans From Banks(i) Foreign Currency Loan 224,586 109,710 Rupee Loan 107,786 141,474 332,372 251,184

(i) Secured by hypothecation of stocks, movable properties and Book Debts, both present and future, and equitable mortgage of company's Factory Land and Building situated at Chambaghat Solan, Himachal Pradesh.

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10. Trade Payable (` in '000)

Particulars As at 31st March 2012

As at 31st March 2011

Micro, Small and Medium Enterprises# 37 28 Others 59,269 138,313 59,306 138,341

# As required under "Micro, Small and Medium Enterprises Development Act, 2006", the information available with the company relating to amount overdue at the end of the year on account of principal amount due is ` 37/- thousands (Previous year ` 28/- thousands) and interest due thereon is Nil (Previous year Nil). 11. Other Current Liabilities

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 (a) Current maturities of long-term debt (refer note no. 5) 59,570 26,275 (b) Interest accrued but not due on borrowings 2,233 254 (c) Interest accrued and due on borrowings 850 362 (d) Unclaimed dividends 1,915 1,992 (e) Other Payables (i) Statutory Dues 7,091 4,790 (ii) Advance From Customers 13,638 6,561 (iii) Others 10,361 7,380 95,658 47,614

12. Short Term provisions

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 (a) Provision for employee benefits i) Bonus 2,021 1,866 ii) Unavailed Leave (refer note no. 27.1) 68 21 (b) Provision for Excise Duty on Finished Goods 3,614 2,073 (c ) Interim Dividend - 3,840 (d) Proposed Final Dividend - 3,840 (e) Tax on Proposed Final Dividend - 1,246 (f) Taxation 40,495 35,108 (g) Other Provisions - 162 46,198 48,156

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13. Non Current Assets - Fixed Assets

(` in '000)

Fixed Assets Gross Block Accumulated Depreciation Net Block As at 1st

April 2011

Additions during the year

Disposals during the year

Revalua-tions/

(Impair-ments)

Effect of Foreign

Currency Difference

Borrowing Cost

Capitalised

Other Adjustm

ents

As at 31st

March 2012

As at 1st April 2011

Depreciation charged

for the year

Adjustment due to

revaluations/ (Impairment)

On dispos

als

As at 31st

March 2012

As at 31st

March 2012

As at 31st

March 2011

(a) Tangible Assets

Leasehold Land

367 13,444 13,444 - 367 - - - - - 367 367

Buildings 34,381 105 - 34,486 11,567 1,151 - - 12,718 21,768 22,814 Plant and Equipment

207,447 22,876 570 - 535 1,397 231,685 96,811 12,049 - 331 108,529 123,156 110,636

Furniture and Fixtures

13,286 3,048 - 16,334 4,909 1,050 - 5,959 10,375 8,377

Vehicles 60,657 12,193 8,112 - 64,738 10,958 6,205 - 2,410 14,753 49,985 49,699 Office Equipment

13,583 1,844 48 - 15,379 7,434 958 - 19 8,373 7,006 6,149

Total (a) 329,721 53,510 22,174 - 535 1,397 - 362,989 131,679 21,413 - 2,760 150,332 212,657 198,042

(b) Intangible Assets*

Computer software

1,201 1,317 - - 2,518 1,151 208 1,359 1,159 50

Total (b) 1,201 1,317 - - - - - 2,518 1,151 208 - - 1,359 1,159 50 Total (a+b) 330,922 54,827 22,174 - 535 1,397 - 365,507 132,830 21,621 - 2,760 151,691 213,816 198,092 Previous year

294,081 41,899 5,032 - - - (26) 330,922 116,654 18,975 2,799 132,830 198,092 177,427

(c) Capital Work In Progress :

-Unit-I 1,284 555 -Unit-IV 133,652 374 Total 134,936 929

* Other than internally generated

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13.1 Leasehold Land: Leasehold Period: 95 years Leasehold Installment: Nil 13.2 In compliance with the companies (Accounting Standard) amendment Rules, 2009 issued by the Ministry of

Corporate Affairs vide Notification no.-G.S.R. 225(E) dated 31st March, 2009 and according to newly inserted paragraph of the Accounting Standard (AS)- 11 " The effect of changes in Foreign Exchange Rates", during the year the company has adjusted ` 995 thousands (Previous year `163 thousands) to the cost of relevant fixed assets. Out of ` 995 thousands, `460 thousands stands included in borrowing cost as per AS-16-"Borrowing Cost read with ASI-10.

13.3 During the year the Company has commenced commercial production of cold bonded clad strips and parts at

its new Unit (viz. Unit-IV) at Solan (Himachal Pradesh). In line with Applicable Accounting Standard(s) and other statutory provisions, pre-operative expenses till the date of start of commercial production/ Commencement of unit IV amounting to ` 3,430 thousands have been capitalized to the carrying cost of fixed assets. The said expenditure, as per details, so capitalized are accumulated as “Capital work in progress” and have been allocated to respective items of plant and machinery to the extent these were put to use and the balance sum is appearing under the head Capital Work in Progress to be capitalized on the remaining plant and machinery/building as and when completed and put to use. the details as are given below:

Capital Work-in-Progress (Unit-IV)

(` in '000) Particulars As at 31st March 2012 As at 31st March 2011 Plant & Machinery under installation 98,676 - Building under Construction 3,661 - Expenses Pending Capitalisation (Unit-IV) Opening Balance 374 - Add: Transferred from Profit & Loss Account (refer note no. 29)

14,829 374

Interest Capitalized 9,944 - Exchange Rate Fluctuation-ASI 10 4,896 - Exchange Rate Fluctuation 4,800 - Total 34,843 374 Less: Expenses Capitalized during the year 3,528 - Closing Balance 31,315 374 Total 133,652 374

14. Non Current Investments

(` in '000) Particulars As at 31 March

2012 As at 31 March

2011 Other Investments Unquoted, fully paid up (a) In Equity Shares of Associate Companies 222,750 shares in Shivalik Bimetal Engineers Pvt. Limited of ` 10/- each

2,228 2,228

(Previous Year 222,750 shares of ` 10/- each) 15,120,000 shares in Innovative Clad Solutions Pvt. Limited of ` 10/- each

151,200 105,200

(Previous Year 10,520,000 shares of ` 10/- each)

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Particulars As at 31 March 2012

As at 31 March 2011

(b) In Equity Shares of Joint Venture 685,900 shares in Checon Shivalik Contact Solutions Pvt. Limited of ` 10 each

11,895 11,895

(Previous Year 685,900 shares of ` 10/- each) (c) In Equity Shares of Other Company 20,000 shares in Shivalik Solid Waste Management Pvt. Limited of ` 10 each

200 200

(Previous Year 20,000 shares of ` 10 each) 165,523 119,523

15. Long term Loans and Advances

(` in '000) Particulars As at 31 March

2012 As at 31 March

2011 (a) Capital Advances Unsecured, considered good 5,200 18,275 5,200 18,275 (b) Security Deposits Unsecured, considered good Balances with Government Authorities 1,012 1,012 Others 1,940 612 2,952 1,624 (c) Other loans and advances Unsecured ,Considered good Prepaid Expenses 22 61 Mat Credit Entitlement 3,791 8,411 3,813 8,472 11,965 28,371

16. Other Non Current Assets

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 (a) Long Term Trade Receivables Unsecured Considered good 77,466 39,553 Considered Doubtful# 14,885 - 92,351 39,553 Less: Provision for doubtful debts 14,885 - 77,466 39,553 (b) Others Inventories 2,532 19,784 2,532 19,784 79,998 59,337

#The company had initiated legal proceedings for recovery of a sum of ` 1,48,85 thousands outstanding amount in respect of a debtor relating to Export. The company sees no possibility of recovery of the aforesaid sum after having been advised by the local solicitors in Korea about non-feasibility of executing the decree passed in the favour of the company. Pending permission from appropriate authorities for writing off the said sum, the company has made provision, being doubtful of recovery.

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17. Current Investments

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 Other Investments (valued at Cost) 2,930 1,984 2,930 1,984

18. Inventories

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 (a) Raw Materials (i) At Store 77,015 74,208 (ii) At Bonded Warehouse 168,686 96,836 (iii) Goods-in transit 3,056 36,639 248,757 207,683 (b) Work-in-Process 34,614 52,722 (c) Finished goods (i) At Store 33,018 18,316 33,018 18,316 (d) Stores, Spares and Packing Material 3,116 3,592 (e) Scrap 17 152 17 152 319,522 282,465

19. Trade Receivables

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 Trade Receivables (Unsecured and Considered Good) (a) Over six months from the date they were due for payment 508 574 (b) Others 159,714 226,766 160,222 227,340

20. Cash and Cash Equivalents

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 (a) Balances with banks in - Current Accounts 953 2,747 - Current Accounts in Foreign Currency 283 3,834 -Margin Money Deposit against Bank Gurantee(s) 2,803 2,338 (b) Margin Money Deposit-Others 601 894 (c) Cheques & drafts on hand 959 4,632 (d) Cash on hand 375 287 (e) Unpaid Dividend 1,914 1,992 7,888 16,724

# Margin Money deposit with banks include Fixed deposit of ` 5,88 thousands (Previous Year ` 6,20 thousands) with maturity of less than 12 months.

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21. Short Term Loans and Advances (` in '000)

Particulars As at 31st March 2012

As at 31st March 2011

Unsecured, considered good (a) Loans and advances to related parties (refer note no.-35) - 1,293 (b) Loans and advances to Employees 331 179 (c ) Prepaid Expenses 1,692 2,737 (d) Balances with Revenue authorities 76,208 70,883 (e) MAT Credit Entitlement 5,000 7,000 (f) Security Deposits 50 - (g) Other loans and advances 3,783 8,239 87,064 90,331

22. Other Current Assets

(` in '000) Particulars As at 31st March

2012 As at 31st March

2011 Interest accrued but not due on FDR 277 234 Export Incentives-SHIS 1,568 1,568 Interest Receivable from Customers - 195 Interest Receivable Subvention - 256 1,845 2,253

23. Revenue from Operations

(` in '000) Particulars 2011-12 2010-11 Sale of products 840,566 942,468 Less: Excise duty 46,132 56,217 794,434 886,251 Other Operating Revenues 274 123 Export Benefits - 1,568 794,708 887,942

24. Other Income

(` in '000) Particulars 2011-12 2010-11 (a) Interest Received on deposits with bank 246 73 (b) Interest received on delayed Payment 3,492 4,980 (c ) Rent Received 360 444 (d) Insurance Claims received 400 147 (e) Miscellaneous Income 98 865 4,596 6,509

25. Cost of Materials Consumed

Particulars 2011-12 2010-11 (` in '000) % of

Consumption (` in '000) % of

Consumption Imported 444,669 94% 467,748 89% Indigenous 28,385 6% 57,788 11% 473,054 100% 525,536 100%

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26. Decrease / (Increase) in Finished Goods and Work-in Process (` in '000)

Particulars 2011-12 2010-11 Inventory (at Beginning) -Finished Goods 22,997 14,376 -Work-in-Process 56,892 52,167 -Scrap 152 80,041 17 66,560 Inventory (at Close) -Finished Goods 33,037 22,997 -Work-in-Process 34,614 56,892 -Scrap 17 67,668 152 80,041 (Increase)/Decrease 12,373 (13,481) Add/(Less): Excise duty variation on opening / closing stock

1,013 924

(Increase) / Decrease 13,386 (12,557) 27. Employee Benefit Expenses

(` in '000) Particulars 2011-12 2010-11 (a) Salaries and Wages 64,710 51,891 (b) Contributions to - (i) Provident fund 2,993 2,540 (ii) ESI Contribution 1,003 961 (iii) Gratuity fund contributions 1,150 1,114 (c) Staff welfare expenses 4,550 3,994 74,406 60,500

27.1 Disclosure pursuant to Accounting Standard (AS) 15 (Revised) “Employee Benefits”: The disclosures required under Accounting Standard 15 (revised) “Employee Benefits” notified in the Companies (Accounting Standards) Rules 2006, are given below: (I) Defined Contribution Plan (a) Provident Fund (b) State defined contribution plans

-Employees’ Pension Scheme 1995 The Provident Fund and State defined contribution plan are operated by the regional provident fund commissioner. Under the scheme, the company is required to contribute a specified percentage of payroll cost to the retirement benefit scheme to fund the benefits. These funds are recognized by the Income tax authorities. Contribution to Defined Contribution Plan, recognized are charged off for the year are as under:

(` in '000) Particulars 2011-12 2010-11 (a) Employer’s Contribution to Provident Fund 2,550 2,282 (b) Employer’s Contribution to Pension Scheme 1,360 1,213

(II) Defined Benefit Plan (a) Gratuity (b) Leave Encashment The employees’ Gratuity fund scheme has been managed by Life Insurance Corporation of India and the present value of obligation is determined by Independent Actuary using the Projected Unit Credit (PUC) Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity. The Actuary has carried out the valuation based on the followings assumptions:

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Particulars 2011-12 2010-11 Gratuity Leave

Encashment Gratuity Leave

Encashment Discounting Rate (per annum) 8.50% 8.50% 8.00% 8.00% Rate of escalation in Salary (per annum)

6.50% 6.50% 6.00% 6.00%

Expected Rate of return on plan assets (per annum)

9.15% 9.15% -

Expected Average remaining working lives of employees in no. of years

23.01 23.01 23.54 23.54

Mortality Table (LIC) (1994-96) duly modified (1994-96) duly modified

(` in '000) Particulars Gratuity (Funded) Leave Encashment

(Unfunded) 2011-12 2010-11 2011-12 2010-11

(a) Changes in Present Value of Obligation Opening balance of Present value of obligation 7,438 5,900 1,609 1,368 Interest Cost 636 472 137 109 Current Service Cost 831 627 299 226 Benefits Paid (398) (212) (27) (25) Actuarial (Gain)/Loss on Obligation 461 651 (68) (69) Closing Balance of Present value of obligation 8,968 7,438 1,950 1,609 (b) Changes in Fair Value of Plan Assets Opening balance of Fair Value of Plan Assets 8,725 5,610 - - Expected Return on Plan Assets 798 513 - - Employer’s Contribution - 2,691 - - Benefits paid (398) (211) - - Actuarial Gain/ (Loss) on Plan Assets (18) 122 - - Closing balance of Fair value of Plan Assets 9,107 8,725 - - Actual return on Plan Assets 780 636 - - (c )Percentage of each category of Plan Assets to total Fair value of Plan assets Administrated by Life Insurance Corporation of India 100% 100% - - (d) Reconciliation of Present Value of Defined Present obligations and the Fair Value of Assets Closing Balance of Present Value of Obligation 8,968 7,438 1,950 1,609 Closing Balance of Fair Value of Plan Assets 9,107 8,725 - - (Asset)/ Liability recognised the Balance Sheet 139 (1,287) 1,950 1,609 (e)Amount Recognised in the Balance Sheet Closing Balance of Present Value of Obligation 8,968 7,438 1,950 1,609 Closing Balance of Fair Value of Plan Assets 9,107 8,725 - - Funded (Asset)/ Liability recognized in the Balance Sheet (139) (1,287) Unfunded Liability recognised in the Balance Sheet - - 1,950 1,609 (f) Expenses recognised in the statement of Profit and Loss Current Service Cost 831 627 299 226 Interest Cost 636 472 137 109 Expected Return on Plan Assets (798) (513) - - Net Actuarial (Gain)/Loss recognised in the period 479 529 (68) (69) Expenses recognized in the statement of Profit and Loss 1,148 1,115 368 266 (g) Experience AdjustmentsExperience adjustment on Plan Liabilities (loss)/gain (489) (651) 62 69 Experience adjustment on Plan Assets (loss)/ gain (18) 122 - - (h) Expected employer contribution for the next year 735 570 392 267

80

28. Finance Cost (` in '000)

Particulars 2011-12 2010-11 (a) Interest expense on (i) Borrowing Cost 24,393 28,097 (ii) Others 1,612 389 (b) Other Finance costs 5,911 2,399 (c ) Applicable Loss on foreign currency transactions and translation

5,400 162

37,316 31,047 29. Manufacturing & Other Expenses

(` in '000) Particulars 2011-12 2010-11 Stores & Spares Consumed (refer note no.-29.1) 16,788 15,674 Power & Fuel 8,280 8,142 Machinery Repairs 9,874 9,022 Building Repairs 6,809 4,414 Other Repairs 10,294 8,127 Processing Charges 5,699 14,060 Research & Development 1,372 1,498 Insurance 591 4,215 Rent 5,605 2,233 Rates & Taxes 771 412 Travelling & Conveyance 11,981 13,289 Electricity and Water Charges 2,098 1,969 Printing & Stationery 1,315 1,235 Communication Expenses 1,783 1,796 Professional and Consultancy Charges 11,507 2,546 Payment to Auditors (refer note no.-29.3) 1,758 1,400 Charity and Donations 100 95 Business Promotion /Development, Advertisement & Publicity 2,557 4,345 Commission on Sales 31,792 39,841 Packing Cost 24,944 39,763 Forwarding & Freight 16,074 18,556 Miscellaneous Expenses 7,898 5,468 Prior Period Expense (refer note no.-29.4) 149 71 Loss on Exchange Fluctuations 7,509 (13,894) 187,548 184,277 Less: Transferred to Expenses Pending for Capitalization (Unit-IV) 14,829 374 Manufacturing Expenses transferred to Statement of Profit & Loss 172,719 183,903

29.1 Stores & Spares consumed

Particulars 2011-12 2010-11 (` in '000) % of

Consumption (` in '000) % of

Consumption Imported 2,926 17% 3,498 22% Indigenous 13,862 83% 12,176 78% 16,788 100% 15,674 100%

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29.2 Value of Imports on CIF basis in respect of (` in '000)

Particulars 2011-12 2010-11 (a) Raw Material 412,748 423,122 (b) Spares parts 3,083 3,611 (c) Capital Goods 96,863 7,667

29.3 Payment to Auditors

(` in '000) Particulars 2011-12 2010-11 (a) Auditor as Statutory Auditor 800 800 (b) Taxation matters 750 550 (c) Company law matters 10 - (d) Other services 146 - (e) Reimbursement of expenses 52 50 1,758 1,400

29.4 Prior Period Items

(` in '000) Particulars 2011-12 2010-11 (a) Prior Period Expense 157 487 (b) Prior Period Income 8 416 149 71

29.5 Expenditure in Foreign Currency

(` in '000) Particulars 2011-12 2010-11 (a) Travelling 374 3,645 (b) Professional Fees 132 570 (c) Export Commission 4,513 3,221 (d) Interest Paid on Buyers' Credit 5,214 710 (e) Expenditure on account of Exchange Fluctuations 12,909 -

30. Exceptional Items (Income)/Expenses

(` in '000) Particulars 2011-12 2010-11 (a) Exceptional Items Expenses -Provision for Doubtful Debts 14,887 111 -Loss on Sale of Fixed Assets 5,814 163 -Loss on Commodity Derrivative 415 (315) 21,116 (41) (b) Exceptional Items Income -Amount received on maturity of Keyman Inurance Policies 51,519 - -Profit on Sale of Fixed Assets 282 - 51,801 - Net (Income)/Expenses (30,685) (41)

31. Earnings Per Share

Particulars 2011-12 2010-11 Net Profit attributable to shareholders (` in '000) 26,345 64,318 Weighted average number of equity Shares 19,201,400 19,201,400 Basic and Diluted Earnings per share (`) 1.37 3.35 Face Value per Equity Share (`) 2 2

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32. Earnings in Foreign Exchange (` in '000)

Particulars 2011-12 2010-11 FOB Value of Export (Net of Returns) 342,462 329,083 Receipts on account of Exchange Fluctuations - 13,732

33. Contingent Liabilities in respect of:

(` in '000) Particulars 2011-12 2010-11 (A) Contingent Liabilities Bank Guarantee(s) submitted 11,211 9,255 Letters of Credit established by the bank 18,033 20,803 Bills Discounted 17,843 15,269 Customs duty on Material imported against Advance License /EPCG Scheme, for pending export obligation

62,350 6,827

Corporate Guarantee(s) on behalf of JV/ Associate Company 55,800 20,100 Surety with Sales Tax Department 500 500 (B) Commitments (a) Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for

14,517 30,958

34. ‘Customs Duty not provided for’ in respect of materials lying in Bonded Warehouses / Materials in Transit

as on Balance Sheet date, is of ` 35,378 thousands inclusive of Cenvatable amount of ` 27,301 thousands (Previous Year ` 23,927 thousands inclusive of Cenvatable amount of ` 18,950 thousands). However, the above policy has no impact on the operating results of the Company.

35. During the year the Company has made plans for changing the scope of operations carried out by “100%

EOU” i.e. Unit-III. The erstwhile operations shall henceforth be continued by the other existing units of the company. As such the Company has applied for permission to surrender 100% EOU status of Unit-III.

36. Foreign currency exposures that are not hedged by forward contracts as on 31st March, 2012 amount to `

2,74,005 thousands (Previous year ` 1,69,810 thousands).

37. The Company’s activities involve predominantly one business segment i.e. Process and product Engineering, which are considered to be within a single business segment since these are subject to similar risks and returns. Accordingly, Process and Product Engineering comprise the primary basis of segmental information as set out in these financial statements, which therefore reflect the information required by AS 17- Segment Reporting, with respect to primary segments.

The Company has identified India and Rest of the World as geographical segments for secondary segmental reporting. Geographical sales are segregated based on the location of the customer who is invoiced or in relation to which the sale is otherwise recognized. Assets other than receivables used in the Company’s business or liabilities contracted have not been identified to any of the reportable segments, as these are used interchangeably between segments. All assets other than receivables are located in India. Secondary Segmental Information

(` in ‘000) Particulars India Rest of world Total

2011-12 2010-11 2011-12 2010-11 2011-12 2010-11 Segment Sales 447,289 554,287 347,145 331,964 794,434 886,251 Segment Assets 166,770 173,160 85,804 93,731 252,574 266,891

38. “Related Party Disclosure” for the year ended 31st March, 2012 in accordance with Accounting Standard-18

issued by the Institute of Chartered Accountants of India:

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(i) List related parties where control exits and related parties with whom transactions have taken place and relationships:

S. No. Name of Related Party Relationship 1. Checon Shivalik Contact Solutions Pvt. Ltd. Joint Venture 2. Shivalik Bimetal Engineers Pvt. Ltd. Associates 3. Innovative Clad Solutions Pvt. Ltd. 4. Mr. S. S Sandhu Key Managerial Personnel (KMP) 5. Mr. N. S. Ghumman 6. Mr. D. J. S. Sandhu 7. Mr. G. C. Prabhu Other Directors 8. Mr. Anil K Sud 9. Mr. Angad Sandhu Relative of Key Managerial Personnel 10. Mr. Kanav Anand 11. Mr. Kabir Ghumman 12. Brig. J. M. Singh 13. TSL Holdings Ltd Enterprises over which Key Managerial

Personnel are able to exercise significant influence

14. Angad Estates Pvt. Ltd. 15. Vishesh Credits Pvt. Ltd. 16. Amar Engineering Company Pvt. Ltd.

(ii) Transactions during the year with related parties:

(` in ‘000) Sr. No.

Nature of Transactions

Joint Venture

Associates Key Managerial Personnel

Others Directors

Relative of Key

Managerial Personnel

Enterprises over which KMP are able to exercise

significant influence

1. Equity Shares - 47,128 - - - - - (30,550) - - - -

2. Share Application Money

- - - - - - - (2,420) - - - -

3. Rent Received - 397 - - - -

(385) (33) - - - -

4. Job Work Income - 446 - - - -

(28) - - - - -

5. Goods Sold 429 108 - - - - (762) (24) - - - -

6. Goods Purchased 184 6,112 - - - - (313) (82) - - - -

7. Other Expenses(Net) 517 - - - - - (265) (126) - - - -

8. Managerial Remuneration

- - 14,723 - - - (12,007) -

9. Professional Fee Paid - - - 875 - - - - - - - -

10.

Remuneration in pursuant to Section 314 of the Companies Act 1956 for holding an office or place of profit.

- - - - 3,138 - - - - - (1,653) -

11. Rent Paid - - - 160 - 4,752 - - - - - (1,291)

12. Security Deposit - - - - - 1,350 - - - - - -

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39. Disclosure in respect of Associate(s)

Name of Company Country of Incorporation

Shivalik Bimetal Engineers Pvt. Ltd. India Innovative Clad Solutions Pvt. Ltd.@ India

@ Consequent to exist of a JV partner from Innovative Clad Solutions Pvt. Ltd.(ICS) (wherein there were three JV partners holding 1/3rd equity each) and modified terms between the remaining two JV partners the Company’s equity holding stands reduced to 26.78% from that of 1/3rd, as such the Company’s interest in ICS stands modified to an associate Company from that of a JV Company as per AS-27 as “Financial Reporting of interest in Joint Ventures” issued by ICAI. 40. Disclosure in respect of Joint Venture The company’s Interest in the Joint Ventures are reported as Long Term Investment (Note No.-14) and stated at cost. The Disclosure as per AS -27 in respect of Investment in Joint Ventures is as under:

Name of Company % of share-

holding

Amount of Interest based on accounts for the year ended 31st March 2012 (Unaudited)

Assets Liabilities Income Expendi-ture

Contingent Liabilities

Capital commitments

Checon Shivalik Contact Solutions Pvt. Ltd.

50% 51,925 51,925 45,489 43,321 150 -

(Previous Year) (60,016) (60,016) (58,171) (50,312) (150) (3,015)

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UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS FOR 6 MONTHS PERIOD

ENDED SEPTEMBER 30, 2012 REVIEW REPORT The Board of Directors Shivalik Bimetal Controls Limited H-2, Suneja Chambers, Alaknanda Commercial Complex, Alaknanda, New Delhi 1. This Review report is issued in accordance with the terms of our agreement dated December 10th, 2012 2. We have reviewed the accompanying unaudited condensed interim financial statements of Shivalik Bimetal

Controls Limited (the "Company"), comprising its condensed Balance sheet as at September 30, 2012, and the condensed Statement of Profit & Loss and condensed Cash Flow Statement for the period then ended (herein after referred to as the "Unaudited Condensed Interim Financial Statements") prepared by the Management of the Company for the purpose of inclusion in the Draft Letter of offer and Letter of Offer pursuant to the proposed rights issue of equity shares by the company as required by item (X)(A)(5) of Part E of Schedule VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended from time to time.

Management's Responsibilities 3. The Unaudited Condensed Interim Financial Statements are the responsibility of the Company's

Management. 4. The Management of the company is responsible for ensuring that the Unaudited Condensed Interim

Financial Statements are prepared in accordance with Accounting Standard 25 - Interim Financial Reporting - issued pursuant to the Companies (Accounting Standards) rules, 2006 as per section 211(3C) of the Companies Act, 1956 and other accounting principles generally accepted in India.

5. The responsibility of the Management includes the design, implementation and maintenance of internal

control relevant to the preparation of the Unaudited Condensed Interim Financial Statements that are free from material misstatement, whether due to fraud or error.

Auditors' responsibilities 6. Our responsibility is to express a conclusion on the unaudited condensed interim financial statements based

on our review. We conducted our review in accordance with the Standard on Review Engagement (SRE) 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity - issued by the Institute of chartered Accountants of India.

7. A review of interim financial information consists of making inquiries, primarily of persons responsible for

financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion 8. Based on our review conducted as above, nothing has come to our attention that causes us to believe that the

accompanying Unaudited Condensed Interim Financial Statements does not give a true and fair view, in all material respects, in accordance with Accounting Standard 25 - Interim Financial Reporting - issued pursuant to the Companies (Accounting Standards) Rules, 2006 and the other accounting principles generally accepted in India.

86

Restrictions on use 9. This review report is addressed to and is provided to enable the Board of Directors of the Company to

include this review report in the Draft letter of Offer and Letter of Offer prepared in connection with the filling of an offer document for a proposed rights issue of equity shares by the Company with BSE Limited, and the Security and Exchange Board of India. Our work and findings shall in no way constitute advise or recommendations (regarding any commercial decisions associated with the issue of equity shares.

For Malik S & Co. Chartered Accountants Firm Regn. No. 00383N (Suresh Malik) FCA M. No. 080493 Place: New Delhi Date: January 07, 2013

87

Condensed Balance Sheet as at 30th September 2012 (` in ‘000)

Balance Sheet as at Note No. 30th September 2012 31st March 2012 Unaudited Audited

I. EQUITY AND LIABILITIES Shareholders’ funds (a) Share capital 3 38,403 38,403 (b) Reserves and surplus 4 478,690 476,444 Non-current liabilities (a) Long-term borrowings 5 109,101 115,451 (b) Deferred tax liabilities (Net) 6 15,124 15,789 (c) Other Long term liabilities 3,371 4,207 (d) Long-term provisions 1,950 1,883 Current liabilities (a) Short-term borrowings 7 270,992 332,372 (b) Trade payables 8 74,862 59,304 (c) Other current liabilities 9 180,338 95,658 (d) Short-term provisions 10 47,884 46,198 TOTAL 1,220,715 1,185,709

II. ASSETS Non-current assets (a) Fixed assets (i) Tangible assets 11 215,946 212,657 (ii) Intangible assets 11 1,045 1,159 (iii)Capital work-in-progress 11 143,555 134,936 (b) Non-current investments 12 165,523 165,523 (c) Long-term loans and advances 6,923 11,965 (d) Other non-current assets 13 77,570 79,998 Current assets (a) Current Investments 3,232 2,930 (b) Inventories 14 246,869 319,522 (c) Trade receivables 15 173,728 160,222 (d) Cash and cash equivalents 8,359 7,888 (e) Short-term loans and advances 16 176,126 87,064 (f) Other current assets 1,839 1,845 TOTAL 1,220,715 1,185,709III. Notes forming part of the Financial Statements 1 to 26

As per our report of even date For Malik S & Co. Chartered Accountants Suresh Malik Proprietor

For and on behalf of the Board

(S S Sandhu)

Chairman

(K S Negi) CFO Corporate

(D.J.S. Sandhu)

Dy. Managing Director

(Ram Parvesh) Company Secretary

Place: New Delhi Date: January 07, 2013

88

Condensed Statement of Profit & Loss for the period from 01st April 2012 to 30th September 2012

(` in ‘000) Statement of Profit & Loss for the Note

No.September

2012 September

2011 Unaudited Unaudited

I Revenue from operations 17 406,042 436,499

II Other income 616 2,754

III Total Revenue (I + II) 406,658 439,253

IV Expenses

(a) Cost of materials consumed 18 255,706 278,476 (b) Decrease/(Increase) in Stock 19 (11,590) (28,935) (c) Employee benefits expense 20 41,087 33,859 (d) Finance costs 21 16,341 17,670 (e) Manufacturing and other expense 22 89,882 90,441 (f) Depreciation expense 11 11,321 10,665 Total expenses 402,747 402,176

V Profit before exceptional and extraordinary items and tax (III-IV)

3,911 37,077

VI Exceptional items (Income)/Expenses 1,000 (23,213)

VII Profit before extraordinary items and tax (V - VI) 2,911 60,290 VIII Extraordinary Items - - IX Profit before tax (VII - VIII) 2,911 60,290

X Tax expense

(a) Current tax 1,330 9,000 (b) Current tax related to previous years - - (b) Deferred tax (665) - 665 9,000 XI Profit (Loss) for the year (IX-X) 2,246 51,290

XII Earnings per equity share (a) Basic 23 0.12 2.67 (b) Diluted 23 0.12 2.67XIII Notes forming part of the Financial Statements 1 to 26

As per our report of even date For Malik S & Co. Chartered Accountants Suresh Malik Proprietor

For and on behalf of the Board

(S S Sandhu) Chairman

(K S Negi)

CFO Corporate

(D.J.S. Sandhu)

Dy. Managing Director

(Ram Parvesh) Company Secretary

Place: New Delhi Date: January 07, 2013

89

Condensed Cash Flow Statement for the period ended September 30, 2012

(` in ‘000) Cash Flow statement for the period ended September 2012 September 2011

Cash Flow From Operating Activities 104,281 59,027 Cash Flow From Investing Activities (19,328) (185,286)Cash Flow From Financing Activities (84,071) 115,112 Net Increase/(Decrease)In Cash And Cash Equivalents 882 (11,147)Cash And Cash Equivalents At The Begining Of The 7,288 15,830 Cash And Cash Equivalents At The End Of The Year * 8,170 4,683

*Excludes earmarked balance with banks as Margin Money Deposits of ` 188 thousands (previous year of ` 600 thousands As per our report of even date For Malik S & Co. Chartered Accountants Suresh Malik Proprietor

For and on behalf of the Board

(S S Sandhu) Chairman

(K S Negi) CFO Corporate

(D.J.S. Sandhu)

Dy. Managing Director

(Ram Parvesh) Company Secretary

Place: New Delhi Date: January 07, 2013

90

Significant Accounting Policies (Forming part of Condensed Financial Statements for the period ended 30th September, 2012) 1. COMPANY’S OVERVIEW

Shivalik Bimetal Controls Limited referred to as “Shivalik” is a widely-held public limited Company which was incorporated in the year 1984 and has been in commercial production since October 1986. “Shivalik’s” manufacturing Units are located in Distt. Solan, in the state of Himachal Pradesh, India. The Company’s shares are listed on Bombay Stock Exchange. “Shivalik” is engaged in the business of manufacturing & sales of Thermostatic Bimetal / Trimetal strips, components and other clad materials, EB welded products, Cold Bonded Clad Strips and Parts etc. The application of “Shivalik”s Products are mainly in Switchgears, Circuit Breakers and various other Electrical and Electronic devices. The Company’s products are exported to over 35 Countries around the world.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation of Financial Statements These financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP) under the historical cost convention on accrual basis. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006, the provisions of the Companies Act, 1956 and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

2.2 Use of Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Accounting estimates could change from period to period.

2.3 Use of Estimates Inventories are valued at the lower of cost and net realizable value, after providing for obsolescence, wherever considered necessary as under:

a. Raw materials, stores and spares: At cost, on “FIFO” basis; b. Work-in-progress/Semi-Finished: At cost plus related cost of conversion including appropriate overheads; c. Finished goods: At cost plus related cost of conversion including appropriate overheads and excise duty

paid/ payable on such goods; and d. Saleable Scrap is valued at estimated realizable value

2.4 Cash and cash equivalents

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

2.5 Cash Flow Statements Cash flows are reported using the indirect method, whereby Profit before tax is adjusted for the effects of transactions of a non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing and investing activities of the company are segregated.

2.6 Depreciation Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner specified in Schedule-XIV of the Companies Act, 1956 except for following:

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a. Dies & Tools included under the head “Plant & Machinery” after being put to use, are depreciated over its estimated life of two years.

b. Assets costing less than ` 5,000/- each are fully depreciated in the year of acquisition.

2.7 Research & Development Expenditure Expenditure in the nature of revenue, incurred for Research & Development relating to business, is charged to profit & loss account.

2.8 Revenue Recognition a. Sales are recognized, net of returns and trade discount, on transfer of significant risks and rewards of

ownership to the buyer, that coincides with the reliability and reasonableness to expect ultimate collection , which is generally on dispatch of goods. Sales include excise duty but excludes sales tax and value added tax.

b. For other incomes, the Company follows the accrual basis of accounting except interest on delayed payment from customers where there is no reasonable certainty regarding the amount and / or its Collectability.

2.9 Export Benefits a. Imports entitlements/Export obligations under Advance Licenses are accounted for at the time of

purchase of Raw Materials/ Export sales. b. Other export incentives are accounted for as and when the claims thereof have been admitted by the

authorities.

2.10 Fixed Assets, Intangible Assets and Capital Work-in-Progress a. Tangible Assets are stated at cost (Net of CENVAT/Value added tax, wherever applicable) less

accumulated depreciation/amortization. Cost comprises the purchase price, freight, foreign exchange adjustments arising from exchange rate variations, borrowing cost attributable to the Qualifying Asset and any other directly attributable cost of bringing the asset to working condition for its intended use.

b. Intangible assets are recorded at consideration paid for acquisition of such assets and are carried at cost less accumulated depreciation or amortization and impairment, if any.

c. Capital work-in-progress represents the cost of tangible assets that are not yet ready for their intended use at the reporting date.

2.11 Capital Commitments Estimated amount of contracts remaining to be executed exceeding ` 1.00 lacs in each case are disclosed in the “Notes to Accounts”.

2.12 Foreign Currency Transactions a. Foreign currency transactions are accounted for at the exchange rate prevailing on the transaction date. b. Foreign currency denominated monetary assets and liabilities are converted at the exchange rate

prevailing on the Balance Sheet date and the resultant difference is charged/ credited to Profit & Loss account.

c. Non-monetary assets and non-monetary liabilities denominated in a foreign currency, measured at historical cost are translated at the exchange rate prevalent at the date of transaction and any translation gain or losses are adjusted to the costs of the relevant assets according to newly inserted para 46A of Accounting Standard -11 vide notification issued by the Ministry of Corporate Affairs.

2.13 Forward Contracts a. The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign

exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the Company and the company does not use those for trading or speculation purposes.

b. Forward contracts are fair valued at each reporting date. The resultant gain or loss from these transactions is recognized in the statement of profit and loss. The company records the gain or loss on effective hedges, if any, in the foreign currency fluctuation reserve until the transactions are completed. On completion, the gain or loss is transferred to the statement of profit and loss of that period. To designate a forward contract as an effective hedge, the Management objectively evaluates and evidences with appropriate supporting documents at the inception of each contact whether the contract is effective

92

in achieving offsetting cash flows attributable to the hedged risk. Any profit & loss arising on the cancellation or renewal of forward contracts is recognized as income or as expense for the year.

c. The company records the gain or loss on effective hedges, if any, in Hedge Reserve until the transaction is complete. In respect of Commodity Hedging transactions, gain/ losses on settlement are recognized in the profit & loss account.

2.14 Investments Current investments are carried at lower of cost and fair value, computed category wise. Long -term Investments are stated at cost, unless there is a decline, other than temporary in the value of Investments.

2.15 Employees' Benefits a. Defined Contribution Plans:

The Company has contributed to State Governed Provident Fund scheme, Employees State Insurance scheme and Employee Pension Scheme which are defined contribution plans. Contribution paid or payable under the scheme is recognized as expense during the period in which employee renders the related service.

b. Defined Benefit Plans: The employees’ gratuity is a defined benefit plan. The present value of the obligation under such plan is determined based on the Actuarial Valuation using the projected unit credit method which recognizes each period of service as giving rise to an additional unit of employee benefit entitlement and measures each unit separately to build up the financial obligation. The Company has an employee gratuity fund managed by Life Insurance Corporation of India (LIC). The gains or losses are charged to Profit and Loss Account.

c. Liability in respect of leave encashment is provided for based on Actuarial Valuation basis using the same projected unit credit method as above.

2.16 Borrowing Costs a. Borrowing Costs that are attributable to the acquisition or construction of qualifying assets as defined in

Accounting Standard-16 are capitalized as part of the cost of such asset till such time as the asset is ready for its intended use. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use. All other borrowing costs are recognized as expenses in the period in which they are incurred.

b. Borrowing costs include interest and exchange difference arising from currency borrowing to the extent they are regarded as an adjustment to the interest cost.

2.17 Inter unit Transactions The Inter unit sale / purchase of materials/Job work transactions are accounted for at the prevailing market prices. Annual Accounts are reported excluding inter-unit transfers/transactions.

2.18 Earnings Per share Basic Earnings per Share is computed by dividing net profit or loss for the period attributable to equity shareholders by the weighted average number of Equity Shares outstanding during the period.

2.19 Taxes on Income Tax on income for the current period is determined on the basis of taxable income and tax credits/ benefits computed in accordance with the provisions of the Income Tax Act 1961. Deferred tax charge/ credit is recognized on timing differences between the accounting income and the taxable income for the year, and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets and liabilities are measured at the tax rates that has been enacted or substantively enacted at the balance sheet date.

2.20 Impairment The Carrying amounts of assets are reviewed at each Balance Sheet date and if there is any indication to the effect that the recoverable amount of the Asset/ CGU (Cash Generating Unit) is less than its carrying

93

amount, the difference is treated as “Impairment Loss”. The recoverable amount is greater of the asset's net selling price and value in use.

2.21 Provision, Contingent Liabilities and Contingent Assets Provisions are recognized for liabilities that can be measured only by using substantial degree of estimation, if: a. the company has a present obligation as a result of past event, b. a probable outflow of resources is expected to settle the obligation; and c. the amount of the obligation can be reliably estimated. Contingent liability is disclosed in case of i. a present obligation arising from past events, when it is not probable that an outflow of resources will be

required to settle the obligation; ii. a present obligation arising from past events, when no reliable estimate is possible; and iii. a possible obligation arising from past events where the probability of outflow of resources is not

remote. Contingent assets are neither recognized nor disclosed. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

Major Notes on Condensed Financial Statements for the period ended 30th September, 2012

3. Share Capital (` in '000, except per share data)

Particulars As at 30th September 2012

As at 31st March 2012

Authorised Equity Shares of ` 2/- each 2,50,00,000 (Previous Year 2,50,00,000) equity shares

50,000 50,000

Issued, Subscribed and Paid up Equity Shares of ` 2/- each 1,92,01,400 (Previous Year 1,92,01,400) equity shares

38,403 38,403

Total 38,403 38,403

3.1 Reconciliation of Number of Shares Particulars Equity Shares (Numbers)

As at 30th September 2012

As at 31st March 2012

Shares as at beginning of the year 19,201,400 19,201,400 Shares issued during the year - - Shares bought back during the year - - Shares as at end of the year 19,201,400 19,201,400

3.2 The Company has only one class of shares referred to as Equity shares having par value of ` 2/-. The holder

of Equity Share is entitled to one vote per share. 3.3 In the event of liquidation of the Company, the residual interest in the company's assets shall be distributed

to the share holders in the proportion to the equity shares held. 3.4 Shareholders holding more than 5% shares:

Name of Shareholders As at 30th September 2012 As at 31 March 2012 No. of Shares

held % of

Holding No. of Shares

held % of

Holding Mr. N. S. Ghumman 1,465,000 7.63 1,465,000 7.63 O D Finance and Investment Pvt. Ltd. 1,419,590 7.39 1,419,590 7.39 Ultra Portfolio Management Pvt. Ltd. 977,380 5.09 977,380 5.09 TSL Holdings Limited 2,790,200 14.53 2,790,200 14.53 Angad Estates Pvt. Ltd. 1,655,000 8.62 1,655,000 8.62

94

4. Reserves and Surplus (` in ‘000)

Particulars As at 30th Sept 2012 As at 31st March 2012 Unaudited Audited(a) Capital Reserve Opening Balance 57 6,420Add: Transferred during the year - -Less: Transferred to General reserve - 6,363 57 57(b) General Reserve Opening Balance 216,363 200,000Add: Transferred from Profit & Loss Account - 10,000Add: Transferred from Capital Reserve - 6,363 216,363 216,363(c ) Profit & Loss Account Opening balance 260,024 243,679Add: Profit for the year 2,246 26,345Amount available for Appropriations 262,270 270,024Less: Appropriations General Reserve - 10,000 262,270 260,024 478,690 476,444

5. Long Term Borrowings

(` in ‘000) Particulars As at 30th Sept 2012 As at 31st March 2012 Unaudited AuditedSecured (a) From Banks Foreign Currency Loan-Buyers' Credit 79,290 76,740Rupee Loan 26,576 31,722 (b) From Others 1,930 2,898 Unsecured From Others 1,305 4,091 109,101 115,451

6. Deferred Taxes

(` in ‘000) Particulars As at 30th Sept 2012 As at 31st March 2012 Unaudited Audited Deferred Tax Liabilities 15,789 22,698Depreciation - - 15,789 22,698Deferred Tax Assets Depreciation 952 755Provision for Doubtful Debts - 4,830Employee Benefits 328 168Others (615) 1,156 665 6,909Deferred Tax Liabilities (Net) 15,124 15,789

95

7. Short Term Borrowings (` in ‘000)

Particulars As at 30th Sept 2012 As at 31st March 2012 Unaudited AuditedSecured Working Capital Loans From Banks(i) Foreign Currency Loan 147,532 224,586Rupee Loan 123,460 107,786 270,992 332,372

(i) Secured by hypothecation of stocks, movable properties and Book Debts, both present and future, and equitable mortgage of company's Factory Land and Building situated at Chambaghat Solan, Himachal Pradesh.

8. Trade Payable (` in ‘000)

Particulars As at 30th Sept 2012 As at 31st March 2012 Unaudited AuditedMicro, Small and Medium Enterprises# 46 37Others 74,816 59,267 74,862 59,304

# As required under "Micro, Small and Medium Enterprises Development Act, 2006", the information available with the company relating to amount overdue at the end of the period on account of principal amount due is ` 46/- thousands (as on 31st March, 2012 ` 37/- thousands) and interest due thereon is Nil

9. Other Current Liabilities (` in ‘000)

Particulars As at 30th Sept 2012 As at 31st March 2012 Unaudited Audited(a) Current maturities of long-term debt 36,612 59,570(b) Interest accrued but not due on borrowings 1,658 2,233(c) Interest accrued and due on borrowings 965 850(d) Unclaimed dividends 1,915 1,915(e) Other Payables (i) Statutory Dues 8,306 7,091(ii) Advance From Customers 13,677 13,638(iii) Forward Contract liability 103,081 -(iv) Others 14,124 10,361 180,338 95,658

10. Short Term Provisions

(` in ‘000) Particulars As at 30th Sept 2012 As at 31st March 2012 Unaudited Audited(a) Provision for employee benefits i) Bonus 3,031 2,021ii) Unavailed Leave - 68(b) Provision for Excise Duty on Finished Goods 3,029 3,614(c) Taxation 41,824 40,495 47,884 46,198

96

11. Non-Current Assets – Fixed Assets

(` in ‘000) Fixed Assets Gross Block Accumulated Depreciation Net Block

As at 1st

April 2012

Additions

during the

period

Disposals

during the

period

Revaluations

/(Impairments

)

Effect of Foreign Currenc

y Differen

ce

Borrowing Cost Capitalised

Other

Adjustments

As at 30th Sept 2012

As at 1st

April 2012

Depreciation charged for the

period

Adjustment due to revaluations /(Impairme

nt)

On disposals

As at 30th Sept 2012

As at 30th Sept 2012

As at 31st

March 2012

Un-audited

Audited

(a) Tangible Assets Leasehold Land Buildings Plant and Equipment Furniture and Fixtures Vehicles Office Equipment

367

34,486 231,685

16,334 64,738 15,379

10,075

353 2,574

76 2,896

663

3,077 18

- - - - - -

-

10,442 34,839

234,259 16,410 64,557 16,024

-

12,719 108,529

5,959 14,752

8,373

-

577 6,585

490 3,062

487

- - - - - -

- -

940 8

-

13,296 115,114

6,449 16,874

8,852

10,442 21,543

119,145 9,961

47,683 7,172

367

21,767 123,156

10,375 49,986

7,006 Total (a) 362,989 16,637 3,095 - - - - 376,531 150,332 11,201 948 160,585 215,946 212,657 (b) Intangible Assets*

Computer software

2,518

6 -

-

2,524

1,359

120

1,479

1,045

1,159

Total (b) 2,518 6 - - - - - 2,524 1,359 120 - - 1,479 1,045 1,159 Total (a + b) 365,507 16,643 3,095 - - - - 379,055 151,691 11,321 - 948 162,064 216,991 213,816 (c) Capital Work in Progress:

- Unit–I - Unit–IV(refer Note No. 11.1) Total

313

143,242

1,284

133,652 143,555 134,936

*Other than internally generated

97

11.1 Capital Work-in-Progress (Unit – IV) (` in ‘000)

Particulars As at 30th Sept 2012 As at 31st March 2012 Plant & Machinery under installation Building under Construction Expenses Pending Capitalisation (Unit – IV) Opening Balance Add: Transferred from Profit & Loss Account Interest Capitalized Exchange Rate Fluctuation Total Less: Expenses Capitalized during the year Closing Balance Total

31,315

4,189 3,003

-

98,675 6,060

38,507

374

19,725 9,944 4,800

98,675 3,662

38,507

-

34,843

3,528 31,315

143,242 133,652

12. Non Current Investments (` in ‘000)

Particulars As at 30th Sept 2012 As at 31st March 2012 Unaudited AuditedOther Investments Unquoted, fully paid up (a) In Equity Shares of Associate Companies222,750 shares in Shivalik Bimetal Engineers Pvt. Limited of ` 10/- each (Previous Year 222,750 shares of `10/- each)

2,228 2,228

15,120,000 shares in Innovative Clad Solutions Pvt. Limited of ` 10/- each (Previous Year 10,520,000 shares of `10/- each)

151,200 151,200

(b) In Equity Shares of Joint Venture 685,900 shares in Checon Shivalik Contact Solutions Pvt. Limited of`10 each (Previous Year 685,900 shares of ` 10/- each)

11,895 11,895

(c) In Equity Shares of Other Company 20,000 shares in Shivalik Solid Waste Management Pvt. Limited of `10 each (Previous Year 20,000 shares of `10 each)

200 200

165,523 165,523

13. Other Non Current Assets (` in ‘000)

Particulars As at 30th Sept 2012 As at 31st March 2012 Unaudited Audited(a) Long Term Trade Receivables Unsecured Considered good 75,523 77,466Considered Doubtful 14,885 14,885 90,408 92,351Less: Provision for doubtful debts 14,885 14,885 75,523 77,466(b) Others Inventories 2,047 2,532 2,047 2,532 77,570 79,998

# The company had initiated legal proceedings for recovery of a sum of ` 1,48,85 thousands outstanding amount in respect of a debtor relating to Export. The company sees no possibility of recovery of the aforesaid sum after having been advised by the local solicitors in Korea about non-feasibility of executing the decree passed in the favour of the company.

98

Pending permission from appropriate authorities for writing off the said sum, the company has made provision, being doubtful of recovery.

14. Inventories (` in ‘000)

Particulars As at 30th Sept 2012 As at 31st March 2012 Unaudited Audited(a) Raw Materials (i) At Store 79,014 77,015(ii) At Bonded Warehouse 81,555 168,686(iii) Goods-in transit - 3,056 160,569 248,757(b) Work-in-Process 49,595 34,614 49,595 34,614(c) Finished goods (i) At Store 29,030 33,018 29,030 33,018(d) Stores, Spares and Packing Material 7,642 3,116 7,642 3,116(e) Scrap 33 17 246,869 319,522

15. Trade Receivables

(` in ‘000) Particulars As at 30th Sept 2012 As at 31st March 2012 Unaudited AuditedTrade Receivables (Unsecured and Considered Good) (a) Over six months from the date they were due for payment 1,733 508(b) Others 171,995 159,714 173,728 160,222

16. Short Term Loans and Advances

(` in ‘000) Particulars As at 30th Sept 2012 As at 31st March 2012 Unaudited AuditedUnsecured, considered good (a) Loans and advances to Employees 1,346 331(b ) Prepaid Expenses 905 1,692(c) Balances with Revenue authorities 65,042 76,208(d) MAT Credit Entitlement 5,000 5,000(e) Security Deposits - 50(f) Forward Contract assets 100,227 -(g) Other loans and advances 3,606 3,783 176,126 87,064

17. Revenue from Operations (` in ‘000)

Particulars 1st April 2012 to 30th Sept. 2012

1st April 2011 to 30th Sept. 2011

Unaudited UnauditedSale of products 436,405 461,997Less: Excise duty 31,062 25,514 405,343 436,484Other Operating Revenues 699 15 406,042 436,499

99

18. Cost of Materials Consumed (` in ‘000)

Particulars 1st April 2012 to 30th Sept. 2012 1st April 2011 to 30th Sept. 2011(` in '000) % of

Consumption(` in '000) % of

Consumption Unaudited Unaudited Imported 236,642 93% 264,628 95%Indigenous 19,064 7% 13,848 5% 255,706 100% 278,476 100%

19. Decrease/(Increase) in Finished Goods and Work-in Process

(` in ‘000) Particulars 1st April 2012 to 30th Sept. 2012 1st April 2011 to 30th Sept. 2011 Unaudited Unaudited Inventory (at Beginning) -Finished Goods 33,037 22,997 -Work-in-Process 34,614 56,892 -Scrap 17 67,668 152 80,041Inventory (at Close) -Finished Goods 29,044 39,662 -Work-in-Process 49,595 70,077 -Scrap 33 78,672 366 110,104 (Increase)/Decrease (11,004) (30,064)Add/(Less): Excise duty variation on opening/closing stock (586) 1,129(Increase)/Decrease (11,590) (28,935)

20. Employee Benefit Expenses

(` in ‘000) Particulars 1st April 2012 to 30th

Sept. 20121st April 2011 to 30th

Sept. 2011 Unaudited Unaudited(a) Salaries and Wages 37,991 29,913(b) Contributions to - (i) Provident fund 1,591 1,501(ii) ESI Contribution 477 546(iii) Gratuity fund contributions 209 643(c) Staff welfare expenses 819 1,256 41,087 33,859

21. Finance Cost

(` in ‘000) Particulars 1st April 2012 to 30th

Sept. 20121st April 2011 to 30th

Sept. 2011 Unaudited Unaudited(a) Interest expense on (i) Borrowing Cost 13,980 14,418(ii) Others 980 675(b) Other Finance costs 1,381 2,577 16,341 17,670

100

22. Manufacturing and Other Expenses (` in ‘000)

Particulars 1st April 2012 to 30th Sept. 2012

1st April 2011 to 30th Sept. 2011

Unaudited UnauditedStores & Spares Consumed 7,157 8,941Power & Fuel 4,389 4,327Machinery Repairs 5,082 5,228Building Repairs 1,153 2,917Other Repairs 5,706 5,507Processing Charges 3,159 3,946Research & Development 698 667Insurance 420 453Rent 3,182 1,420Rates & Taxes 521 391Travelling & Conveyance 6,927 6,312Electricity and Water Charges 1,333 930Printing & Stationery 417 633Communication Expenses 999 907Professional and Consultancy Charges 1,702 825Payment to Auditors 655 919Charity and Donations 52 42Business Promotion /Development, Advertisement & Publicity 708 1,047Commission on Sales 15,652 16,296Packing Cost 11,953 14,819Forwarding & Freight 6,606 8,003Miscellaneous Expenses 2,802 3,234Prior Period Expense 231 114Loss on Exchange Fluctuations* 12,567 2,561 94,071 90,441Less: Transferred to Expenses Pending for Capitalization (Unit-IV) 4,189 -Manufacturing Expenses transferred to Statement of Profit & Loss

89,882 90,441

*Relocation/reorganisation in term of AS 16 (ASI 10) shall be carried out, at the end of Financial Year.

23. Earnings Per Share (` in ‘000)

Particulars 1st April 2012 to 30th Sept. 2012

1st April 2011 to 30th Sept. 2011

Unaudited UnauditedNet Profit attributable to shareholders (` in '000) 2,246 51,290Weighted average number of equity Shares 19,201,400 19,201,400Basic and Diluted Earnings per share (`) 0.12 2.67Face Value per Equity Share (`) 2 2

24. Contingent Liabilities in respect of:

(` in ‘000) Particulars 1st April 2012 to 30th

Sept. 2012As at 31st March 2012

Unaudited Audited(A) Contingent Liabilities Bank Guarantee(s) submitted 15,742 11,211Letters of Credit established by the bank - 18,033Bills Discounted 16,879 17,843Customs duty on Material imported against Advance License /EPCG Scheme, for pending export obligation

70,304 62,350

101

Particulars 1st April 2012 to 30th Sept. 2012

As at 31st March 2012

Unaudited AuditedCorporate Guarantee(s) on behalf of JV/ Associate Company 55,800 55,800Surety with Sales Tax Department 500 500(B) Commitments (a) Estimated amount of contracts (net of advances) remaining to be executed on capital account and not provided for

10,100 14,517

25. The Company’s activities involve predominantly one business segment i.e. Process and product

Engineering, which are considered to be within a single business segment since these are subject to similar risks and returns. Accordingly, Process and Product Engineering comprise the primary basis of segmental information as set out in these financial statements, which therefore reflect the information required by AS 17- Segment Reporting, with respect to primary segments. The Company has identified India and Rest of the World as geographical segments for secondary segmental reporting. Geographical sales are segregated based on the location of the customer who is invoiced or in relation to which the sale is otherwise recognized. Assets other than receivables used in the Company’s business or liabilities contracted have not been identified to any of the reportable segments, as these are used interchangeably between segments. All assets other than receivables are located in India. Secondary Segmental Information

(` in ‘000) Particulars India Rest of world Total

1st April 2012 to 30th Sept. 2012

1st April 2011 to 30th Sept. 2011

1st April 2012 to 30th Sept. 2012

1st April 2011 to 30th Sept. 2011

1st April 2012 to 30th Sept. 2012

1st April 2011 to 30th Sept. 2011

Unaudited Unaudited Unaudited Unaudited Unaudited UnauditedSegment Sales 253,792 249,696 151,551 186,787 405,343 436,483Segment Assets 183,217 181,734 66,034 87,660 249,251 269,394

26. “Related Party Disclosure” for the period ended 30th September, 2012 in accordance with Accounting

Standard-18 issued by the Institute of Chartered Accountants of India:

I. List related parties where control exits and related parties with whom transactions have taken place and relationships:

Sr. No.

Name of Related Party Relationship

1. Checon Shivalik Contact Solutions Pvt. Ltd. Joint Venture 2. Shivalik Bimetal Engineers Pvt. Ltd. Associates 3. Innovative Clad Solutions Pvt. Ltd. 4. Mr. S. S Sandhu Key Managerial Personnel (KMP) 5. Mr. N. S. Ghumman 6. Mr. D. J. S. Sandhu 7. Mr. G. C. Prabhu Other Directors 8. Mr. Anil K Sud 9. Mr. Angad Sandhu Relative of Key Managerial Personnel 10. Mr. Kanav Anand 11. Mr. Kabir Ghumman 12. Late Brig. J. M. Singh 13. TSL Holdings Ltd Enterprises over which Key Managerial Personnel are

able to exercise significant influence 14. Angad Estates Pvt. Ltd. 15. Vishesh Credits Pvt. Ltd. 16. Amar Engineering Company Pvt. Ltd.

102

II. Transactions during the period with related parties: (` in ‘000)

Sr. No.

Nature of Transactions Joint Venture

Associates Key Managerial Personnel

Others Directors

Relative of Key

Managerial Personnel

Enterprises over which KMP are able to exercise

significant influence Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited

1. Job Work Income - 24 -

2. Rent Received - 202 -

3. Job Work Expense - 360 -

4. Goods Sold 12 - -

5. Goods Purchased 4 1,769 -

6. Other Expenses(Net) 34 - -

7. Managerial Remuneration

- - 11,512

8. Professional Fee Paid - - 375

9. Remuneration in pursuant to Section 314 of the Companies Act 1956 for holding an office or place of profit.

- - - - 1,708

10. Rent Paid - - - 240 2,530

103

CAPITALISATION STATEMENT

The capitalisation statement of the Company as at March 31, 2012, as adjusted post issue is as under:

(` in lakhs) Particulars Pre Issue at March 31, 2012 Adjusted for the Issue* Borrowings Short-term debt 3,323.72 [●] Long-term debt 1,154.51 [●] Total Debt 4,478.23 [●] Shareholders’ funds: Equity Share Capital 384.03 [●] Reserves and Surplus 4,764.43 [●] Total Shareholders’ funds 5,148.46 [●] Long term debt / equity ratio 0.22 [●] Total debt / equity ratio 0.87 [●]

* Will be updated at the time of finalization of Letter of Offer. Notes: 1. The long term debt/equity ratio has been computed as under:

Long term debt/total shareholders' funds 2. The total debt/equity ratio has been computed as under:

Total debt/total shareholders' funds 3. Short term debt is considered as debt due within 12 months from March 31, 2012 4. Long term debt is considered as debt other than short term debt, as defined above.

104

STATEMENT OF ACCOUNTING RATIOS

The following tables present certain accounting and other ratios derived from the Company’s audited financial statements as at and for the year ended March 31, 2012 and Unaudited condensed Interim Financial Statements for the period ended September 30, 2012 included in the “Financial Statements” on page 60 and 85 of the Draft Letter of Offer respectively.

* not annualised

Particulars For half Year ended September

30, 2012

For the financial year ended March 31,

2012 March 31,

2011 (Unaudited) (Audited) (Audited)

Net Worth (` In Lakhs) 5,170.93 5,148.47 4,885.01 Earnings Attributable to Equity Share Holders (` in Lakhs) 22.46 263.45 643.18 No. of Equity Shares outstanding at the end of Specified Period

1,92,01,400 1,92,01,400 1,92,01,400

Weighted No. Of Equity Shares outstanding during the Specified Period

1,92,01,400 1,92,01,400 1,92,01,400

Earnings Per Share (EPS) (Face value of ` 2/- Each) - Basic And Diluted Earnings Per Share (`)

0.12 * 1.37 3.35

Return on Net Worth (%) 0.43% * 5.12% 13.17% Net Assets Value per share of ` 2/- each (`) 26.93 26.81 25.44

105

CERTAIN OTHER FINANCIAL INFORMATION (WORKING RESULTS)

Unaudited standalone working results of our Company for the period from April 01, 2012 to November 30, 2012:

Particulars Amount (` in lakhs) Sales 5,202.32 Other income 34.02 Estimated Gross Profit (excluding Depreciation) 226.55 Provision for Depreciation 151.69 Provision for taxation 13.30 Estimated Net Profit 61.56

106

STOCK MARKET DATA

The Equity shares of our Company are listed and traded on BSE Limited (“BSE”). The shares are infrequently traded at BSE. The share trading data for the equity shares of our Company is as under: Stock Market Data for BSE The closing market price of the equity shares of the Company on the first business day after the Board approved the Issue i.e. on December 11, 2012 was ` 9.50 per equity share on the BSE. The high and low closing prices and associated volumes of securities traded during last 3 years recorded on BSE is as follows: Calendar

Year High (`)

Date of High

Volume on date of high

(no. of shares)

Low (`)

Date of Low

Volume on date of low

(no. of shares)

Weighted Average Price (`)

2012 14.90 22/12/2012 8,202 7.54 05/09/2012 4,573 10.40 2011 32.40 03/01/2011 1,07,447 9.65 29/12/2011 1,603 19.50 2010 40.35 16/06/2010 3,96,832 18.00 24/02/2010 3,525 31.46

The high and low price, and associated volume of securities traded during the last 6 months on BSE is as follows:

Period High (`)

Date of High

Volume on date of high

(no. of shares)

Low (`)

Date of Low

Volume on date of low

(no. of shares)

Weighted Average Price (`)

December 2012

10.10 07/12/2012 5,800 8.26 17/12/2012 1,230 9.38

November 2012

9.46 19/11/2012 7,096 8.23 02/11/2012 4,451 8.69

October 2012

10.25 03/10/2012 3,733 8.50 11/10/2012 5,010

8.96

September 2012

9.75 28/09/2012 1,380 7.54 05/09/2012 4,573 8.35

August 2012

10.29 03/08/2012 560 8.00 31/08/2012 2,169 8.87

July 2012 10.72 16/07/2012 1,201 9.00 30/07/2012 3,500 9.63 Latest Stock Market Data for the preceding four weeks from the date of filing of Draft Letter of Offer with SEBI:

Week Starting

From

Week ending on

High Low Week’s Closing Price

(in `)

Total Traded quantity during

the period Amount

(in `) Date Amount

(in `) Date

January 07, 2013

January 13, 2013

10.15 January 07, 2013

8.64 January 01, 2013

9.49 17,036

December 31, 2012

January 06, 2013

9.65 January 04, 2013

8.50 December 31, 2012

9.49 9,750

December 24, 2012

December 30, 2012

9.56 December 27, 2012

8.75 December 28, 2012

8.75 4,908

December 17, 2012

December 23, 2012

9.90 December 21, 2012

8.26 December 17, 2012

9.45 8,881

107

Form the purpose of this chapter: Year is a calendar year Average price is the weighted average share price of the Equity Shares traded during the respective period High price is the maximum of the daily high prices and Low price is the minimum of the daily low prices of

the Equity Shares of our Company for the year, or the month, as the case may be In case of two days with the same high / low / closing price, the date with higher volume has been

considered Source: www.bseindia.com

108

FINANCIAL INDEBTEDNESS

Set forth below is a brief summary of the Company’s aggregate borrowing outstanding as on November 30, 2012 Secured Loans

(` in lakhs) Name of the

Bank and Nature of limit

Amount Sanctioned Outstanding as on

30.11.2012

Rate of Interest (%) Securities

Indian Bank – Working Capital

2900.00 Repayable on demand

1384.62 OCC: Base Rate + Tenor Premium (0.50%) + 0.75% PC/FBP/FBN: Base Rate + 0.25% Doc BP/DABP/SBP: Base Rate + 1.25% BP-LC (DA): Base Rate + 0.25% *

The Fund based limits are secured by equitable mortgage / charge on the Factory land and building situated at Chambaghat, District Solan along with the Stock, Book Debts, Plant & Machinery and Moveable Properties, both present and future, situated at the Factory Premises. - Guarantee of Promoters

Indian Bank - Term Loan

560.00 (Repayable in 60 monthly installments w.e.f. April 2012)

386.92

Base Rate + Tenor Premium (1%) + 1.00%

Indian Bank - Non Fund Based - LC / /Bill purchased Guarantee)

2200.00 1438.42 Bank Guarantee: 0.50% p.a.

Demand Promissory Note Signed by Company, BP Agreement, documentary bill covering finished goods, Bill of Lading/ Airway bill / Railway receipts / lorry receipts etc, hypothecation of titled goods covered under the LC. - Counter Guarantee of Company

Indian Bank - One time Letter of Undertaking / Letter of Comfort – Buyers Credit for imported machines)

650.00 Repayable in 3 years by April 23, 2014

614.58 ** Buyer’s Credit Guarantee fee @ 0.50% p.a. and commission @ 0.50% p.a

Indian Bank - Bank Guarantee in favor of Ordinance Factory in Nagpur

500.00 103.64 NA

Indian Bank - Forward Cover

3,500.00 563.04 NA -

ICICI Bank Vehicle Loan

83.00 24.08 At variable rates Hypothecation of the respective Vehicle

HDFC Bank Vehicle Loan

225.00 96.53 At variable rates Hypothecation of the respective Vehicle

* OCC: Open Cash Credit PC/FBP/FBN: Packing Credit / Foreign Bill Purchase / Foreign Bills for Negotiation Doc BP/DABP/SBP: Documents Bill Purchase / Documents against acceptance for Bill Purchase / Supply Bill Purchase BP-LC: Bill Purchase (Letter of Credit)

109

** In view of exchange rate fluctuation, till 30 November 2012 we have provided for ` 131.63 Lakhs as additional cost of imported Plant & Machinery in our Books of Accounts as Capital Work in Progress. The same is not included in the aforesaid outstanding amount. Unsecured Loans

(` in lakhs) Name of Lender

Nature of Loan

Amount Sanctioned

Outstanding as on 30.11.2012

Rate of Interest (%)

Repayment terms

Ultra Portfolio Private Limited *

Sales Bill Discounting

200.00 178.57 12.00 Repayable on Demand

Clean Loans 130.00 47.93 12.00 Repayable in 22 monthly installments Clean Loans 3.25 1.12 11.50 Repayable in 12 monthly installments Clean Loans 20.00 12.93 12.00 Repayable in 36 monthly installments Clean Loans 9.75 2.20 11.50 Repayable in 24 monthly installments Clean Loans 24.50 9.97 12.00 Repayable in 24 monthly installments Clean Loans 93.00 3.88 11.00 Repayable in 24 monthly installments Clean Loans 25.00 4.10 11.50 Repayable in 23 monthly installments Clean Loans 91.00 32.70 8.50 Repayable in 36 monthly installments Clean Loans 20.00 0.65 11.50 Repayable in 36 monthly installments

* Ultra Portfolio Private Limited is a Non Banking Financial Company and is our Promoter Group Company.

110

OUTSTANDING LITIGATIONS

Except as described below, there are no outstanding litigations including, suits, criminal or civil prosecutions and taxation related proceedings against us that would have a material adverse effect on our business. Further, there are no defaults, non-payment of statutory dues including institutional / bank dues that would have a material adverse affect on our business other than unclaimed liabilities against us as of the date of the Draft Letter of Offer. Further, except as disclosed below, we are not aware of any litigation involving moral turpitude, material violations of statutory regulations and or proceedings relating to economic offences which have arisen in the last ten years. Further, except as disclosed below, we are not subject to: (a) Any outstanding litigation which does not impact our future revenues for an amount more than one percent

of our networth, for the last completed financial year. (b) Any outstanding litigation which impacts the future revenues for an amount more than one percent of our

revenue, for the last completed financial year. Further from time to time, we have been and continue to be involved in legal proceedings filed by and against us, arising in the ordinary course of our business. These legal proceedings are both in the nature of civil and criminal proceedings. A. Civil Proceedings

Cases filed by our Company

Sr. No

Case No. Parties to the Dispute

Brief facts of the case Court / forum

Extent of claim / liability

Present Status

1 Company Application No. 29406 of 2012 in case no. Misc. Company Application No. 1 of 2008

Shivalik Bimetal Controls Ltd. Vs. M/s. B.P.L Display Devices Ltd., (Erstwhile Uptron C.P.T Ltd.)

Respondent company has been directed to be wound up on the recommendation of B.I.F.R and the official liquidator has been appointed. The respondent company was supplied goods worth ` 1,70,00,000 by Shivalik. Since the respondent company failed to pay the dues of Shivalik a suit has been filed by the Company for recovery of the said amount. The matter is sub judice as the claim is yet to be processed by the official liquidator.

The High Court of Judicator, Allahabad

` 1,70,00,000 (One Crore Seventy Lakh Only)

Our Company has filed its claim against the respondent company and the same is yet to be processed by the official liquidator.

2 Company Petition No. 227 of 2012

Shivalik Bimetal Controls Ltd. Vs. Samtel Color Ltd

Shivalik has filed a petition under section 433 and 434 read with section 439 of the Companies Act, 1956 seeking an order of winding up against the respondent company and appointment of an official liquidator to take over its affairs since the respondent company has failed to pay an amount of ` 5,27,87,061, which is said to be due and payable to the Company

The High Court Delhi

` 5,27,87,061 (Five Crore Twenty Seven Lakh Eighty Seven Thousand and Sixty One Only)

The matter is sub judice

111

Sr. No

Case No. Parties to the Dispute

Brief facts of the case Court / forum

Extent of claim / liability

Present Status

3 2010 GAHAP 23701

Shivalik Bimetal Controls Ltd.Vs. Jtech Inc., Korea

The Company made exports from the year 2002-2005 to M/s Jtech Inc., Korea for an amount of USD 19,27,812.80 out of which a total payment of USD 3,73,278.42 remained outstanding. Thereafter the Company invoked arbitration in Korea for recovery of the said amount. However, since Jtech Inc. expressed its inability to pay the due amount the Company filed a suit for recovery of the amount due before the Busan District Court.

Busan District Court, Korea

USD 3,73,278.42 (The same has been accounted for as ` 148.85 lakhs in our financial statements under Sundry Debtors)

The matter was decided by the Busan District Court on March 30, 2011 in favour of the Company. However, the defendants were untraceable and therefore the decree could not be executed.

4 Suit no. 35 of 2008

Shivalik Bimetal Controls Limited Vs. Himachal Exicom Communications Limited

The agreement for purchase of land was entered into between Shivalik and Himachal Exicom Communications Ltd at a consideration of ` 103 lacs on 19/03/2004. For the transfer of land in the Company's name, Shivalik had to take permission of the HP Govt. This permission is pending with HP Govt and in the meantime the seller company refunded the advance paid to them by Shivalik. Shivalik filed a suit for specific performance of the contract and the same is pending in court of law

High Court of Himachal Pradesh at Shimla

` 1,03,00,000 (One Crore Three Lakh Only)

The matter is listed for the plaintiff evidence on 18.04.2013

B. Tax matters against the Company a) For Assessment Year 2005-06 the Income Tax Department has initiated re-opening of Assessment u/s

148 of Income Tax Act, 1961 vide notice dated March 28, 2012. Our Company has filed writ petition bearing no. 7087/2012 in Delhi High Court against the referred notice / proceedings and for quashing of the same. The Income Tax Department has to file counter affidavit before the Court. The next date of hearing is January 24, 2013. The adverse financial liability which may be imposed by the Income Tax Department cannot be ascertained at this stage.

b) Our Company has received 13 different Show Cause Notices (SCN) from the office of the Commissioner of Central Excise and Service Tax, Commissionerate-I, Chandigarh and Shimla for wrong availment of CENVAT credit aggregating to ` 4,38,09,929/-. If the matter is decided against our Company, we will have to reverse the CENVAT Credit availed and interest and penalty may also be imposed. Our Company has filed replies to the said SCN disputing the claim and requested for personal hearing in the matter.

C. Compounding application filed by the Company

Our Company has filed compounding application under Section 297 of the Companies Act with respect to the transactions undertaken by it with Checon Shivalik Contact Solutions Private Limited (for the financial years 2006-07, 2007-08, 2008-09, 2009-10 and 2011-12), Innovative Clad Solutions Private Limited (for the financial years 2008-09 and 2009-10) and Shivalik Bimetal Engineers Private Limited (for the financial year 2011-12). The said application was filed with the Registrar of Companies, Punjab, Chandigarh and Himachal Pradesh on October 18, 2012 and is pending before the authorities.

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GOVERNMENT AND OTHER APPROVALS

Except as stated below, our Company is in compliance with all applicable regulations governing our business activities and has received the necessary consents, licenses, permissions and approvals from government and various regulatory agencies, required for us to undertake our current business activities and there are no pending approvals and renewals required for carrying on our present business:

Sr. No.

Nature of approval Authority granting approval

Approval / Registration no. / Letter no.

Validity

1 Consent to operate (Unit - I) under Air Act, 1981 and Water Act 1974

H.P. State Pollution Control Board

No. PCB (2973) Shivalik Bimetal (ID No. 12866)/2011-5786-89 dated 13/06/2011

Valid till 31/03/2012 Renewal Application dated 19/06/2012 has been filed and is pending for approval

2 Consent to operate (Unit - II) under Air Act, 1981 and Water Act 1974

H.P. State Pollution Control Board

No. PCB/EE/ PWN (765-06-21-22) dated 04/04/2006

Renewal application dated 03/02/2012 filed for the year 2012-13

3 Registration and licence to work a factory (Unit - I) under Factories Act 1948

Labour Department, Himachal Pradesh

9-37/86 (Fac) Lab; Sr. No. 1178 dated 16/06/1986

Renewal application dated 12/10/2011 filed for 3 years (2012-2014) and is pending for approval

4 Registration and licence to work a factory (Unit - II) under Factories Act 1948

Labour Department, Himachal Pradesh

9-165/98 (Fac) Lab; Sr. No. 1737 dated 26/11/1998

Renewal application dated 12/10/2011 filed for 3 years (2012-2014) and is pending for approval

5 Registration and licence to work a factory (Unit - III) under Factories Act 1948

Labour Department, Himachal Pradesh

9-03/04 (Fac) Lab; Sr. No. 2171 dated June 2004

Valid till December 31, 2011. Renewal application dated 21/01/2012 filed for the year 2012 and is pending for approval

6 Trademark for logo of the Company

Registrar of Trademarks

- Trademark Application No. 2138073 dated May 02, 2011 filed

We have commenced our operations at manufacturing facility on a temporary basis on rented premises at Chambagat, Dist. Solan, Himachal Pradesh. The registration obtained for the said premises are as under:

Sr. No.

Nature of approval

Authority granting approval

Approval / Registration no. / Letter no.

Validity

1 Permission for setting up an industrial enterprise

District Industries Centre

Permission vide letter no. (34)Regn (L&M) 1496/2011 dated 09/09/2011

Approval for setting up project on temporary basis in rented premises. Valid for one year from the date of issue or commissioning of the industry whichever is earlier. Company to ensure that: 70% Himachalis are employed in the enterprise After seeking permission under the H.P Tenancy and

Land reforms Act, the entire enterprise is shifted to the Original proposed Location

2 Office Order for Sanctioned Load

HPSEB Ltd. Order No. 0004295 dated 22/02/2012 (Effective date 25/02/2012)

Not applicable

4 Service Tax Central Board of Excise & Customs

AAACS0623CSD005 Not applicable

5 Excise Central Board of Excise & Customs

AAACS0623CEM008 Not applicable

6 Entrepreneurs Memorandum

District Industries Centre

02/09/12/50202 dated 10/04/2012

Not applicable

The registrations obtained by our Company for the proposed manufacturing facility at Kandaghat, Dist. Solan, Himachal Pradesh are as under:

Sr. No.

Nature of approval Authority granting approval

Approval / Registration no. / Letter no.

Validity & Conditions

Registrations received 1 Single Window

clearance Directorate of Industries

Provisional Registration no. 02/09/1106/Regn/ (L&M) dated 27/05/2011

Valid till 26/05/2012 (Company to ake effective steps to establish the project). *

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Sr. No.

Nature of approval Authority granting approval

Approval / Registration no. / Letter no.

Validity & Conditions

2 NOC for purchase of land

Special Area Development Authority (SADA), Kandaghat

SADA/KGT/Case No. 320/SA/ 11-75 dated 01/07/2011

Company to ensure that: No tree is cut without prior permission NOC from H.P P.W.D, I&PH, Pollution and

Electricity Department is attained. NOC from Pollution Control Board Planning permission is taken before any

development work at site To be developed in steps as per rules, no step

exceeding 3.50 mtrs in height 3 NOC for purchase of

land Public Works Department

NHD/CB/NOC/R 15/2011-62-63 dated 03/04/2012

Not applicable

4 Permission to purchase land for setting up of industrial unit under Tenancy & Land Reforms Act, 1972

Department of Revenue Government of Himachal Pradesh

Rev. B.F(10)/131/2012 dated 12/06/2012

Land to be used within two year for the purpose for which granted

5 Provisional NOC Directorate of Fire Services

IIOM(FS)(HQ)6-10/76 Solan-XXXIII-9521 dated 17/09/2012

-

6 Revised Essentiality Certificate

Directorate of Industries Government of Himachal Pradesh

3112 dated December 06, 2011

The Company shall ensure that: Land to be used within two year for the purpose for

which granted The enterprise shall obtain other necessary NOCs /

permission from other concerned authorities. 7 Service Tax Central Board of

Excise & Customs AAACS0623CSD006 Not applicable

8 Excise Central Board of Excise & Customs

AAACS0623CEM007 Not applicable

9 Central Sales Tax under Central Sales Tax Act, 1956

Department of Excise & Taxation

02020300224 dated 22/07/2011

Not applicable

10 Local Sales Tax under HP Value Added Tax Act, 2005

Department of Excise & Taxation

02020300224 dated 22/07/2011

Not applicable

Registrations applied for 1 Application for

development of land under Town and Country Planning Act

Special Area Development Authority

- Application No. SBCL (Unit – IV) /-11 Dated September 05, 2012

* Our Company, vide letters dated May 12, 2012 and July 13, 2012 has applied for extension of time with The Commissioner Industries, Directorate of Industries, Himachal Pradesh appraising the fact of purchase of land by the Company for the said project and for extension of time for implementation of the project. MATERIAL DEVELOPMENT AFTER THE DATE OF THE AUDITED FINANCIAL STATEMENTS AS ON MARCH 31, 2012 In the opinion of our Board, there have not arisen since the date of the last audited financial statements i.e. March 31, 2012, any circumstances that materially or adversely affect or are likely to affect our profitability taken as a whole or the value of our assets or our ability to pay our material liabilities within the next 12 months.

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OTHER REGULATORY AND STATUTORY INFORMATION

Authority for the Issue Pursuant to a resolution under Sections 81(1) of the Companies Act passed by our Board of Directors on December 10, 2012 and the member in their Extra Ordinary General Meeting held on January 07, 2013, it has been decided to make the rights offer to the Eligible Equity Shareholders of our Company. The Board in its meeting held on [●] determined the Issue Price as ` [●] and the rights entitlement of [●] Equity Shares for every [●] Equity Shares, alongwith one detachable Warrant, held on the Record Date. The Issue Price has been arrived at in consultation with the Lead Manager. Prohibition by SEBI, RBI or governmental authorities Our Company, our Directors, our Promoters, the Promoter Group entities, the persons in control of our Company and the companies with which our Directors, Promoters or persons in control are associated as directors or promoters or persons in control have not been prohibited from accessing or operating in the capital markets or restrained from buying, selling or dealing in securities under any order or direction passed by SEBI. None of our Directors is associated with the capital markets in any manner. None of our Company, our Group Companies, members of our Promoter Group or ventures with which our Promoters was associated with in the past have been declared as wilful defaulters by the RBI or any other governmental authority and there have been no violations of securities laws committed by any of them in the past and no such proceedings are currently pending against them. Association with securities markets None of the Directors of the Company are associated with the securities markets in any manner. Compliance with Part E of Schedule VIII of SEBI Regulations Our Company is in compliance with the provisions specified in Clause (1) of Part E of Schedule VIII to the SEBI ICDR Regulations as explained below: (a) Our Company has been filing periodic reports, statements and information in compliance with the Listing

Agreements for the last three years immediately preceding the date of filing of the Draft Letter of Offer with SEBI;

(b) The reports, statements and information referred to in sub-clause (a) above are available on the website of BSE which is a recognised stock exchange with nationwide trading terminals; and

(c) Our Company has an investor grievance-handling mechanism which includes meeting of the Share Transfer Committee and Shareholders / Investors Grievance Committee at frequent intervals, appropriate delegation of power by the Board as regards share transfer and clearly laid down systems and procedures for timely and satisfactory redressal of investor grievances.

DISCLAIMER CLAUSE OF SEBI AS REQUIRED, A COPY OF THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE DRAFT LETTER OF OFFER TO SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT LETTER OF OFFER. THE LEAD MANAGER, SPA CAPITAL ADVISORS LIMITED HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.

115

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT LETTER OF OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ISSUER DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER, SPA CAPITAL ADVISORS LIMITED HAS FURNISHED TO SEBI, A DUE DILIGENCE CERTIFICATE DATED JANUARY 14, 2013 IN ACCORDANCE WITH THE SEBI (MERCHANT BANKERS) REGULATIONS, 1992 WHICH READS AS FOLLOWS: 1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO

LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS, ETC., AND OTHER MATERIALS IN CONNECTION WITH THE FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO THE SAID ISSUE;

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE ISSUER, ITS

DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER PAPERS FURNISHED BY THE ISSUER,

WE CONFIRM THAT:

(A) THE DRAFT LETTER OF OFFER FILED WITH SEBI IS IN CONFORMITY WITH THE

DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE; (B) ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE, AS ALSO THE

REGULATIONS, GUIDELINES, INSTRUCTIONS, ETC. FRAMED/ ISSUED BY SEBI, THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

(C) THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL REQUIREMENTS.

3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE

DRAFT LETTER OF OFFER ARE REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATION IS VALID.

4. WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITER TO

FULFIL THEIR UNDERWRITING COMMITMENTS. - NOT APPLICABLE 5. WE CERTIFY THAT WRITTEN CONSENT FROM THE PROMOTERS HAS BEEN OBTAINED

FOR INCLUSION OF THEIR EQUITY SHARES AS PART OF THE PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN AND THE EQUITY SHARES PROPOSED TO FORM PART OF THE PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN WILL NOT BE DISPOSED OR SOLD OR TRANSFERRED BY THE PROMOTER DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT LETTER OF OFFER WITH SEBI UNTIL THE DATE OF COMMENCEMENT OF THE LOCK-IN PERIOD AS STATED IN THE DRAFT LETTER OF OFFER. - NOT APPLICABLE

6. WE CERTIFY THAT REGULATION 33 OF THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE

REQUIREMENTS) REGULATIONS, 2009, WHICH RELATES TO SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS' CONTRIBUTION, HAS BEEN DULY COMPLIED

116

WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER / LETTER OF OFFER. - NOT APPLICABLE

7. WE UNDERTAKE THAT SUB-REGULATION 4 OF REGULATION 32 AND CLAUSE (C) AND

(D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITOR’S CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE COMPANY ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE. - NOT APPLICABLE

8. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE

FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.

9. WE CONFIRM THAT NECESSARY ARRANGEMENTS WILL BE MADE TO ENSURE THAT

THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SECTION 73(3) OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE LETTER OF OFFER. WE FURTHER CONFIRM THAT THE AGREEMENT TO BE ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION. - NOTED FOR COMPLIANCE

10. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF OFFER

THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE EQUITY SHARES IN DEMAT OR PHYSICAL MODE.

11. WE CERTIFY THAT ALL APPLICABLE DISCLOSURES MANDATED IN THE SEBI (ISSUE OF

CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION TO DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE INVESTOR TO MAKE A WELL INFORMED DECISION.

12. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT

LETTER OF OFFER:

(A) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE COMPANY; AND

(B) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY SEBI FROM TIME TO TIME.

13. WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO

ADVERTISEMENT IN TERMS OF THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE MAKING THE ISSUE.

14. WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN

EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OF

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THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, RISK FACTORS, PROMOTERS EXPERIENCE, ETC.

15. WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE

APPLICABLE PROVISIONS OF THE SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS OF COMPLIANCE, PAGE NUMBER OF THE DRAFT LETTER OF OFFER WHERE THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.

16. WE ENCLOSE STATEMENT ON ‘PRICE INFORMATION OF PAST ISSUES HANDLED BY

MERCHANT BANKERS (WHO ARE RESPONSIBLE FOR PRICING THIS ISSUE)’, AS PER THE FORMAT SPECIFIED BY THE BOARD THROUGH CIRCULAR. - NOT APPLICABLE

17. WE CERTIFY THAT THE PROFITS FROM RELATED PARTY TRANSACTIONS HAVE

ARISEN FROM LEGITIMATE BUSINESS TRANSACTIONS. - COMPLIED WITH TO THE EXTENT OF RELATED PARTY TRANSACTIONS REPORTED IN ACCORDANCE WITH ACCOUNTING STANDARD 18 IN THE CONDENSED INTERIM FINANCIAL INFORMATION OF THE COMPANY FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2012.

THE FILING OF THE DRAFT LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ISSUER FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY AND OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI, FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD MANAGER, ANY IRREGULARITIES OR LAPSES IN THE DRAFT LETTER OF OFFER. Disclaimer Statement from our Company and the Lead Manager OUR COMPANY AND THE LEAD MANAGER ACCEPT NO RESPONSIBILITY FOR STATEMENTS MADE OTHERWISE THAN IN THIS DRAFT LETTER OF OFFER OR IN THE ADVERTISEMENT OR ANY OTHER MATERIAL ISSUED BY OR AT THE INSTANCE OF OUR COMPANY AND THAT ANYONE PLACING RELIANCE ON ANY OTHER SOURCE OF INFORMATION WOULD BE DOING SO AT HIS OWN RISK. INVESTORS WHO INVEST IN THE ISSUE WILL BE DEEMED TO HAVE BEEN REPRESENTED BY OUR COMPANY AND THE LEAD MANAGER AND THEIR RESPECTIVE DIRECTORS, OFFICERS, AGENTS, AFFILIATES AND REPRESENTATIVES THAT THEY ARE ELIGIBLE UNDER ALL APPLICABLE LAWS, RULES, REGULATIONS, GUIDELINES AND APPROVALS TO ACQUIRE EQUITY SHARES AND WARRANTS OF OUR COMPANY, AND ARE RELYING ON INDEPENDENT ADVICE / EVALUATION AS TO THEIR ABILITY AND QUANTUM OF INVESTMENT IN THIS ISSUE. Caution The Lead Manager accepts no responsibility, save to the limited extent as provided in the Issue Agreement. All information shall be made available by our Company and the Lead Manager to the Eligible Equity Shareholders at large and no selective or additional information would be made available for a section of Eligible Equity Shareholders in any manner whatsoever. Applicants will be required to confirm and will be deemed to have represented to our Company and the Lead Manager and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire the Rights Shares and that they shall not issue, sell, pledge or transfer their Rights Entitlement or Rights Shares to any person who is not eligible under applicable laws, rules, regulations, guidelines and approvals to acquire the Rights Shares. Our Company, the Lead Manager and their respective directors, officers, agents, affiliates and representatives accept no responsibility or liability for advising any Applicant on whether such Applicant is eligible to acquire any Rights Shares.

118

The Lead Manager and its affiliates may engage in transactions with, and perform services for, our Company and our Group Entities or affiliates in the ordinary course of business and have engaged, or may in the future engage, in transactions with our Company and our Group Entities or affiliates, for which they have received, and may in the future receive, compensation. Disclaimer with respect to jurisdiction The Draft Letter of Offer has been prepared under the provisions of Indian Laws and the applicable rules and regulations thereunder. Any disputes arising out of the Issue will be subject to the jurisdiction of the appropriate court(s) in Himachal Pradesh, India only. Selling restrictions The distribution of the Draft Letter of Offer and the issue of Equity Shares alongwith detachable Warrant on a rights basis to persons in certain jurisdictions outside India may be restricted by the legal requirements prevailing in those jurisdictions. Persons into whose possession the Draft Letter of Offer may come are required to inform themselves about and observe such restrictions. We are making this Issue of Equity Shares alongwith detachable Warrant on a rights basis to our eligible Equity Shareholders and will dispatch the Letter of Offer / Abridged Letter of Offer and CAFs to the eligible Equity Shareholders who have provided an Indian address. No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that the Draft Letter of Offer was filed with SEBI for observations. Accordingly, the rights of Equity Shares alongwith detachable Warrant may not be offered or sold, directly or indirectly, and the Draft Letter of Offer may not be distributed in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt of the Draft Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to make such an offer and, under those circumstances, the Draft Letter of Offer must be treated as sent for information only and should not be copied or redistributed. Accordingly, persons receiving a copy of the Draft Letter of Offer should not, in connection with the issue of the Equity Shares, distribute or send the same in or into the United States or any other jurisdiction where to do so would or might contravene local securities laws or regulations. If the Draft Letter of Offer is received by any person in any such territory, or by their agent or nominee, they must not seek to subscribe to the Equity Shares or the rights referred to in the Draft Letter of Offer. Neither the delivery of the Draft Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in the Company’s affairs from the date hereof or that the information contained herein is correct as at any time subsequent to this date. Designated Stock Exchange The Designated Stock Exchange for the purposes of the Issue will be BSE. Disclaimer Clause of the BSE As required, a copy of the Draft Letter of Offer will be submitted to BSE. The disclaimer clause as intimated by BSE to us, upon grant of in-principle listing approval, shall be included in the Letter of Offer prior to filing the Letter of Offer with the Stock Exchange. Filing The Draft Letter of Offer will be filed with SEBI at 5th Floor, Bank of Baroda Building, Sansad Marg, New Delhi - 110 001, for its observations. SEBI has vide its letter [●] dated [●] issued its final observations and the Letter of Offer has been filed with the Designated Stock Exchange.

119

Listing The existing Equity Shares are listed on the BSE. We will file in-principle approval application to obtain in-principle approval from the BSE in respect of the Equity Shares and Warrants being offered in terms of the Issue. If the permission to deal in and for an official quotation of the securities is not granted by the Stock Exchange mentioned above, we shall forthwith repay, without interest, all monies received from applicants in pursuance of the Draft Letter of Offer. We will issue and dispatch Allotment advice / share certificates / demat credit and / or letters of regret along with refund order or credit the Allotted Equity Shares and / or Warrants to the respective beneficiary accounts, if any, within a period of 15 days from the Issue Closing Date. If in either of the above cases money is not repaid within eight days from the day we become liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the refusal by the Stock Exchange(s), whichever is earlier), we and every Director who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to pay the money with interest as prescribed under Section 73 of the Companies Act. Consents Consents in writing of the Promoters, Directors, Lead Manager to the Issue, Legal Counsel, Registrar to the Issue, Bankers to the Company, Statutory Auditors and Bankers to the Issue and experts to act in their respective capacities have been obtained and such consents have not been withdrawn up to the date of the Draft Letter of Offer. M/s Malik S and Co., Chartered Accountants, the Statutory Auditors, have given their written consent for the inclusion of their report in the form and content appearing in this Draft Letter of Offer and such consent and report have not been withdrawn up to the date of this Draft Letter of Offer. Expenses of the Issue The total expenses of the Issue are estimated to be approximately ` [●] million ([●]% of the total Issue Size). The expenses of the Issue include, among others, fees of the Lead Manager, fees of the Registrar to the Issue, fees of the other advisors, printing and stationery expenses, advertising, travelling and marketing expenses and other expenses. The estimated Issue expenses are as follows:

(` in lakhs) Particulars Estimated

Expenses % of

Estimated Issue size

% of Estimated

Issue expenses Fees payable to intermediaries including Lead Manager and Registrar to the Issue

[●] [●] [●]

Advertising, travelling and marketing expenses [●] [●] [●]Printing and stationery expenses [●] [●] [●]Other expenses (including but not limited to legal fees, SEBI fees, listing charges, depository fees, auditor fees, commission, brokerage, out of pocket reimbursements, etc.)

[●] [●] [●]

Total [●] [●] [●] Investor Grievances and Redressal System Our Company has adequate arrangements for redressal of Investor complaints. We have been registered with the SEBI Complaints Redress System (SCORES) as required by the SEBI Circular no. CIR/ OIAE/2/2011 dated June 03, 2011.

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Our Company has a Share Transfer Committee and Shareholders’ / Investors’ Grievance Committee which meets as and when required, to deal and monitor redressal of complaints from shareholders. Generally, the investor grievances are dealt within two or three days of the receipt of the complaint. MAS Services Limited is our Registrar and Share Transfer Agent. All investor grievances received by us have been handled by the Registrar and Share Transfer Agent in consultation with the Compliance Officer. We have adequate arrangements for the redressal of investor complaints in compliance with the corporate governance requirements under the Listing Agreements. Additionally, we have been registered with the SEBI Complaints Redress System (SCORES) as required by the SEBI Circular no. CIR/OIAE/2/2011 dated June 3, 2011. Consequently, investor grievances are tracked online by us. The share transfer and dematerialization for us is being handled by MAS Services Limited, Registrar and Share Transfer Agent, which is also the Registrar to the Issue. Letters are filed category wise after being attended to. All investor grievances received by us have been handled by the Registrar and Share Transfer agent in consultation with the compliance officer. Our Board has constituted the Shareholders’ / Investors’ Grievance Committee. This committee currently comprises of 3 members, namely Mr. Nirmaljeet Singh Gill, Mr. Narinder Singh Ghumman and Mr. Devinder Jeet Singh Sandhu. Our Shareholders’ / Investors’ Grievance Committee oversees the reports received from the registrar and transfer agent and facilitates the prompt and effective resolution of complaints from our shareholders and investors. Its broad terms of reference include: Redressal of Equity Shareholder and Investor complaints including, but not limited to non-receipt of share

certificates, transfer of Equity Shares and issue of duplicate share certificates, non-receipt of balance sheet, non-receipt of declared dividends, etc. and

Our Company has also formed a Share Transfer Committee comprising of Mr. Satinder Jeet Singh Sandhu and Mr. Narinder Singh Ghumman. Its broad terms of reference include: Monitoring transfers, transmissions, dematerialization, rematerialization, splitting and consolidation of

shares issued by the Company. Status of Shareholders Complaints (a) No. of shareholders complaints outstanding as on December 31, 2012: Nil (b) Status of the pending complaints: Not applicable Investor Grievances arising out of the Issue Any investor grievances arising out of the Issue will be handled by the Registrar to the Issue. The Registrar to the Issue will have a separate team of personnel handling only our post-Issue correspondence. Our agreement with the Registrar to the Issue provides for retention of records with the Registrar for a period of at least three years from the last date of dispatch of letters of Allotment and refund orders to enable the Registrar to the Issue to redress grievances of Investors. All grievances relating to the Issue may be addressed to the Registrar to the Issue or the SCSB in case of ASBA Applicants giving full details such as folio no. / demat account no. / name and address, contact telephone / cell numbers, email id of the first applicant, number of Equity Shares applied for, CAF serial number, amount paid on application and the name of the bank / SCSB and the branch where the CAF, or the plain paper Application, as the case may be, was deposited, alongwith a photocopy of the acknowledgement slip. In case of renunciation, the same details of the Renouncee should be furnished. The average time taken by the Registrar to the Issue for attending to routine grievances will be 15 working days from the date of receipt. In case of non-routine grievances where verification at other agencies is involved, it would be the endeavour of the Registrar to the Issue to attend to them as expeditiously as possible. We undertake to resolve the investor grievances in a time bound manner.

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Investors may contact the Registrar to the Issue at: MAS Services Limited SEBI Regn. No.: INR 000000049 T - 34, IInd Floor Okhla Industrial Area, Phase II New Delhi - 110 020 Tel.: +91 11 2638 7281 - 83 Fax: +91 11 2638 7384 E-mail: info@masserv.com Investor Grievance e-mail id: sblr@masserv.com Website: www.masserv.com Contact Person: Mr. N C Pal Investors may contact the Compliance Officer at the below mentioned address and/ or Registrar to the Issue at the above mentioned address in case of any pre-Issue/ post -Issue related problems such as non receipt of allotment advice / share certificates / demat credit / refund orders etc. Address of our Compliance Officer: Mr. Ram Parvesh Company Secretary and Compliance Officer H-2 Suneja Chambers, 2nd Floor, Alaknanda Commercial Complex, New Delhi - 110 019 Tel No: +91 11 2602 7174, 2602 8175 Fax No: +91 11 2602 6776 E-mail: shivalik@shivalikbimetals.com Minimum Subscription If we do not receive the minimum subscription of 90% in this Issue or if the Promoters and Promoter Group fails to subscribe for unsubscribed portion in the Issue after the Issue Closing Date or the subscription level falls below 90% after the Issue Closing Date on the account of cheques being returned unpaid or withdrawal of applications, we shall refund the entire subscription amount received within 15 days from the Issue Closing Date. If there is delay in the refund of the subscription amount by more than eight days after we become liable to pay the subscription amount (i.e., 15 days after the Issue Closing Date), we and every officer in default shall be jointly and severally liable to pay interest for the delayed period, as prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act.

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OFFERING INFORMATION

The Equity Shares and / or Warrants proposed to be issued are subject to the terms and conditions contained in the Draft Letter of Offer, the Letter of Offer, the Abridged Letter of Offer, the CAF enclosed with the Letter of Offer, the Memorandum and Articles of Association, the provisions of the Companies Act, FEMA, the SEBI Regulations, any other regulations, guidelines, notifications and regulations for issue of capital and for listing of securities issued by SEBI, RBI and/ or other statutory authorities and bodies from time to time, and the terms and conditions as stipulated in the Allotment advice or letters of Allotment or share certificate and rules as may be applicable and introduced from time to time. All rights/ obligations of Equity Shareholders in relation to Applications and refunds pertaining to the Issue shall apply to Renouncee(s) as well. Please note that, in terms of SEBI circular CIR/CFD/DIL/1/ 2011 dated April 29, 2011, QIB applicants, Non Institutional Investors and other applicants whose application amount exceeds ` 2,00,000 can participate in the Issue only through the ASBA process. The Investors who are not (i) QIBs, (ii) Non-Institutional Investors or (iii) investors whose application amount is more than ` 200,000, can participate in the Issue either through the ASBA process or the non ASBA process. ASBA Investors should note that the ASBA process involves application procedures that may be different from the procedure applicable to non ASBA process. ASBA Investors should carefully read the provisions applicable to such applications before making their application through the ASBA process. For details, see “Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”) Process” on page 128 of the Draft Letter of Offer. Authority for the Issue Pursuant to a resolution under Sections 81(1) of the Companies Act passed by our Board of Directors on December 10, 2012 and the member in their Extra Ordinary General Meeting held on January 07, 2013, it has been decided to make the rights offer to the Eligible Equity Shareholders of our Company. Basis for the Issue The Equity Shares alongwith detachable Warrants are being offered for subscription for cash to those existing equity shareholders of our Company whose names appear, as beneficial owners as per the list to be furnished by the Depositories in respect of the Equity Shares held in the electronic form, and on the register of members of our Company in respect of Equity Shares held in the physical form at the close of business hours on the Record Date, i.e., [●], fixed in consultation with the Designated Stock Exchange. Ranking of Equity Shares The Equity Shares shall be subject to the Memorandum and Articles of Association. The Equity Shares allotted in the Issue shall rank pari passu with the existing Equity Shares in all respects, including payment of dividends, provided that voting rights and dividend payable shall be in proportion to the paid-up value of the Equity Shares held. Mode of Payment of Dividend We shall pay dividends (in the event of declaration of such dividends) to our equity shareholders as per the provisions of the Companies Act and our Articles of Association. The distribution of the Draft Letter of Offer and the issue of the Equity Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions. We are making the issue of the Equity Shares on a rights basis to the Equity Shareholders and the Draft Letter of Offer, Abridged Letter of Offer and the CAFs will be dispatched only to those Equity Shareholders who have a registered address in India or who have provided an Indian address. Any person who acquires Rights Entitlements or the Equity Shares will be deemed to have declared, warranted and agreed, by accepting the delivery of the Draft Letter of Offer, that it is not and that at the time of subscribing for the Equity Shares or the Rights Entitlements, it will not be, in the United States and in other restricted jurisdictions.

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PRINCIPAL TERMS OF THE EQUITY SHARES ISSUED UNDER THE ISSUE Face Value Each Equity Share shall have the face value of ` 2 each. Issue Price Each Equity Share is being offered at a price of ` [●](including a premium of ` [●] per Equity Share). The Issue Price has been arrived at by us in consultation with the Lead Manager. Rights Entitlement Ratio The Equity Shares are being offered on a rights basis to the existing equity shareholders of our Company in the ratio of [●] Equity Shares for every [●] Equity Shares held as on the Record Date. As your name appears as a beneficial owner in respect of Equity Shares held in the electronic form or appears in the register of members as an equity shareholder of our Company as on the Record Date, you are entitled to the number of Equity Shares as set out in Part A of the CAF enclosed with the Draft Letter of Offer. An Eligible Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an Application to subscribe to the Issue on plain paper. For further details, see the section titled “Offering Information - Application on Plain Paper” on page 131 and 138. Terms of payment

Amount payable per Equity Share Face Value (`) Premium (`) Total (`) On application 1/- [●] [●] On first and final call 1/- [●] [●] Total 2/- [●] [●]

Where an applicant has applied for additional Equity Shares and is allotted lesser number of Equity Shares than applied for, the excess Application Money paid shall be refunded. The monies would be refunded within 15 days from the Issue Closing Date. In the event that there is a delay of making refunds beyond eight days after our Company becomes liable to make such refunds, i.e. on the expiry of 15 days from the Issue Closing Date, our Company shall pay interest for the delayed period at rates prescribed under sub-sections (2) and (2A) of section 73 of the Companies Act. Separate ISIN for partly paid up Equity Shares and their listing and trading Partly paid up Equity Shares allotted under the Issue shall be listed and admitted for trading on BSE for which the Company will make an application to NSDL and CDSL for allotment of new ISIN. The formalities for listing and trading of partly paid up Equity Shares will be completed within 7 working days from the date of allotment. The Company has received in-principal approval from the BSE through letter no. [●] dated [●]. Fractional Entitlements For Equity Shares being offered on a rights basis under the Issue, if the shareholding of any of the Eligible Equity Shareholders is equal to or less than [●] Equity Shares or is not in multiples of [●], the fractional entitlement of such Eligible Equity Shareholders shall be ignored for computation of the Rights Entitlement. However, Eligible Equity Shareholders whose fractional entitlements are being ignored earlier will be given preference in the Allotment of one additional Equity Share each, if such Eligible Equity Shareholders have applied for additional Equity Shares. An illustration stating the rights entitlement for number of Equity Shares is set out below: Those Eligible Equity Shareholders holding less than [●] Equity Shares and therefore entitled to zero Equity Shares under the Issue shall be dispatched a CAF with zero entitlement. Such Eligible Equity Shareholders are entitled to apply for additional Equity Shares. However, they cannot renounce the same in favors of any third parties. CAF with zero entitlement will be non-negotiable/ non-renounceable.

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Forfeiture If there is a failure to pay the call money on or before the day appointed for the payment of the same in accordance with the provisions of the articles of association of the Company, the Board may, at any time during which any part of the call or installment remains unpaid, serve a notice on such member of the Company requiring him to pay the same together with any interest that may have accrued. The notice shall fix a date and a place or places on and at which such call or installment and such interest as aforesaid are to be paid. The notice shall also state that in the event of non-payment at or before the time and at the place or places appointed, the shares in respect of which such call was made or installment is payable and to which the notice relates will be liable to be forfeited. If the requisites of such notice are not complied with, any shares in respect of which such notice has been given may, at any time thereafter before payment of all calls or installments, interest and expenses due in respect thereof, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture. Any share so forfeited shall be deemed to be the property of the Company, and the Board may sell, re-issue or otherwise dispose of the same in such manner as they think fit. Arrangement for Odd Lot Equity Shares The Company has not made any arrangements for the disposal of odd lot Equity Shares arising out of the Issue. The Company will issue certificates of denomination equal to the number of Equity Shares being allotted to the Equity Shareholder. Rights of the Equity Shareholder Subject to applicable laws, Equity Shareholders shall have the following rights: Right to receive dividend, if declared; Right to attend general meetings and exercise voting powers, unless prohibited by law; Right to vote on a poll either in person or by proxy; Right to receive offers for rights shares and be allotted bonus shares, if announced; Right to receive surplus on liquidation; Right of free transferability of shares; and Such other rights, as may be available to a shareholder of a listed public company under the Companies Act

and the Memorandum and Articles of Association. PRINCIPAL TERMS OF THE WARRANTS ISSUED UNDER THE ISSUE Exercise of Warrants For each equity share offered and allotted under the Issue, the allottee will receive one Detachable Warrant convertible into one equity share of our Company upon exercise. The Warrant holder can apply for equity shares of the Company within the Warrant Exercise Period for allotment of underlying equity share of the Company. The Warrants can be freely and separately traded till the same are tendered for exercise. The market lot for warrants is one. No amount is payable for the warrants at the time of allotment of equity shares under the Rights Issue. The share entitlement on each warrant shall be proportionately adjusted for any further bonus issue made by the Company prior to the Warrant Exercise Period so as to ensure that the benefit to the warrant holder is not prejudiced and remains the same as if the bonus would not have been declared. For example, should the Company declare a bonus issue prior to the Warrant Exercise Period in the ratio of 1:1, then the number of equity shares to be issued pursuant to exercise of warrant shall double. The face value of the equity shares is ` 2 each. In the event of any sub-division or consolidation of the face value, the share entitlement on each warrant shall be proportionately increased / decreased such that the aggregate nominal value of the entitlement remains the same as the nominal value of the Equity Shares immediately prior to such subdivision or consolidation e.g. in case the Company decides to reduce the face value of Equity Shares to ` 1 each, then upon exercise of each warrant by making payment under the Warrant Exercise Price, the warrant holder would get two Equity Shares of ` 1 each instead of one Equity Share of ` 2 each.

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However, in case the Company announces a rights issue during the tenure of the warrants, neither would any adjustment be made to the share entitlement on each warrant nor would there be any reservations for warrant holders. Exercise of Warrants on the Exercise Date will be carried out without the need for the Company to take any further approvals, however the Warrant-holders should independently check if they require any approvals. The Board, subject to the terms of the Draft Letter of Offer, our Memorandum and Articles of Association, the approvals from the Government of India and RBI and provisions of the Companies Act, any other legislative enactments and rules as may be applicable will proceed with the process of exercise of the Warrants in accordance with the applicable laws. Warrant Exercise Price The Warrant shall be exercisable at a price equivalent to 25% discount to the then prevailing market price of the Equity Shares of the Company at the time of conversion. Since the warrant exercise price is based on the then prevailing market price of the equity shares, there is no adjustment required to be made in the warrant exercise price in case of any corporate event like bonus, split or consolidation of equity shares. The “then prevailing market price” shall be the average of the daily closing prices of the equity shares on the stock exchange during the two weeks period immediately preceding the date of commencement of the Warrant Exercise Period. The exercise price for Warrant shall be payable in full on exercise of warrants for allotment of equity shares. The Warrant exercise price would be advertised by us in one English National Daily and one Hindi National Daily with wide circulation (including the place where our Registered Office is situated). The said warrant exercise price shall be advertised within three working days of the beginning of warrant exercise period. Provided, however, the Warrant Exercise Price, shall at no time be lower than the face value of the underlying equity shares. Exercise Period of Warrants The Warrant Exercise Period shall be from February 01, 2014 to February 15, 2014. The Company shall fix a record date of 15 days (or such other period as specified by the listing agreement) for the purpose of determining the names of holders of Warrants who would be eligible to exercise their right for making an application for equity shares of the Company. After such record date, the Warrants shall not be tradable on the Stock Exchange. The Warrants that are not exercised during this period shall lapse, i.e. the Warrant holder shall not be entitled to exercise or claim issue of equity shares after expiry of the Warrant exercise period and no equity shares shall be allotted against such detachable Warrant. The application form for exercise of warrants shall be sent by the Company to all the warrant holders, whose name appears in the register of warrant holders of the Company on the record date. The Application Form would also be available to all warrant holders on request with the Registrar during the Warrant Exercise Period and can be downloaded from the Company’s website www.masserv.com. During the Warrant Exercise Period, the Warrant holder should send their application to the Registrar and Transfer Agent of the Company by filling up the said application form. It should be accompanied by a cheque / demand draft for the requisite amount. Allotment of shares arising from Warrant Exercise (Applicable Allotment Date) The application for the warrant exercise can be made at any time immediately after the announcement of Warrant Exercise Price. The Company will allot the shares within 10 working days (i.e. excluding Sunday and gazetted holidays) from the date of expiry of the Warrant exercise period. Procedure for issue of equity shares in exchange of Warrants Warrant holders can apply for such number of shares as they desire by surrendering relevant warrants (one equity share per warrant) together with the appropriate amounts as per procedure detailed below.

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In case of Warrant held in Physical Mode During the Warrant Exercise Period, the Warrant holder should send his application for issue of Equity Shares to the Registrar of the Company by filling up the requisite particulars on the Warrant Exercise Application Form and by discharging on the reverse of the Warrants certificate. In case of Warrant held in dematerialised mode, the Registrar and Transfer Agent of the Company, M/s MAS Services Limited will, before the warrant exercise period open a special depository account with NSDL “Shivalik - Warrant Conversion Escrow Account” with a Depository Participant (the “Special Depository Account”). The Company will open the Special Depository Account through the Registrar with NSDL at least 2 days prior to the commencement of the warrant exercise period. Shareholders of Shivalik having the depository account with CDSL must use inter depository delivery instruction slip for the purpose of crediting their warrants in favour of the Special Depository Account with the NSDL. Beneficial owners who wish to tender their warrants for conversion, will be required to send their application for issue of Equity Shares on the prescribed application form sent separately, accompanied by a cheque / demand draft along with a photocopy of the delivery instruction in “off market” mode or counterfoil of the delivery instruction in “off market” mode, duly acknowledged by the depository participant in favour of the special depository account, to the Registrars, M/s MAS Services Limited before the close of warrant exercise period. In case the warrants along with the cheques / drafts towards full payment of the Warrant Exercise Price do not reach the Registrar by the end of warrant exercise period then the same shall lapse. Warrants with payments for lesser amounts shall be rejected & returned. Any excess conversion price beyond the call option price shall be refunded by the Company. Shares allotted on exercise of valid warrants will be dispatched / credited to the applicant’s electronic account within 10 days from the expiry of warrant exercise period, subject to requisite approvals from the statutory authorities. On allotment, Company shall apply for listing of resulting equity shares. The cheques / demand draft for exercise of Warrants shall be issued as under:

Category of investor Pay order / demand draft to be issued in favor of For Resident Shareholders / Non-resident Equity Shareholders applying on non-repatriation basis

“Shivalik - Warrant Issue a/c - R” payable at New Delhi

For Non-resident Equity Shareholders applying on repatriation basis

“Shivalik - Warrant Issue a/c - NR” payable at New Delhi

Variance in the terms of the Warrants The rights, privileges and conditions attached to the warrants may be modified or varied or abrogated with the consent of the holders of the warrants by a Special Resolution passed at a meeting of the warrant holders and / or with the consent in writing of the holders of not less than three-fourth of the warrants at a meeting of the warrant holders, every warrant holder, and in the case of joint holders the one whose name stands first in the Register, shall be entitled to vote, either in person or by proxy, in respect of such warrants. The warrant holder will be entitled to one vote on a show of hands and his / her voting rights on a poll shall be in proportion to the outstanding number of the warrants held by him / her. The quorum for such meetings shall be at least five warrant holders present in person. The proceedings of the meeting of the warrant holders shall be governed by the provisions contained in the Articles and such other rules in force for the time being to the extent applicable and in relation to matters not otherwise provided for in terms of the Issue. Separate ISIN for warrants and their listing and trading Warrants proposed to be issued along with Equity Shares on rights basis shall be listed and admitted for trading on BSE for which the Company will make an application to NSDL and CDSL for allotment of new ISIN. The formalities for listing and trading of warrants will be completed within 7 working days from the date of allotment. The Company has received in-principal approval from the BSE through letter no. [●] dated [●]. The Equity Shares issued pursuant to the allotment made to warrant holders would also be listed on BSE within 21 days of the expiry of the warrant exercise period.

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Rights of Warrant Holders Subject to the above, the Detachable Warrants shall be transferable and transmittable in the same manner

and to the same extent and be subject to the same restrictions and limitations and other related matters as in the case of Equity Shares of the Company.

The Detachable Warrants shall not confer upon the holders thereof any right to receive any notice of the meeting of the Shareholders of the Company or Annual Report of the Company and or to attend / vote at any of the General Meetings of the Shareholders of the Company held, if any.

Save and except the right of subscription to the Company’s Equity Shares as per the terms of the Issue of Detachable Warrants, the holders of the Detachable Warrants in their capacity as Detachable Warrant holders shall have no other rights or privileges.

The equity shares arising from the exercise of warrants shall be subject to the Memorandum and Articles of Association of the Company and shall rank pari passu in all respects with existing equity shares of the Company including dividends. Except that the shares arising from conversion of warrants shall be eligible for dividends only after payment of Warrant exercise price and allotment of the equity shares.

The Warrant holders inter-se, shall rank pari passu without any preference or priority of one over the other or others.

A separate register of warrant holders would be maintained by the Company. GENERAL TERMS AND CONDITIONS OF THE ISSUE FOR ASBA APPLICANTS AND NON – ASBA APPLICANTS Market lot The Equity Shares of the Company is tradable only in dematerialized form. The market lot for Equity Shares in dematerialised mode is one. In case of holding in physical form, the Company would issue to the allottees one separate certificate for the Equity Shares and Warrants allotted to one folio ("Consolidated Certificate"). In respect of the Consolidated Certificate, the Company will, upon receipt of a request from the Equity Shareholder, split such Consolidated Certificate into smaller denomination within one month’s time from the request of the Equity Shareholder in accordance with the provisions of the Articles of Association. Restrictions on transfer and transmission of shares and on their consolidation / splitting There are no restrictions on transfer and transmission and on their consolidation / splitting of shares issued pursuant to the Issue. Joint-Holders Where two or more persons are registered as the holders of any Equity Shares and / or Warrants, they shall be deemed to hold the same as joint-holders with benefits of survivorship subject to provisions contained in the Articles of Association. Nomination facility In terms of Section 109A of the Companies Act, nomination facility is available in case of Equity Shares. An applicant can nominate, by filling the relevant details in the CAF in the space provided for this purpose. A sole Eligible Equity Shareholder or first Eligible Equity Shareholder, along with other joint Eligible Equity Shareholders being individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the joint-holders, as the case may be, shall become entitled to the Equity Shares. A Person, being a nominee, becoming entitled to the Equity Shares by reason of the death of the original Eligible Equity Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Eligible Equity Shareholder(s) may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Share is held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh nominations can be made only in the prescribed form

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available on request at our Registered and Corporate Office or such other person at such addresses as may be notified by our Company. The applicant can make the nomination by filling in the relevant portion of the CAF. Only one nomination would be applicable for one folio. Hence, in case the Eligible Equity Shareholder(s) has already registered the nomination with our Company, no further nomination needs to be made for Equity Shares to be allotted in the Issue under the same folio. However, new nominations, if any, by the Eligible Equity Shareholder(s) shall operate in supersession of the previous nomination, if any. In case the Allotment of Equity Shares is in dematerialised form, there is no need to make a separate nomination for the Equity Shares to be allotted in the Issue. Nominations registered with respective Depository Participant of the applicant would prevail. If the applicant wants to change the nomination, they are requested to inform their respective Depository Participant. Notices All notices to the Eligible Equity Shareholders required to be given by our Company shall be published in one English National Daily and one Hindi National Daily with wide circulation (including the place where our Registered Office is situated) and/ or will be sent by ordinary post or registered post or speed post to the registered address of the Equity Shareholders in India as updated with the Depositories/ registered with the Registrar and Transfer Agent from time to time. Procedure for Application The CAF for Equity Shares would be printed for all Equity Shareholders. In case the original CAF is not received by the Equity Shareholder or is misplaced by the Equity Shareholder, the Equity Shareholder may request the Registrar to the Issue, for issue of a duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name and address. In case the signature of the Equity Shareholder(s) does not match with the specimen registered with us, the application is liable to be rejected. Please note that neither the Company nor the Registrar shall be responsible for delay in the receipt of the CAF / duplicate CAF attributable to postal delays or if the CAF / duplicate CAF are misplaced in the transit. Please note that, in terms of SEBI circular CIR/CFD/DIL/1/ 2011 dated April 29, 2011, QIB applicants, Non Institutional Investors and other applicants whose application amount exceeds ` 2,00,000 can participate in the Issue only through the ASBA process. The Investors who are not (i) QIBs, (ii) Non-Institutional Investors or (iii) investors whose application amount is more than ` 200,000, can participate in the Issue either through the ASBA process or the non ASBA process. Please also note that by virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Any Equity Shareholder being an OCB is required to obtain prior approval from RBI for applying to the Issue. The RBI has however clarified in its circular, A.P. (DIR Series) Circular No. 44, dated 8 December 2003 that OCBs which are incorporated and are not under the adverse notice of the RBI are permitted to undertake fresh investments as incorporated non resident entities in terms of Regulation 5(1) of RBI Notification No.20/ 2000-RB dated May 3, 2000 under FDI Scheme with the prior approval of Government if the investment is through Government Route and with the prior approval of RBI if the investment is through Automatic Route on case by case basis. Shareholders renouncing their rights in favour of OCBs may do so provided such Renouncee obtains a prior approval from the RBI. On submission of such approval to us at our Registered Office, the OCB shall receive the Abridged Letter of Offer and the CAF. PROCEDURE FOR APPLICATION THROUGH THE APPLICATIONS SUPPORTED BY BLOCKED AMOUNT (“ASBA”) PROCESS This section is for the information of the ASBA Investors proposing to subscribe to the Issue through the ASBA Process. We and the Lead Manager are not liable for any amendments or modifications or changes in applicable laws or regulations, which may occur after the date of the Draft Letter of Offer. Equity Shareholders who are eligible to apply under the ASBA Process are advised to make their independent investigations and to ensure that the CAF is correctly filled up.

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The Lead Manager, we, its directors, affiliates, associates and their respective directors and officers and the Registrar to the Issue shall not take any responsibility for acts, mistakes, errors, omissions and commissions etc. in relation to applications accepted by SCSBs, Applications uploaded by SCSBs, applications accepted but not uploaded by SCSBs or applications accepted and uploaded without blocking funds in the ASBA Accounts. It shall be presumed that for applications uploaded by SCSBs, the amount payable on application has been blocked in the relevant ASBA Account. Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number CIR/CFD/DIL/1/ 2011 dated April 29, 2011, all applicants who are QIBs, Non-Institutional Investors or other applicants whose application amount exceeds ` 200,000 can participate in the Issue only through the ASBA process. The Investors who are not (i) QIBs, (ii) Non-Institutional Investors or (iii) investors whose application amount is more than ` 200,000, can participate in the Issue either through the ASBA process or the non ASBA process. The list of banks which have been notified by SEBI to act as SCSBs for the ASBA Process is provided on http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries. For details on Designated Branches of SCSBs collecting the CAF, please refer the above mentioned SEBI link. Equity Shareholders who are eligible to apply under the ASBA Process The option of applying for Equity Shares through the ASBA Process is available only to the Equity Shareholders on the Record Date. To qualify as ASBA applicants, eligible Equity Shareholders: are required to hold Equity Shares in dematerialized form as on the Record Date and apply for (i) their

Rights Entitlement or (ii) their Rights Entitlement and Equity Shares in addition to their Rights Entitlement in dematerialized form;

should not have renounced their Right Entitlement in full or in part; should not have split the CAF; should not be Renouncees; should apply through blocking of funds in bank accounts maintained with SCSBs; and are eligible under applicable securities laws to subscribe for the Rights Entitlement and the Equity Shares in

the Issue. All applicants who are QIBs and Non - Institutional Investors can participate in the Issue only through the ASBA Process. Any Application by such categories of Investors including plain paper applications by them have to be made through the ASBA process. CAF The Registrar will dispatch the CAF to all Eligible Equity Shareholders as per their Rights Entitlement on the Record Date. Those Eligible Equity Shareholders who must apply or who wish to apply through the ASBA process and have complied with the parameters mentioned above will have to select this mechanism in Part A of the CAF and provide necessary details. Eligible Equity Shareholders applying through the ASBA process are required to submit their Applications by selecting the ASBA option in Part A of the CAF. Application in electronic mode will only be available with such SCSBs who provide such facility. The Eligible Equity Shareholder shall submit the CAF to the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the Application in the said bank account maintained with the same SCSB. Please note that no more than five Applications (including CAF and plain paper) can be submitted per bank account in the Issue. ASBA Investors are also advised to ensure that the CAF is correctly filled up, stating therein the bank account number maintained with the SCSB in which an amount equivalent to the amount payable on Application as stated in the CAF will be blocked by the SCSB.

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Acceptance of the Issue ASBA Investors may accept the Issue and apply for the Equity Shares either in full or in part, by filling Part A of the respective CAFs sent by the Registrar, selecting the ASBA process option in Part A of the CAF and submit the same to the SCSB before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors in this regard. Mode of payment An ASBA Investor agrees to block the entire amount payable on Application with the submission of the CAF, by authorising the SCSB to block an amount, equivalent to the amount payable on Application, in a bank account maintained with the SCSB. After verifying that sufficient funds are available in the bank account details of which are provided in the CAF, the SCSB shall block an amount equivalent to the amount payable on Application mentioned in the CAF until it receives instructions from the Registrar to the Issue. Upon receipt of intimation from the Registrar to the Issue, the SCSBs shall transfer such amount as per the Registrar to the Issue’s instruction from the bank account maintained with the SCSB, as mentioned by the Eligible Equity Shareholder in the CAF. This amount will be transferred in terms of the SEBI Regulations, into a separate bank account maintained by our Company as per the provisions of Section 73(3) of the Companies Act. The balance amount remaining after the finalisation of the Basis of Allotment shall be unblocked by the SCSBs on the basis of the instructions issued in this regard by the Registrar to the Issue and the Lead Manager to the respective SCSB. The ASBA Investor would be required to block the entire amount payable on their Application at the time of the submission of the CAF. The SCSB may reject the Application at the time of acceptance of CAF if the bank account with the SCSB, details of which have been provided by the Eligible Equity Shareholder in the CAF, does not have sufficient funds equivalent to the amount payable on Application mentioned in the CAF. Subsequent to the acceptance of the Application by the SCSB, our Company would have a right to reject the Application only on technical grounds. Options available to the ASBA Investors A summary of options available to Eligible Equity Shareholders is presented below. ASBA Investors may exercise any of the following options with regard to the Equity Shares, using the respective CAFs received from Registrar:

Option Available Action Required Accept whole or part of your Rights Entitlement without renouncing the balance.

Fill in and sign Part A of the CAF (All joint holders must sign)

Accept your Rights Entitlement in full and apply for additional Equity Shares

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

The Equity Shareholders applying under the ASBA Process will need to select the ASBA process option in the CAF and provide required details. However, in cases where this option is not selected, but the CAF is tendered to the SCSBs with the relevant details required under the ASBA process option and the SCSBs block the requisite amount, then that CAF would be treated as if the Eligible Equity Shareholder has selected to apply through the ASBA process option. Additional Equity Shares An ASBA Applicant is eligible to apply for additional Equity Shares over and above the number of Equity Shares that it is entitled to, provided that it is eligible to apply for Equity Shares under applicable law and has applied for all the Equity Shares (as the case may be) offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and Allotment shall be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed under “Offering Information - Basis of Allotment” on page 146 of the Draft Letter of Offer. If you desire to apply for additional Equity Shares please indicate your requirement in the place provided for additional Equity Shares in Part A of the CAF.

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Renunciation under the ASBA process Renouncees are not eligible to participate in the Issue through the ASBA process. Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF and who is applying under the ASBA Process may make an application to subscribe to the Issue on plain paper. The Equity Shareholder shall submit the plain paper application to the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB. The envelope should be superscribed “Shivalik Bimetal Controls Limited - Rights Issue”. The application on plain paper, duly signed by the Investors including joint holders, in the same order as per the specimen recorded with us / Depositories, must reach the Designated Branch of the SCSBs before the Issue Closing Date and should contain the following particulars: Name of Issuer, being Shivalik Bimetal Controls Limited; Name and address of the Equity Shareholder including joint holders; Registered Folio Number/ DP and Client ID no.; Number of Equity Shares held as on Record Date; Number of Equity Shares entitled to; Number of Equity Shares applied for; Number of additional Equity Shares applied for, if any; Total number of Equity Shares applied for; Total amount to be blocked at the rate of ` [●] per Equity Share; Details of the ASBA Account such as the account number, name, address and branch of the relevant SCSB; In case of non-resident investors, details of the NRE/FCNR/NRO account such as the account number, name, address and branch of the SCSB with which the account is maintained; Except for applications on behalf of the Central or State Government, residents of Sikkim and the officials

appointed by the courts, PAN number of the Investor and for each Investor in case of joint names, irrespective of the total value of the Equity Shares applied for pursuant to the Issue; and

Signature of the Equity Shareholders to appear in the same sequence and order as they appear in our records. Additionally, all such applicants are deemed to have accepted the following: “If we understand the offering to which this application relates is not, and under no circumstances is to be construed as, an offering of any Equity Shares or Warrants or Rights Entitlement for sale in the United States, or as a solicitation therein of an offer to buy any of the said Equity Shares or Warrants or Rights Entitlement in the United States. Accordingly, I/we understand this application should not be forwarded to or transmitted in or to the United States at any time. I/we understand that neither us, nor the Registrar, the Lead Manager or any other person acting on behalf of us will accept subscriptions from any person, or the agent of any person, who appears to be, or who we, the Registrar, the Lead Manager or any other person acting on behalf of us have reason to believe is, a resident of the United States or “U.S. Person” (as defined in Regulation S) or is ineligible to participate in the Issue under the securities laws of their jurisdiction. I/We will not offer, sell or otherwise transfer any of the Equity Shares or Warrants which may be acquired by us in any jurisdiction or under any circumstances in which such offer or sale is not authorized or to any person to whom it is unlawful to make such offer, sale or invitation except under circumstances that will result in compliance with any applicable laws or regulations. We satisfy, and each account for which we are acting satisfies, all suitability standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of our residence. I/We (i) am/are, and the person, if any, for whose account I/we am/are acquiring such Rights Entitlement and/or the Equity Shares or Warrants is/are, outside the United States, (ii) am/are not a “U.S. Person” (as defined in Regulation S), and (iii) is/are acquiring the Rights Entitlement and/or the Equity Shares or Warrants in an offshore transaction meeting the requirements of Regulation S.

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I/We acknowledge that we, the Lead Manager, their affiliates and others will rely upon the truth and accuracy of the foregoing representations and agreements.” OPTION TO RECEIVE EQUITY SHARES IN DEMATERIALISED FORM ELIGIBLE EQUITY SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE EQUITY SHARES OF OUR COMPANY UNDER THE ASBA PROCESS CAN BE ALLOTTED ONLY IN DEMATERIALISED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES ARE HELD BY SUCH ASBA APPLICANT ON THE RECORD DATE. PLEASE NOTE THAT IN ALL CASES WHERE ALLOTMENT OF EQUITY SHARES IS MADE IN DEMAT FORM, WARRANTS WILL ALSO BE ALLOTTED IN DEMAT FORM ONLY AND IN CASES WHERE ALLOTMEN IS MADE IN PHYSICAL FORM, WARRANTS WILL ALSO BE ALLOTTED IN PHYSICAL FORM ONLY. General instructions for ASBA Investors Please read the instructions printed on the CAF carefully. Pursuant to the applicability of the directions issued by SEBI vide its circular bearing number

CIR/CFD/DIL/1/2011 dated 29 April 2011, all Applicants who are QIBs or Non Institutional Investors shall, on a mandatory basis, make use of the ASBA process in the Issue. In addition all investors applying through the ASBA process including QIBs and Non Institutional Investors will have to comply with the eligibility conditions as specified in SEBI circular no. SEBI/CFD/DIL/ASBA/1/2009/30/12 dated December 30, 2009. Applicants that are QIBs and Non Institutional Investors can participate in the Issue only through the ASBA process. Eligible Equity Shareholders who are not QIBs or Non Institutional Investors can participate in the Issue through either the ASBA process or the non ASBA process.

Applications should be made on the printed CAFs only and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/ or which are not completed in conformity with the terms of the Draft Letter of Offer, Abridged Letter of Offer are liable to be rejected. The CAF must be filled in English.

The CAF / plain paper application in the ASBA process should be submitted at a Designated Branch of the SCSB and whose bank account details are provided in the CAF and not to the Bankers to the Issue (assuming that such Banker to the Issue is not a SCSB), to our Company or Registrar or a Lead Manager to the Issue.

All applicants, and in the case of Application in joint names, each of the joint applicants, should mention his / her PAN number allotted under the IT Act, irrespective of the amount of the Application. Except for Applications on behalf of the Central or State Government, the residents of Sikkim and the officials appointed by the courts, CAFs without PAN will be considered incomplete and are liable to be rejected. With effect from 16 August 2010, the demat accounts for Investors for which PAN details have not been verified shall be “suspended for credit” and no Allotment and credit of Equity Shares and Warrants shall be made into the accounts of such Investors.

All payments will be made by blocking the amount in the bank account maintained with the SCSB. Cash payment or payment by cheque/ demand draft/ pay order is not acceptable. In case payment is affected in contravention of this, the Application may be deemed invalid and the Application money will be refunded and no interest will be paid thereon.

Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Eligible Equity Shareholders must sign the CAF as per the specimen signature recorded with our Company and/ or Depositories.

In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with the Depository/ our Company. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant.

All communication in connection with Application for the Equity Shares, including any change in address of the Eligible Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of Allotment in the Issue quoting the name of the first/ sole applicant Eligible Equity Shareholder, folio numbers and CAF number.

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Only the person or persons to whom the Equity Shares have been offered shall be eligible to participate under the ASBA process.

Only persons outside restricted jurisdictions and who are eligible to subscribe for Rights Entitlement and Equity Shares under applicable securities laws are eligible to participate.

Only the Eligible Equity Shareholders holding shares in demat form, and who comply with all the parameters for being an ASBA Investor, are eligible to participate through ASBA process.

Eligible Equity shareholders who have renounced their entitlement in part/ full are not entitled to apply using ASBA process.

Do’s for ASBA Investors: Ensure that the ASBA process option is selected in part A of the CAF and necessary details are filled in. In

case of non-receipt of the CAF, the Application can be made on plain paper with all necessary details as required under the paragraph “Application on plain paper” appearing in the section titled “Offering Information - Procedure for application through the Applications Supported by Blocked Amount (“ASBA”) process” on page 128 of the Draft Letter of Offer.

Ensure that the details about your Depository Participant and beneficiary account are correct and the beneficiary account is activated.

Ensure that the CAFs are submitted with the Designated Branch of the SCSBs and details of the correct bank account have been provided in the CAF.

Ensure that there are sufficient funds (equal to {number of Equity Shares as the case may be applied for} multiplied by {the Issue Price, as the case may be}) available in the bank account maintained with the SCSB mentioned in the CAF before submitting the CAF to the respective Designated Branch of the SCSB.

Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on Application mentioned in the CAF, in the bank account maintained with the respective SCSB, of which details are provided in the CAF and have signed the same.

Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF in physical form.

Except for CAFs submitted on behalf of the Central or State Government, the residents of Sikkim and the officials appointed by the courts, each applicant should mention their PAN allotted under the IT Act.

Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary account is held with the Depository Participant. In case the CAF is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the CAF.

Ensure that the Demographic Details are updated, true and correct, in all respects. Ensure that the account holder in whose bank account the funds are to be blocked has signed authorizing

such funds to be blocked. Ensure that you apply through the ASBA process if you are a QIB or a Non - Institutional Investor. Don’ts for ASBA Investors: Do not apply if you are not eligible to participate in the Issue under the securities laws applicable to your

jurisdiction. Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB. Do not pay the amount payable on Application in cash, by money order or by postal order. Do not send your physical CAFs to the Lead Manager / Registrar to the Issue / Bankers to the Issue

(assuming that such Bankers to the Issue is not a SCSB) / to a branch of the SCSB which is not a Designated Branch of the SCSB / Bank; instead submit the same to a Designated Branch of the SCSB only.

Do not submit the GIR number instead of the PAN as the Application is liable to be rejected on this ground. Do not apply if the ASBA Account has been used for five applicants. Do not instruct respective banks to release the funds blocked under the ASBA process. In the event that you are a QIB or a Non - Institutional Investor, do not apply in the Issue through the non –

ASBA process. Grounds for Technical Rejection under ASBA process Applications under the ASBA process are liable to be rejected on the following grounds: Application on a Split Application Form.

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Application for Allotment of Rights Entitlements or additional shares which are in physical form. DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available with

the Registrar. Renouncee applying under the ASBA process. Sending CAF to a Lead Manager / the Registrar to the Issue/ the Registrar and Transfer Agent/ a Banker to

the Issue (assuming that such Banker to the Issue is not a SCSB)/ to a branch of a SCSB which is not a Designated Branch of the SCSB/ Bank.

Insufficient funds are available with the SCSB for blocking the amount. Funds in the bank account with the SCSB whose details are mentioned in the CAF having been frozen

pursuant to regulatory orders. Account holder not signing the CAF or declaration mentioned therein. CAFs that do not include the certification set out in the CAF to the effect that the subscriber does not have a

registered address (and is not otherwise located) in restricted jurisdictions and is authorized to acquire the rights and the securities in compliance with all applicable laws and regulations.

CAFs which have evidence of being executed in/ dispatched from restricted jurisdiction or executed by or for the benefit of a “U.S. Person” (as defined in Regulation S).

An Eligible Equity Shareholder, who is not complying with any or all of the conditions for being an ASBA Investor, applies under the ASBA process.

Submitting the GIR instead of the PAN. Depository account and bank details for ASBA Investors IT IS MANDATORY FOR ALL THE ELIGIBLE EQUITY SHAREHOLDERS WHO COMPLY WITH THE PARAMETERS FOR BEING AN ASBA INVESTOR TO RECEIVE THEIR EQUITY SHARES AND WARRANTS IN DEMATERIALISED FORM. ALL SUCH ELIGIBLE EQUITY SHAREHOLDERS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF. SUCH ELIGIBLE EQUITY SHAREHOLDERS MUST ENSURE THAT THE NAME GIVEN IN THE CAF IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE CAF. Such Eligible Equity Shareholders should note that on the basis of name of these Eligible Equity Shareholders, Depository Participant’s name and identification number and beneficiary account number provided by them in the CAF, the Registrar to the Issue will obtain from the Depository, the Demographic Details. Hence, Eligible Equity Shareholders should carefully fill in their Depository Account details in the CAF. These Demographic Details would be used for all correspondence with such Eligible Equity Shareholders including mailing of the letters intimating unblocking of bank account of the respective Eligible Equity Shareholder. The Demographic Details given by the Eligible Equity Shareholders in the CAF would not be used for any other purposes by the Registrar to the Issue. Hence, Eligible Equity Shareholders are advised to update their Demographic Details as provided to their Depository Participants. By signing the CAFs/ plain paper ASBA Applications, ASBA Investors would be deemed to have authorised the Depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records. Letters intimating Allotment and unblocking of funds would be mailed to the address of the ASBA Investors as per the Demographic Details received from the Depositories. The Registrar to the Issue will give instructions to the SCSBs for unblocking funds in the ASBA Account to the extent Equity Shares are not allotted to such shareholders. ASBA Investors may note that delivery of letters intimating unblocking of the funds may get delayed if the same once sent to the address obtained from the Depositories are returned undelivered. In such an event, the address and other details given by the Eligible Equity Shareholder in the CAF would be used only to ensure dispatch of letters intimating unblocking of the funds.

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Note that any such delay shall be at the sole risk of the ASBA Investors and none of the Company, the SCSBs or the Lead Manager shall be liable to compensate the ASBA Investors for any losses caused due to any such delay or liable to pay any interest for such delay. In case no corresponding record is available with the Depositories that matches three parameters, (a) names of the Eligible Equity Shareholders (including the order of names of joint holders), (b) the DP ID and (c) the beneficiary account number, then such Applications are liable to be rejected. PROCEDURE FOR APPLICATION BY NON ASBA PROCESS The CAF consists of four parts: Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares; Part B: Form for renunciation; Part C: Form for Application by Renouncee(s); and Part D: Form for request for Split Application Forms. The summary of options available to the Eligible Equity Shareholder who applies through the Non - ASBA process is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the enclosed CAF:

Option Available Action Required Accept whole or part of your Rights Entitlement without renouncing the balance.

Fill in and sign Part A (all joint holders must sign)

Accept your Rights Entitlement in full and apply for additional Equity Shares

Fill in and sign Part A including ‘Block III’ relating to the acceptance of Rights Entitlement and ‘Block IV’ relating to additional Equity Shares (all joint holders must sign)

Renounce your Rights Entitlement in full to one person, (Joint Renouncees are considered as one).

Fill in and sign Part B (all joint holders must sign) indicating the number of Equity Shares renounced and hand it over to the Renouncee. The Renouncees must fill in and sign Part C (all joint Renouncees must sign)

Accept a part of your Rights Entitlement and renounce the balance to one or more Renouncee(s)

Fill in and sign Part D (all joint holders must sign) requesting for Split Application Forms. Send the CAF to the Registrar to the Issue so as to reach them on or before the last date for the receipt of requests for Split Application Forms. Splitting will be permitted only once. On receipt of the Split Application Form take action as indicated below. For the Equity Shares you wish to accept, if any, fill in and sign Part A. For the Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Equity Shares renounced and hand it over to the Renouncees. Each of the Renouncees should fill in and sign Part C for the Equity Shares accepted by them.

Introduce a joint holder or change the sequence of joint holders

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

Please note that: Part A of the CAF must not be used by any person(s) other than the Eligible Equity Shareholders. If used,

this will render the Application invalid. Request for Split Application Form should be made for a minimum of one Equity Share or in multiples

thereof and one Split Application Form for the balance Equity Shares, if any.

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Request by the Eligible Equity Shareholder(s) for the Split Application Form should reach the Registrar to the Issue on or before [●].

Only the person, to whom the Draft Letter of Offer and / or Abridged Letter of Offer has been addressed to and not the Renouncee(s) shall be entitled to renounce and to apply for Split Application Forms. CAF once split cannot be split again.

Eligible Equity Shareholders may not renounce in favour of persons or entities in restricted jurisdictions including the United States or to or for the account or benefit of U.S. Person (as defined in Regulation S) who would otherwise be prohibited from being offered or subscribing for Equity Shares or Rights Entitlement under applicable securities law.

While applying for or renouncing their Rights Entitlement, joint Eligible Equity Shareholders must sign the CAF in the same order and as per specimen signatures recorded with our Company / the Depositories.

Split Application Forms(s) will be sent to the applicant(s) by post at the applicant’s risk. Acceptance of the Issue You may accept the offer to participate and apply for the Equity Shares offered, either in full or in part, by filling Part A of the CAFs and submit the same along with the application money payable to the collection branches of the Bankers to the Issue as mentioned on the reverse of the CAFs before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors or any committee thereof in this regard. Investors at centres not covered by the branches of Bankers to the Issue can send their CAFs together with the cheque drawn at par on a local bank at New Delhi / demand draft payable at New Delhi to the Registrar to the Issue by registered post. Such applications sent to anyone other than the Registrar to the Issue are liable to be rejected. For further details on the mode of payment, see “Offering Information - Payment options for Non ASBA Applicants” on page 140 of the Draft Letter of Offer. Additional Equity Shares You are eligible to apply for additional Equity Shares over and above your Rights Entitlement, provided that you are eligible to apply under applicable law and have applied for all the Equity Shares offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and allotment shall be made at the sole discretion of the Board, subject to sectoral caps and in consultation if necessary with the Designated Stock Exchange and in the manner prescribed under “Offering Information - Basis of Allotment” on page 146 of the Draft Letter of Offer. If you desire to apply for additional Equity Shares, please indicate your requirements in the place provided for additional Equity Shares in Part A of CAF. The Renouncees applying for all the Equity Shares renounced in their favor may also apply for additional Equity Shares by indicating the details of additional Equity Shares applied for in the place provided for additional Equity Shares in Part C of CAF. Renouncees applying for all the Equity Shares renounced in their favor may also apply for additional Equity Shares by indicating the details of additional Equity Shares applied for in the place provided for additional Equity Shares in Part C of CAF. Applications for additional Equity Shares by Non Resident Eligible Equity Shareholders will be subject to the permission of the RBI/ FIPB. Where the number of additional Equity Shares applied for exceeds the number available for Allotment, the Allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange. Renunciation the Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part in favour of any other person or persons. Your attention is drawn to the fact that we shall not Allot and/ or register and Equity Shares in favour of more than three persons (including joint holders), partnership firm(s) or their nominee(s), minors, HUF, any trust or society (unless the same is registered under the Societies Registration Act, 1860 or the Indian Trust Act, 1882 or any other applicable law relating to societies or trusts and is authorized under its constitution or bye-laws to hold equity shares, as the case may be). Additionally, existing Equity Shareholders may not renounce in favour of persons or entities in the United States, or to, or for the account or benefit of a “U.S. Person” (as defined in Regulation S), or who would otherwise be prohibited from being offered or subscribing for Equity Shares or Rights Entitlement under applicable securities laws.

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Pursuant to letters dated May 25, 2012 and August 24, 2012, the RBI has allowed the renunciation of Rights Entitlements by a (i) non resident Equity Shareholder to a resident investor, (ii) a non resident Equity Shareholder to a non resident investor and (iii) a resident Equity Shareholder to a non resident investor, on the floor of the Stock Exchanges. However, renunciation of Rights Entitlements by way of private arrangement by (i) non resident Equity Shareholder to a resident investor, (ii) a non resident Equity Shareholder to a non resident investor and (iii) a resident Equity Shareholder to a non resident investor, would require prior approval of the RBI. Applications not accompanied by the aforesaid approvals are liable to be rejected. Renunciations by OCBs By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies OCBs have been derecognized as an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, the existing Equity Shareholders who do not wish to subscribe to the Equity Shares being offered but wish to renounce the same in favour of Renouncee shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s). The RBI has however clarified in its circular, A.P. (DIR Series) Circular No. 44, dated December 8, 2003 that OCBs which are incorporated and are not under the adverse notice of the RBI are permitted to undertake fresh investments as incorporated non-resident entities in terms of Regulation 5(1) of RBI Notification No.20/ 2000-RB dated May 3, 2000 under FDI Scheme with the prior approval of Government if the investment is through Government Route and with the prior approval of RBI if the investment is through Automatic Route on case by case basis. Shareholders renouncing their rights in favour of OCBs may do so provided such Renouncee obtains a prior approval from the RBI. On submission of such approval to us at our Registered Office, the OCB shall receive the Abridged Letter of Offer and the CAF. Part ‘A’ of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used, this will render the application invalid. Submission of the CAF to the Banker to the Issue at its collecting branches specified on the reverse of the CAF with the form of renunciation (Part ‘B’ of the CAF) duly filled in shall be conclusive evidence for us of the person(s) applying for Equity Shares in Part ‘C’ of the CAF to receive Allotment of such Equity Shares. Part ‘A’ of the CAF must not be used by the Renouncee(s) as this will render the application invalid. Renouncee(s) will have no further right to renounce any Equity Shares in favour of any other person. The right of renunciation is subject to the express condition that our Board shall be entitled in its absolute discretion to reject the Application from the Renouncee(s) without assigning any reason thereof. Renouncee(s) shall not be entitled to further renounce the entitlement in favour of any other person. Procedure for renunciation To renounce the entire Rights Entitlement in favour of one Renouncee If you wish to renounce the Rights Entitlement indicated in Part A of the CAF, in whole, please complete Part B of the CAF. In case of joint holding, all joint holders must sign Part B of the CAF. The person in whose favour renunciation has been made should complete and sign Part C of the CAF. In case of Renouncees, all joint Renouncees must sign this part of the CAF. To renounce in part/ or renounce the whole to more than one person(s) If you wish to either accept the Rights Entitlement in part and renounce the balance or renounce the entire Rights Entitlement in favour of two or more Renouncees, the CAF must be first split into requisite number of forms. Please indicate your requirement of Split Application Forms in the space provided for this purpose in Part D of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date of receiving requests for Split Application Forms. On receipt of the required number of Split Application Forms from the Registrar to the Issue, the procedure as mentioned in paragraph above shall have to be followed. In case the signature of the Eligible Equity Shareholder(s), who has renounced the Equity Shares, does not agree with the specimen registered with our Company, the Application is liable to be rejected.

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Renouncee(s) The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part C of the CAF and submit the entire CAF to the Bankers to the Issue on or to any of the collection branches of the Bankers to the Issue as mentioned in the reverse of the CAF on or before the Issue Closing Date along with the application money in full. Further, Eligible Equity Shareholders renouncing their Rights Entitlement in whole or in part will not be eligible to participate through the ASBA process. Change and/ or introduction of additional holders If you wish to apply for Equity Shares jointly with any other person(s), not exceeding three persons, who is/ are not already a joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure, as stated above shall have to be followed. However, this right of renunciation is subject to the express condition that our Board of Directors shall be entitled in its absolute discretion to reject the Application from the Renouncee(s) without assigning any reason thereof. Offer to Non Resident Eligible Equity Shareholders / Applicants Applications received from NRs for Allotment shall be inter alia, subject to the conditions imposed from time to time by the RBI under FEMA in the matter of receipt and refund of Application Money, Allotment, issue of letters of Allotment/ Allotment advice/ share certificates, payment of interest, dividends, etc. General permission has been granted to any person resident outside India to purchase shares offered on a rights basis by an Indian company in terms of FEMA and Regulation 6 of notification No. FEMA 20/2000-RB dated 3 May 2000. Our Board of Directors may at its absolute discretion, agree to such terms and conditions as may be stipulated by RBI while approving the Allotment of Equity Shares, payment of dividend etc. to the Non Resident Eligible Equity Shareholders. The Equity Shares purchased on a rights basis by non-residents shall be subject to the same conditions including restrictions in regard to the repatriability as are applicable to the original equity shares against which equity shares are issued on a right basis. The Draft Letter of Offer and CAF shall only be dispatched to Non Resident Eligible Equity Shareholders with registered addresses in India. Availability of Duplicate CAF In case the original CAF is not received, or is misplaced by an applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the applicant who should furnish the registered folio number/ DP and Client ID number and his/ her full name and address to the Registrar to the Issue. Please note that the request for duplicate CAF should reach the Registrar to the Issue at least seven days prior to the Issue Closing Date. Please note that those who are making the Application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently. If the applicant violates any of these requirements, he/ she shall face the risk of rejection of both the Applications. Neither the Registrar to the Issue nor the Lead Manager or our Company, shall be responsible for postal delays or loss of duplicate CAFs in transit, if any. Application on Plain Paper An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to the Issue on plain paper, along with cheque / demand draft (after deducting banking and postal charges) payable at New Delhi which should be drawn in favour of “Shivalik Bimetal Controls Limited - Rights Issue - R” in case of resident shareholders and non-resident shareholders applying on non-repatriable basis and in favour of “Shivalik Bimetal Controls Limited - Rights Issue - NR” in case of non-resident shareholders applying on repatriable basis and send the same by registered post directly to the Registrar to the Issue so as to reach Registrar to the Issue on or before the Issue Closing Date. The envelope should be superscribed “Shivalik Bimetal Controls Limited - Rights Issue - R” in case of resident shareholders

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and Non-resident shareholders applying on non-repatriable basis, and “Shivalik Bimetal Controls Limited - Rights Issue - NR” in case of non-resident shareholders applying on repatriable basis. Applications on plain paper, duly signed by the applicants including joint holders, in the same order as per specimen recorded with our Company, must reach the office of the Registrar to the Issue before the Issue Closing Date and should contain the following particulars: Name of Company, being “Shivalik Bimetal Controls Limited”; Name and address of the Eligible Equity Shareholder including joint holders; Registered Folio Number/ DP and Client ID No.; Share certificate numbers and distinctive numbers of Equity Shares (if Equity Shares are held in physical

form); Number of Equity Shares held as on Record Date; Number of Equity Shares entitled as per Rights Entitlement; Number of Equity Shares applied for as per Rights Entitlement; Number of additional Equity Shares applied for, if any; Total number of Equity Shares applied for; Total amount paid at the rate of ` [●] per Equity Share; Particulars of cheque/ demand draft/ pay order; Savings/ current account number and name and address of the bank where the Eligible Equity Shareholder

will be depositing the refund order. In case of Equity Shares allotted in dematerialised form, the bank account details will be obtained from the information available with the Depositories;

Details of PAN, except in case of Applications on behalf of the Central or State Government and the officials appointed by the courts and by Investors residing in Sikkim, irrespective of the total value of the Equity Shares being applied for pursuant to the Issue;

Signature of Eligible Equity Shareholders to appear in the same sequence and order as they appear in the records of our Company;

If the payment is made by a draft purchased from NRE/FCNR/NRO account, as the case may be, an account debit certificate from the bank issuing the draft, confirming that the draft has been issued by debiting the NRE/FCNR/NRO account.

Additionally, by subscribing to any Equity Shares offered in the Issue, you are deemed to have represented, warranted, acknowledged and agreed to us, the Lead Manager, as follows:

“If we understand the offering to which this application relates is not, and under no circumstances is to be construed as, an offering of any Equity Shares or Warrants or Rights Entitlement for sale in the United States, or as a solicitation therein of an offer to buy any of the said Equity Shares or Warrants or Rights Entitlement in the United States. Accordingly, I/we understand this application should not be forwarded to or transmitted in or to the United States at any time. I/we understand that neither us, nor the Registrar, the Lead Manager or any other person acting on behalf of us will accept subscriptions from any person, or the agent of any person, who appears to be, or who we, the Registrar, the Lead Manager or any other person acting on behalf of us have reason to believe is, a resident of the United States or “U.S. Person” (as defined in Regulation S) or is ineligible to participate in the Issue under the securities laws of their jurisdiction. I/We will not offer, sell or otherwise transfer any of the Equity Shares or Warrants which may be acquired by us in any jurisdiction or under any circumstances in which such offer or sale is not authorized or to any person to whom it is unlawful to make such offer, sale or invitation except under circumstances that will result in compliance with any applicable laws or regulations. We satisfy, and each account for which we are acting satisfies, all suitability standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of our residence. I/We (i) am/are, and the person, if any, for whose account I/we am/are acquiring such Rights Entitlement and/or the Equity Shares or Warrants is/are, outside the United States, (ii) am/are not a “U.S. Person” (as defined in Regulation S), and (iii) is/are acquiring the Rights Entitlement and/or the Equity Shares or Warrants in an offshore transaction meeting the requirements of Regulation S.

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I/We acknowledge that we, the Lead Manager, their affiliates and others will rely upon the truth and accuracy of the foregoing representations and agreements.” Please note that those who are making the Application otherwise than on original CAF shall not be entitled to renounce their rights and should not utilize the original CAF for any purpose including renunciation even if it is received subsequently. If an applicant violates any of these requirements, he/ she shall face the risk of rejection of both the Applications. Our Company will refund such Application Money to such applicant without any interest thereon. Last date of application The last date for submission of the duly filled in CAF or the plain paper Application is [●]. Our Board or any committee thereof will have the right to extend the said date for such period as it may determine from time to time but not exceeding 30 (thirty) days from the Issue Opening Date. If the CAF, or the plain paper Application together with the amount payable is not received by the Bankers to the Issue / Registrar to the Issue, on or before the close of banking hours on the aforesaid last date or such date as may be extended by our Board or any committee of our Board, the offer contained in the Draft Letter of Offer shall be deemed to have been declined and our Board or any committee of our Board shall be at liberty to dispose of the Equity Shares hereby offered, as provided under the section titled “Offering Information - Basis of Allotment’ on page 146 of the Draft Letter of Offer. Payment options for Non - ASBA Applicants Mode of payment for Resident Eligible Equity Shareholders / Applicants Non - ASBA Applicants who are resident in centers with the bank collection centres shall draw cheques/

drafts accompanying the CAF, crossed account payee only and marked “Shivalik Bimetal Controls Limited - Rights Issue - R”.

Resident Non - ASBA Applicants residing at places other than places where the bank collection centres have been opened by our Company for collecting Applications, are requested to send their Applications together with Demand Draft / Pay Order payable at New Delhi, crossed account payee only and marked “Shivalik Bimetal Controls Limited - Rights Issue - R” directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. Our Company or the Registrar to the Issue or the Lead Manager will not be responsible for postal delays or loss of Applications in transit, if any.

Mode of payment for Non - Resident Eligible Equity Shareholders/ Applicants Non Resident Non - ASBA Applicants applying on a non-repatriation basis should send their completed CAF by registered post / speed post to the Registrar to the Issue, along with demand drafts net of bank and postal charges, payable at New Delhi in favour of the Bankers to the Issue, crossed account payee only and marked “Shivalik Bimetal Controls Limited - Rights Issue - R” or “Shivalik Bimetal Controls Limited - Rights Issue - NR”, as the case may be, so that the same are received on or before Issue Closing Date in any of the following manner: Application with repatriation benefits By Indian Rupee drafts purchased from abroad and payable at New Delhi or funds remitted from abroad

(submitted along with Foreign Inward Remittance Certificate); or By cheque / draft on a Non Resident External Account (NRE) or FCNR Account maintained in India; or By Rupee draft purchased by debit to NRE / FCNR Account maintained elsewhere in India and payable at

New Delhi; or FIIs registered with SEBI must remit funds from special non resident rupee deposit account. Non Resident investors applying with repatriation benefits should draw crossed account payee cheques/

drafts in favour of the Bankers to the Issue and marked “Shivalik Bimetal Controls Limited - Rights Issue - NR” payable at New Delhi for the full Application Money.

In the case of NRIs who remit their application money from funds held in FCNR / NRE Accounts, refunds and other disbursements, if any shall be credited to such account, details of which should be furnished in the appropriate columns in the CAF. In the case of NRIs who remit their application money through Indian Rupee Drafts from abroad, refunds and other disbursements, if any will be made in U.S. Dollars at the rate of exchange prevailing at such time subject to the permission of RBI. Our Company will not be liable for

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any loss on account of exchange rate fluctuation for converting the Rupee amount into U.S. Dollar or for collection charges charged by the applicant’s bankers.

Application without repatriation benefits As far as Non Residents holding shares on non-repatriation basis is concerned, in addition to the modes

specified above, payment may also be made by way of cheque drawn on Non Resident (Ordinary) Account maintained in India or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at New Delhi. In such cases, the Allotment of Equity Shares will be on non repatriation basis.

All cheques/ demand drafts submitted by non-residents applying on a non-repatriation basis should be drawn in favour of the Bankers to the Issue and marked “Shivalik Bimetal Controls Limited - Rights Issue - R” payable at New Delhi and must be crossed ‘account payee only’ for the full Application Money. The CAF duly completed together with the amount payable on Application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

Applicants may note that where payment is made by drafts purchased from NRE / FCNR / NRO accounts as the case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/ FCNR/ NRO account should be enclosed with the CAF. Otherwise the Application shall be considered incomplete and is liable to be rejected.

New demat account shall be opened for holders who have had a change in status from resident Indian to NRI.

Note: In case where repatriation benefit is available, interest, dividend, sales proceeds derived from then

investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to IT Act. In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity

Shares cannot be remitted outside India. The CAF duly completed together with the amount payable on Application must be deposited with the

Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.

In case of an Application received from Non Residents, Allotment, refunds and other distribution, if any, will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such Allotment, remittance and subject to necessary approvals. General instructions for Non - ASBA Applicants (a) Please read the instructions printed on the enclosed CAF carefully. (b) Application should be made on the printed CAF, provided by our Company or a plain paper Application and

should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/ or which are not completed in conformity with the terms of the Draft Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the names of all the applicants, details of occupation, address, father’s/ husband’s name must be filled in block letters.

(c) The CAF together with cheque/ demand draft should be sent to the Bankers to the Issue / Collecting Bank or to the Registrar to the Issue, and not to our Company, the Lead Manager. Resident applicants residing at places other than cities where the branches of the Bankers to the Issue have been authorized by our Company for collecting Applications, will have to make payment by crossed account payee cheques or demand drafts / pay orders payable at New Delhi and marked “Shivalik Bimetal Controls Limited - Rights Issue” and send their CAFs to the Registrar to the Issue by registered post/ speed post. If any portion of the CAF is/ are detached or separated, such Application is liable to be rejected.

(d) Each of the applicants should mention his/ her PAN allotted under the IT Act along with the Application for the purpose of verification of the number. Except in case of Applications on behalf of the Central or State Government and the officials appointed by the courts and by Investors residing in Sikkim, CAFs without the PAN details will be considered incomplete and are liable to be rejected.

(e) Investors holding Equity Shares in physical form, are advised to provide information as to their savings/ current account number, the nine digit MICR number and the name of the Company, branch with whom

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such account is held in the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees. Applications not containing such details are liable to be rejected.

(f) All payment should be made by cheques/ demand draft only. Application through the ASBA process as mentioned above is acceptable. Cash payment is not acceptable. In case payment is effected in contravention of this, the Application may be deemed invalid and the Application Money will be refunded and no interest will be paid thereon.

(g) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Eligible Equity Shareholders must sign the CAF or the plain paper Application as per the specimen signature recorded with our Company.

(h) In case of an Application under a power of attorney or by a body corporate or by a society, a certified true copy of the relevant power of attorney or relevant resolution or authority to the signatory to make the relevant investment under the Issue and to sign the Application and a certified true copy of the memorandum and articles of association and/ or bye-laws of such body corporate or society must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closing Date, then the Application is liable to be rejected.

(i) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with our Company. Further, in case of joint applicants who are Renouncees, the number of applicants should not exceed three. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant.

(j) Application(s) received from Non Residents/ NRIs, or persons of Indian origin residing abroad for Allotment of Equity Shares shall, inter alia, be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund of Application Money, Allotment of Equity Shares, subsequent issue and Allotment of Equity Shares, interest, dispatch of share certificates, etc. In case a Non Resident Eligible Equity Shareholder has specific approval from the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF.

(k) All communication in connection with Application for the Equity Shares, including any change in address of the Eligible Equity Shareholders should be addressed to the Registrar to the Issue prior to the Allotment Date quoting the name of the first/ sole applicant Eligible Equity Shareholder, folio numbers and CAF number. Please note that any intimation for change of address of Eligible Equity Shareholders, after the Allotment Date, should be sent to the Registrar and Share Transfer Agent, in the case of Equity Shares held in physical form and to the respective Depository Participant, in case of Equity Shares held in dematerialised form.

(l) Split Application Forms cannot be re-split. (m) Only the person or persons to whom Equity Shares have been offered and not Renouncee(s) shall be entitled

to obtain Split Application Forms. (n) Applicants must write their CAF number at the back of the cheque/ demand draft. (o) A separate cheque/ demand draft must accompany each CAF. Outstation cheques/ demand drafts or post-

dated cheques and postal/ money orders will not be accepted and Applications accompanied by such cheques/ demand drafts/ money orders or postal orders will be rejected. The Registrar will not accept payment against Application if made in cash. (For payment against Application in cash please refer point (f) above).

(p) No receipt will be issued for Application Money received. The Bankers to the Issue/ Collecting Bank/ Registrar to the Issue will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF.

(q) Our Company shall not allot and/ or register any Equity Shares in favour of any person situated or subject to any jurisdiction where the offering in terms of the Draft Letter of Offer could be illegal or requires compliance with applicable securities laws.

(r) The distribution of the Draft Letter of Offer and issue of Equity Shares under the Issue and Rights Entitlements to persons in certain jurisdictions outside India may be restricted by legal requirements in those jurisdictions. Persons in the United States and such other jurisdictions are instructed to disregard the Draft Letter of Offer and not to attempt to subscribe for Rights Issue Equity Shares.

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Do’s for non-ASBA Investors: (a) Check if you are eligible to apply i.e. you are an Eligible Equity Shareholder on the Record Date; (b) Read all the instructions carefully and ensure that the cheque/ draft option is selected in part A of the CAF

and necessary details are filled in; (c) In the event you hold Equity Shares in dematerialised form, ensure that the details about your Depository

Participant and beneficiary account are correct and the beneficiary account is activated as the Equity Shares will be allotted in the dematerialised form only;

(d) Ensure that your Indian address is available to our Company and the Registrar and Transfer Agent, in case you hold Equity Shares in physical form or the depository participant, in case you hold Equity Shares in dematerialised form;

(e) Ensure that the value of the cheque/ draft submitted by you is equal to the (number of Equity Shares applied for) X (Issue Price of Equity Shares, as the case may be) before submission of the CAF;

(f) Ensure that you receive an acknowledgement from the collection centres of the collection bank for your submission of the CAF in physical form;

(g) Ensure that you mention your PAN allotted under the IT Act with the CAF, except for Applications on behalf of the Central and State Governments, residents of Sikkim and officials appointed by the courts;

(h) Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary account is held with the Depository Participant. In case the CAF is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the CAF; and

(i) Ensure that the Demographic Details are updated, true and correct, in all respects. Dont’s for non-ASBA Investors: (a) Do not apply through the non-ASBA process if you are a QIB or a Non – Institutional Investor; (b) Do not apply on duplicate CAF after you have submitted a CAF to a collection centre of the Bankers to the

Issue; (c) Do not pay the amount payable on Application in cash, by money order or by postal order; (d) Do not submit the GIR number instead of the PAN as the Application is liable to be rejected on this ground; (e) Do not submit an Application accompanied with stockinvest; or (f) Do not apply if you are not eligible to participate in the Issue under the securities laws applicable to your

jurisdiction. Grounds for Technical Rejections for non-ASBA Investors Investors are advised to note that Applications are liable to be rejected on technical grounds, including the following: Amount paid does not tally with the Application Money payable; Bank account details (for refunds) are not given and the same are not available with the Depository

Participant (in the case of Equity Shares held in dematerialised form) or the Registrar and Transfer Agent (in the case of Equity Shares held in physical form);

Age of the first applicant not given (in case of Renouncees); Except in case of Applications on behalf of the Central or State Government and the officials appointed by

the courts and by Investors residing in Sikkim, PAN details not given; PAN in CAF not matching the PAN in the DP ID; In case of CAF under power of attorney or by limited companies, corporate, trust, etc., relevant documents

are not submitted; If the signature of the existing shareholder does not match with the one given on the CAF and for

Renouncees if the signature does not match with the records available with their depositories; If the applicant desires to have Equity Shares in electronic form, but the CAF does not have the applicant’s

depository account details; CAF is not submitted by the applicants within the time prescribed as per the CAF and the Draft Letter of

Offer; CAF not duly signed by the sole/ joint applicants; CAF by OCBs unless accompanied by specific/general approval from the RBI permitting such OCBs to

invest in the Issue; CAF accompanied by stockinvest/ outstation cheques/ post – dated cheques/ outstation money orders/ postal

orders/ outstation demand drafts;

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CAFs that do not include the certifications set out in the CAF to the effect that, among other thing, the subscriber is not located in restricted jurisdictions and is authorized to acquire the Rights Entitlements and Equity Shares under the Issue in compliance with all applicable laws and regulations;

CAFs which have evidence of being executed in/dispatched from restricted jurisdictions; In case no corresponding record is available with the Depositories that matches three parameters, namely,

names of the applicants (including the order of names of joint holders), the DP ID and the beneficiary’s identity;

CAFs by ineligible Non Residents (including on account of restriction or prohibition under applicable local laws) and where last available address in India has not been provided;

Multiple Applications, including where an applicant submits a CAF and a plain paper Application; and Duplicate Applications; In case the GIR number is submitted instead of the PAN; and Applications by Renouncee(s) who are persons not competent to contract under the Indian Contract Act,

1872, including minors. Please read the Draft Letter of Offer and the instructions contained therein and in the CAF carefully before filling in the CAF. The instructions contained in the CAF are an integral part of the Draft Letter of Offer and must be carefully followed. The CAF is liable to be rejected for any non-compliance of the provisions contained in the Draft Letter of Offer or the CAF. Option to receive Equity Shares in Dematerialised Form Except for ASBA Applicants, Investors shall be Allotted Equity Shares in dematerialised (electronic) form at the option of the Investor. Our Company, along with the Registrar and Transfer Agent, has signed tripartite agreements dated June 20, 2001 and June 07, 2002 entered into with NSDL and CDSL, respectively, which enables the Investors to hold and trade in securities in dematerialised form, instead of holding the securities in the form of physical certificates. Our Company has appointed MAS Services Limited as the Registrar to the Issue, which has connectivity with both Depositories, and can therefore, credit the Equity Shares Allotted in dematerialised form. In the Issue, Allottees who have opted for Equity Shares in dematerialised form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a Depository Participant. Investors will have to give the relevant particulars for this purpose in the appropriate place in the CAF or the plain paper application, as the case may be. Applications, which do not accurately contain this information, will receive securities in physical form. No separate Applications for securities in physical and/ or dematerialised form should be made. If such Applications are made, the Application for physical securities will be treated as multiple Applications and is liable to be rejected. In case of partial Allotment, Allotment will be done in demat option for the shares sought in demat and balance, if any, may be allotted in physical shares. PLEASE NOTE THAT IN ALL CASES WHERE ALLOTMENT OF EQUITY SHARES IS MADE IN DEMAT FORM, WARRANTS WILL ALSO BE ALLOTTED IN DEMAT FORM ONLY AND IN CASES WHERE ALLOTMEN IS MADE IN PHYSICAL FORM, WARRANTS WILL ALSO BE ALLOTTED IN PHYSICAL FORM ONLY. INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES AND / OR WARRANTS CAN BE TRADED ON THE STOCK EXCHANGE ONLY IN DEMATERIALIZED FORM. The procedure for availing the facility for Allotment of Equity Shares in the Issue in the electronic form is as under: Open a beneficiary account with any depository participant (care should be taken that the beneficiary

account should carry the name of the holder in the same manner as is registered in our records. In the case of joint holding, the beneficiary account should be opened carrying the names of the holders in the same order as registered in our records). In case of Investors having various folios with different joint holders, the Investors will have to open separate accounts for such holdings. Those Equity Shareholders who have already opened such beneficiary account(s) need not adhere to this step.

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For Equity Shareholders already holding Equity Shares in dematerialized form as on the Record Date, the beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Equity Shares by way of credit to such account, the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that the Allotment of Equity Shares arising out of the Issue may be made in dematerialized form even if the original Equity Shares are not dematerialized. Nonetheless, it should be ensured that the depository account is in the name(s) of the Equity Shareholders and the names are in the same order as in our records.

The responsibility for correctness of information (including Investor’s age and other details) filled in the CAF vis-à-vis such information with the Investor’s depository participant, would rest with the Investor. Investors should ensure that the names of the Investors and the order in which they appear in CAF should be the same as registered with the Investor’s depository participant. If incomplete / incorrect beneficiary account details are given in the CAF, the Investor will get Equity Shares in physical form. The Equity Shares allotted to applicants opting for issue in dematerialized form, would be directly credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s depository participant will provide to the applicant the confirmation of the credit of such Equity Shares to the applicant’s depository account. Renouncees will also have to provide the necessary details about their beneficiary account for Allotment of Equity Shares in the Issue. In case these details are incomplete or incorrect, the application is liable to be rejected. Payment of refunds to Non - ASBA Applicants Our Company will issue and dispatch refund orders within a period of 15 days from the Issue Closing Date. If such money is not repaid within the stipulated time period, our Company shall pay that money with interest at the rate of 15% per annum for the delayed period at rates prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act. The payment of refund to Non - ASBA Applicants, if any, would be done through any of the following modes: 1. NECS - Payment of refund would be done through NECS for Investors having an account at any of the

centres where such facility has been made available. This mode of payment of refunds would be subject to availability of complete bank account details including the MICR code as appearing on a cheque leaf, from the Depositories/ the records of the Registrar and Transfer Agent. The payment of refunds is mandatory for Investors having a bank account at any centre where NECS facility has been made available by the RBI (subject to availability of all information for crediting the refund through NECS), except where the Investor, being eligible, opts to receive refund through NEFT, direct credit or RTGS.

2. National Electronic Fund Transfer (“NEFT”) - Payment of refund shall be undertaken through NEFT wherever the Investor’s bank has been assigned the Indian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character Recognition (MICR), if any, available to that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the Investors have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the Investors through this method.

3. Direct Credit - Investors having bank accounts with the Refund Banker(s), in this case being, [●] shall be eligible to receive refunds through direct credit. Charges, if any, levied by the Refund Bank(s) for the same would be borne by our Company.

4. RTGS - If the refund amount exceeds ` 2 lakhs, the Investors have the option to receive refund through RTGS. Such eligible Investors who indicate their preference to receive refund through RTGS are required to provide the IFSC code in the CAF. In the event the same is not provided, refund shall be made through NECS or any other eligible mode. Charges, if any, levied by the refund bank(s) for the same would be borne by the Company. Charges, if any, levied by the Investor’s bank receiving the credit would be borne by the Investor.

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5. For all other Investors, including those who have not updated their bank particulars with the MICR code, the refund orders will be dispatched through Speed Post/ Registered Post. Such refunds will be made by cheques, pay orders or demand drafts drawn and will be payable at par.

6. In case of any category of Investors specified by SEBI, crediting of refunds to the Investors in any other electronic manner permissible under the banking laws of India for the time being in force which is permitted by SEBI from time to time.

Printing of Bank Particulars on Refund Orders As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the Investor’s bank account are mandatorily required to be given for printing on the refund orders. Bank account particulars, where available, will be printed on the refund orders/refund warrants which can then be deposited only in the account specified. We will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud. Basis of Allotment Subject to the provisions contained in the Draft Letter of Offer, the Articles of Association and the approval of the Designated Stock Exchange, the Board will proceed to allot the Equity Shares in the following order of priority: (a) Full Allotment to those Equity Shareholders who have applied for their Rights Entitlement either in full or in

part and also to the Renouncee(s) who has / have applied for Equity Shares renounced in their favour, in full or in part.

(b) Allotment pertaining to fractional entitlements in case of any shareholding other than in multiples of [●]. Investors whose fractional entitlements are being ignored would be given preference in allotment of one additional Equity Share. The Allotment of such Equity Shares will be at the sole discretion of the Board of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and not preferential Allotment.

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

(d) Allotment to Renouncees who having applied for all the Equity Shares renounced in their favour, have applied for additional Equity Shares provided there is surplus available after making full Allotment under (a), (b) and (c) above. The Allotment of such Equity Shares will be at the sole discretion of the Board of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and not preferential Allotment.

(e) Allotment to any other person as our Board may, in its absolute discretion deem fit provided there is surplus available after making Allotment under (a), (b), (c) and (d) above, and the decision of the Board in this regard shall be final and binding.

In the event of oversubscription, Allotment will be made within the overall size of the Issue. For each equity share offered and allotted under the Issue, the allottee will receive one Detachable Warrant convertible into one equity share of our Company upon exercise. Intention and extent of participation by the Promoters and the members of the Promoter Group in the Issue Mr. Narinder Singh Ghumman and Mr. Satinder Jeet Singh Sandhu, Promoters of our Company, have confirmed, on behalf of the Promoter Group, vide their letter dated January 12, 2013 that they intend to subscribe to the full extent of their Rights Entitlement in the Issue, in compliance with regulation 10(4) of the SEBI Takeover Regulations. Mr. Narinder Singh Ghumman and Mr. Satinder Jeet Singh Sandhu, Promoters of our Company, on their behalf and on behalf of the Promoter Group, have further confirmed vide their letter dated January 12, 2013 that, they

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intend to (i) subscribe for additional Equity Shares and (ii) subscribe for unsubscribed portion in the Issue, if any. Such subscription to additional Equity Shares and the unsubscribed portion, if any, to be made by the Promoter Group, shall be in accordance with regulation 10(4) of the SEBI Takeover Regulations. Further, such subscription shall not result in breach of the minimum public shareholding of 25%, as stipulated in the Clause 40A of the Listing Agreement. Letter of Allotment / Allotment Advice / Share Certificate / Demat Credit / Refund Order We will issue and dispatch Allotment advice / share certificates / demat credit and / or letters of regret along with refund order or credit the allotted Equity Shares to the respective beneficiary accounts, if any, within a period of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day we become liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the refusal by the Stock Exchange(s), whichever is earlier) we and every Director who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to pay the money with interest as prescribed under Section 73 of the Companies Act. Investors residing at centers where clearing houses are managed by the RBI will get refunds through National Electronic Clearing Service (“NECS”) except where Investors have not provided the details required to send electronic refunds. In case of those Investors who have opted to receive their Rights Entitlement in dematerialized form using electronic credit under the depository system, advice regarding their credit of the Equity Shares shall be given separately. Investors to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit of refund within 15 days of the Issue Closing Date. In case of those Investors who have opted to receive their Rights Entitlement in physical form and we issue letter of allotment, the corresponding share certificates will be kept ready within three months from the date of Allotment thereof or such extended time as may be approved by the Company Law Board under Section 113 of the Companies Act or other applicable provisions, if any. Investors are requested to preserve such letters of allotment, which would be exchanged later for the share certificates. The letter of allotment / refund order would be sent by registered post / speed post to the sole / first Investor’s registered address in India or the Indian address provided by the Equity Shareholders from time to time. Such refund orders would be payable at par at all places where the applications were originally accepted. The same would be marked ‘Account Payee only’ and would be drawn in favour of the sole / first Investor. Adequate funds would be made available to the Registrar to the Issue for this purpose. Disposal of Application and Application Money The Bankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF. Please note that no such acknowledgment will be issued by our Company. In case an Application is rejected in full, the whole of the Application Money received will be refunded. Wherever an Application is rejected in part, the balance of Application Money, if any, after adjusting any money due on Equity Shares Allotted, will be refunded to the applicant within 15 days from the Issue Closing Date. In the event that there is a delay of making refunds beyond eight days after our Company becomes liable to make such refunds, i.e. on the expiry of 15 days from the Issue Closing Date, our Company shall pay interest for the delayed period at rates prescribed under sub-sections (2) and (2A) of section 73 of the Companies Act. For further instruction, please read the CAF carefully. Underwriting Our Company has not currently entered into any underwriting agreements. However, it may enter into such an agreement for the purpose of the Issue at an appropriate time and on such terms and conditions as it may deem fit. In the event our Company enters into such an arrangement, it shall be done prior to the filing of the Letter of Offer with the Designated Stock Exchange and the Letter of Offer will be updated to reflect the same.

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Impersonation As a matter of abundant caution, attention of the investors is specifically drawn to the provisions of Sub-section (1) of Section 68A of the Companies Act which is reproduced below: “Any person who (a) makes in a fictitious name an application to a Company for acquiring, or subscribing for, any shares

therein, or (b) otherwise induces a Company to allot, or register any transfer of shares therein to him, or any other

person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years”. Payment by Stockinvest In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003-04 dated 5 November 2003, the stockinvest scheme has been withdrawn with immediate effect. Hence, payment through stockinvest would not be accepted in the Issue. Investment by FIIs In accordance with the current regulations, the following restrictions are applicable for investment by FIIs: No single FII can hold more that 10% of our post-Issue paid-up share capital. In respect of an FII investing in the Equity Shares on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed 5% of our total paid-up share capital, in case such sub-account is a foreign corporate or an individual. Applications will not be accepted from FIIs in restricted jurisdictions. Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number CIR/CFD/DIL/1/2011 dated April 29, 2011, all applicants who are QIBs, Non-Institutional Investors or are applying in the Issue for Equity Shares for an amount exceeding ` 2 lakhs shall mandatorily make use of ASBA facility. Investment by NRIs Investments by NRIs are governed by the Portfolio Investment Scheme under Regulation 5(3)(i) of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. Applications will not be accepted from NRIs in restricted jurisdictions. Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number CIR/CFD/DIL/1/2011 dated April 29, 2011, all applicants who are QIBs, Non-Institutional Investors or are applying in the Issue for Equity Shares for an amount exceeding ` 2 lakhs shall mandatorily make use of ASBA facility. Procedure for Applications by Mutual Funds A separate application can be made in respect of each scheme of an Indian mutual fund registered with the SEBI and such applications shall not be treated as multiple applications. The applications made by asset management companies or custodians of a mutual fund should clearly indicate the name of the concerned scheme for which the application is being made. Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number CIR/CFD/DIL/1/2011 dated April 29, 2011, all applicants who are QIBs, Non-Institutional Investors or are applying in the Issue for Equity Shares for an amount exceeding ` 2 lakhs shall mandatorily make use of ASBA facility. Investment by QFIs In terms of circulars dated January 13, 2012, SEBI and RBI have permitted investment by QFIs in Indian equity issues, including in rights issues. A QFI can invest in the Issue through its depository participant with whom it has opened a demat account. No single QFI can hold more than five percent of paid up equity capital of the company at any point of time (includes investment made as a QFI and FDI). Further, aggregate shareholding of all QFIs shall not exceed ten percent of the paid up equity capital of the Company at any point of time.

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Applications will not be accepted from QFIs in restricted jurisdictions. QFI applicants which are QIBs, Non-Institutional Investors or whose application amount exceeds ` 2 lakhs can participate in the Issue only through the ASBA process. The Board of Directors declares that: (a) All monies received out of the Issue shall be transferred to a separate bank account referred to subsection (3)

of Section 73 of the Companies Act; (b) Details of all monies utilized out of the Issue shall be disclosed under an appropriate separate head in our

balance sheet indicating the purpose for which such monies have been utilised till the time any of the Issue Proceeds remained unutilised;

(c) Details of all unutilized monies out of the Issue, if any, shall be disclosed under an appropriate separate head in our balance sheet indicating the form in which such unutilized monies have been invested; and

(d) We may utilize the funds collected in the Issue only after finalisation of the Basis of Allotment. Our undertakings We undertake the following: 1. The complaints received in respect of the Issue shall be attended to by us expeditiously and satisfactorily. 2. All steps for completion of the necessary formalities for listing and commencement of trading at all Stock

Exchange where the Equity Shares are to be listed will be taken within 7 working days of finalisation of Basis of Allotment.

3. The funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be made available to the Registrar to the Issue by us.

4. Where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the Investor within 15 days of the Issue Closing Date, giving details of the banks where refunds shall be credited along with amount and expected date of electronic credit of refund.

5. The allotment of Equity Shares and dispatch of refund orders / share certificate and demat credit is completed within 15 days from the Issue Closing Date

6. The certificates of the securities / demat credit / refund orders to the non-resident Indians shall be dispatched within the specified time.

7. The Company agrees that it shall pay interest @ 15% p.a. if the allotment is not made and / or the refund orders are not dispatched to the investors within 15 days from the Issue Closure Date for the period of delay beyond 15 days.

8. No further issue of securities affecting equity capital of our Company shall be made till the securities issued/offered through the Draft Letter of Offer Issue are listed or till the application money are refunded on account of non-listing, under-subscription etc.

9. Adequate arrangements shall be made to collect all ASBA applications and to consider them similar to non-ASBA applications while finalising the Basis of Allotment.

10. At any given time there shall be only one denomination of Equity Shares. 11. We accept full responsibility for the accuracy of information given in the Draft Letter of Offer and confirm

that to the best of its knowledge and belief, there are no other facts the omission of which makes any statement made in the Draft Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertain such facts.

12. All information shall be made available by the Lead Manager and the Issuer to the Investors at large and no selective or additional information would be available for a section of the Investors in any manner whatsoever including at road shows, presentations, in research or sales reports etc.

13. We shall comply with such disclosure and accounting norms specified by SEBI from time to time. Minimum Subscription If we do not receive the minimum subscription of 90% in the Issue or if the Promoters and Promoter Group fails to subscribe for unsubscribed portion in the Issue after the Issue Closing Date or the subscription level falls below 90% after the Issue Closing Date on the account of cheques being returned unpaid or withdrawal of applications, we shall refund the entire subscription amount received within 15 days from the Issue Closing Date. If there is delay in the refund of the subscription amount by more than eight days after we become liable to pay the subscription amount (i.e., 15 days after the Issue Closing Date), we and every officer in default shall be

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jointly and severally liable to pay interest for the delayed period, as prescribed under sub-sections (2) and (2A) of Section 73 of the Companies Act. Important Please read the Draft Letter of Offer carefully before taking any action. The instructions contained in the

accompanying CAF are an integral part of the conditions of the Draft Letter of Offer and must be carefully followed; otherwise the Application is liable to be rejected.

It is to be specifically noted that the Issue of Equity Shares is subject to the risk factors mentioned in the

section titled “Risk Factors” on page 7 of the Draft Letter of Offer. All enquiries in connection with the Draft Letter of Offer, Letter of Offer or accompanying CAF and

requests for Split Application Forms must be addressed (quoting the Registered Folio Number/ DP and Client ID number, the CAF number and the name of the first Eligible Equity Shareholder as mentioned on the CAF and super-scribed “Shivalik Bimetal Controls Limited - Rights Issue” on the envelope) to the Registrar to the Issue at the following address:

MAS Services Limited SEBI Regn. No.: INR 000000049 T - 34, IInd Floor Okhla Industrial Area, Phase II New Delhi - 110 020 Tel.: +91 11 2638 7281 - 83 Fax: +91 11 2638 7384 E-mail: info@masserv.com Investor Grievance e-mail id: sblr@masserv.com Website: www.masserv.com Contact Person: Mr. N C Pal The Issue will be kept open for a minimum of 15 days unless extended, in which case it will be kept open for a maximum of 30 days.

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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 our Company or entered into more than two years before the date of the Draft Letter of Offer, which are or may be deemed material have been entered or are to be entered into by our Company. These contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered Office of the Company situated at 16-18, New Electronics Complex, Chambaghat, Dist. Solan, Himachal Pradesh - 173 213 from 10.00 AM to 02.00 p.m. from the date of the Draft Letter of Offer until the date of closure of the Rights Issue. A. Material Contracts 1. Issue Agreement dated January 14, 2013 entered between our Company and the Lead Manager 2. Agreement dated January 14, 2013 entered between our Company and the Registrar to the Issue 3. Escrow Agreement dated [●] between our Company, the Lead Manager, the Registrar to the Issue, and

Banker to the Issue. B. Documents available for inspection 1. Certificate of Incorporation of the Company dated June 18, 1984. 2. Memorandum and Articles of the Company. 3. Tripartite agreements dated June 20, 2001 and June 07, 2002 entered into with NSDL and CDSL

respectively. 4. Copy of the Resolution passed by the Directors in their meeting dated December 10, 2012 approving the

Issue. 5. Copy of the Resolution passed by the members in their Extra Ordinary General Meeting dated January 07,

2013 approving the Issue. 6. Consents of the Promoters, Directors, Lead Manager to the Issue, Legal Counsel, Registrar to the Issue,

Bankers to the Company, Statutory Auditors and Bankers to the Issue to include their names in the Draft Letter of Offer to act in their respective capacities.

7. Letter of Offer dated May 17, 1995 for the previous rights issue made by the Company. 8. Copy of resolution appointing the Managing Director and Whole time Directors and the copy of approval

from Central Government for payment of remuneration to the said Directors. 9. Shareholders Resolution passed at the Annual General Meeting held on September 26, 2012 appointing M/s

Malik S and Co., Chartered Accountants, as statutory auditors. 10. Annual Reports of the Company for the financial year ended March 31, 2012. 11. The Report of the Auditors dated January 07, 2013 in relation to the limited reviewed financial statements of

our Company as at and for the six months ended September 30, 2012 12. Statement of Tax Benefits dated January 11, 2013 received from the Auditors of our Company. 13. Due Diligence certificate dated January 14, 2013. 14. In-principle listing approval for this Issue dated [●] from BSE. 15. SEBI Observation letter no. [●] dated [●]. Any of the contracts or documents mentioned in the Draft Letter of Offer may be amended or modified at any time if so required in the interest of the Company or if required by the other parties, without reference to the Shareholders subject to compliance of the provisions contained in the Companies Act and other relevant statutes.

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DECLARATION

No statement made in the Draft Letter of Offer contravenes any of the provisions of the Companies Act, 1956 and the rules made thereunder. All the legal requirements connected with the said issue as also the regulations, instructions etc. issued by SEBI, Government of India, Reserve Bank of India and any other competent authority in this behalf, have been duly complied with. We further certify that all statements made in the Draft Letter of Offer are true and correct. On behalf of the Board of Directors of Shivalik Bimetal Controls Limited

Satinder Jeet Singh Sandhu Chairman and Whole Time Director

Narinder Singh Ghumman * Managing Director

Devinder Jeet Singh Sandhu Deputy Managing Director

Rohit Kapur * Independent, Non Executive Director

Nirmaljeet Singh Gill * Independent, Non Executive Director

Gurmeet Singh Gill * Independent, Non Executive Director

Kripal Singh Negi Chief Financial Officer

* Signed through power of attorney holder. Place: New Delhi Date: January 14, 2013