JMC PROJECTS (INDIA) LIMITED - CiteSeerX

JMC PROJECTS (INDIA) LIMITED(The Company was originally incorporated as "Civen Construction Private Limited" on June 5, 1986 under the Companies Act, 1956 withits registered office at Ahmedabad. Subsequently on December 10, 1987, the name was changed to Joshi & Modi Constructions PrivateLimited. The name was further changed to JMC Projects (India) Private Limited on January 21, 1994 and was subsequently convertedinto a Public Limited Company in the name of JMC Projects (India) Limited on February 4, 1994).

Registered & Corporate Office: A-104, Shapath-4, Opposite Karnavati Club, S.G.Road, Ahmedabad - 380 051, IndiaTel: +91-79-3001 1500 Fax: +91-79-3001 1600/1700 E-mail: [email protected]; Website: www.jmcprojects.com

(The Registered Office of the Company was shifted from People's Plaza Near Memnagar Fire Station, Navrangpura,Ahmedabad 380 009 to 4, Kuldip Society, Near Ishvar Bhuvan, Navrangpura, Ahmedabad - 380 009 w.e.f. May 9, 1988 and

subsequently to Level -11, JMC House, Ambawadi, Ahmedabad 380 006 w.e.f April 5, 2002 and to the present registeredoffice w.e.f .November 7, 2005).

LETTER OF OFFERISSUE OF 46,46,550 EQUITY SHARES OF RS. 10/- EACH AT A PREMIUM OF RS. 90/- PER EQUITY SHAREAGGREGATING RS. 4646.55 LAKHS TO THE EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OFTWO (2) EQUITY SHARES FOR EVERY FIVE (5) EQUITY SHARES HELD ON THE RECORD DATE i.e.SEPTEMBER 21, 2006 ("ISSUE"). THE ISSUE PRICE IS 10 TIMES THE FACE VALUE OF THE EQUITY SHARE.

GENERAL RISKS

Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in thisIssue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factorscarefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on theirown examination of the Issuer and the Issue including the risks involved. The securities have not been recommended orapproved by Securities and Exchange Board of India ("SEBI") nor does SEBI guarantee the accuracy or adequacy of thisdocument. Investors are advised to refer to "Risk Factors" on page vi of this Letter of Offer before making aninvestment in this Issue.

ISSUER’S ABSOLUTE RESPONSIBILITY

The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Letter of Offer containsall information with regard to the Issuer and the Issue, which is material in the context of this Issue, that the informationcontained in this Letter of Offer is true and correct in all material respects and is not misleading in any material respect,that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of whichmakes this document as a whole or any of such information or the expression of any such opinions or intentions misleadingin any material respect.

LISTING

The existing Equity Shares of the Company are listed on Bombay Stock Exchange Limited ("BSE"). The Company hasreceived the "in-principle" approval from BSE for listing the Equity Shares arising from this Issue vide letterno. DCS/SJK/SM/NS/JA/06 dated August 29, 2006.

Letter of Offer for Equity Shareholders of the Company only

ISSUE OPENS ON LAST DATE FOR RECEIVING ISSUE CLOSES ONREQUESTS FOR SPLIT FORMS

September 30, 2006 October 16, 2006 October 30, 2006

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

Inga Advisors Private LimitedA-404, Neelam Centre,Hind Cycle Road, Worli,Mumbai - 400 030Tel: +91-22-2498 2937, 2498 2919, 2498 2954Fax: +91-22-2498 2956Email: [email protected]: www.ingaadvisors.com

Intime Spectrum Registry LimitedC-13, Pannalal Silk Mills Compound,LBS Marg, Bhandup (West)Mumbai - 400 078.Tel: +91-22-2596 0320Fax: +91-22-2596 0329E-mail: [email protected]: www.intimespectrum.com

C M Y B

TABLE OF CONTENTS

GLOSSARY OF TERMS AND ABBREVIATIONS ...................................................................................... ii

RISK FACTORS ........................................................................................................................................... vi

SELECTED FINANCIAL INFORMATION ................................................................................................... 1

GENERAL INFORMATION .......................................................................................................................... 2

CAPITAL STRUCTURE ............................................................................................................................... 5

OBJECTS OF THE ISSUE .......................................................................................................................... 11

BASIS FOR ISSUE PRICE ......................................................................................................................... 19

INDUSTRY OVERVIEW............................................................................................................................... 21

BUSINESS OVERVIEW ............................................................................................................................... 26

HISTORY AND CORPORATE STRUCTURE ............................................................................................ 28

PROMOTERS ............................................................................................................................................... 30

MANAGEMENT ............................................................................................................................................ 33

FINANCIAL STATEMENTS ......................................................................................................................... 46

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATION ........................................................................................................................ 99

UNAUDITED WORKING RESULTS ........................................................................................................... 110

OUTSTANDING LITIGATIONS AND DEFAULTS ...................................................................................... 111

GOVERNMENT APPROVALS ..................................................................................................................... 178

STATUTORY AND OTHER INFORMATION .............................................................................................. 180

STOCK MARKET DATA .............................................................................................................................. 186

TERMS OF THE ISSUE .............................................................................................................................. 187

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ......................................................... 201

DECLARATION ............................................................................................................................................ 203

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GLOSSARY OF TERMS AND ABBREVIATIONS

Company 1JMC / Issuer JMC Projects (India) Limited

Issue related

Abridged Letter of Offer Abridged form of a Letter of Offer which discloses basic information laid down in Section IV of Chapter VI of the SEBI Guidelines which is sent to the Equity Shareholders along with CAF

Act The Companies Act, 1956 and amendments thereto

Articles Articles of Association of the Company

Board Board of Directors of JMC Projects (India) Limited

Board /Committee of Directors

Committee of the Board of Directors of JMC Projects (India) Limited authorized to take decisions on matters related to / incidental to this Issue

Depositories NSDL and CDSL

Designated Stock Exchange Bombay Stock Exchange Limited

DP Depository Participant

Director(s) Directors on Board of Directors of the Company

Equity share Equity shares of the company of Rs.10/- each

Equity Shareholders Means holder of Equity Shares

Issue or Rights Issue or Offer

Issue by the Company of 46,46,550 equity shares of Rs. 10/- each for cash at Rs. 100/- per equity share (including a premium of Rs. 90/- per equity share) on Rights basis to the existing Equity Shareholders of the Company in the ratio of Two (2) equity shares for every Five (5) equity shares held on September 21, 2006 i.e. Record Date aggregating to Rs. 4646.55 lakhs

Issue price Rs. 100/- per equity share

Issue Opening Date September 30, 2006

Issue Closing Date October 30, 2006

Lead Manager to the Issue Inga Advisors Private Limited

Letter of Offer / LOO/ Offer Document

The Letter of Offer which discloses information as laid down in Section III of Chapter VI of the SEBI Guidelines.The Equity Shareholders of the Company can request for a copy of Letter of Offer dated September 14, 2006 from the Registrar to the Issue

Memorandum Memorandum of Association of the Company

Record Date September 21, 2006

Registrars to the Issue Intime Spectrum Registry Limited

Rights Entitlement

The number of Equity Shares that an Equity Shareholder is entitled to under this Letter of Offer in proportion to his / her / its existing shareholding in the Company as on the Record Date

Security certificates Equity share certificates

SPA Share Purchase Agreement dated October 14, 2004 executed between the ‘Purchaser’ being ‘Kalpataru Power Transmission Limited, Kalpataru Energy Venture (Private) Limited and the ‘Sellers’ being Mr. I K Modi, Mr. Hemant Modi, Mr. Suhas Joshi, Mrs. Sonal Modi, Mrs. Suverna Modi, Mrs. Madhuri Joshi, Mrs. Maltiben Joshi, Ms Ami Modi, Ms Anar Modi, Minar Investments and Finance Private Limited and the Company

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Industry related

APDRP Accelerated Power Development and Reform Programme

BOT Build Operate and Transfer

BOOT Build Own Operate and Transfer

BRASS Measure of weight; one brass equals four tons

CAR Contractors All Risk

EPC Engineering, Procurement and Commissioning

MORTH Ministry of Road Transport and Highways

NH National Highway

NHAI National Highway Authority of India

NHDP National Highway Development Programme

Abbreviations

AGM Annual General Meeting

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

Anr. Another

BSE Bombay Stock Exchange Limited

BUTP Bombay Urban Transport Project

CDSL Central Depository Services (India) Limited

CAF Composite Application Form

CEO Chief Executive Officer

DD Demand Draft

GM General Meeting

EBIDTA Earnings before Interest, Depreciation, Tax and Amortisation

EGM Extra-ordinary General Meeting

EPS Earnings Per Share

EOU Export Oriented Unit

FCNR Foreign Currency Non-Resident account

FDI Foreign Direct Investment

FEMA

Foreign Exchange Management Act, 2000 read with rules and regulations there under and amendments thereto

FIFO First In First Out

FII(s) Foreign Institutional Investors registered with SEBI under applicable laws

FIPB Foreign Investment Promotion Board

FY

Financial year being a period commencing on April 1st and ending on March 31st of the following year

GDP Gross Domestic Product

GIR Number General Index Registry Number

GoI Government of India

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HUF Hindu Undivided Family

IT/ITES Information Technology/ Information Technology Enabled Services

IT Act The Income Tax Act, 1961 and amendments thereto

JMQL/ JMC Mining JMC Mining and Quarries Limited

JV Joint Venture

Kms Kilometers

KPPL Kalpataru Properties Private Limited

KCPL Kalpataru Construction Private Limited

KPTL Kalpataru Power Transmission Limited

KV Kilo Volt

LC Letter of Credit

LIBOR London Interbank Offer Rate

LIC Life Insurance Corporation of India

MD Managing Director

MOU Memorandum of Understanding

MT Metric Ton

MUTP Mumbai Urban Transport Project

MW Mega Watt

NA Not Applicable

NAV Net Asset Value

NOC No Objection Certificate

NR Non-resident

NRI(s) Non-resident Indians

NRE Account Non Resident External account

NRO Account Non Resident Ordinary account

NSDL National Securities Depository Limited

NSE The National Stock Exchange of India Limited

OCB(s) Overseas Corporate Body(ies)

Ors. Others

PAC Persons Acting in Concert

P/E or P/E ratio Price-Earnings Ratio

p.a. Per annum

PAN Permanent Account Number

PAT Profit After Tax

PBDIT Profit Before Depreciation Interest and Tax

PBT Profit Before Tax

PGCIL Power Grid Corporation of India Limited

PSU Public Sector Undertaking

PWD Public Works Department

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R&D Research & Development

RBI The Reserve Bank of India

RONW Return on Networth

SEB State Electricity Board

SEBI Securities and Exchange Board of India

SEBI Guidelines/ SEBI (DIP)

SEBI (Disclosure & Investor Protection) Guidelines, 2000 as amended from time to time

SEBI (SAST) Securities and Exchange Board of India (Substantial Acquisitions of shares and Takeovers) Regulation, 1997 and subsequent amendments thereto

SPV Special Purpose Vehicle

Sq ft/ sq ft Square feet

SSI Small Scale Industry

TDS Tax Deducted at Source

UTI Unit Trust of India

vol Volume

w.e.f. With effect from

WPI Wholesale Price Index

In this Letter of Offer, all references to "Rs." refer to Rupees, the lawful currency of India. References to the singular also refer to the plural and one gender also refers to any other gender wherever applicable.

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RISK FACTORS

The investors should consider the following risk factors together with all other information included in this Letter

of Offer carefully, in evaluating the Company and its business before making any investment decision. Any

projections, forecasts and estimates contained herein are forward looking statements that involve risks and

uncertainties. Such statements use forward looking terminology like “may”, “believes”, “will”, “expect”,

“anticipate”, “estimate”, “plan” or other similar words. The Company’s actual results could differ from those

anticipated in these forward-looking statements as a result of certain factors including those, which are set forth

in the “Risk Factors”.

Market data used throughout this Letter of Offer was obtained from internal Company reports, data and industry

publications whose consents have not been sought. Industry publications database generally state that the

information contained in those publications has been obtained from sources believed to be reliable, but that their

accuracy and completeness and underlying assumptions are not guaranteed and their reliability cannot be

assured. Although, market data used in this Letter of Offer is reliable, it has not been independently verified.

Similarly, internal Company reports and data, while reliable, have not been verified by any independent source.

RISK FACTORS AND MANAGEMENT PERCEPTION

Note: Unless specified or quantified in the relevant risk factors below, the Issuer is not in a position to quantify financial or other implication of any risks mentioned herein under. The Issuer and the Lead Manager will keep the investors informed of any material changes till the listing and commencement of trading.

Litigations Against the Issuer Company: The Company/ its Directors/ Promoters / Group Companies /

Subsidiaries/ Ventures of the Promoters are defendants in certain legal proceedings, incidental to the

business and operations. These legal proceedings are pending at different levels of adjudication before

various courts and tribunals. Should any new development arise, such as a change in Indian law or rulings

by appellate courts or tribunals, the company would need to make provisions in its financial statements

which could adversely impact its business results. A brief of the outstanding litigations are as follows:

Litigations against JMC

I. Criminal Litigations

Against the Company

• A criminal litigation has been filed against the Issuer Company before the Judicial Magistrate, First Class,

Ahmedabad; vide Criminal Case No. 2678 of 1999 by the Government Labour Officer alleging violation of Section 3 of Child Labour (Prohibition and Regulation) Act, 1986 and rules framed there under at one of the JMC site. The Government Labour Officer has alleged that he found child workers on a JMC site. JMC has denied any violation of the said Act. An application has been filed on behalf of JMC dated 16.10.2003 seeking certain particulars, documents, on which the prosecution (complainant) seeks to rely, so that cross-examination could be done in respect thereof. The matter is pending at that stage as the said details are yet to be provided to JMC. The next hearing of the case is on 16/10/2006

Past Criminal Cases

• A criminal litigation has been filed against the Issuer Company before the Court of Additional Chief Metropolitan Magistrate; vide Criminal Case No. 900/98 by the Registrar of Companies, Ahmedabad alleging violation of Section 383(1A) of the Companies Act, 1956. The case states that despite the paid up capital of JMC being higher than Rs. 50 lakhs, JMC did not have a whole time Company Secretary. The Hon'ble Court,

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vide its order dated 13/12/1999, ordered a fine of Rs. 742 /- to JMC which was paid on the same day. The case now stands discharged

Against Directors of the Company

Mr. Ajay Munot

• Case No. 379 of 2003 has been filed by the Senior Inspector of Factories and Boilers, Sri Ganganagar against Mr. Ajay Munot before Civil Judge (J. D.) and Judicial Magistrate, First Class, Padampur, District Sri Ganganagar, Rajasthan, for alleged violation of sections 21 and 61 of the Factories Act, 1948 in view of the death of a workman due to alleged non-fencing of the conveyor belt in the factory premises of KPTL at Padampur, The said case is pending.

Mr. Hemant Modi

• Criminal Case No. 2678 of 1999 has been filed by Government Labour Commissioner against Mr. Hemant Modi for alleged violation of the provision of Child Labour (Prohibition and Regulation) Act, 1986 The next hearing of the case is on 16/10/2006

• Criminal Complaint case no. 270/2002 has been filed by Mr. Mantu alleging that cheque no. 457936 dated 13/10/2001 for an amount of Rs. 4,19,327 issued by JMC, has returned unpaid. It has been alleged by Mr. Mantu that JMC, pursuant to alleged receipt of purported notice in terms of section 138 of Negotiable Instruments Act, 1881, did not make good the said amount and hence Mr. Mantu has filed the compliant..The case shall be listed on 19.09.2006.

• A criminal litigation has been filed against the Issuer Company before the Court of Additional Chief Metropolitan Magistrate; vide Criminal Case No. 900/98 by the Assistant Registrar of Companies, Ahmedabad alleging violation of Section 383(1A) of the Companies Act, 1956. The case states that despite the paid up capital of JMC being higher than Rs. 50 lakhs, JMC did not have a whole time Company Secretary. The Hon'ble Court, vide its order dated 13/12/1999, ordered a fine of Rs. 742 /- to JMC which was paid on the same day. The case now stands discharged

II. A summary of the litigations in which the Company is involved is set out below:

By the Company Against the Company

Sr. Particulars Number

of cases

Amount

involved, where

quantifiable

(Rs. lakhs)

Number

of cases

Amount

involved, where

quantifiable

(Rs. lakhs)

1. Income Tax / Sales Tax cases 2 Nil Nil

2. Civil cases including money suits.

7 852.31 7 21.71

3 Criminal Cases Nil

2 4.20

4. Labour Matters

Nil 14 58.18

5. Arbitration

5 2243.49 Nil

6. Misc. / Notices Nil 22 73.11

7. Other Cases (Motor Accident Claims)

Nil 10 74.60

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Besides, there are litigations filed by the Issuer Company and notices against the Issuer Company, its

Directors, Promoters and Group Companies of Promoters which have been detailed under the section

Outstanding Litigations and Defaults on page 111 of this Letter of Offer.

Risks related to the Projects 1. Competition: The Company faces stiff competition from other existing players and this could result in the

erosion of margins enjoyed by them in their projects.

Management Perception: While this phenomenon is common to all businesses, the company, while participating in the tenders incorporates all factors relating to the macro and micro costing and sets a minimum tender price for the project, below which the company does not participate.

2. Time or cost overruns: Monetary penalties or liquidated damages incase of time or cost overruns or delay in execution of projects may affect the company’s profitability

Management Perception: The Company has been maintaining a track record of completing projects without levy of substantial liquidated damages. The cost overruns normally are covered sufficiently in majority of the projects as cost escalation is built-in, in the bid value quoted by the company for the projects.

3. Fixed Price Contracts: Any abnormal increase in the prices of raw materials in Fixed Price Contracts would

have an adverse effect on the profitability

Management Perception: The Company does a cost analysis of the project and accordingly the cost escalation based on its estimates is built-in the quotation. The effect of normal rise in prices of raw material has a very negligible effect on the profitability.

4. Monitoring the use of Issue proceeds: The aggregate fund requirements have not been appraised by any

bank or financial institution. The deployment of funds in various projects will be entirely at the discretion of the Company and as such no independent body will monitor the utilization of the Issue proceeds.

Management Perception: The Company enjoys credit limit sanctions from a consortium of banks which regularly monitor the overall performance of the Company. In addition to the above, the financial performance will also be regularly monitored by the audit committee.

5. Capital expenditure: While the company has identified certain machineries and equipments required for its existing and future projects, it is yet to crystallise the aggregate machinery requirements. Of the total budget of Rs. 4007 lakhs for capital expenditure, purchase orders for equipment worth Rs. 2492.39 has been placed while for the balance equipment has only been identified and not ordered. There may be a variation in this list of identified equipment.

Management Perception: The Company will choose from the balance identified equipment list as per the requirement at that point of time. In case a particular project has been completed and the equipments at that project site can be utilised for the new project, then such equipments may be shifted to the new project site and only the other required equipments will be purchased.

6. Tie up of working capital: The estimated net additional working capital requirement of the Company for the year 2006-07 is Rs. 8010 lakhs. Out of this, Rs. 2025 lakhs will be funded from the issue proceeds, Rs. 561 lakhs from proceeds of warrant conversion, Rs. 4909 lakhs through unutilised working capital facilities with banks and the balance through internal accruals. The funds to be received from conversion of warrants are not assured.

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Management Perception: The Company already has a sanction of working capital limit of Rs. 5960 lakhs from a consortium of banks. The Company is in process of getting the sanctions from the remaining consortium banks which will increase its working capital limit to Rs. 6500 lakhs. It will approach the banks for enhancement of the credit limits, whenever required. Given the Group profile and their overall performance, the company is confident of sourcing these requirements in a cost effective manner. The balance requirement if any will be met through internal accruals and debt.

Risks Internal to the Company

1. Size deterrent in bidding for large projects: The Company’s moderate size could be a deterrent in bidding for large contracts.

Management Perception: Accepting their position in the industry, the management has initiated several steps to strengthen its financial and operational position which in the years to come will elevate the company to a level wherein they will qualify for large projects. The company will opt for a joint venture route for those projects where they are unable to qualify on a stand alone basis.

2. High fund requirement: High capital expenditure coupled with the large working capital needs may affect

the profit margins.

3. Promoters’ interest in similar ventures: Mr. Hemant Modi and Mr. Suhas Joshi, Promoters of the Company, (individually or jointly) together with their relatives have interest in the following ventures which are authorized by its main objects clause to carry on a similar line of activities. This may result in a conflict of business interests among these ventures and the Company. There are certain business transactions with the mentioned companies/firms. Their interest in the companies is given below:

Name of the venture Nature of interest

JMC Infrastructure Limited Shareholding (97.20%)

SAI Consulting Engineers Private Limited Shareholding (100.00%)

JMC Consultants and Developers Private Limited Shareholding (100.00%)

JM Construction Shareholding (100.00%)

Management Perception: The Companies mentioned above facilitate the project execution capabilities of the Company. JMC subcontracts the projects to its associate companies / seeks project consultancy services at market rates. In future, as agreed under the SPA, these associate companies / firms will not undertake any competing activities with the Company and shall carry out only those activities which are beneficial to the Company with the consent of the Board of the Company.

4. Loss by other ventures of the promoters and promoter group companies: The following ventures of the promoters have incurred losses: a. J. M. Construction incurred a loss of Rs. 0.20 lakhs and Rs. 12.03 lakhs for the year ended March 31,

2006 and March 31, 2005. b. Kalpataru Construction Private Limited incurred a loss of Rs. 123.60 lakhs for the year ended March

31, 2005 c. Kalpataru Properties Private Limited (formerly known as Kalpataru Constructions Overseas Private

Limited) incurred a loss of Rs. 587.50 lakhs for the year ended March 31, 2003. Management Perception: J.M. Construction incurred losses as there were no business activities in the last two years. Kalpataru Construction Private Limited incurred loss mainly on account of the valuation of stock of certain trading stock of premises at the market value which was lower than the cost of the same as on March 31, 2005. Subsequently there was a significant change in the market trend and the management is of the opinion that the said loss would be recoverable in the subsequent period. The losses incurred by Kalpataru Properties Private Limited were due to the reduction in net market realizable value of unsold stock

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as compared to cost incurred on account of recessionary trend. Subsequently the Company has earned a profit of Rs. 375.81 lakhs in FY 2004 and Rs. 857.97 lakhs in FY 2005.

5. Shortfall in the promised performance: There has been a shortfall in the financial performance of the Company for the year 1995 vis-à-vis projections made in their prospectus dated September 2, 1994. The details are as under:

Rs. lakhs

Year ending

March 31

1995 1996

1997

Promised Actual Variation Promised Actual Variation Promised Actual Variation

A B ( B - A ) A B ( B - A ) A B ( B - A )

Income 1500.00 1372.63 -127.37 1750.00 3005.72 1255.72 2100.00 4910.07 2810.07

PBDIT 213.04 195.52 -17.52 285.01 485.61 200.60 344.86 738.34 393.48

Profit Before Tax 168.11 143.04 -25.07 232.63 308.84 76.21 292.9 403.74 110.84

Profit After Tax 159.84 140.41 -19.43 191.64 232.55 40.91 193.79 287.49 93.70

EPS (Rs.) 5.33 4.53 -0.80 6.39 7.51 1.12 6.46 9.28 2.82

Management Perception: The projected sales could not be achieved in the year 1995, due to heavy rains during the said period, which affected the commencement and progress of some of the projects. However steps are being initiated to minimize such aberrations in future.

6. Status of deployment of funds of previous rights issue proceeds The main objects for the previous Rights Issue are given below along with the actual utilization

As on March 31, 2006, there was an unutilized balance of Rs. 278.27 lakhs held in cash credit account with banks. The funds were fully utilized by June 2006.

7. Contingent liabilities: As per the last audited accounts, the contingent liabilities are as follows:

Rs. lakhs

Particulars As at March

31, 2006

As at

September 30,

2005

A. Bank Guarantees* 3.20 3.20

Rs. lakhs

Particulars Proposed Actual

April 05 -

Sept 05

Oct 05 –

March 06

Total Upto June

30, 2006

Purchase of premises for new Registered office

165.00 - 165.00 164.32

Purchase of capital equipment

600.00 300.00 900.00 912.42

Repayment of debt 1035.00 1035.00 1038.54

Working capital margin 695.00 290.00 985.00 981.46

Issue expenses 51.42 - 51.42 39.68

Total 2546.42 590.00 3136.42 3136.42

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B. Counter Guarantees given in respect of cash credit and loans advanced to the Subsidiary Company (Outstanding balance of Cash credit as on 31/03/2006 is Rs. 62.66 lakhs.)

79.10 79.10

C. Letters of Credit 241.26 573.03

D. Claims against the Company not acknowledged as debts** 536.29 536.57

E Estimated amount of orders remaining to be executed on capital account and not provided for (net of advances)

486.90 41.43

No provision has been made for these contingent liabilities

*As per opinion by the expert advisory committee of the Institute of Chartered Accountants of India, Bank Guarantee furnished in respect of performance, retention and mobilization advance, etc. are not in the nature of contingent liabilities, hence same are excluded from the bank guarantee outstanding as on as on as on March 31, 2006 and September 30, 2005.

**The figures shown in “D” above does not include amount of claims raised by way of counter claims by clients against the claims raised by the Company in terms of provisions of Accounting Standard 29.

8. Accidents and consequent liabilities: Improper handling of materials and machines used in the projects can

result in accidents and the Company could face significant liabilities.

Management Perception: The Company has been executing a variety of projects using modern techniques and state-of-the-art plant & equipment. The Company has taken requisite insurance policies to mitigate financial risk. The Company has a prescribed safety policy implemented and the workers are also given training for proper handling of the machines thereby minimising accident related risks.

9. Restrictive covenants in Loan Agreements: The loan agreements entered into by the Company contain certain restrictive covenants. These covenants primarily relate to:

• Declaration and payment of dividend

• Raising further capital

• Effecting any change in the Company’s capital structure

• Formulating any scheme of amalgamation or reconstruction

• Obtaining financial resources from any other source

Management Perception: No Objection Certificates have been obtained from the bankers for raising capital under the current issue and similar approvals will be taken whenever required.

10. Restrictive covenants in the Share Purchase Agreement:

A MOU was entered into between Mr. I.K. Modi, Mr. Hemant Modi, Mr. Suhas Joshi and their relatives and Minar Investments and Finance Pvt. Ltd. (“Sellers”) and Kalpataru Power Transmission Limited and Kalpataru Energy Venture Pvt. Ltd. (“Purchaser”) on October 1, 2004.Subsequently a Share Purchase Agreement was entered into between the aforesaid parties on October 14, 2004 for purchase of 15,00,000 Equity Shares at Rs. 40/- each representing 32.28% of the share capital of JMC. There are certain restrictive covenants in the Share Purchase Agreement. These covenants require certain key decisions to be taken up for consideration at a Board meeting after they have been approved by the Purchaser (KPTL, Kalpataru Energy Venture Private Limited) in writing.

11. Mr. Vijay Choraria, Chairman of the Company is associated with SEBI registered entities wherein routine

enquiries have been made by SEBI which pertain to trades concluded as also the bank details for payments made/received and demat details like delivery instructions with respect to purchase/sale of shares on behalf of its clients. SEBI has issued warning letters dated August 22, 2006 to A.K Equities Ltd. and V. J. Finsecurities

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Pvt. Ltd. in relation to the transaction of purchase/sale of shares of a company carried out on behalf of its clients who were related / connected/ associated to that company. These entities have been advised to exercise caution on compliance of SEBI Act, 1992 and all rules and regulations in future transactions.

External Risk Factors

The following factors which are beyond the control of the Company could have a negative impact on its performance. 1. Project delays: There could be project delays due to unfavourable climatic conditions or transportation

delays, which may affect the overheads and increase financing costs, on account of material, machinery and workforce that is employed at the construction site. Unlike in a manufacturing enterprise, the inventory and manpower cannot be re-shuffled between the projects, as it is difficult to move the resources quickly across the country.

2. Availability of raw materials: Inadequate supply of raw materials can adversely affect the performance of

the Company. 3. Government Policies: Adverse changes if any in the Government Policies in the Infrastructure Sector and

particularly the Road Sector could affect business prospects. 4. Other factors: Political, economic, social developments, natural calamity, acts of violence or war could

adversely affect the industrial and commercial operations in the country thereby affecting the business of the Company. Such events could also create a perception that investments in Indian companies involve a higher degree of risk, which could have an adverse effect on the market for securities of Indian companies.

5. Changes in technology: Changes in technology may render Company’s current Plant & Machineries

obsolete and require it to make substantial capital investments. 6. Change in political and regulatory environment: Global, economic and political factors that are beyond the

Company’s control influence the forecasts and directly affect performance. These factors include interest rates, rates of economic growth, fiscal and monetary policies of governments, inflation, deflation, consumer credit availability, consumer debt levels, tax rates and policy, unemployment trends, terrorist threats and activities, worldwide military and domestic disturbances and conflicts, and other matters that influence consumer confidence, spending and tourism. Increasing volatility in financial markets may cause these factors to change with a greater degree of frequency and magnitude. Increases in interest rates may increase the Company’s financing costs. The taxation system within the country still remains complex. Any change in the regulatory environment may have an impact on the business of the Company.

Notes to Risk Factors

1. Investors are advised to refer to “Basis for Issue Price” on page 19 of this Letter of Offer. 2. Net worth of the Company as on March 31, 2006 is Rs.3722.48 lakhs. The size of the Issue is Rs. 4646.55

lakhs. The net asset value per share (book value) as on March 31, 2006 is Rs.32.05 per share. 3. Cost of acquisition per share by the promoters :

Mr. Suhas Joshi Rs. 32.46 per share

Mr. Hemant Modi Rs. 42.08 per share

Kalpataru Power Transmission Limited Rs. 50.63 per share

4. Details of transactions of shares of the Company by the promoter during the last six months from the date of

filing the document with the Stock Exchange are:

xiii

a. Purchase

Name of Promoter /

PAC

No. of

shares

Date of

Purchase

Price per

share Rs.

Amount Rs.

115867 29/03/2006 231.45* 26816871.48 Kalpataru Power Transmission Ltd. (Promoter)

34133 31/03/2006 247.24 8439202.13

* KPTL has purchased 115867 equity shares on 29/03/2006 in different lots and at various rates between Rs. 228.14 to Rs. 233.16. The average rate has been considered.

b. Market Sale

There were no sale transactions by any Promoters or PAC during last six months.

5. The Company had entered into certain related party transactions for the financial years ending March 31, 2006, September 30, 2005 and March 31, 2004. The same has been disclosed in the Financial Statements- Related Party Transaction

6. The Lead Manager and the Company are obliged to keep this Letter of Offer updated and inform the public of

any material change/development.

1

SELECTED FINANCIAL INFORMATION

SUMMARY STATEMENT OF ASSETS AND LIABILITIES (AS RESTATED)

Rs. lakhs

As at March 31 Description As at March

31, 2006

As at

September

30, 2005 2004 2003 2002

Net Fixed Assets 5938.14 5108.81 4343.50 4003.54 4121.22

Investments 51.15 51.61 51.61 51.85 51.86

Deferred Tax Assets 20.60 95.74 - - -

Current Assets, Loans and Advances 11932.37 10454.69 9660.38 8770.40 8848.91

Less: Liabilities and Provisions 14219.77 12119.86 12404.25 10774.63 10601.80

Net Worth 3722.48 3590.99 1651.24 2051.16 2420.19

Represented by :

Shareholder’s Funds

Share Capital 1161.64 1161.64 464.66 464.66 464.66

Reserves 2560.85 2468.54 1186.58 1592.87 1966.63

3722.48 3630.18 1651.24 2057.53 2431.29

Less: Profit & Loss Account ( Debit Balance )

-

39.19 - - -

Less: Miscellaneous Expenditure (to the extent not written off or adjusted)

-

- - 6.36 11.09

Net Worth 3722.48 3590.99 1651.24 2051.16 2420.19

STATEMENT OF PROFITS AND LOSSES AS RESTATED

Rs. lakhs

For the year ended March 31, Particulars For the six

months

period ended

March 31,

2006

For the eighteen

months period

ended September

30, 2005

2004 2003 2002

Total Income 14331.06 35311.27 18573.38 21082.42 24473.46

Expenditure 13412.11 34106.72 17816.07 19357.39 22691.32

Profit/ (Loss) before interest, depreciation, tax & extra-ordinary items

918.95 1204.55 757.31 1725.03 1782.14

Interest 493.10 1689.09 1075.33 1091.05 1095.01

Depreciation 201.04 531.64 315.84 305.05 293.37

Profit/ (Loss) before Tax & Extra-ordinary Items

224.81 (1016.18) (633.86) 328.93 393.76

Less : Extra ordinary expense - 966.70 - - -

Add: Extra ordinary income - 209.00 - - -

Profit/ (Loss) before tax 224.81 (1733.88) (633.86) 328.93 393.76

Taxation (Previous Year) - - - 16.97 -

Taxation (Current Year) - - - 36.00 30.11

Deferred Tax Provision 75.14 (627.46) (229.89) 71.46 24.69

Fringe Benefit Tax 18.18 10.55 - - -

Net Profit/ (Loss) after tax 131.49 (1156.97) (403.97) 204.50 338.96

2

GENERAL INFORMATION

Dear Shareholder(s), Pursuant to the resolutions passed by the Board of Directors of the Company at its meeting held on May 2, 2006 and by the Shareholders at the Annual General Meeting held on June 17, 2006, it has been decided to make the following offer to the Equity Shareholders of the Company:

ISSUE OF 46,46,550 EQUITY SHARES OF Rs. 10/- EACH AT A PREMIUM OF Rs. 90/- PER EQUITY

SHARE AGGREGATING RS. 4646.55 LAKHS TO THE EQUITY SHAREHOLDERS ON RIGHTS

BASIS IN THE RATIO OF TWO (2) EQUITY SHARES FOR EVERY FIVE (5) EQUITY SHARES

HELD ON THE RECORD DATE i.e. SEPTEMBER 21, 2006 (“ISSUE”). THE ISSUE PRICE IS 10

TIMES THE FACE VALUE OF THE EQUITY SHARE.

Registered Office of the Company:

JMC Projects (India) Limited Registration No.: 04-8717 Registered Office: A-104, Shapath-4, Opposite Karnavati Club, S. G. Road, Ahmedabad – 380 051, India Tel: 91-79- 3001 1500 Fax: 91-79-3001 1600/1700 E-mail: [email protected] Website: www.jmcprojects.com Address of Registrar of Companies, Gujarat Dadra & Nagar Haveli: ROC Bhavan, Opp. Rupal Park Society, Near Ankur Bus Stand, Naranpura, Ahmedabad – 380013.

Board of Directors

Name of Director Designation

Vijay Choraria Chairman

Hemant Modi Vice Chairman

Suhas Joshi Managing Director

M.D. Khattar Managing Director

Ajay Munot Director

Kamal Jain Director

Narsinhbhai Patel Director

Mahendra G Punatar Director

For more details regarding the Directors please refer to “Management” on page 33 of this Letter of Offer. Company Secretary & Compliance Officer Ashish Shah A-104, Shapath –4 Opposite Karnavati Club, S.G. Road Ahmedabad -380051 Tel: 91-79- 3001 1500 Fax: 91-79-3001 1600/1700 Email: [email protected] Investors may contact the Compliance Officer for any pre-Issue/post Issue related matter.

3

Legal Advisors to the Company

Singhi & Co. Advocates, Solicitor & Notary 7-8, Premchand House Annexe, Ashram Road, Ahmedabad – 380 009 Tel:91-79-26588336; Fax:91-79-26587536 Email:[email protected]

Bankers of the Company

Oriental Bank of Commerce “Neel Kamal”, Opp: Sales India Ashram Road Ahmedabad – 380 009 Tel: 91- 79-27542029 Fax: 91-79-27541113 The Karur Vysya Bank Limited Motilal Centre, Ashram Road Ahmedabad – 380 009 Tel: 91-79-27546247 Fax: 91-79-27546087 State Bank of India “Paramsiddhi Complex” Opp: V S Hospital, Ellisbridge Ahmedabad – 380 006 Tel: 91-79-2658 5623 Fax: 91-79- 26581512

Andhra Bank 41, Parimal Society, CG Road Ahmedabad – 380 006 Tel: 91-79-2646 0945 Fax: 91-79-26460947 Lead Manager to the Issue

Inga Advisors Private Limited

A-404, Neelam Centre,Hind Cycle Road,Worli, Mumbai – 400 030. Tel: 91-22-24982937, 24982919, 24982954 Fax No.:91-22-24982956 Contact Person: Ms. Roopa Parameswaran Email: [email protected] Website: www.ingaadvisors.com

4

Bankers to the Issue

Industrial Development Bank of India

IDBI Complex, Off C.G.Road Ellisbridge Ahmedabad -380006 Tel: +91-79-26431902/1909 Fax: +91-79-26565105 Email: [email protected] Registrar to the Issue

Intime Spectrum Registry Limited C-13, Pannalal Silk Mills Compound L.B.S. Marg, Bhandup (West) Mumbai 400 078 Tel: 91-22-2596 0320 Fax: 91-22-2596 0329 Contact Person: Ms. Awani Punjani Email:[email protected] Auditor of the Company

Sudhir N Doshi & Co.

Chartered Accountants 22, Empire Tower, 2nd Floor, Adjoining Associated Petrol Pump, C. G. Road, Ellisbridge, Ahmedabad – 3800 006 Tel: 91-79-2644 9403

Credit Rating

This being an issue of Equity Shares, no credit rating is required.

5

CAPITAL STRUCTURE

Capital Structure as on September 5, 2006

* Warrants were allotted on September 9 2005 vide Letter of Offer dated June 20 2005. The conversion ratio of these warrants is 1:2 i.e. two (2) warrants will get converted into one (1) Equity Share. The warrant conversion period commenced from September 9, 2006 and will close on March 8, 2007. ** The share premium account post conversion of warrants cannot be determined as the warrant conversion shall be at a discount of 10% to the average daily closing market price of the shares during the three calendar months immediately preceding the month in which the warrant conversion is exercised or the floor price of Rs. 50/- per share whichever is higher. # As on March 31, 2006, as per the audited Balance Sheet.

Description Aggregate

Nominal Value

(Rs.)

Aggregate Value

at Issue Price

(Rs.)

A Authorised Share Capital

2,00,00,000 Equity Shares of Rs. 10/- each

20,00,00,000

B Issued, Subscribed and Paid up Share Capital 1,16,16,375 Equity Shares of Rs. 10/- each

11,61,63,750

C Present Issue being offered to the existing

shareholders through this LOO

46,46,550 Equity shares of Rs. 10/- each at a premium of Rs. 90/- i.e. at a price of Rs. 100/- each

4,64,65,500

46,46,55,000

D Paid up Capital after the present issue 1,62,62,925 Equity Shares of Rs. 10/- each Upon conversion of warrants * 1,85,86,172 Equity Shares of Rs. 10/- each (assuming full conversion)

16,26,29,250

18,58,61,720

**

E Share Premium Account

♦ Existing Share Premium Account #

♦ On Issue of Equity Shares

♦ On conversion of warrants

24,68,54,194 41,81,89,500

**

6

Notes to Capital Structure

1. Shareholding pattern as on September 8, 2006 (Pre and Post Issue)

Pre Issue Rights Issue Post Issue* Category

No. of shares % to total No. of shares No. of

shares*

% to total

PROMOTER GROUP

Promoters

KPTL 5795999 49.90 2318400 8114399 49.90

Hemant Modi 172804 1.49 69122 241926 1.49

Suhas Joshi 56654 0.49 22662 79316 0.49

Sub- Total (a) 6025457 51.87 2410183 8435640 51.87

PAC

Nina Shishir Modi 67500 0.58 27000 94500 0.58

Sonal Hemant Modi 2500 0.02 1000 3500 0.02

Ami Hemant Modi 5000 0.04 2000 7000 0.04

Rasilaben Vinodchandra Modi 3199 0.03 1280 4479 0.03

Varsha Hiren Gandhi 1875 0.02 750 2625 0.02

Sub- Total (b) 80074 0.69 32030 112104 0.69

Total Promoters (a+b) 6105531 52.56 2442212 8547743 52.56

Non- Promoter Holding

Mutual Funds and UTI 4244 0.04 1698 5942 0.04

Pvt. Corporate Bodies 898278 7.73. 359311 1257589 7.73

Indian Public 4261157 36.68 1704463 5965620 36.68

NRIs and OCBs 290211 2.50 116084 406295 2.50

Others 56954 0.49 22782 79736 0.49

Sub-total (c) 5510844 47.44 2204338 7715182 47.44

Grand Total (a+b+c) 11616375 100.00 4646550 16262925 100.00

* Warrants were allotted on September 9 2005 and warrant conversion period commenced on September 9, 2006 and will close on March 8, 2007. Equity Shares that would be allotted pursuant to conversion of the said warrants are not considered in the Post Issue shareholding as the conversion of warrants is optional.

7

2. None of the Promoters and persons forming part of the Promoter Group have been restrained from

accessing the capital market for any reasons by SEBI or any other authorities.

3. Details of Promoters’ shares pledged with Banks/Financial Institutions

No shares have been pledged.

4. The promoters have confirmed vide their letter of intent dated July 12, 2006 that they intend to subscribe to the full extent of their entitlement in the issue.

In case of undersubscription the promoters either jointly or severally undertake to subscribe to such undersubscribed portion of the Issue. As a result of this subscription and consequent allotment, the promoters may acquire equity shares over and above their entitlement in the issue, which may result in their shareholding in the Company being above their current shareholding. This subscription and acquisition of such undersubscribed shares by the promoters, if any, will not result in change of control of the management of the Company and shall be exempt in terms of proviso to Regulations 3(1) (b) (ii) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. As such, other than meeting the requirements indicated in Objects of the issue (refer “Particulars of the Issue”), there is no other intention / purpose for this issue, including any intention to delist the Company, even if, as a result of allotments to the Promoters through this Issue, the Promoter shareholding in the Company exceeds their current shareholding.

5. The Promoters have given an undertaking that in case the Rights Issue of the Company is completed with

their subscribing to Equity Shares over and above their entitlement and as a result, if the public shareholding in the Company after the Rights Issue falls below the “permissible minimum level” on the basis of which the securities of the Company continue to be listed, they will either individually or jointly with other Promoters make an offer for sale of their holdings so that the public shareholding is raised to the “permissible minimum level” within a period of 3 months from the date of allotment in the proposed Issue, as per the requirements of sub-clause 17.1 and 17.2 of SEBI (Delisting of Securities) Guidelines, 2003 or as per any amendment thereto or any other period as may be directed by SEBI or any appropriate authority.

6. Details of transactions in Equity Shares by the Promoter and Promoter Group during the last six

months

a. Purchase

Name of Promoter /

PAC

No. of

shares

Date of

Purchase

Price per

share Rs.

Amount Rs.

115867 29/03/2006 231.45* 26816871.48 Kalpataru Power Transmission Ltd. (Promoter)

34133 31/03/2006 247.24 8439202.13

* KPTL has purchased 115867 equity shares on 29/03/2006 in different lots and at various rates between Rs. 228.14 to Rs. 233.16. The average rate has been considered.

b. Market Sale

There were no sale transactions by any Promoters or PAC during last six months.

8

Highest and Lowest price details for above market purchases and sales transactions

Rs. per share

Purchases Sales Name of Promoter / PAC

High Low High Low

Kalpataru Power Transmission Ltd. (Promoter)

247.24 228.14 Not Applicable

7. Top Ten shareholders

a. Top ten Shareholders as on date of filing the Letter of Offer

b. Top ten Shareholders as on ten days prior to filing the Letter of Offer

S.No. Name of the Shareholder No. of Shares % of total capital

1 Kalpataru Power Transmission Limited 5795999 49.90 2 Hemant Modi 172804 1.49 3 Mukul Agrawal 150757 1.30 4 Dr Sanjeev Arora 135300 1.16 5 Bishwanath Prasad Agrawal 78876 0.68 6 Nina Modi 67500 0.58 7 Suvarna Commercial Private Limited 66325 0.57 8 Suhas Joshi 56654 0.49 9 Ashish Choudhary 55000 0.47

10 Pinkky Shah 54000 0.46

c. Top ten Shareholders two year prior to filing the Letter of Offer

S.No. Name of The Shareholder No. of Shares % of total capital

1 Suhas Joshi 553775 11.92

2 Hemant Modi 472696 10.17

3 Anubhav Aggarwal 426104 9.17

4 Sonal Hemant Modi 188866 4.06

5 Ishverlal K. Modi 187125 4.03

6 Madhuri Suhas Joshi 173197 3.73

7 Maltiben Vasantrao Joshi 128613 2.77

8 Minar Investments And Finance Pvt. Ltd. 76317 1.64

9 Nina Modi 67500 1.45

10 Arun Sarabhai Sheth 45000 0.97

S.No. Name of the Shareholder No. of Shares % of total capital

1 Kalpataru Power Transmission Limited 5795999 49.90

2 Hemant Modi 172804 1.49

3 Mukul Agrawal 150757 1.30

4 Dr Sanjeev Arora 134300 1.16

5 Bishwanath Prasad Agrawal 78876 0.68

6 Nina Modi 67500 0.58

7 Suvarna Commercial Private Limited 66325 0.57

8 Suhas Joshi 56654 0.49

9 Ashish Choudhary 55000 0.47

10 Pinkky Shah 54000 0.46

9

8. The total number of shareholders as on September 8, 2006 is 8929. 9. The present Issue being a Rights Issue, as per clause 4.10.1(c) of extant SEBI guidelines, the requirement of

Promoters’ contribution and lock-in are not applicable. 10. The Company has received a sanction for a bridge loan of Rs. 1000 lakhs from Karur Vysya Bank for

purchase of capital goods. As on September 6, 2006, the Company has availed Rs. 575.53 lakhs of the sanctioned bridge loan. It has been utilized for purchase of capital equipment. The Company proposes to repay the bridge loan from the proceeds of the present Rights Issue. The tenure of the loan is six months and the applicable interest rate is 10.00% p.a (BPLR-2.50) which is to be serviced on monthly basis. The loan is to be repaid within four months from the date of the first disbursement. During the period between the date of filing of the Letter of Offer and Issue closing date, the Company may avail the balance bridge loan of Rs. 424.47 lakhs which will also be repaid out of the proceeds of the Rights Issue.

11. The Promoters and Directors of the Company and Lead Managers of the Issue have not entered into any

buy-back, standby or similar arrangements for any of the securities being issued through this Letter of Offer.

12. The terms of issue to Non-Resident Equity Shareholders/Applicants have been presented under the section

“Terms of the Issue” on page 187 of this Letter of Offer. 13. At any given time, there shall be only one denomination of the Equity Shares of the Company. 14. The Company has 46,46,493 outstanding warrants which are convertible into 23,23,247 equity shares at the

option of the warrant holder during the conversion period (September 9, 2006 and March 8, 2007). The Company also has a one time call option during the conversion period. As per the terms of the warrant conversion, allotment of these shares would commence only in October 2006. The rights entitlement has been computed on 116,16,375 equity shares, the outstanding share capital as on the record date (September 21, 2006).

15. The Company does not have any partly paid Equity Shares 16. The Company has not issued any shares out of the revaluation reserves. 17. The Company has complied with the provisions of chapter XV of the SEBI guidelines. In terms of

provisions 15.1.10, a certificate duly signed by the issuer company and counter signed by the Company Secretary in practice has been submitted to SEBI on February 26, 2000 certifying compliance of all terms and conditions (as provided in the guidelines) for issue of 15,48,850 bonus shares.

18. There has been no issue of shares for consideration other than cash except to the extent of Bonus Shares

issued to the existing shareholders by capitalisation of free reserves. 19. The Company as well as major shareholders have duly complied with the provisions of Chapter II of SEBI

(SAST) Regulations, 1997 but with a delay for the years 1997-2002. The Company has filed necessary disclosures on March 31, 2003 under the SEBI Regularisation Scheme, 2002. The filings for the subsequent years i.e. March 31, 2003, 2004, 2005 and 2006 were done on April 8, 2003 and September 23, 2003 (for dividend), April 12, 2004 and April 14, 2005 and April 12, 2006 respectively.

20. No further issue of capital by way of issue of bonus Equity Shares, preferential allotment, rights issue or

public issue or in any other manner which will affect the capital of the Company, except on account of conversion of warrants upto a maximum of 23,23,247 Equity Shares, shall be made during the period commencing from the filing of the Letter of Offer with the SEBI till the Equity Shares issued under this Letter of Offer have been listed or application moneys are refunded on account of the failure of the Issue.

10

Further, presently the Company does not have any proposal, intention, negotiation or consideration to alter the capital structure by way of split / consolidation of the denomination of the shares / issue of shares on a preferential basis or issue of bonus or rights or public issue of Equity Shares or any other securities within a period of six months from the date of opening of the present Issue.

However, if the business needs of the Company so require, the Company may alter the capital structure by way of split / consolidation of the denomination of the shares / issue of shares on a preferential basis or issue of bonus or rights or public issue of shares or any other securities during the period of six months from the date of listing of the Equity Shares issued under this LOO or from the date the application moneys are refunded on account of failure of the Issue, after seeking and obtaining all the approvals which may be required for such alteration.

11

OBJECTS OF THE ISSUE The main objects clause and objects incidental or ancillary to the main objects of the Memorandum of Association of the Company enable the Company to undertake its existing activities and the activities for which the funds are being raised through this Issue. The total fund requirements of the Company are given below:

Particulars Rs lakhs

Purchase of Capital Equipment* 3257

Repayment of short term loan from UTI Bank Ltd. 750

Working Capital Margin 2025

Issue Expenses 50

Total 6082

* The Company has availed a bridge loan of Rs. 575.53 lakhs from Karur Vysya Bank Ltd. and has utilized the same to purchase capital equipments. The said bridge loan will be recouped from the proceeds of the present Issue. The requirement of funds for the purposes described above and use of the proceeds from this Issue in the manner detailed above are based on internal management estimates and have not been appraised by any bank or financial institution. In view of the competitive and dynamic nature of the industry in which the company operates, the company may have to revise its business plan from time to time and consequently its fund requirement may also change. This may include rescheduling of capital expenditure programs, starting unplanned new projects and increase or decrease in the capital expenditure for a particular business unit vis-à-vis current plans at the discretion of the Board. In case of any variations in the actual utilization of funds earmarked for the above activities, increased fund deployment for a particular activity will be met from internal accruals of the Company and by raising additional resources as may be decided by the Board of Directors.

Means of Finance

Particulars Rs. lakhs

Proceeds from the present Rights Issue 4646.55

Internal Accruals 36.11

Equipment Advance 1399.34

Total 6082.00

The internal accrual of Rs. 36.11 lakhs has been fully utilized towards capital expenditure and issue expenses.

Details of Utilisation of Funds

1. Purchase of capital equipment The projects undertaken by the Company fall under three main categories namely: Industrial projects, Building projects and Infrastructure projects. These projects require huge investments in capital equipment at regular intervals. However these expenses are in the normal course of the business. The Company intends to expand its presence in infrastructure projects like roads, railways, etc. The work on hand including Joint Venture contracts as on July 31, 2006 is Rs. 80638 lakhs. The Company has bid for various projects to the tune of approximately Rs. 134636 lakhs. The Company has budgeted a sum of Rs. 4007 lakhs towards capital expenditure. This includes equipments and machineries worth Rs. 700 lakhs which have not been identified. Depending upon the requirements/ bids awarded, the Company will place orders for the machineries.

12

List of Equipments for which purchase orders have been placed and part payment has been made.

List of Equipments Details of Purchase Order Raised for Equipments

Payments

made

Sr.

No. Equipment No. Rs lakhs PO No. Name of Supplier No. Rs lakhs

Rs

lakhs

1 JCB 4 71.19 17/2006-07 & 20/2006-07

L&T Case Equi. / JCB India Ltd.

4 71.19 70.18

2 Bitumen Bowser / Distributor

2 12.48 Agreement copy Dodsal Private Ltd 2 12.48 12.48

3 WMM Senser Paver

3 107.24 7/2006-07 & 10/2006-07

Gujarat Apollo Equipments

3 107.24 97.94

4 WMM Plant 1 24.11 6/2006-07 Gujarat Apollo Equipments

1 24.11 22.18

5 Asphalt Senser Paver (HM paver)

2 71.24 Agreement copy Dodsal Private Ltd. 2 71.24 67.68

6 Pneumatic Tyre Roller

2 23.40 Agreement copy Dodsal Private Ltd. 2 23.40 22.23

7 Concrete Batching Plant - Mobile (20 Cum & 15 Cum )

2 45.85 36/2006-07 & 37/2006-07

Maxocrete equipments

2 45.85 45.85

8 Transit Mixer 9 203.87 28/2006, 29/2006, 62/2006

& 6/3/2006

Greaves Cotton Ltd./Ashok Leyland

6 90.61 71.09

9 DG Set - 40 KVA 6 20.32 32/2006 Powerica Ltd. 2 6.77 6.77

10 DG Set- 125 KVA

6 36.29 24/2006 & 25/2006

Powerica Ltd. 4 24.19 12.10

11 DG Set - 725 KVA

1 39.41 76/2006 GMMCO Ltd. 1 39.41 35.68

12 Crusher - 200 TPH

2 489.74 PUZZ / 2005-06 & MECH / 2005-

06

Puzzolana Machinery Fabricators / Mechtech Engg.

2 489.74 313.79

13 Weigh Bridge - 100 Tons

1 8.95 66/2006 Essae Digitronics Pvt. Ltd.

1 8.95 7.16

14 Weigh Bridge - 50 Tons

1 4.50 67/2006 Essae Digitronics Pvt. Ltd.

1 4.50 3.60

15 Kerb Casting Machine

1 7.86 8/2006-07 Apollo Construction Equip.pvt.Ltd.

1 7.86 7.21

13


Payments

made

Sr.

No. Equipment No. Rs lakhs PO No. Name of Supplier No.

Rs

lakhs

Rs

lakhs

16 Shuttering / Scaffolding

Lot 551.00 44/2006-07 , 42/2006-07, 43/2006-07 ,

82/2006, 90/2006, 72/2006, 74/2006,

NH7/shut/06/097 & 028, 45/2006-07, 46/2006-07,

47/2006-07, 48/2006-07 49/2006-07 50/2006-07 54/2006-07 55/2006-07 56/2006-07 57/2006-07

MOR-BDMC00027,

MOR-BDMC00026,

MOR-CHAR00013

Tata Steel Ltd. / Max International / Hi Reach Construction / Scaff India / Kacharu Panchal (labour) / N Mohamed Kasim (Labour) / S M S Trading / Economic Traders, Devam Enterprises/Reliance Steel Traders/Jaygauri Fabricators/United Scaffolding Pvt. Ltd./Polytech Industries/Hi-reach construction Equipment Pvt. Ltd./Furquan Steel Works/I S Steels/New Age Scaffolds Pvt. Ltd./Saff India/Shah Steel & Tubes/amar Tubes (P) Ltd./grace Castings Pvt. Ltd./N R Steel Corporation/Ambica Iron and Steel Re-rolling Mill

Lot 379.02 157.00

17 Surveying Equipment Set

Lot 6.00 MOR-DRGL00003

MOR-GLFH00008

K K Sales, Lawrence & Mayo (I) Pvt. Ltd.

Lot 1.04 1.04

18 Bar Cutting M/c. 7 10.81 TMRP / KI/871, 34-A/2006

Modern Equipments, Ispat Infrastructure India Pvt. Ltd.

3 4.79 3.25

19 Tough Rider 11 28.60 9-A/2006-07 Universal Sales Corporation

8 20.80 5.20

20 Vibratory Compactor - 850 Kg.

2 4.16 1/2006 Surelia Engg. Works 2 4.16 4.16

21 FO Heating system for Batch mix plant

1 10.00 84/2006 Gujarat Apollo Equipments

1 10.00 9.78

22 Misc. Machinery & Tools

Lot 33.00 Lot

6.81 6.81

23 Loader 3 107.06 68/2006 & 16/2006-07

Gunangxi Liugong / Caterpillar India Pvt. Ltd.

3 107.06 88.41

14


Payments

made

Sr.

No. Equipment No. Rs lakhs PO No. Name of Supplier No.

Rs

lakhs

Rs

lakhs

24 Motor Grader 8 332.02 JMC/ SANY/2005-06

SANY Heavy Indust.India Pvt.Ltd.

8 332.02 109.39

25 Reversible Drum Mixer

5 21.35 87/2006 Universal Sales Corporation

1 4.27 4.27

26 Concrete Pump 5 83.75 26/2006 SANY Heavy Indust.India Pvt.Ltd.

1 16.75 16.75

27 Hydra Crane 4 40.59 23/2006-07 & 13/2006-07 &

12/2006-07

Action Construction Equip. Ltd.

4 40.59 40.59

28 Vibratory Compactor - 2 MT

2 22.92 27/2006 Greaves Cotton Ltd. 2 22.92 22.92

29 DG Set- 25 KVA 5 11.78 19/2006-07 Supernova Engg. Ltd.

1 2.36 2.36

38/2006-07 & 39/2006-07

Xiangtan jianglu imp & exp co.ltd. / SA Syncon Infrastructure India Pvt. Ltd.

1 51.01 30 Tower crane 1

51.01

59/2006-07 Jiangsu Zhengxing Construction Machine Co. Ltd.

2 58.25

4.80

31 Mobile Tower Crane

2 47.91 14/2006-07 Action Construction Equip. Ltd.

1 23.95 23.95

32 Computers-HW/SW/Connectivity

Lot 30.00 IT/064/2006, IT/065/2006, IT/066/2006, IT/067/2006, IT/068/2006 IT/069/2006 IT/070/2006, IT/071/2006, IT/072/2006, IT/073/2006, IT/075/2006, IT/076/2006, IT/077/2006,

TMRP/PO/B/126/06-07,

TMRP/PO/A/240/06-07

Silvertouch Technologies Ltd. Compulink Systems, Trident Infotech Services, Mascom Electronics Pvt. Ltd., Dixit Infotech Services, Kavish Engieer, Tulip IT Services Ltd., HV Computers, MU_Tech Computers

Lot 13.99 3.15

Total (A) 2558.41

2127.34 1343.01

15

List of Equipments for which purchase orders have been placed but no payment have been made.

List of Equipments Details of Purchase Order raised for Equipments

Sr.

No. Equipment No. Rs. lakhs PO No. Name of Supplier No.

Rs.

lakhs

1 Hot Mix Plant 2 316.01 4-A/2006-07 & 5/2006-07

Gujarat Apollo Equipments 2 316.01

2 Tandom Roller 1 19.97 15/2006-07 L&T Case Equi. 1 19.97

3 DG Set- 380 KVA

1 16.20 18/2006-07 Supernova Engg. Ltd. 1 16.20

4 Total Station 1 3.68 83/2006 Topcon South Asia Pte Ltd. 1 3.68

5 Laboratory Equipment

Lot 9.18 58/2006-07 EIE Instruments Pvt. Ltd. Lot 0.74

Total (B) 365.05

356.60

Equipments identified by the Company for which Purchase orders have not yet been placed

Sr. No. Equipment No. Rs lakhs

1 Batching Plant 3 105.00

2 Tipper- 20 MT 15 240.00

3 Welding M/c. 1 2.00

4 Compressor 1 1.00

5 Site Conveyance - Four Wheelers 6 30.00

6 Site Conveyance - Two wheelers 13 5.20

7 Equipments to be finalised based on present/bids awarded 700.00

Total (C) 1083.20

The Company has budgeted a capital expenditure of Rs. 4007 lakhs. The Company has placed orders for equipments worth Rs. 2483.94 lakhs and payment to extent of Rs. 1343.01 lakhs has been made. The Company has utilized internal accruals to the extent of Rs. 17.48 lakhs as well as the short term loan of Rs. 750 lakhs from UTI Bank Ltd. and the bridge loan of Rs. 575.53 lakhs towards this payment.

2. Repayment of Short Term Loan from UTI Bank.

The Company has availed a short term loan of Rs. 750 lakhs from UTI Bank Ltd. The Company proposes to repay this loan from the proceeds of the Issue which has been utilized towards purchase of capital equipment. Terms of the Loan are:

• Tenor: 6 months

• Date of Disbursement: June 15, 2006

• Interest Rate: PLR-4.00% p.a i.e. 9.00%. Interest to be serviced on monthly basis

• Repayment: Repayment in one bullet payment at the end of six months from date of disbursement

• Security: (1) Residual charge on the assets of the Company (2) Post dated cheque for the amount of Loan (3) Comfort letter for the loan extended from Kalpataru Power Transmission Limited

16

3. Working Capital Margin The work on hand as on July 31, 2006 was Rs. 80638 lakhs (includes Rs. 40119 lakhs through joint venture). With the large value addition to the contracts on hand and the Company’s plan to expand further, the requirement of long term working capital has been estimated as under:

Working Capital Calculations

Rs. lakhs

Particulars

2006-07

(Estimated)

2005-06

(Actual)

Raw Materials Inventory 2683 1467

Sundry Debtors 12267 8105

Loans & Advances 1606 1482

Cash & Bank Balances 933 879

Sub Total 17489 11933

Less :

Sundry Creditors 4780 7221

Other Current Liabilities 940 952

Sub Total 5720 8173

Net Working Capital Requirement 11769 3759

Working capital as on 31/03/2006 3759

Additional Working Capital Requirement 8010

Less: Balance fund based working capital limit available *4909

Financed by proceeds of this Rights Issue 2025

Financed by proceeds of Outstanding Warrant Conversion 561

Balance from Internal Accruals 515

* calculated based on the to-be enhanced limit of Rs. 6500 lakhs.

Assumptions for the Calculation of Working Capital Requirement

Assumptions 2006-07

(Estimated)

2005-06

(Actual)

Inventory Days 45 39

Debtor Days 100 106

Creditor Days for Materials 36 37

Creditor Days for Labour 30 51

Creditor Days for Expenses 17 32

Sources of finance for the working capital as at March 31, 2006


Fund Based Limits from Banks 1591

Unsecured loan from promoters and fixed deposit 1522

Project specific working capital loan from Banks in lieu of mobilization advance.

468

Internal accruals 179

Total Working Capital 3759

17

Details of existing working capital limits: Sanctioned Working Capital facilities as on August 31, 2006


Fund Based Limits from Banks Total

Oriental Bank of Commerce

Cash Credit 624

WCDL Foreign Currency & Rupee 2496 3120

The Karur Vysya Bank Ltd

Cash Credit 325


State Bank of India*

Cash Credit 140


Andhra Bank*

Cash Credit 75


Total of Fund Based Limits 5960

Sanctioned Non- Fund Based Limits

Oriental Bank of Commerce

Bank Guarantee 15000

Sub Limit for Letter of Credit (1200) 15000

The Karur Vysya Bank Ltd

Bank Guarantee 10625


State Bank of India

Bank Guarantee 2400


Andhra Bank

Bank Guarantee 800


Total Non Fund Based Limits 28825

* The credit limits from these banks are expected to be increased thereby taking the total fund based

limit upto Rs. 6500 lakhs

4. Issue Expenses The Issue expenses are estimated at Rs. 50 lakhs, comprising of fees and expenses payable to the Lead Manager to the Issue, Banker to the Issue, Registrar to the Issue, Auditor, Legal Advisor, printing and stationery expenses, advertising expenses and other statutory expenses like SEBI/ Stock Exchange fees and all other incidental and miscellaneous expenses for listing the Equity Shares on the Stock Exchange. The Company has already deployed Rs. 18.63 lakhs towards the issue expenses. The components of the Issue expenses are:


Fees to Lead Manager, Legal Advisors & Auditors 23.53

Registrar’s Fee 1.10

Regulatory and Statutory expenses 5.43

Printing, stationery, postage and advertising 10.93

Miscellaneous & Contingencies 9.01

Total 50.00

18

The Company does not propose to utilize any part of the rights issue proceeds to repay loans taken from

the promoters/ relatives of the promoters/directors or their associate companies. No part of the Issue

proceeds will be paid as consideration to promoter, directors, key management personnel, associate or

group companies.

Schedule of Implementation/Deployment of Issue Proceeds

The details of funds utilized and proposed deployment of Issue proceeds are as follows: Rs. lakhs

Utilisation of funds Funds

utilized as on

Sept 6, 2006

Oct 06-Mar

07 April 07-

Sept 07 Oct 07-

Mar 08 Total

Purchase of Capital Equipments 593.01 1906.99* 457.00 300.00 3257.00

Working Capital Margin - 2025.00 - - 2025.00

Repayment of short term loan from UTI Bank Ltd. - 750.00 - - 750.00

Issue Expenses 18.63 31.37 - - 50.00

Total from rights issue proceeds 611.64 4713.36 457.00 300.00 6082.00

* Includes repayment of bridge loan from Karur Vysya Bank Ltd.

Sources & Deployment of Funds as on September 6, 2006


A Deployment of Funds

Rights Issue Expenses 18.63

Purchase of Capital Equipment 1343.01

Total 1361.64

B Sources of Funds

Internal Accruals:

Rights Issue Expenses 18.63

Purchase of Capital Equipment 17.48 36.11

Short Term Loan from UTI Bank Ltd. 750.00

Bridge Loan from Karur Vysya Bank Ltd.

575.53

Total 1361.64

The above statement of sources of financing and deployment of funds have been certified by Sudhir N. Doshi & Co., Chartered Accountants, 22, Empire Tower, 2nd floor, Sheth C G Road, Ellisbridge, Ahmedabad – 380006, Membership No. 030539, vide their letter dated September 6, 2006.

Monitoring the use of funds There is no external monitoring agency appointed for the purpose of monitoring the use of funds. On a quarterly basis the audit committee and the board will review the use of funds. Interim Use of Funds Pending any use as described above, proceeds of the Issue shall be used by the Company for reduction of cash credit limits and invest the funds in high quality, interest/dividend bearing short term/long term liquid instruments including deposits with banks for the necessary duration. The Company may also deploy the proceeds of this Issue in temporarily reducing its exposure to working capital borrowings from banks and financial institutions. Such investments would be in accordance with the directives of the Board of Directors.

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BASIS FOR ISSUE PRICE Qualitative Factors

• JMC has execution capabilities across a variety of construction segments including industrial, institutional, infrastructural, residential and commercial complexes.

• JMC has 20 years track record of project execution. It has executed major institutional buildings and projects on a turnkey basis, demonstrating an adequate integrating and project management capacity

• The Company is one of the leading companies in the Industrial and Factory building segment.

• The maximum bid capacity as on date of the Company for NHAI projects is Rs. 671.20 crore and the Company can execute individual NHAI projects upto Rs. 204.55 crore. Presently the Company is pre-qualified to bid for some of the road projects to be invited by NHAI & PWD of various states.

• Emerged as a player with autonomous offices at the following strategic locations: Mumbai, Chennai, Bangalore, Hyderabad and New Delhi.

• Repeat orders from prestigious customers like Asian Paints, Nirma, Cadila Healthcare, Bajaj Auto, IIM, Videocon, Prestige Group, Raheja Group, Mantri Group, etc.

• The company follows standard practices uniformly at all sites in accordance with the quality plans as laid down under ISO where each method statement is standardised. Records of all results are maintained and approved by the client.

Quantitative Factors

1. Adjusted Earnings Per Share (EPS)

Basic EPS Rs. Weight

12 months ended March 31, 2004 (8.70) 1

18 months ended September 30, 2005 (6.64)* 2

6 months ended March 31, 2006 2.26* 3

Weighted Average EPS --

*Annualised

2. Price/Earning Ratio (P/E) in relation to Issue Price at Rs. 100/- per share.

(a) Based on annualized EPS for the year ended March 31, 2006 – 44.25 (b) Industry P/E (i) Highest 229.30 (ii) Lowest 2.30 (iii) Average 34.10 Source: Capital Market Aug 28-Sept 10, 2006; Category: Construction 3. Return on Net Worth (RONW)

RONW (%) Weight

12 months ended March 31, 2004

(24.46) 1

18 months ended September 30, 2005

(21.48)* 2

6 months ended March 31, 2006 7.06* 3

Weighted Average RONW (7.70)

* Annualised

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4. Minimum Return on Total Net Worth after Issue Needed to maintain EPS :4.39% 5. Net Asset Value (NAV) per Equity Share (a) As on March 31, 2006: Rs. 32.05 (b) After Issue: Rs. 51.46 (c) Rights Issue price: Rs. 100.00 6. Comparison with Financial Ratios of Peer Group

Accounting Ratios for the FY 2005-06 Name of the Peer Group

Company Book Value

Rs.

RONW % EPS Rs. P/E Ratio

(price as on

August 21,

2006)

JMC Projects (India) Limited* 32.00 7.06 2.26 38.40

BL Kashyap & Sons Ltd. 237.80 21.60 26.30 38.98

Era Constructions (India) Limited 124.00 20.20 14.60 14.10

Hindustan Construction Co. Ltd. 34.70 12.40 3.20 32.40

MSK Projects Limited 34.50 13.30 5.00 13.40

Nargarjuna Construction Co. Ltd. 91.10 16.40 9.90 24.50

Subhash Projects 26.10 4.60 6.80 14.50

Unitech Limited 2.80 35.00 0.80 138.60

Valecha Engineering Company Limited

170.40 11.60 12.20 13.30

Source: Capital Market Aug 28-Sept 10, 2006 * Information for JMC Project (India) Ltd. is based on six months period ended March 31, 2006 and RONW and EPS have been annualized.

7. Issue Price

In view of the reasons mentioned above, the Company and the Lead Managers to the Issue, in consultation with whom the premium has been decided, are of the opinion that the premium is reasonable and justified.

The face value of each Equity Share is Rs. 10 per Equity Share and the Issue Price of Rs. 100/- per Equity Share is 10 times the face value.

21

INDUSTRY OVERVIEW

Data in this section has been sourced from the following:

The ET Knowledge Series, Economic Times- Infrastructure & Construction Report, Press Information Bureau

and Midterm Appraisal of Tenth Five Year Plan, www.ibef.org and CMIE April’06, May’06 and June’06 and

other publicly available documents.

Overview

Construction activity is an integral part of a country’s infrastructure and industrial development and can be termed as the basic input for socio-economic development. It includes urban infrastructure, hospitals, schools, townships, offices, houses, commercial buildings, highways, roads, ports, railways, airports, power system, etc. The size of the construction industry in India is over $25 billion and accounts for more than 6% of the GDP. It is also the largest employer in the country after the agriculture sector, employing almost 18 million people. The Indian construction industry is riding on a growth wave and this wave is powered by the large spends on the ongoing infrastructure programs. The sectors contributing to high growth rates are power, transport, petroleum and urban infrastructure. The construction industry has linkages with several other sectors such as steel, cement, etc.

Sector wise break up of the industry

Particulars % of construction

sector

Group A RCC/Brick Load bearing/Steel structure building- Buildings (Residential & Institutional)

9%

Group B Highways/Small Bridges & Roads 15%

Group C Major Bridges 9%

Group D Core Sector- Power, Railways, Minerals, Transmission Sector, 43%

Group E Urban Infrastructure/Maintenance 12%

Group F Irrigation, Power Resources- Dams/Hydro Power Plants, etc 12%

Urban Infrastructure

Urban Infrastructure projects are used to describe projects to provide urban transportation facilities, shopping complexes, water supply, sanitation and other public facilities. Urbanisation is perceived as a determinant and consequence of economic development. In India the share of urban areas in the net domestic product is expected to be over 50% by 2011. Roads

India has more than 3 million kms of road, though only 2-3% of these are four-laned. Roads accounts for about 70% of the freight movement and 85% of the passenger traffic within the country. The bulk of this is on the national highways, which account for less than 2% of the total road network and carry almost 40% of the traffic. According to the Ministry of Road Transport & Highways, the road traffic in India is growing at 7-10% per annum while the vehicle population is increasing at the rate of 12%. The Ministry of Commerce and Industry has estimated the total investment required for roads would be to the tune of $40 billion. Therefore various initiatives such as BOT and annuity projects have been designed to encourage private sector participation in roads. The National Highways Authority of India (NHAI) constituted by the National Highways Authority Act, 1988, started operations in 1995. It was entrusted with the responsibility of developing, maintaining and managing the

22

National Highways. The NHAI commenced the National Highway Development Project involving the conversion of 14,279 kilometers of National Highways to 4/6-lanes, at a total estimated cost of Rs. 54,000 crore. This development program is founded on a revenue model comprising tolls and a cess on fuel, to build roads which deliver sustained performance. The NHDP is a seven phased program to connect the length and breadth of the country with a good road network. It includes –

Phase Description Length

Km

Current status

I Golden Quadrilateral 5846 4611 kms completed by February 2005

II North-South East-West Corridor 7300 544 km on NS and 148 km on EW completed. 866 km under construction.

III Widening existing National Highways having high traffic density to 4/6 lanes on BOT basis

10000 4/6 laning of 4000 km of NH approved on BOT basis. 507 km contract awarded. Project report prepared for widening 6000 km of NH

IV Upgrading of single lane / intermediate lane NH to 2-lane with paved shoulders

21000 Proposal to be submitted for government approval

V Upgrading four laned roads with high traffic density or with tourist or economic importance to six-laned roads

5000 Identification of sections for 6-laning

VI Building expressways connecting important commercial and industrial townships on BOT basis

1000 1 expressway completed. Other sections to be identified in a study supported by WB

VII Building ring roads, flyovers and bypasses on BOT basis

Conceptual stage

(Source: NHAI website)

The Government has announced the following incentives:

• All future road projects, starting from NHDP III would be on BOT basis

• NHAI could provide viability gap funding up to 40% on a case-to case basis

• Income Tax Exemption for 10 years within 15 years under Section 80(1A)

• Concession period up to 30 years for BOT projects

• Duty free import of certain equipments for highway construction.

Non-NHDP Roads

The NHAI has been entrusted with the development, maintenance and management of 10,000 km. of national highways under the non-NHDP by the MORTH. The project is envisaged to be implemented on public-private partnership. In case of low viable project, it would be taken up on an annuity/EPC basis.

Rail based transport

In cities with large populations, the provision of a rail-based mass transport system has become a necessity. Delhi has responded by implementing the Delhi Metro Railway Project. The Delhi Metro is one of the largest infrastructure projects and the first one of its kind to be undertaken in India and to meet world standards. By 2015, the population of Delhi is projected to touch 209 lakhs. The new master plan for Delhi Metro has

23

recommended a metro network of 244 km of eight lines. Section I of Phase I of the Delhi Metro Rail was commissioned and dedicated to the services in December 2002 The Mumbai Urban Transport Project is a sequel to the Bombay Urban Transport Project (BUTP). The BUTP was completed in 1984 at an estimated cost of Rs. 3900 lakhs. The MUTP has been formulated as a multi-modal project to bring about an improvement in the traffic and transportation situation and bring relief to a city’s traffic problems. The approximate project implementation period is from 2002-2008. The Government announced the National Rail Vikas Yojana (NRVY) in August, 2002 in order to remove capacity bottlenecks in the critical sections of the Indian Railway Network. It included strengthening of the Golden Quadrilateral (GQ) and its diagonals, strengthening of rail connectivity to ports and development of multi – modal corridors to the hinterland and construction of four mega bridges. The NRVY projects, except for the mega bridges, are targeted to be completed by 2007. The Rail Vikas Nigam Limited (RVNL) was set up as a special purpose vehicle (SPV) to undertake project development and mobilisation of resources along with execution of projects on a commercial format, using largely non-budgetary funds. The Union government has envisaged a budgetary support of Rs.3,000 crore for RVNL, including Rs.1,500 crore as external aid from the Asian Development Bank (ADB), which shall be available to RVNL as Government of India equity. (Source: Tenth Five Year Plan) Real Estate, Housing and Commercial Complex & Shopping Malls The Indian real estate market is experiencing exponential growth. India is witnessing a change with demand for integrated townships on the rise. Year 2006 started on a promising note when the Government of India provided fresh impetus to the construction and development sector by allowing 100% FDI under ‘automatic route’ in order to spur investment in the vital infrastructure sector. Real estate development in India focuses on two primary areas: retail and residential. The global real-estate consulting group Knight Frank has ranked India 5th in the list of 30 emerging retail markets and predicted an impressive 20% growth rate for organized retail segment by 2010. The organized sector is expected to grow from a mere 2% to 20% by the end of the decade. The outstanding investments of real estate sector as of April 2006 stood at Rs. 1,63,269.80 crore. There is a sharp 60 per cent hike in the investments envisaged a year ago. These aggregate investments are spread over 903 projects. A total of 236 projects, amounting to Rs. 31,911 crore are currently under implementation. Real estate developers are tapping massive opportunities for development of residential properties across large metropolitan cities as well as tier two and three cities. The advent of IT parks, SEZs, BPOs and malls in the commercial space is also fuelling the boom. The Government has cleared investments worth Rs. 100,000 crore in special economic zones (SEZ). The Board of Approval comprising officials from various ministries cleared 148 proposals to set up SEZs. The board has asked all the information technology SEZs to operationalise their zone within three years in order to enjoy income tax benefits The changing demographics, lower interest rate regime, rising disposable incomes, stable property prices and fiscal incentives are the main drivers of growth in the housing segment. The Indian housing industry is highly fragmented with the unorganized sector, comprising of small builders and contractors accounting for over 70% of the housing units constructed. The organized sector comprises of large builders and government or government-affiliated entities. The Tenth Five Year Plan envisages a growth of 381% in the total investment made in the housing segment. The number of households in India is expected to increase at a CAGR of 2.58 per cent owing to growth in urbanization, increasing affordability, and further nuclearisation of families. There is a huge demand and supply gap in housing in India. It has been estimated that the urban housing sector in India will require investments worth US $ 25 bn. over the next five year period. The number of malls in Mumbai, Bangalore, New Delhi, Hyderabad and Pune is expected to grow to about 250 by 2010 as against 40 at present. In terms of total area there was 12.40 mn. sq. ft. of mall space available in

24

these cities. The new concept making way into India’s retail space is discount malls. The concept behind a discount mall is to get the surplus production of leading brands and eliminate the middleman. Discount malls would primarily constitute of factory outlets of various brands in categories such as apparel, cosmetics, electronics, etc. An existing player in discount mall space is Huma Malls.

Power Cheap and abundant power is a must for a country’s development. India has taken great strides in the field of power since independence. The number of units generated has increased from 4.1 billion in 1947 to 515 billion in 2001-02. Presently, power generation in India is dominated by the state sector. The state sector primarily, the state electricity boards, has about 60% of the total installed generation capacity, about 63,000 MW. The central utilities namely NTPC, NHPC and NEEPCO have a total of about 33,000 MW of generation capacity. According to Power Grid Corporation of India Ltd (PGCIL), about Rs. 71,000 crore worth of investment will be required for the creation of a national power grid. PGCIL will be able to raise about Rs. 50,000 crore, while the balance will have to come from private sector. Overall, India has an energy shortage on the generation side. As per estimates, the energy shortage is about 9% while the peak power shortage is about 12%. The proposed capacity addition by 2012 is 1,00,000 MW. Of this 41,000 MW has to be added in the 10th Five Year Plan. Most of the new capacity addition will be through thermal-based power. Natural gas would have a smaller share. A total of 14,000 MW of capacity addition is planned in the hydel sector. The Planning Commission has allocated a total of Rs. 143,399 crore for the Ministry of Power for the 10th Plan period. During the 10th Plan period, the Electricity Bill -2003, has been passed and generation has been delicensed and captive generation has been freely permitted. The major players in the business in India are Kalpataru Power Transmission Limited, KEC International, Jyoti Structures, RPG Transmission and L&T.

Competitors

Valecha Engineering Limited

Valecha Engineering Ltd. is a Mumbai based construction company executing projects across various construction segments like highways, airports, flyovers, bridges, tunnels, canals, water supply schemes, sewerage projects, buildings and foundation engineering. Valecha Engineering Ltd. was among the first few players to concentrate on concrete paved roads. Some of the projects undertaken by Valecha are Guwhati bypass project, Uttar Pradesh road project, resurfacing project for Mumbai Airport, runway projects of Dimapur, Chennai and Vadodara airports, Borivili National Park flyover in Mumbai, construction of tunnel in Laole-Oazigund section along the Udhampur-Srinager Baramulla new broad gauge railway line.etc.Valecha recorded a PAT of Rs. 28 crores for the financial year 2005-06 as against Rs. 6 crores in the year 2004-05.

Hindustan Construction Company (HCC) Hindustan Construction Company began its operations with tunneling works in 1926. Today HCC has a presence in dams, bridges, power plants and industrial construction. HCC gets the bulk of its business from road and hydel power. HCC was also involved in the construction of the Calcutta Metro rail project. It is also the contractor for several stretches in the ongoing National Highway Development Project (NHDP). Some other major projects on which HCC has worked include the Mumbai Pune Expressway and bridges on the river Ganga and Brahmaputra. HCC has also undertaken several projects in Tanzania, Sri Lanka, Iraq, Myanmar, Qatar, Bhutan, etc. The PAT recorded for the financial year 2005-06 stood at Rs. 125 crores.

25

Nagarjuna Construction Company Ltd (NCCL)

Nagarjuna Construction Company Ltd. originally a partnership firm became public limited company in 1990 and subsequently was listed on the Bombay and Hyderabad Stock Exchanges in 1992. NCCL is primarily involved in construction of industrial and commercial buildings, roads, flyovers and other civil works. Of late, it has made progress into water supply lines and electrical works. NCCL’s well known projects include Kalina-Vakola flyover n Mumbai, the Necklace Road in Hyderabad, the bottling hall of Balaji Distilleries, Chennai, the civil and structural steel works of Nalco Damanjodi, Orrisa, etc. NCCL has been involved with the prestigious Mandalapalli AP-TRANSCO project, 100-km long 400 KV transmission line. The PAT figure for the financial year 2005-06 stood at Rs. 103.9 crores. Era Constructions (India) Ltd

Era Constructions (India) Limited is engaged in diversified construction activities for airports, power projects, infrastructure, institutional & industrial complexes, multiplexes and residential buildings. The Company has serviced many reputed clients like National Thermal Power Corporation Ltd. (NTPC), Indian Railway Welfare Organization, NBCC, Public Works Department (PWD), Central Public Works Department (CPWD), National Dairy Development Board, NHPC, IRCON International Ltd., Unichem Laboratories Ltd. and Rajasthan Spinning & Weaving Mills Ltd. Some of the projects undertaken by Era Constructions are Composite Denim Project at Lalru, Punjab for Rainbow Denim, Civil & Structural Works for 2500 TCD Sugar Plant for Krishak Sahkari Shakkar Karkhana., Guna, District Administrative Complex at Hoshiarpur (Punjab) for Punjab Urban Planning & Development Authority, construction of TG Area-Civil Works-I Package For Talcher Super Thermal Power Project I & II Unit of Stage-II for NTPC, etc. The PAT for the financial year 2005-06 stood at Rs. 26 crores. B L Kashyap & Sons Limited. B L Kashyap & Sons Ltd. is primarily involved in construction services including turnkey projects that comprise civil construction, electrical, plumbing, fire-fighting, air conditioning and other works. Broadly, the business activities could be categorized into four segments: (i) Commercial Construction; (ii) Corporate Construction (iii) Residential Construction (iv) Industrial Construction B L Kashyap & Sons Ltd. cater to the construction needs of diverse sectors such as hospitals & hospitality, industrial, IT / ITES, malls & multiplexes. They are also involved in construction and turnkey projects catering to residential and corporate office requirements. Some of the projects undertaken by B L Kashyap are Construction of Brigade Millennium – May Flower Tower at Bangalore, Construction of Factory Building for M/s GlaxoSmithkline Consumer Healthcare Ltd. at Sonepat. Civil Work for Salarpuria Infozone at Bangalore for Quardo Infotechnologies Private Limited. The PAT figure for the financial year 2005-06 was Rs. 28 crores.

26

BUSINESS OVERVIEW

JMC Projects (India) Ltd. caters to all major sectors of the economy namely Industries, Buildings and Infrastructure. The Company provides all types of construction services including fabrication and erection of structural steel components, pre-casting and allied works. It has successfully ventured into fields of turnkey execution involving Civil, Mechanical, Electrical, HVAC, Fire Fighting, Architectural and Landscaping works. JMC has implemented various fast-track projects in the construction industry. The Company has been certified with ISO 9001:2000 certificate from TUV SUD Management Service for Quality Management System, for construction of industrial, institutional and infrastructure projects. The company’s logo is registered vide Trademark no. 722765 in class 16. The maximum bid capacity as on date of the Company for NHAI projects is Rs. 671.20 crore and the Company can execute individual NHAI projects upto Rs. 204.55 crore. Over the last 2 decades, JMC has executed a variety of projects in the following sectors:

Industrial Buildings Infrastructure & Power

Agrochemicals, Automobiles, Cement & Steel, Paints, Chemicals and Petrochemicals, Electronics, Heavy Engineering, Textiles, Pharmaceuticals and Sugar

Commercial Complexes, Hotels & Hostels, Hospitals & Health Centres, High-rise Buildings, Institutional Buildings, Information Technology Parks, Multiplexes & Shopping Malls, Research & Development Centres, Residential Campus, Townships, Educational institutes and Hostels

Bridges & Flyovers, Bus Terminus, Railway stations, Drainage works, Effluent Treatment Plants, Highways, Heliports, Water Supply and Treatment Plants, Marine Works, Captive Power Plants and Underpasses

The work on hand as on July 31, 2006 is Rs. 40519 lakhs. The work on hand through joint venture Agarwal-JMC is Rs. 40119 lakhs. The Company has bid for various number of projects to the tune of approximately Rs. 134636 lakhs.

The work on hand as on July 31, 2006

Contract

Value

Work on

hand

No. of

Projects Rs. lakhs

Industrial Projects

Automobiles 1 3372 425

Pharmaceuticals 2 1452 1106

Textiles 4 7150 6594

Others 2 1548 1018

Building Projects

IT/Software Parks 3 4341 1569

Hospitals / Medical Colleges 2 9357 6115

Commercial/Office Complexes 8 15571 5709

Residential 6 11205 8350

Infrastructure & Power Projects

Flyovers / Roads / Power Transmission Lines 3 10435 9633

Total Projects on hand 31 64431 40519

Road Project through Joint Venture Agarwal-JMC 2 41996 40119

27

Key Industrial Regulations

• Mines Act, 1952

• The Mine & Minerals Act, 1957

• The Explosives Act, 1884

• The Standards of Weights & Measures Act, 1976

• Industrial Dispute Act, 1947

• Workmen’s Compensation Act, 1923

• The Contract Labour (Regulation & Abolition) Act, 1970

• The Building & Other Construction Workers (Regulation of Employment & Conditions of Services) Act, 1996

• Environment Protection Act, 1986

• The Employees’ Provident Funds & Miscellaneous Provision Act, 1952

• E.S.I. Act, 1948

• Gratuity Act, 1972

• Minimum Wages Act, 1948

• Child Labour (Prohibition and Regulation) Act, 1986 Insurance

The Company has taken the following Insurance Policies with New India Assurance Company Limited, United India Insurance Company Limited, Bajaj Allianz and Oriental Insurance Company Limited.

No. Type of Insurance Sum Insured

(Rs. lakhs)

1 Fire Policy for Plant & Machineries 2113

2 Fire Policy for Stocks 1500

3 Fire Policy for Office Equipments 118

4 Fire Policy for Store Building & Shades, Electrical Installation, JMC House - 3rd / 5th & 11th Floor Premises

417

5 Fire Policy for Computers, Printers, Laptops & LCD 89

6 Fire Policy for Office / Site Furniture 157

7 Group Personal Accident Policy for Employees & Personal Accident, Policy for Directors

6414

8 Workmen Compensation Policy for Labourers 2990

9 Mediclaim Policy for Employees & Directors 750

10 Cash In Transit Policy 2806

11 Vehicle Insurance Policies 1203

12 Fire & Burglary Policy for Shapath Office 251

13 Professional Indemnity Policy for Hyderabad Fly Over Project 20

14 Contractors’ All Risk Policies for Projects - 23 nos. 59786

28

HISTORY AND CORPORATE STRUCTURE

Brief History The Company was originally incorporated as “Civen Construction Private Limited” on June 5, 1986 under the Companies Act, 1956 with its Registered Office at Ahmedabad. Subsequently on December 10, 1987, the name was changed to Joshi & Modi Construction Private Limited, to reflect the names of the promoters. As the Company expanded its business, the first alphabet from each word of the Company name was taken and the name was further changed to JMC Projects (India) Private Limited on January 21, 1994. Subsequently the Company was converted into a Public Limited Company in the name of JMC Projects (India) Limited on February 4, 1994. The Company made its maiden Public Issue in 1994.

Due to space constraints, the Registered Office of the Company was shifted from People’s Plaza Near Memnagar Fire Station, Navrangpura, Ahmedabad - 380 009 to 4, Kuldip Society, Near Ishvar Bhuvan, Navrangpura, Ahmedabad – 380 009 w.e.f 9th May 1988. As the Company’s business expanded, the registered office of the Company was shifted to Level -11, JMC House, Ambawadi, Ahmedabad - 380006 w.e.f April 5, 2002. The Company again shifted its registered office to A-104, Shapath – 4, Opp. Karnavati Club, S.G.Road, Ahmedabad – 380051 w.e.f. November 7, 2005. The Company has regional / branch offices at Navi Mumbai, Chennai, Bangalore, Hyderabad and New Delhi.

The Company was originally promoted by Mr. I.K Modi, Mr. Hemant Modi and Mr. Suhas Joshi.

Change in Management Control

A MOU was entered into between Mr. I.K. Modi, Mr. Hemant Modi, Mr. Suhas Joshi and their relatives and Minar Investments and Finance Pvt. Ltd. (“Sellers”) and Kalpataru Power Transmission Limited and Kalpataru Energy Venture Pvt. Ltd. (“Purchaser”) on October 1, 2004 for purchase of Equity Shares of JMC constituting 32.28% of the paid up capital of JMC. Pursuant to the said MOU, Public Announcement was made on October 2, 2004 by the Purchaser, to acquire 25% (11,61,638 Equity Shares) of the share capital of JMC from the existing shareholders of JMC pursuant to Regulations 10 & 12 of SEBI (SAST) Regulations, 1997 on account of proposed substantial acquisition of Equity Shares and change in control of JMC. A Share Purchase Agreement was entered into between the aforesaid parties on October 14, 2004 for purchase of 15,00,000 Equity Shares at Rs. 40/- each representing 32.28% of the share capital of JMC Kalpataru Energy Ventures Private Ltd. which was one of the Purchasers in the SPA have relinquished and surrendered all their rights, powers and claims in relation to the operation of JMC arising out of or pursuant to the SPA, including right to participate in the management of JMC in favour of KPTL, vide their letter dated February 11, 2005 addressed to KPTL. By virtue of the above transaction, the promoters of JMC are KPTL, Mr. Suhas Joshi and Mr. Hemant Modi. Mr. I K Modi has ceased to be the promoter and has also resigned from the Board of the Company w.e.f February 5, 2005.

Awards / Citation won by the Company

• Award for “Perfection in Time & Quality” was presented by Management Association for Construction of World Class Management Institution Building at Ahmedabad in the year 1997.

• ACCE Billimoria Award 2000 for “Excellence in Construction of High Rise Building” was presented by Association of Consulting Civil Engineering (India) for JMC House at Ahmedabad in the year 2000.

29

• 500000 man-hours without a lost time incident presented by Kvaerner – Dupont

• Citation from Prestige Group for exemplary services rendered towards successful completion of Intel India Design centre

• 1000000 man-hours without a lost time incident was presented by SABIC Research & Technology Pvt. Ltd.

Joint Venture Partner JMC Projects (India) Ltd. and Dineshchandra R Agarwal Infracon Pvt. Ltd.(Dineshchandra) have formed a joint venture in the name and style AGARWAL-JMC for the execution of the NHAI project of Four laning and Strengthening of existing two lane National Highway no.45-B from Trichy bypass end to Madurai via Melur (From km. 0.00 to 124.84) in Tamil Nadu (Package-VII A & B). Dineshchandra was incorporated in 1972 in Mehsana, Gujarat. It commenced its operations with projects involving Roads, Highways and Bridges. In 1975 it diversified its activities into construction of buildings, water supply projects, Sewage, Water Treatment projects, etc. In 1977, irrigation projects were undertaken and in 1988 it forayed to construction of airport runways. Some of the projects undertaken by Dineshchandra apart from the above mentioned National Highway projects are: Widening and strengthening of existing National Highway from 2 lane to 4 lane from km 1065.00 to km 1040.30 of Nalbari to Bijni section of NH-31 in Assam on East West Corridor under Phase-II programme of NHDP, Widening and strengthening of SH 06, Vadodara - Padra - Jambusar (KM 8.268 to KM 53.00) Contract Package No. GSHP/9A.

30

PROMOTERS

Details of individual promoters

JMC was originally promoted by Mr. I K Modi, Mr. Hemant Modi and Mr. Suhas Joshi and as disclosed in the Prospectus for the Initial Public Offering dated September 2, 1994. Mr. I K Modi has resigned from the Board of the Company w.e.f. February 5, 2005, and currently has no shareholding in the Company and has by virtue of the same ceased to be a promoter. Mr. Hemant Modi, 51, is the Vice Chairman of the Company. He holds a masters’ degree in civil engineering from Rutgers, the State University of New Jersey, U.S.A. During 1980 to 1981, he worked as design engineer in Iffland Kavanagh Water Burry, P. C. New York, U.S.A. and during the years 1981 to 1983, he worked as a design engineer with Sheladia Associates Inc. Washington D.C., USA. From 1983 to 1986, he was one of the partners of Joshi & Modi Associates (partnership firm). Since June 1986 he is associated with JMC Projects (India) Ltd. He has a total experience of over 25 years in project management, execution and construction of Industrial structures and institutional and infrastructure projects. Mr. Suhas Joshi, 51, is the Managing Director – Buildings and Factories. He holds a bachelor’s degree in Civil Engineering from M. S. University, Baroda. During 1980 to 1983, he worked as a partner with M/s Kanshiram A Patel, AA Class Contractors, Visnagar, and Gujarat. During 1983 to 1986, he was one of the partners of Joshi & Modi Associates (partnership firm). Since June 1986, he is associated with JMC Projects (India) Ltd. He has a total experience of over 25 years in execution of various projects. He is involved in operations and is responsible for all activities at various sites, which inter alia include planning and scheduling, site management, procurement and control of material usage. Kalpataru Power Transmission Ltd. (KPTL) Kalpataru Power Transmission Ltd. was incorporated on April 23, 1981 as HT Power Structure Private Limited with a registration no. of 04-4281 and is registered in Gujarat. The Registered Office is situated in Gujarat and Corporate Office in Mumbai. The promoters of KPTL are Mr. Mofatraj Munot, Mr. Parag M. Munot and Mr. Ismail. M. Kanga. It was converted into a public limited company on December 20, 1993 and the name was changed to Kalpatraru Power Transmission Ltd. on January 4, 1994. KPTL made its Initial Public Offering in December 1994. The shares of the KPTL are listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited (NSE). The business of the Company is divided into four divisions namely Transmission and Distribution Division, Real Estate Division, Biomass Energy Division and Infrastructure division. The Board of KPTL consists of Mr. Mofatraj P. Munot, Mr. Mahendra G. Punatar, Mr. K. V. Mani, Mr. Ajay Munot, Mr. Parag Munot, Mr. Sajjanraj Mehta, Mr. Vimal Bhandari, Mr. Imtiaz I. Kanga and Mr. Shitin Desai.

31

The following details of the Promoters of JMC Projects (India) Ltd. have been submitted to the Stock Exchange.

Name Details Photograph

Mr. Hemant Modi PAN: AAYPM5722B Bank Account: 002401000173, ICICI Bank Ltd., JMC House, Ahmedabad Passport No.:F2564262 Driving License: 187519/AR Voters ID: NA

Mr. Suhas Joshi PAN: ADDPJ0867A Bank Account: 002401000172, ICICI Bank Ltd., JMC House, Ahmedabad Passport No.:F4235868 Driving License: GJ01/126221/03 Voters ID:GJ/11/079/555036

Kalpataru Power Transmission Ltd PAN No.: AAACK8387R Bank Account: OCC A/C No. 416207073- Indian Bank, Mumbai ; OCC A/C No. 01704010000040-Oriental Bank of Commerce, Ahmedabad ; OCC A/C No. 10301048095- State Bank of India, Ahmedabad; OCC A/C No. 359305010077603- Union Bank of India, Gandhinagar

Interest of the Promoters in JMC Projects (India) Limited Mr. Hemant Modi, Mr. Suhas Joshi and KPTL, promoters of JMC Projects (India) Limited, the Issuer Company are interested in the Company to the extent of their shareholding for which they are entitled to receive dividend declared, if any. KPTL is interested to the extent of interest income earned on account of unsecured loan given to the company. Mr. Suhas Joshi, Managing Director and Mr. Hemant Modi, Vice Chairman are interested to the extent of remuneration from the Company as disclosed under “Compensation to Vice Chairman and Managing Directors” on page 35 of the Letter of Offer Mr. Hemant Modi and Mr. Suhas Joshi are also promoter directors of JMC Mining and Quarries Limited, subsidiary of JMC Projects (India) Limited, JMC Infrastructure Limited and JMC Consultants and Developers Private Limited. Mr. Hemant Modi is also promoter director of SAI Consulting Engineers Pvt. Ltd. The Company has paid sub- contract charges to these Companies. The details of these transactions are given under “Related Party Transactions” in Financial Statement section.

Payment or benefit to Promoter of the Company

Rs Particulars 6 months ended March 31, 2006 18 months ended September 30, 2005

Hemant

Modi

Suhas

Joshi

KPTL Hemant

Modi

Suhas

Joshi

KPTL

Remuneration including perquisites

1529723 1369100 - 4130325 2808034 -

Interest - - 3695331 - - 6268981

Dividend - - - - - -

32

Exchange Rates

Presently the Company is concentrating on the domestic market only and hence its revenues are not directly affected by the fluctuations in the foreign exchange rates. However exchange rate fluctuation may have an impact in cases where machines are imported and payments are made in foreign currencies

Currency of Presentation In this Offer Document, all references to “Rupees” and “Rs.” are to the legal currency of India and “USD/$” refers to US Dollar.

Dividend Policy The Company does not have any written policy for dividend payment.

33

MANAGEMENT

Board of Directors

S.No Name, Designation,

Address & Occupation

Age Date of joining

the company as

Director

Details of other directorships held

1 Mr. Vijay Choraria Chairman S/o Mr. Kundanmal Choraria Choraria House, 5, Pali Hill, Bandra (W), Mumbai – 400 050. Occupation: Business

41 February 5, 2005 • Sharyans Resources Ltd

• Intime Spectrum Securities Ltd.

• Prebon Yamane (India) Ltd.

• Sidhant Cinevision Ltd.

• Mukta Arts Ltd.

• A.K. Equities Pvt. Ltd.

• Fine Estates Pvt. Ltd.

• Kirti Equities Pvt. Ltd.

• Prokem Trade & Investment Pvt. Ltd.

• V.J. Finsecurities Pvt. Ltd.

• Mukta Tele Media . Ltd.

• Whistling Woods International Pvt.Ltd.

• Bellflowers and Leisures Pvt. Ltd.

• NEUE Allianz Corporate Services Pvt. Ltd.

• Tamarind Tours Pvt. Ltd.

2 Mr. Hemant Modi Vice Chairman S/o Mr. I.K. Modi Plot No. 363/A, Lane 18, Satyagrah Chhavni Soc. Satellite Rd, Ahmedabad – 380 015. Occupation: Business

51 June 5, 1986. • JMC Infrastructure Ltd.

• SAI Consulting Engineers Private Limited

• JMC Mining and Quarries Ltd.

• JMC Consultants & Developers Pvt. Ltd.

3 Mr. Suhas Joshi Managing Director – Buildings & Factories S/o Mr. Vasantrao Joshi C-2/33, Goyal Intercity Drive-in Thaltej Road, Ahmedabad – 380 052 Occupation: Business

51 June 5, 1986. • JMC Infrastructure Ltd.

• JMC Mining & Quarries Ltd

• JMC Consultants and Developers Pvt. Ltd.

• JMC B&R Infra Bharat Deesa Toll Road Pvt. Ltd.

4 Mr. M. D. Khattar Managing Director – Infrastructure S/o. Mr. J.R. Khattar Address: 703-C Runwal Centre, Near Lakme, Deonar, Mumbai – 400 088 Occupation: Service

68 November 21, 2005

Nil

34

S.No Name, Designation,

Address & Occupation

Age Date of joining

the company as

Director

Details of other directorships held

5 Narsinhbhai. Patel Director S/o Mr. Kalyandas Dosabhai Patel 15, Kairavi Bungalows, Nr. Sarthi Hotel, Vastrapur Road, Bodakdev, Ahmedabad – 380 054 Occupation: Business

80 April 9, 1994 Nil

6 Mr. Ajay Munot Director S/o Mr. Amarchand Pukhraj Munot 302, Hillside, 2nd Floor, 27, Napeansea Road, Mumbai – 400 026 Occupation: Business

35 February 5, 2005 • Kalpataru Power Transmission Limited

7 Mr. Kamal Jain Director S/o Mr. Mohanlalji Kanaiyalalji Jain ‘NINAAD’ C-24, GIDC Opp. Videocon Factory, K Road, Sector 26, Gandhinagar,-382 044 Occupation: Service

49 February 5, 2005 • Energylink (India) Private Limited

• JMC Mining and Quarries Limited

8 Mr. Mahendra. G. Punatar Director S/o Mr. Gulabrai Punatar 1302, 13th Floor, Raheja Majestic, Nr. Starcity Cinema, Manmala Road, Matunga (W), Mumbai – 400 016 Occupation: Business

70 January 30, 2006 • Kalpataru Power Transmission Limited

Mr. Ajay Munot and Mr. Kamal Jain have been nominated by KPTL as per the terms of the SPA dated October 14, 2005. Except the above, there is no arrangement or understanding with major shareholders, customers, suppliers or others pursuant to which any person was selected as a director. None of the directors have any relationship with the promoters or other directors of the Company. There is no bonus/profit sharing plan with the directors.

Brief Details of the Directors

For details of Promoter Directors refer section Promoters on page 30 of this Letter of Offer.

35

Brief profile of other Directors

Mr. Vijay Choraria: (41), is a Chartered Accountant with a Degree in General Law. He has over 16 years experience in capital markets and holds directorships in various companies. He has successfully established ventures in various business segments but more notably in real estate and financial services. Some of the companies promoted by Mr. Vijay are Sharyans Resources Ltd., A.K Equities Pvt. Ltd., Fine Estates Pvt. Ltd., Intime Spectrum Commodities Pvt. Ltd., etc. Apart from being a promoter of several successful entities, he is actively associated as a director in select companies as listed on page 33 of this Letter of Offer. Mr. M. D Khattar: (68), holds a Bachelor’s Degree in Civil Engineering and is a Management graduate from AIMA, Delhi. He was appointed as the Managing Director on November 21, 2005. He possesses rich and vast experience of more than 40 years in the Construction Industry and in the development of infrastructure business in particular. He started his career in Railways and later joined IRCON. Prior to joining the company, he was the Executive Director of Hindustan Construction Company Ltd. He has successfully handled various infrastructure projects covering railways, roads, ports, nuclear and hydro power plants, water works etc. Mr. Narsinhbhai Patel: (80), is a Graduate in Mechanical and Electrical Engineering and holds a Bachelor of Science degree in Engineering. He is an industrialist with more than 50 years experience in the field of plastics manufacturing machinery. Prior to joining JMC he was the Joint Managing Director of Klockner Windsor (India) Ltd. Mr. Ajay Munot: (35) is a Chartered Accountant and Bachelor of General Law having experience of 10 years. He has experience in the field of EPC contracting in power transmission lines, oil and gas pipelines, corporate affairs, finance, human resources, operations, business development, purchase, etc. Mr. Kamal Jain: (49) is a Chartered Accountant having experience of 22 years in the field of finance, taxation, corporate affairs and human resource development. Mr. Mahendra G Punatar (70) is a master in Structural Engineering, having profound experience of over 45 years in planning and designing structures like bridges, transmission line towers, production etc.

Borrowing Powers of Directors

Vide a resolution passed at the Annual General Meeting of the Company held on December 10, 2005, consent of the members of the Company was accorded to the Board of Directors of the Company pursuant to Section 293(1)(d) of the Companies Act, 1956 for borrowing from time to time any sum or sums of monies which together with the monies already borrowed by the Company (apart from temporary loans obtained from the Company’s bankers in the ordinary course of business) may exceed the aggregate for the time being of the paid up capital of the Company and its free reserves, that is to say, reserves not set apart for any specific purpose, provided that the total amount so borrowed by the Board shall not at any time exceed the limit of Rs. 150 crore.

Compensation to Vice Chairman and Managing Directors

Mr. Hemant Modi – Vice Chairman In accordance with a resolution adopted at the Annual General Meeting held on September 21, 2004, Mr. Hemant Modi has been appointed as the CEO & Managing Director of the Company for a period of 5 years w.e.f April 1, 2004. The terms of his remuneration was fixed for a period of 3 years. He is entitled to a basic salary of Rs. 27 lakhs p.a., perquisites such as fully furnished house or House Rent Allowance, expenditure incurred on gas, electricity, water and furnishing, medical benefits for self and family, Leave Travel Concession, club fees, personal accident insurance premium (not exceeding Rs. 10,000 p.a) or other allowances not exceeding an amount equal to the annual salary. The salary and perquisites shall be exclusive of (i) contribution to provident fund, superannuation fund or annuity fund to the extent of these either singly or put together, are not taxable under the Income-Tax Act, 1961; and (ii) Gratuity payable at the rate not exceeding

36

half a month’s salary for each completed year of service. Mr. Hemant Modi is also entitled to 1 % commission on the net profits, within the permissible limits under the provisions of the Companies Act, 1956. Apart from remuneration Mr. Hemant Modi is also entitled to free use of the Company’s car with driver for the business of the Company and a telephone at his residence. In case of absence or inadequacy of profits in any financial year, Mr. Hemant Modi will be entitled to a minimum remuneration in accordance with the provisions in the Companies Act, 1956. At the Board Meeting held on November 7, 2005, Mr. Hemant Modi has been redesignated as Vice Chairman w.e.f November 21, 2005.

Mr. Suhas Joshi –Managing Director (Factories and Buildings)

In accordance with a resolution adopted at the Annual General Meeting held on September 21, 2004, Mr. Suhas Joshi has been appointed as the Joint Managing Director of the Company for a period of 5 years w.e.f April 1, 2004 and his terms of remuneration was fixed for a period of 3 years. At the Board meeting held on November 7, 2005, it has been decided to re-designate him as Managing Director and increase his remuneration w.e.f November 21, 2005 and the shareholders approval was taken at the Annual General Meeting held on June 17, 2006. He is entitled to a basic salary of Rs. 27 lakhs p.a., perquisites such as fully furnished house or House Rent Allowance, expenditure incurred on gas, electricity, water and furnishing, medical benefits for self and family, Leave Travel Concession, club fees, personal accident insurance premium (not exceeding Rs. 10,000 p.a) or other allowances not exceeding an amount equal to the annual salary. The salary and perquisites shall be exclusive of (i) contribution to provident fund, superannuation fund or annuity fund to the extent of these either singly or put together, are not taxable under the Income-Tax Act, 1961; and (ii) Gratuity payable at the rate not exceeding half a month’s salary for each completed year of service. Mr. Suhas Joshi is also entitled to 1 % commission on the net profits, within the permissible limits under the provisions of the Companies Act, 1956. Apart from remuneration Mr. Suhas Joshi is also entitled to free use of the Company’s car with driver for the business of the Company and a telephone at his residence. In case of absence or inadequacy of profits in any financial year, Mr. Suhas Joshi will be entitled to a minimum remuneration in accordance with the provisions in the Companies Act, 1956.

Mr. M .D Khattar –Managing Director (Infrastructure Business)

Mr. M .D Khattar has been appointed as additional director of the Company w.e.f November 21, 2005 vide resolution passed by the Board of Directors at its meeting held on November 7, 2005. In accordance with the resolution adopted at the Annual General Meeting held on December 10, 2005, Mr. M. D Khattar has been appointed as Managing Director – Infrastructure Business of the Company for the period effective from 21st November 2005 till 31st March 2008. He is entitled to a basic salary of Rs. 27 lakhs p.a., Gas, Electricity & Water Allowance of Rs. 2.70 lakhs p.a., other allowances towards HRA, Medical & LTA Rs. 5.40 lakhs p.a., perquisites such as club fees, personal accident insurance premium (not exceeding Rs. 4,000 p.a). The salary and perquisites shall be exclusive of (i) contribution to provident fund, superannuation fund or annuity fund to the extent of these either singly or put together, are not taxable under the Income-Tax Act, 1961; and (ii) Gratuity payable at the rate not exceeding half a month’s salary for each completed year of service. Apart from remuneration Mr. M D Khattar is also entitled to free use of the Company’s car for the business of the Company and a telephone at his residence. In case of absence or inadequacy of profits in any financial year, Mr. M .D Khattar will be entitled to a minimum remuneration in accordance with the provisions in the Companies Act, 1956.

Compensation to Non-Executive Directors

The non-executive directors are paid no other remuneration apart from sitting fees of Rs. 2500 per board meeting and Rs. 2000 per audit committee meeting.

37

Term of Directors

Mr. Hemant Modi, Mr. Suhas Joshi and Mr. M D Khattar have been appointed as non-retiring directors. All other Directors are liable to retire by rotation and are eligible for reappointment in General Meeting subject to the approval of the shareholders in terms of Section 257 of the Companies Act, 1956.

Compliance with Corporate Governance requirements

JMC Projects (India) Ltd. is fully compliant with the code of Corporate Governance as prescribed by the Listing Agreement.

The Company has complied with SEBI Guidelines in respect of Corporate Governance especially with respect to broad basing of Board, constituting the Committees such as Shareholders/Investor Grievance Committee, etc.

Board Composition

Name of Director Designation

Vijay Choraria Chairman, Non-executive Independent Director

Hemant Modi Executive Promoter Director

Suhas Joshi Executive Promoter Director

M.D. Khattar Executive Director

Ajay Munot Non-executive Director

Kamal Jain Non-executive Director

Narsinbhai Patel Non-executive Independent Director

Mahendra. G. Punatar Non-executive Independent Director

Audit Committee

The Audit Committee continues to function as prescribed under Section 292(A) of the Companies Act, 1956 and the terms of Reference of Audit Committee. The utilization of proceeds of the present Issue will be monitored on a quarterly basis by the audit committee.

The members of the Audit Committee are:

Name Category

Mr. Narsinhbhai Patel (Chairman) Non- Executive Independent Director

Mr. Ajay Munot Non -Executive Director

Mr. Vijay Choraria Non -Executive Independent Director

Mr. Mahendra G Punatar Non-Executive Independent Director

Broad Terms of Reference of the Audit Committee

The terms of reference for the Committee as laid down by the Board include the following:

1. To discuss with the auditors periodically about internal control systems, the scope of audit including the observations of the auditors

2. To review quarterly and annual financial statements before submission to the Board 3. To ensure compliance with the internal audit / statutory audit reports 4. To make recommendations to the Board on any matters relating to financial management and enforce

implementation of the same.

38

5. Overseeing of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

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

7. Recommending the Board, the appointment, re-appointment of Internal Auditor, Scope of Internal Audit and the fixation of audit fees

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

a. Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956

b. Changes, if any, in accounting policies and practices and reasons for the same c. Compliance with listing and other legal requirements relating to financial statements d. Disclosure of any related party transactions e. Qualifications, if any in the draft audit report

9. Discussion with internal auditors any significant findings and follow up there on.

During the six months period ended on March 31, 2006, meetings were held on November 7, 2005 and January 30, 2006.

Remuneration Committee

The Company has constituted the Remuneration Committee for the purpose of approving remuneration payable to Executive Directors, to review the remuneration package of the executive directors periodically and to discharge any other statutory duties and functions as may be specified under the law or to perform such task(s) as may be entrusted by the Board of Directors from time to time. The committee members are:

Name Category

Mr. Narsinhbhai Patel (Chairman) Non- Executive Independent Director

Mr. Ajay Munot Non- Executive Director

Mr. Kamal Jain Non -Executive Director

Mr. Vijay Choraria Non-Executive Independent Director

Mr. Mahendra G Punatar Non-Executive Independent Director

Terms of Reference:

The broad terms of reference of the Committee is to review the Company’s policy on specific remuneration packages to executive directors including pension rights and any compensation payment, while striking a balance with the interest of the Company and the Shareholders.

During the 6 months period ended March 31, 2006, the Remuneration Committee met on November 7, 2005 to consider revision in salary of Mr. Suhas Joshi and fixing the remuneration of Mr. M. D Khattar.

Shareholders’ Grievances Committee

This Committee was reconstituted to redress the shareholders’ and investors’ complaints like transfer of shares, non-receipt of balance sheets, non-receipt of declared dividends, etc. The members of this committee are:

Name Category

Mr. Narsinhbhai Patel (Chairman) Non -Executive Independent Director

Mr. Suhas Joshi Executive Director

Mr. Kamal Jain Non- Executive Director

39

Terms of Reference

1. To discuss and take steps to resolve any of the shareholders’ complaints relating to share transfer, payment of dividend, non-receipt of the Annual Report and Notices of the Members’ meetings, furnishing of various information, production of statutory records for inspection, issue of duplicate shares etc.

2. To issue necessary instructions to the Secretarial Department and the Share Transfer Agents of the Company to resolve any of the queries or complaints received from the shareholders.

3. To periodically review the shareholders’ complaints received and steps taken to resolve the same.

During the six months period ended March 31, 2006, one meeting was held on January 30, 2006. There were no complaints pending as of March 31, 2006. In August 2006 the Company has received some investor complaints from SEBI. The Company has initiated steps to resolve the same.

Interest of the Directors/Promoters All the Directors/Promoters of the Company, apart from normal remuneration and other benefits including reimbursement of expenses incurred and their shareholding in the Company (including rights entitlement, if any) have no other interests in the Company except in respect of commercial transactions between the Company, its subsidiaries and other companies in which they are interested in the capacity of promoter directors.

Qualification Shares

A Director need not hold any shares in the Company to qualify for the office of a Director of the Company.

Shareholding of Directors

Director No. of Shares held in JMC % to total share capital

Hemant Modi 172804 1.49%

Suhas Joshi 56654 0.49%

Apart from the above, none of the directors hold any shares in JMC.

Changes in the Directors in the last three years

Director Date of Appointment Date of Cessation Reason

I .K Modi 09/04/1994 05/02/2005 Resigned

Nilesh Mehta 08/04/2002 05/02/2005 Resigned

Deval R. Shah 31/01/2004 30/01/2006 Resigned

Ajay Munot 05/02/2005 -- Appointed

Vijay Choraria 05/02/2005 -- Appointed

Kamal Jain 05/02/2005 -- Appointed

M .D Khattar 21/11/2005 -- Appointed

Mahendra G Punatar 30/01/2006 -- Appointed

40

Key Management Personnel

No. Name, Age,

Designation &

Qualification

Previous Employment Total

Exp.

Yrs.

JMC.

Exp.

Date of

Joining

Responsibility Remuner

ation (Rs

lakhs) *

1 Atul Shah, 48,

Sr. Vice President BE & MBEM

• Hindustan Construction Company Ltd.

• Traflagar House Construction I Ltd.

22 7 yrs 21/04/1999 • In-charge of Western India operation

• Identifying opportunities and business expansion

15.32

2 V. Lanka, 60, Sr. Vice President BEC

• Bharat Heavy Electrical Ltd.

• Bharat Heavy Plates & vessel Ltd.

32 10 yrs 02/07/1996 • In-charge of South India Operations


• Negotiation, finalizing and monitoring contracts

18.39

3 Alok Sapre, 45, Sr Vice President

BEC, M Tech

• OSE Pvt. Ltd

26 1 yr 12/09/2005 • In-charge of Infrastructure Projects


• Negotiation, finalizing and monitoring contracts

17.00

4 Nitin C. Parikh, 51,

Asst. Vice President B.Com

• TATA Textile

• Arbuda Mills Ltd.

21 17 yrs 01/02/1989 • In-charge of Accounting System of South India operations

• In charge of raw material procurement

12.69

5 Naresh Kachhwah, 42 Asst. Vice President BEC, PGCM

• Nagarjuna Construction Company Ltd.

• Shipra Estate

17 10 mths 08/11/2005 • In-charge of Business development

• Monitoring of project execution for Northern Region

9.81

6 Amit K. Raval, 41, General Manager B.Com/ICWA/ MBA/Inter CS

• Fisher Rosemount India Ltd.

• Yokogawa Bluestar Ltd.

13 5 1/2 yrs

02/11/2000 • In-charge of accounts and taxation

• MIS

• Commercial support to tender department

9.81

7 Narendra R. Kantawala, 55, General Manager BEC

• Ramjibhai Jirjibhai & Sons

• Ruchi Construction

32 15 yrs 20/09/1991 • In-charge of projects in Gujarat

• Monitoring projects for timely completion and safety requirements

9.19

8 Virendra Kumbhat,41, General Manager

ACA

• Self Employed 17 1 yr 01/03/2005 • In-charge of Costing & Auditing of Western India

• Developing auditing system.

• Monitoring Zero base budgeting.

• Cost control.

9.79

9 Shyam Kapoor,47, General Manager BEC

• Larsen & Toubro Ltd.

• Gammon India Ltd.

• Birla Group

26 1 yr 12/04/2005 • In-charge of operations in Mumbai

• Monitoring of the projects for timely completion and safety requirements

8.09

41

No. Name, Age,

Designation &

Qualification

Previous Employment Total

Exp.

Yrs.

JMC.

Exp.

Date of

Joining

Responsibility Remuner

ation (Rs

lakhs) *

10 M. Chandrasekhar, 45 General Manager

BEC, ME

• Madhucon Projects Ltd.

• Sai Sri Enterprises

18 1 yr 13/07/2005 • In-charge of operations in Bangalore, Hyderabad & Chennai.

• Monitoring of the projects for timely completion and safety requirements

8.58

11 A P Kandpal, 45 General Manager

DCE

• Era Construction Ltd

• Nucon India Pvt. Ltd.

22 3 yrs 07/04/2003 • Monitoring projects in northern region

9.18

12 S. K. Sahani, 47 General Manager

DME

• Punj Lloyd Ltd.

• National Building Construction Corp. Ltd.

• Hindustan Construction Company Ltd.

23 - 06/09/2006 • Identifying opportunities for Business Development in Power Sector & Industrial Building sector

• Responsible for tendering & negotiation

11.64

*Annualised figures based on FY 2006-07 remuneration.

The persons whose names appear as key management personnel are on the rolls of the Company as permanent employees. Employees of the Company’s subsidiaries / group companies have not been included in the key managerial personnel. There is no arrangement or understanding with major shareholders, customers, suppliers or others pursuant to which any person was selected as a member of senior management. None of the Key Managerial Personnel have any relationship with the promoters or the directors of the Company. There is no bonus/profit sharing plan with the key managerial personnel.

Details of shares held by Key Managerial Personnel as on September 8, 2006

SNo Name of the key managerial personnel No. of shares held % to total capital

1

V. Lanka 3750 0.03

The above-mentioned shares have been acquired through market purchases and allotted in the rights issue.

Changes in Key Managerial Personnel during the last three years

Name Designation Date Reason/Change

2006-07

Mr. B. N. Nagraj General Manager 25/01/2006 Resigned

Mr. Sanjiv Kothari General Manager 19/06/2006 Resigned

S. K. Sahani General Manager 06/09/2006 Joined

2005-06

Mr. Shyam Kapoor General Manager 12/04/2005 Joined

Mr. Pankaj C Shah Vice President 30/04/2005 Resigned

Mr. Naresh Kachhwah Asst. Vice President 08/11/2005 Joined

Mr. M Chandrashekhar General Manager 13/07/2005 Joined

Mr. Alok Sapre Sr.Vice President 12/09/2005 Joined

Mr. Bharat Brahmbhatt General Manager 30/06/2005 Resigned

Mr. B.N Nagraj General Manager 09/12/2005 Joined

Mr. A. K Gupta General Manager 31/12/2005 Resigned

2004-05

Mr. A. K. Gupta General Manager 31/08/2004 Joined

Mr. Virendra Kumbhat General Manager 01/03/2005 Joined

42

Bonus or Profit Sharing Plan for the Key Managerial Personnel

There is no profit sharing plan for the key managerial personnel. The Company makes bonus payments as per their terms of appointment.

Stock Option Scheme/Employees Stock Purchase Scheme

There is no stock option scheme for the employees at present Payment or Benefit to officers of the Company (non- salary related) The Company provides Medical Insurance for all its employees. It also provides Group Personal Accident Insurance for all its permanent employees. The on-site labourers hired by contractors and the Company are covered under the Workmen Compensation policy. For senior officials the Company has policies for leased accommodation and company owned car scheme on a case-to-case basis.

Subsidiary of JMC Projects (India) Limited

JMC Mining and Quarries Limited (JMQL)

JMC Mining and Quarries Ltd was incorporated as JMC Mining and Quarries Private Limited on February 1, 1996. The Company was subsequently converted into a Public Limited Company in October 1998 pursuant to the erstwhile section 43A of the Companies Act, the same being a wholly owned subsidiary company of JMC. The company has its Registered Office at A-104, Shapath-4, Opp. Karnavati Club, S. G. Road, Ahmedabad 380051. JMQL has facilities at Thasara, Dist. Kheda for manufacturing aggregates like kapchi, grit and rubble, which are the basic raw materials required for construction activity. JMQL supplies this basic material of consistent quality to supplement the raw material requirements of the projects handled by JMC as well as to other external clients. Due to the quality advantage available to JMQL, it has established its name in the supply of crushed aggregate in and around Kheda district. With the increased expenditure on road development projects by the Government, across the country and more particularly, in the vicinity of the JMCs operations, it would alter the growth opportunity of the JMQL. Board of Directors:

1. Mr. Hemant Modi 2. Mr. Suhas Joshi 3. Mrs. Sonal Modi 4. Mr. Kamal Jain

Shareholding Pattern as on March 31, 2006

Name No. of

Shares

% of capital

JMC Projects (India) Ltd. 499400 99.88

6 individuals (nominees of JMC Projects (India) Ltd.) 600 0.12

Total 500000 100.00

43

Brief Audited Financial Information

Rs. lakhs

Particulars

2005-06

(6 months)

2004-05

(18 months)

2003-04

(12 months)

Equity (issued & paid up capital) 50.00 50.00 50.00

Reserves 67.24 62.96 54.94

Miscellaneous Exp not written off 0.66 0.70 0.86

Income from Operation 236.86 608.11 358.57

Profit After Tax 4.28 8.03 7.88

Earnings Per Share (Rs) 0.86 1.61 1.58

Net Asset Value per share (Rs) 23.31 22.45 20.97

For complete financial information of the subsidiary please refer ‘Financial Statements’ section of this Letter of Offer.

Conflict of Interest The company is into manufacturing and trading of aggregates that supplements the Construction business of JMC. There are no conflicting businesses or interests amongst JMC and JMQL.

Litigations

For details refer ‘Outstanding Litigations and Defaults’ on page 111 of the Letter of Offer.

Ventures Promoted by the Promoters (Mr. Hemant Modi and Mr. Suhas Joshi)

JMC Infrastructure Ltd. (JMCIL)

JMC Infrastructure Ltd. was incorporated on January 13, 1995 as Interlink Aeroproducts Private Limited. The promoters of JMCIL are Mr. Hemant Modi and Mr. Suhas Joshi. It was subsequently converted into a Public Limited Company on December 13, 1999. The name was subsequently changed to JMC Infrastructure Limited on December 16, 1999. JMCIL was incorporated mainly with the objective to execute Infrastructure projects on its own or through Joint Venture / tie ups with other companies. In the financial year 2000-01, it commenced the flyover project at Worli, Mumbai which was completed in the financial year 2002-03. The Directors on the Board of JMCIL are Mr. Hemant Modi, Mr. Suhas Joshi and Ms. Sonal Modi

SAI Consulting Engineers Pvt. Ltd. (Formerly known as Sheladia Associates & Consultants India Pvt.

Ltd.) SAI Consulting Engineers Private Limited was founded by Mr. Hemant Modi. It was incorporated on February 14, 1983 to carry on the business as Civil Engineers, Architects, Structural Engineers, Electrical Engineers, Mechanical Engineers, Industrial Engineers, Electronics Engineers, and Designing Engineers. The name was changed from Sheladia Associates and Consultants (India) Pvt. Ltd. to SAI Consulting Engineers Private Limited with effect from February 21, 2005. SAI Consulting Engineers Pvt. Ltd. carries out its business activities independent of JMC. The Directors are Mr. Hemant Modi, Ms. Sonal Modi, Mr. Deval Shah, Mr. S. Ramanathan and Mr. Dhaval Parikh.

44

JMC Consultants and Developers Pvt. Ltd.

JMC Consultants and Developers Pvt. Ltd. was originally incorporated as L & M – JMC India Pvt. Ltd. on December 4, 2000 by Mr. Hemant Modi and Mr. Suhas Joshi as a SPV to bid for and execute an IT park project in Bangalore in Joint Venture Partnership with an Indonesian company. However, the project was not awarded to the Joint Venture. The name was changed to JMC Consultants and Developers Pvt. Ltd on February 20, 2004 subsequent to the resignation of the directors of the Indonesian Company. No business has been carried out by the Company since then. Mr. Hemant Modi and Mr. Suhas Joshi are the Directors.

J.M. Construction

J.M Construction is a partnership firm formed on January 20, 1994 by Mr. Hemant Modi and Mr. Suhas Joshi. It was formed for the purpose of carrying on construction business as civil contractors, engineers and designers. JMC sub-contracts small size construction work to JM Construction. The profit sharing ratio of the partners is as follows: Mr. Hemant Modi – 50% Mr. Suhas Joshi – 50% The firm has incurred a loss of Rs. 0.20 lakhs for the year ended March 31, 2006 as no activities are being carried out at present.

Minar Investments & Finance Pvt. Ltd. (Company where promoters have disassociated themselves)

The promoters sold their entire shareholding in Minar Investments & Finance Pvt. Ltd. to third parties and also resigned from the Board of Minar Investments & Finance Pvt. Ltd. in January 2004. Subsequently, Minar Investments & Finance Pvt. Ltd. transferred its entire holding of 93,516 Equity Shares of JMC to KPTL under the Share Purchase Agreement. Since Minar Investments & Finance Pvt. Ltd. is no longer related to promoters either by virtue of their shareholding or by its own holding in JMC, the Promoters have disassociated from Minar Investments & Finance Pvt. Ltd. with effect from February 28, 2005.

Conflict of Interest There are no conflicting interest between JMC and ventures promoted by the promoters. Litigations

For details of litigations of ventures promoted by the Promoters refer ‘Outstanding Litigations and Defaults’ on page 111 of the Letter of Offer.

Promoter Group Companies

The following three companies are part of the promoter’s (KPTL) group by virtue of Explanation II given in clause c (ii) under the provisions of clause 6.8.3.2(m) of SEBI DIP Guidelines

Kalpataru Constructions Pvt. Ltd. The Company was incorporated on October 9, 1981 as Kalpataru Constructions Pvt. Ltd. The name was subsequently changed to Kalpataru (Indo Saigon) Constructions Pvt. Ltd w.e.f February 24, 1984. Again the name was changed to Kalpataru Constructions Pvt. Ltd. w.e.f September 6, 1993. The Company is into the

45

business of Real Estate & Property Development in Mumbai. The Board members are Mr. Mofatraj P. Munot, Mr. Parag M. Munot, Ms. Monica P. Munot, and Mr. Imtiaz I. Kanga

Kalpataru Properties Pvt. Ltd. (previously known as Kalpataru Construction Overseas Pvt. Ltd)

The Company was incorporated on June 9, 1975 as Kalpataru Consultants Private Limited. The name was changed to Kalpataru Construction Overseas Pvt. Ltd. on January 21, 1982. and subsequently changed to Kalpataru Properties Pvt. Ltd. w.e.f June 6, 2006. The Company is in the business of Real Estate/ Property Development and Real Estate Consultancy. The Directors are Mr.Ismail M. Kanga, Mr. J.B. Shah, Mr. Mofatraj P. Munot, Mr. S.R.Mehta, Mr.Imtiaz I.Kanga, Mr.Parag M. Munot, Mr. Sharad V. Bhansali, Mr. S.R. Merchant and Mr. Anuj A. Munot.

K.C. Holdings Pvt. Ltd. K.C. Holdings Pvt. Ltd. was incorporated on June 24, 1981. The main activity of the Company is investment in shares and real estate. The Directors are Mr. Mofatraj P. Munot, Mr. Parag M. Munot, Ms. Monica P. Munot and Mr. Imtiaz I. Kanga.

Litigations

For details of litigations of Promoter Group Companies refer ‘Outstanding Litigations and Defaults’ on page 111 of the Letter of Offer.

46

FINANCIAL STATEMENTS

AUDITOR’S REPORT

The Board of Directors, JMC Projects (I) Ltd, Ahmedabad 1) We have examined the financial information contained in the statements annexed to this report which is

proposed to be included in the Letter of Offer of JMC PROJECTS (I) LTD. (“The Company”) in connection with the proposed Rights Issue, as required by :

i. Paragraph B (1) of Part II of Schedule II to the Companies Act, 1956 and

ii. The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000, and amendments thereto issued by SEBI on January 19, 2000 in pursuance of Section 11 of The Security and Exchange Board of India Act (SEBI), 1992, “the SEBI Guidelines” and

iii. The instructions dated 30th June, 2006 received from JMC Projects (I) Ltd. requesting us to issue a

report as statutory auditor of the Company relating to the offer document being issued by the Company in connection with the Right Issue Offer of equity shares of JMC Projects (I) Ltd.

2) We report as under:

(i) The statements of adjusted Profits and Losses, and the Assets and Liabilities and the Cash Flow

of the Company as at the end of each of the three years ended 31stMarch, 2002, 2003, 2004 & for the eighteen months period ended as on 30thSeptember, 2005 & for the six months period ended as on 31st March 2006 reflect the profits and losses and assets and liabilities and the cash flows for those relevant years and period, extracted from the audited financial statements for those years and period, audited by us, after making such adjustments regroupings and disclosures as were, in our opinion, appropriate and required to be made in accordance with the provisions of Part II and Schedule II of the Companies Act, 1956 and the provisions of paragraph 6.10 of The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 and amendments thereto.

(ii) In our opinion, read with the respective Significant Accounting Policies and subject to/read

together with the notes thereon and after making such adjustments, regroupings and disclosures as were, in our opinion, appropriate and required; these statements have been prepared in accordance with Part II of Schedule II of the Companies Act, 1956 and the SEBI Guidelines.

(iii) As regards the audited Financial Information, of the Company’s wholly owned subsidiary

viz. JMC Mining and Quarries Ltd., We report, as per the provisions of the paragraph 6.10.2.3 of The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 that Statement of adjusted Profits and Losses and the Assets and Liabilities of the subsidiary company for each of the Three years ended as on 31st March 2002, 2003, 2004 & for the eighteen months period ended as on 30th September 2005 & for the six months period ended as on 31st March, 2006 reflects the Profit & Loss Account and Balance Sheet for those years audited by M/s. Shah Narielwala & Co. and M/s. H. S. Modi & Associates, after making such adjustments, regrouping and disclosures, as were, in our opinion appropriate. The Profits and Losses as well as the Assets and Liabilities of the said subsidiary, being a wholly owned subsidiary, entirely concern the members of the JMC Projects (I) Ltd.

47

3) Our this Report, is being provided solely for the use of JMC Projects (I) Ltd, for the purpose of

inclusion in the said Offer Document in connection with the Rights Issue Offer of the equity shares of the Company.

4) This Report may not be used or relied upon by, or disclosed, referred to or communicated by yourself

(in whole or in part) to, any third party for any purpose other than the stated use, except with our written consent in each instance, and which consent, may be given, only after full consideration of the circumstances at that time.

Yours Faithfully, Place: Ahmedabad. For Sudhir N. Doshi & Co.

Chartered Accountants Date: 6th July 2006

(Sudhir N. Doshi)

Proprietor Membership No. 030539

48

“Financial Information” dealt with by this report:

PART - A

a. Statement of adjusted Assets and Liabilities. b. Statement of adjusted Profits and Losses. c. Major Notes to, including inter alia significant Accounting Policies followed by the company, and

forming a part of the Statement of adjusted Profits and Losses and Statement of adjusted Assets and Liabilities.

Including:

i) Statement of Cash Flows of the Company ii) Statement of Capitalisation iii) Statement of Accounting Ratio iv) Statement of Rate of Dividend v) Details of other Income vi) Details of Contingent Liabilities vii) Details / Analysis of Unsecured Loan taken by the Company viii) Details / Analysis of Secured Loan taken by the Company ix) Details of Loans & Advances x) Details of Age-wise Analysis of Sundry Debtors (Related Party JMC Infrastructure Ltd.) &

Break up of Sundry Debtors outstanding for more than 6 months xi) Tax Shelter Statement xii) Details of Related Party Transaction xiii) Top Twenty Five borrowings.

PART - B

a. Audited Financial Information of JMC Mining & Quarries Ltd., a wholly owned subsidiary of JMC

Projects (India) Ltd including : a. Statement of adjusted Assets and Liabilities. b. Statement of adjusted Profits and Losses. c. Major Notes to, including inter alia significant Accounting Policies followed by the company,

and forming a part of the Statement of adjusted Profits and Losses and Statement of adjusted Assets and Liabilities.

PART – C

a. Statement of adjusted Consolidated Assets and Liabilities. b. Statement of adjusted Consolidated Profits and Losses. c. Statement of adjusted Consolidated Cash Flows. d. Major Notes to, including inter alia significant Accounting Policies followed by the company, and

forming the part of the Statement of Consolidated adjusted Profits and Losses and Statement of adjusted Consolidated Assets and Liabilities.

49

PART A

STATEMENT OF ASSETS & LIABILITIES AS AT 31ST

MARCH, 2006, 30TH

SEPTEMBER, 2005 &

31ST

MARCH, 2004, 2003 & 2002 Rs. lakhs

As at

31st March

As at

30th

September

As at 31st March

Particulars

2006 2005 2004 2003 2002

A Fixed Assets

Gross Block 8173.94 7249.95 6051.05 5424.29 5285.94

Less : Depreciation 2361.00 2172.06 1707.55 1420.75 1164.72

Net Block 5812.93 5077.89 4343.50 4003.54 4121.22

Capital Work in Progress 125.21 30.92 0.00 0.00 0.00

Total 5938.14 5108.81 4343.50 4003.54 4121.22

B Investments 51.15 51.61 51.61 51.85 51.86

C Deferred Tax Assets 20.60 95.74 0.00 0.00 0.00

D Current Assets, Loans and Advances

Inventories 1466.93 1433.38 948.99 538.34 722.93

Sundry Debtors 8104.74 6921.77 6878.70 6878.54 6265.36

Cash and Bank Balances 878.58 894.07 740.82 404.16 433.19

Loans and Advances 1482.12 1205.47 1091.87 949.36 1427.43

Total 11932.37 10454.69 9660.38 8770.40 8848.91

E Liabilities and Provisions

Loan Funds

Secured 4186.66 6009.86 6293.63 5616.46 5425.60

Unsecured 1521.55 1685.37 842.06 907.30 793.36

Total 5708.21 7695.23 7135.69 6523.76 6218.96

F Deferred Tax Liability 0.00 0.00 531.72 761.61 138.10

G Current Liabilities and Provisions

Current Liabilities 8172.92 4163.60 4736.84 3463.05 4188.98

Provisions 338.64 261.03 0.00 26.21 55.76

Total 8511.56 4424.63 4736.84 3489.26 4244.74

50

As at

31st

March

As at

30th

September

As at 31st March

Particulars

2006 2005 2004 2003 2002

H

Net Worth 3722.48 3590.99 1651.24 2051.16 2420.19

Represented by :

I Shareholder's Funds

Share Capital 1161.64 1161.64 464.66 464.66 464.66

Reserves 2560.85 2468.54 1186.58 1592.87 1966.63

Total 3722.48 3630.18 1651.24 2057.53 2431.29

Less

J Profit & Loss Account ( Debit Balance ) 0.00 39.19 0.00 0.00 0.00

K Miscellaneous Expenditure (to the extent not written off or adjusted) 0.00 0.00 0.00 6.36 11.09

L Net Worth 3722.48 3590.99 1651.24 2051.16 2420.19

51

STATEMENT OF PROFIT AND LOSS FOR THE PERIOD ENDING ON 31ST

MARCH, 2006, 30TH

SEPTEMBER, 2005 AND 31ST

MARCH, 2004, 2003 & 2002 Rs. lakhs

For the six

months

period

ended on

31st

March

For the

Eighteen

Months period

ended 30th

September

For the year ended 31st March Particulars

2006 2005 2004 2003 2002

Income

Contract Receipts 14199.61 35023.75 18369.90 20993.90 24309.26

Other Income 131.45 287.52 203.48 88.52 164.20

Total Income 14331.06 35311.27 18573.38 21082.42 24473.46

Expenditure

Cost of Materials 7106.63 17397.14 9864.05 11015.42 12537.88

Work Charges 3077.41 8868.03 3794.15 4317.90 5411.59

Construction Expenses 1329.83 3817.03 1573.60 1631.37 2190.73

Payment to Employees 1018.36 2312.54 1281.02 1310.77 1415.12

Other Expenses 879.88 1711.98 1303.25 1081.93 1136.00

Total Expenditure before

Interest, Depreciation, Tax &

Exceptional Items 13412.11 34106.72 17816.07 19357.39 22691.32

Profit/ (Loss) Before Interest,

Depreciation, Tax &

Exceptional Items 918.95 1204.55 757.31 1725.03 1782.14

Interest 493.10 1689.09 1075.33 1091.05 1095.01

Depreciation 201.04 531.64 315.84 305.05 293.37

Total 694.14 2220.73 1391.17 1396.10 1388.38

Profit/ (Loss) before Tax &

Exceptional Items 224.81 (1016.18) (633.86) 328.93 393.76

Less: Extra-ordinary item of Expense - 966.70 - - -

Add: Extra ordinary item of Income - 209.00 - - -

Profit/(Loss) before Tax 224.81 (1773.88) (633.86) 328.93 393.76

Taxation (Previous Year) 0.00 0.00 0.00 16.97 0.00

Taxation (Current Year) 0.00 0.00 0.00 36.00 30.11


Fringe Benefit Tax 18.18 10.55 0.00 0.00 0.00

Net Profit/ (Loss) After Tax 131.49 (1156.97) (403.97) 204.50 338.96

52

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS AS AT

31ST

MARCH, 2006

1 Significant Accounting Policies

i.

Accounting Convention

ii. Revenue Recognition

a. Construction contracts

Running Account Bills are prepared on percentage of completion method based on completion of physical proportion of the contract work. RA Bills submitted to the contractees are treated as work completed at the end of the year. The income on account of claims / extra item works are recognised to the extent Company expects reasonable certainty about receipts or acceptance from the client.

b. Joint Venture Contracts

Contracts executed in Joint Ventures under Work Sharing Arrangement (Consortium) are accounted in accordance with the accounting policy followed by the company as that of an independent contract to the extent work is executed. In case where the contracts are executed independently by the Joint Venture, the share of Profit / Loss is recognised as a income / loss in the books of accounts of the Company.

c. Other income

Revenue in respect of other income is recognised when no significant uncertainty as to its determination or realisation exist.

iii. Fixed Assets

Fixed Assets are stated at cost of acquisition less accumulated depreciation. Cost is inclusive of all identifiable expenditure incurred to bring the assets to their working condition for intended use. Additional cost arising out of fluctuations in foreign currency is adjusted to the cost of the assets. Where an asset is scrapped or otherwise disposed off, the cost and related depreciation are removed from the books of accounts and the resultant profit or loss, if any, is reflected in the Profit and Loss Account. Advances paid towards acquisition of Fixed Assets and direct costs as well as related incidental expenses incurred on assets that are not yet ready for their intended use or not put to use as on the Balance sheet date are stated as Capital Work in progress.

iv. Depreciation

The depreciation on the Fixed assets has been provided on the straight line method in accordance with Companies Act, 1956 except for Plant and Machineries acquired on or after 1st October,2005 which are depreciated @ 12.5% in stead of 4.75%. (Refer note no. 16)

Depreciation on addition to assets or on sale/disposal of assets, is calculated prorata from the date of such addition or upto the date of such sale/disposal as the case may be.

v. Impairment of Assets

The carrying amount of assets is reviewed at each balance sheet date if there is any indication of impairment of the carrying amount of the Company's assets. If any indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognised wherever the carrying amount of the assets exceeds its recoverable amount.

53

vi. Investments

Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary in the opinion of the management.

vii. Retirement Benefits to Employees

a. Gratuity liability has been covered by Master Policies of Life Insurance Corporation of India under irrevocable trusts, annual premium whereof computed is charged to Profit & Loss Account. Adjustments or refund thereof by L.I.C. and shortfall in gratuity payable to employees, if any, are accounted as and when they arise.

b. Contribution to Provident Fund and Superannuation scheme accruing during each year as per the schemes is charged to Profit & Loss Account.

viii. Expenses relating to Shares

Shares issue expenses are adjusted against Securities Premium Account.

ix. Inventories

Stores and Construction material are valued at lower of cost or net realisable value. Cost of inventories comprise of all costs of purchase, cost of conversion and other cost incurred in bringing them to their respective present location and condition. Cost is determined using FIFO method of inventory valuation.

Work in progress is valued at lower of cost and net realisable value. Cost includes direct materials and labour and proportion of manufacturing overheads wherever applicable. In case where work is completed but Running Account bill can not be raised on client due to contractual conditions, the work in progress is valued at contract rates.

x. Provision for Taxes

a Current Tax:

Provision for Income Tax is determined in accordance with the provisions of Income Tax Act, 1961

b Deferred Tax Provision:

Deferred Tax charge or credit is recognised, on timing differences, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is calculated using the applicable tax rates and tax laws that have been enacted by the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the asset will be realised in future. At each Balance -sheet date, recognised and unrecognised Deferred Tax Assets are reviewed.

c Fringe Benefit Tax

Tax on Fringe Benefits is measured as the specified rates on the value of Fringe Benefits in accordance with the provisions of the Section 115WC of the Income Tax Act, 1961. Accounting for Fringe Benefit Tax is done as per the Guidance note issued by ICAI.

xi. Foreign Currency Transaction

a Transactions denominated in Foreign Currency are normally recorded at the exchange rate prevailing at the time of the transaction.

b In respect of transactions covered by forward exchange contracts, the difference between the forward rate and the exchange rate at the date of the transaction is recognised as income or expense over the life of the contract. Any income or expense on account of exchange rate difference either on settlement or on translation is recognised in profit and loss account.

54

xii. Accounting for Project Mobilisation expenses

Expenditure incurred on mobilisation and creation of infrastructure facilities for site is written off in proportion to work done.

xiii. Borrowing Costs

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalised as a part of the cost of such assets till such period the assets are ready for use. All other borrowing costs are charged to revenue.

xiv. Earning Per Share

Earning Per Share is calculated by dividing the net profit or loss for the period attributable to equity share holders by the no. of equity shares outstanding during the period. For the purpose of calculating Diluted Earnings Per Share, the net profit or loss for the period attributable to equity shareholders and no. of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

xv. Other Accounting Policies

These are consistent with the generally accepted accounting standards.

2. Contingent Liabilities & Commitments Rs. lakhs

Particulars As at

31st March 2006

As at 30th

September 2005

A Bank Guarantees 3.20 3.20

B Guarantee given in respect of cash credit and loans advanced to the Subsidiary Company (Outstanding balance of Cash credit as on 31/03/06 is Rs. 62.66 lakhs.)

79.10 79.10

C In respect of Letters of Credit : 241.26 573.03

D Claims against the Company not acknowledged as debts 536.29 536.57

E Estimated amount of orders to be remaining to be executed on capital account and not provided for (net of advances)

486.90 41.43

Note: The figures shown in "D" above does not include amount of claims raised by way of counter claims by clients against the claims raised by the Company.

3. On September 9, 2005 the Company has issued and allotted 69,69,825 fully paid equity shares of Rs. 10/-

each for cash at a premium of Rs. 35/- per equity share at an issue price of Rs. 45/- per equity share aggregating to Rs. 3136.42 lakhs on right basis along with detachable warrants. The utilisation of the fund raised through right issue upto 31st March, 2006 is as under.

Rs. lakhs


New office Premises 165.00 164.32 Purchase of Capital Equipments 900.00 634.15 Repayment of Debts 1,035.00 1,038.54 Reduction in working capital 985.00 981.46 Issue Expenses 51.42 39.68

Unutilised Balance Balance in Cash Credit Account with banks - 278.27

Total 3,136.42 3,136.42

55

4. Directors' Remuneration

Managerial Remuneration U/s 198 of the Companies Act, 1956 Rs. lakhs

Particulars For the six months

period ended on

31/03/2006

For the eighteen

months period ended

on 30/09/2005

Salaries 37.80 60.55

Commission on Profit - -

Contribution to Provident Fund 4.20 7.24

Perquisites 0.29 1.60

5. Auditor's Remuneration

Rs. lakhs

Particulars

For the six months

period ended on

31/03/2006

For the eighteen

months period

ended on

30/09/2005

Audit Fees 3.99 4.96

Taxation matters 4.15 6.37

For Certification and Other Services 0.19 0.36

Reimbursement of Expenses 0.51 0.46

6. The Income-tax Assessments of the Company have been completed upto the Accounting period ended

31st March, 2005.

7. The Net Deferred Tax Liability/ (Assets) as on 31st March 2006 comprises the following :

Rs. lakhs

Particulars As at

31st March, 2006

As at 30th

September, 2005

Deferred Tax Liabilities Depreciation Differences 938.52 978.93

(A) 938.52 978.93

Deferred Tax Assets Unabsorbed Depreciation 383.33 383.33 Business Loss to be carried forward to next period 575.79 691.33

(B) 959.12 1074.66

Net Deferred Tax (Assets) / Liabilities : (A-B) (20.60) (95.74)

Recognition of Deferred Tax Asset for Unabsorbed Depreciation and Business Loss

Deferred Tax Asset has been recognised in respect of unabsorbed depreciation and business loss. Considering the current order backlog, the management of the Company expects reasonable certainty of earning.

56

8. Related Party Disclosure

(A) Particulars of Subsidiary / Associates Companies Nature of Relationship

(1) JMC Mining and Quarries Ltd. Wholly Owned Subsidiary Company

(2) JMC Infrastructure Ltd. Associate Company

(3) SAI Consulting Engineers Private Ltd. Associate Company

(4) J M Construction Associate Firm

(5) AGGRAWAL - JMC JV Association of Persons

(6) JMC Consultants & Developers Pvt. Ltd. Associate Company

(7) Kalpataru Power Transmission Ltd. Associate Company

(B) Key Management Personnel Nature of Relationship

(1) Mr. Hemant Modi Vice Chairman

(2) Mr. Suhas Joshi Managing Director

(3) Mr. M. D. Khattar Managing Director

(4) Mr. Ajay Munot Director

(5) Mr. Kamal Jain Director

(C) Relatives of Key Management Personnel

(1) Mr. I. K. Modi

(2) Mrs. Suverna I. Modi

(3) Mrs. Sonal H. Modi

(4) Mrs. Madhuri Joshi

(5) Mrs. Malti Joshi Rs. Lakhs

(D ) Transactions with Subsidiary / Associate

Companies

Subsidiary

Company

Associate

Companies /

Firm / AOP

Subsidiary

Company

Associate

Companies /

Firm

For the six months period

ended on

31/03/2006

For the eighteen months

period ended on

30/09/2005

Purchase of Materials 42.42 - 198.58 -

Sub-Contract Charges Received - 124.79 - -

Sub-Contract Charges Paid - - - 60.93

Sale of Materials - 4.54

Income Earned on Services Rendered 7.65 3.05 26.40 0.74

Expenditure incurred on Services received 25.42 47.12 81.90 70.20

Inter Corporate Deposit / Loans received during the period

- 674.64 - 1,649.00

Inter Corporate Deposit / Loans given / repaid during the period

- 672.36 - 997.00

Inter Corporate Deposit / Loans Payable at the end of period

- 660.52 - 658.24

Guarantees Given to Banks 79.10 - 79.10 -

Outstanding balance included in Current Assets - 148.11 - 28.92

Outstanding balance included in Current Liabilities 35.16 2,105.79 23.23 4.58

Interest income received - - - -

Interest paid - 36.95 - 62.69

57

Rs. lakhs

(E) Transactions with persons referred to in item (B)

above

For the six months

period ended on

31/03/2006

For the eighteen

months period

ended on 30/09/2005

Remuneration paid during the period 42.28 69.38

Loans Received during the period 0.00 393.81

Loans repaid during the period 41.26 100.49

Loans outstanding at the end of period 327.06 368.32

Rs. lakhs

(F) Transactions with persons referred to in item (C)

above

For the six months

period ended on

31/03/2006

For the eighteen

months period

ended on 30/09/2005

Loans Received during the period - 131.00

Loans outstanding at the end of period 162.90 162.90

Fixed Deposits matured and renewed during the period 2.75 3.75

Fixed Deposits repaid during the period 0.00 6.00

Interest on Fixed Deposits 0.17 0.77

9. Disclosure as per Accounting Standard - 7 (Revised)

Rs. lakhs

For the six months

period ended on

31/03/2006

For the eighteen

months period

ended on 30/09/2005

(1) Amount of contract revenue recognised as revenue in the period

14199.62 35023.75

(2) Disclosure in respect of contracts in progress at the reporting date

(a) contract costs incurred and recognised profit less recognized losses upto the reporting date 15912.92 14116.19

(b ) Advances received 4561.39 2040.34

(c) Retention amount 842.84 406.91

Note : The information in point no. (2) above is provided only in respect of contracts received on or after 1st April' 04 and remained incomplete as on 31st March '06.

10. Hire Purchase Transactions

Rs. lakhs

For the six months

period ended on

31/03/2006

For the eighteen

months period

ended on 30/09/2005

Hire Purchase Charges paid 37.85 79.48

As At 31st

March, 2006

As At 30th

September, 2005

Principal amount of Hire Purchase obligation

a. Due within one year of the Balance sheet date 288.55 251.28

b. Due within a period between one year and five years

444.71 557.49

58

11. Loans and Advances in the nature of Loans given to Subsidiary Company (JMC Mining and

Quarries Ltd)

Rs. Outstanding as at 31st March, 2006 : NIL Maximum Balance Outstanding during the period : NIL

12. Segmental Reporting

The management information system of the Company recognises and monitors "Construction" as the business segment.

13. Since the company is engaged in construction activity, the provisions of Para 3 of Part II of Schedule VI

of the Companies Act 1956 regarding quantitative details, are not applicable to the company.

14. Company has entered into Joint Venture with Associated Environmental Engineers Pvt. Ltd. in respect of execution of a contract. The Company's share of interest in the Joint Venture is 51%. The Joint Venture has no independent assets and liabilities except for Trade receivables from client and Payables to the venture partners in respect of work executed by them in their respective capacities. The Company has recognised the share of loss in JV firm to the extent of 51% i.e. Rs. 2.15 lakhs upto FY 2004-05. Due to non-availability of the site by the client the work has been suspended for more than 3 years. Therefore the company has decided to terminate JV.

The Company has also entered into Joint Venture with M/s. Dineshchandra R Agrawal Infracon Pvt. Ltd. for the execution road projects awarded by NHAI. The Company's share of Profit / Loss in the JV is 50%.No share of Profit/Loss for the period is considered in the above financial statements.

15. During the six month period ended on 31st March, 2006, the Company has provided Rs.105.37 lakhs

towards defect liability period expenses and reversed the provision of Rs. 27.76 lakhs made in the earlier period which is no longer required to be carried forward.

16. The Company has revised estimated useful life of new plant and machineries and has started charging

depreciation at the accelerated rate on such assets purchased during the period. This has resulted into additional depreciation charge of Rs. 8.33 lakhs and the profit for the period is understated to that extent.

17. Additional information pursuant to the provision of part II Schedule VI to the Companies Act, 1956 (wherever applicable).

Rs. lakhs

Particulars For the six months

period ended on

31/03/2006

For the eighteen

months period

ended on

30/09/2005

A. Value of imports Calculation on CIF Basis :

Capital Goods 4.42 46.62

Materials 60.42 54.48

B. Expenditure in Foreign Currencies

Subscription - -

Travelling 0.52 2.33

Interest on Foreign currency working capital loan 118.23 283.14

18. The Management is of the opinion that as on the Balance sheet date, there are no indications of a potential impairment loss on Fixed Assets, hence, the need to provide for impairment loss does not arise.

59

Note: Previous Period's EPS has been restated as per the current period EPS to have uniform comparison. The Company has 46,46,493 outstanding detachable warrants which are convertible into equity shares. Two warrants shall entitle the holder to receive one equity share of Rs. 10 each during warrant Exercise period, which shall be the period between 12-18 months from the date of allotment of warrants i.e.9th September, 2005. Warrant holders can exercise their right to apply for the equity shares at the Warrant Exercise Price at any time during this period. In such case Warrant Exercise Price shall be the price which is at a discount of 10% to the average daily closing market price of the shares during the three calendar months immediately preceding the month in which warrant conversion is exercised, or at floor price of Rs. 50 per share, whichever is higher. The Company also will have a one-time call option of exercising the warrants during the same period. If the call option is exercised by the Company, the Warrant Exercise Price would be fixed at Rs. 50 per share. In either of the above cases, unexercised warrants will get elapsed. However, if warrants are exercised in full, the paid up capital of the Company will increase by Rs. 232.32 lakhs. 20. Previous Year figures have been regrouped wherever necessary.

19. Earnings Per Share : For the six months

period ended on

31/03/2006

For the eighteen

months period

ended on 30/09/2005

Profit computation for both basic and diluted earnings per share of Rs. 10/- each

(A) Net Profit / (Loss) as per Profit & Loss Account available for equity shareholders ( Rs. lakhs)

131.49 (1156.98)

(B) Weighted average number of equity shares for EPS computation (for basic and diluted EPS) (Nos.)

11616375 11616375

(C) EPS ( Basic & Diluted ) (Rs.) 1.13 (9.96)

(D) Annualised EPS ( Basic & Diluted ) (Rs.) 2.26 (6.64)

60

STATEMENT OF CASH FLOW FOR THE PERIOD ENDING ON 31ST MARCH, 2006, 30TH SEPTEMBER, 2005 AND 31ST MARCH, 2004, 2003 & 2002 Rs. lakhs

For the year ended 31st March Particulars For the Six Months period

ended 31st March ,

2006

For the Eighteen Months period

ended 30th

September,2005

2003-04 2002-03 2001-02

CASH FLOW FROM OPERATING ACTIVITIES

Profit/ (Loss) Before Taxation & Exceptional Items 224.81 (1016.18) (633.86) 328.93 393.76 Adjustment For : Interest / Depreciation / Other Non Cash Expenses 707.48 3243.05 1659.92 1499.33 1498.92 Interest / Dividend / Other Adjustments (31.48) (265.07) (47.68) (42.80) (54.750) OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 900.81 1961.80 978.38 1785.46 1837.93 Changes in Working Capital ( Increase ) / Decrease 2585.20 (1936.89) 475.92 (765.20) (1227.29) CASH GENERATED FROM OPERATIONS 3486.01 24.91 1454.30 1020.26 610.64 Direct taxes paid 18.18 10.55 0.00 52.98 152.78 CASH FLOW BEFORE EXCEPTIONAL ITEMS 3467.83 14.36 1454.30 967.28 457.86 Exceptional Items 0.00 (757.70) 0.00 0.00 0.00 NET CASH FROM OPERATING ACTIVITIES (A) 3467.83 (743.34) 1454.30 967.28 457.86 CASH FLOW FROM INVESTMENT ACTIVITIES : (Additions) / deductions to Fixed Assets / Other (1012.22) (1070.61) (635.93) (154.31) (665.35) Adjustments NET CASH USED IN INVESTING ACTIVITIES (B) (1012.22) (1070.61) (635.93) (154.31) (665.35) CASH FLOW FROM FINANCING ACTIVITIES Increase / ( Decrease ) in Share Capital/ Borrowings (1978.00) 3656.29 617.26 304.81 1464.42 Adjustment to Net Worth Interest Paid (493.10) (1689.09) (1075.33) (1091.05) (1095.00) Dividend 0.00 0.00 (23.64) (55.76) (102.41) NET CASH USED IN FINANCING ACTIVITIES (C) (2471.10) 1967.20 (481.71) (842.00) 267.01 Net Change in cash and cash equivalents ( A + B + C ) (15.49) 153.25 336.66 (29.03) 59.52 Cash and Cash equivalents 894.07 740.82 404.16 433.19 373.67 (opening balance) Cash and Cash equivalents 878.58 894.07 740.82 404.16 433.19 (Closing balance) Difference in cash & cash equivalents (15.49) 153.25 336.66 (29.03) 59.52 ( CLG. - OPG. )

61

STATEMENT OF CAPITALISATION

Particulars Pre-issue as at 31st

March, 2006 Post Issue

Rs Rs Borrowings Short - term debt 347038099 347038099 Long - term debt 223783262 223783262 Total Debts 570821361 570821361 Shareholders' Funds Equity Share Capital 116163750 162629250 Reserves and Surplus 256084619 674274119 Total Shareholders Funds 372248369 836903369

Long Term Debt / Equity Ratio 0.60 0.27 Note: The above statement does not include the amount in respect of existing warrants convertible into equity shares in future. STATEMENT OF ACCOUNTING RATIOS

For the Year ended 31st March

Accounting Ratios For the Six months ended 31st March,

2006

For the Eighteen months ended 30th September, 2005

2004 2003 2002

Earnings Per Share ( EPS ) (Rs.) 1.13 (1.64) (8.70) 4.40 7.30 (Before Exceptional items) Earnings Per Share ( EPS ) (Rs.) 1.13 (9.96) (8.70) 4.40 7.30 (After Exceptional items) Return on Networth Ratio (%) 3.53% (32.22%) (24.46%) 9.97% 14.01% Net Asset Value per Equity Share (Rs.) 32.05 30.91 35.54 44.15 52.09

Definitions: 1) EPS = NET PROFIT AFTER TAX / NUMBER OF PAID UP SHARES

A where NET PROFIT/ (LOSS) AFTER TAX IS NET PROFIT/ (LOSS) B where NUMBER OF EQUITY SHARES IS AS AT THE END OF THE FINANCIAL YEAR

2) RETURN ON NET WORTH RATIO = NET PROFIT/ (LOSS) AFTER TAX / NET WORTH

A where NET PROFIT AFTER TAX IS NET PROFIT/ (LOSS) B where NET WORTH IS SHARE CAPITAL + RESERVES & SURPLUS - PRELIMINARY & PRE-

OPERATIVE EXPENSES- PROFIT & LOSS ACCOUNT (DEBIT BALANCE) 3) NET ASSET VALUE PER EQUITY SHARE = NET WORTH / NUMBER OF EQUITY SHARE

A where NET WORTH IS SHARE CAPITAL + RESERVES & SURPLUS - PRELIMINARY & PRE-OPERATIVE EXPENSES-PROFIT & LOSS ACCOUNT (DEBIT BALANCE)

B Where NUMBER OF EQUITY SHARES IS AS AT THE END OF THE FINANCIAL YEAR

62

STATEMENT OF RATE OF DIVIDEND

Financial year 2005-2006 2004-2005 2003-2004 2002-2003 2001-2002

Paid - Up Capital (Rs.) 116163750 116163750 4646550 4646550 4646550

Dividend Rate (%) 0.00% 0.00% 0.00% 5.00% 12.00%

Gross Dividend Amount (Rs.) 0.00 0.00 0.00 2323275 5575860

AGM Date 17/06/2006 10/12/2005 21/09/2004 22/09/2003 16/09/2002

Book Closure – from 10/06/2006 05/12/2005 15/09/2004 02/09/2003 09/09/2002

- to 17/06/2006 09/12/2005 21/09/2004 10/09/2003 16/09/2002

Record Date for Dividend - - - 01/09/2003 16/09/2002

Dividend Payment Date - - - 30/09/2003 23/09/2002

DETAILS OF OTHER INCOME Rs. lakhs

For the Six

Months

ended 31st

March

For the

Eighteen

Months

ended 30th

September

For the Year ended 31st

March

Description

2006 2005 2004 2003 2002

Profit Before Tax & Exceptional Items 224.81 (807.18) (633.86) 328.93 393.76

20% of Net Profit Before Tax 44.96 (161.44) (126.77) 65.79 78.75

Other Income for the Year 131.45 496.52 203.48 88.52 164.20

Other Income Details

Recurring, From Business Activities

Miscellaneous receipts 58.36 103.93 75.61 34.32 78.07

Rentals on Machineries 41.60 127.52 80.19 5.45 -

Subtotal 99.96 231.45 155.80 39.77 78.07

Non Recurring, From Business Activities

Profit on Sale of Assets 0.04 214.57 8.97 - -

Profit on Sale of Investments - - 0.85 - -

Provision for Doubtful Debts Written Back - - - - 31.38

Subtotal 0.04 214.57 9.82 0.00 31.38

Income from Investment Activities

Dividend - 0.41 0.21 0.21 0.21

Interest 31.44 50.09 37.65 48.54 54.54

Subtotal 31.44 50.50 37.86 48.75 54.75

Total Other Income 131.45 496.52 203.48 88.52 164.20

63

DETAILS OF CONTINGENT LIABILITY Rs lakhs

As at 31st March

Particulars As at 31st

March,

2006

As at 30th

September,

2005 2004 2003 2002

A Counter Guarantees given to bankers for Guarantees given by them :

to various parties on behalf of the company, in respect of contracts for works

3.20 3.20 3.20 5508.87 5276.86

B Guarantee given in respect of cash credit

and loans advanced to the Subsidiary Company

79.10 79.10 79.10 79.10 74.22

C In respect of Letters of Credit : 241.26 573.03 269.16 185.29 0.00 D Claims against the Company not

acknowledged as debts :

a) In respect of suits filed against the company by suppliers/ sub-contractors/ Others

504.19 504.77 431.05 428.90 2.00

E

b) In respect of Legal notices issued against the company by suppliers/ sub-contractors.

Estimated amount of orders remaining to be executed on capital account and not provided for ( net of advances )

32.10

486.90

31.80

41.43

3.84

-

-

-

-

-

Note:

1) The figures shown in “D” above does not include amount of claims raised by way of counter

0claims by clients against the claims raised by the Company.

2) As per opinion by the expert advisory committee of the Institute of Chartered Accountants of India, Bank Guarantee furnished in respect of performance, retention and mobilization advance etc. are not in the nature of contingent liabilities, hence same are excluded from Bank Guarantee outstanding as on 31st March, 2006.

64

DETAILS/ANALYSIS OF UNSECURED LOANS

Rs. lakhs

Sr.

No

.

Name of the

Lender

Facility Sanctioned Balance

as on

31.03.06

Balance

as on

30.09.05

Rate of

Interest

p.a

Repayment

Schedule

1) Kalpataru Power Transmission Ltd.

ICD Not Applicable

660.52 658.24 10.00% Repayable after Six Months from the date of

borrowing

2) Minar Investment & Finance Pvt. Ltd.

ICD Not Applicable

0.00 81.69 10.00% Repayable after Six Months from the date of

borrowing

TOTAL – INTERCORPORATE

DEPOSITS

660.52 739.93

1 Hemant Modi Unsecured Loan

Not Applicable

97.64 138.90 Interest free

Not Applicable

2 I. K. Modi Unsecured

Loan

Not Applicable


Not Applicable

3 Sonal Modi Unsecured

Loan

Not Applicable


Not Applicable

4 Suhas Joshi Unsecured

Loan

Not Applicable


Not Applicable

5 Malti Joshi Unsecured

Loan

Not Applicable


Not Applicable

6 Madhuriben Joshi Unsecured

Loan

Not Applicable


Not Applicable

TOTAL – UNSECURED LOAN FROM

DIRECTORS & RELATIVES

489.96 531.22

1 Fixed Deposits – Public

Fixed Deposit

Not Applicable

371.12 414.22 8% - 13%

6 Months – 3 Years

65

DETAILS/ANALYSIS OF SECURED LOANS

Rs lakhs

Sr.

No.

Name of

the Lender

Facility

Sanction

ed

Balance

as on

31.03.06

Rate of

Interest

p.a

Repayment

Schedule

Security

1 Andhra Bank

Cash Credit 75.00 -2.43 12.50% Renewed on yearly basis.

As per Note (1) mentioned below

2 Andhra Bank

Working Capital Demand Loan – FCNR

300.00 302.45 6 Month Libor + 2%

Renewed on yearly basis.


TOTAL 375.00 300.02

3 Karur Vysya Bank Ltd.




Term Loan 1900.00 1175.32 10.00% Repayment within 3 years in 12 quarterly wherein 1 installment of Rs.125 lakhs, 6 installments of Rs.150 lakhs and 5 installments of Rs. 175 lakhs commencing from 1.4.2005

First charge on the fixed assets of the Company excluding the fixed assets on which the other banks have exclusive first charge on fixed assets. First charge on 11th Level, JMC House, Ambawadi, Ahmedabad.



840.00 834.01 6 Month Libor + 5%




Short Term Loan

300.00 225.00 10.00% Repayable in 4 equal monthly installments after a moratorium period of 8 months beginning from 13 March 2006.

NA

66

Rs lakhs

Sr.

No.

Name of

the Lender

Facility

Sanction

ed

Balance

as on

31.03.06

Rate of

Interest

p.a

Repayment

Schedule

Security

7 Karur Vysya Bank

Short Term Loan

243.00 243.57 9.50% Repayment in four equal monthly installments in 9th,10th,11th and 12th months beginning from 23-08-06

NA

8 Karur Vysya Bank

Short Term Loan

500.00 218.37 11.00% Repayment within 90 days

NA

TOTAL 3993.00 2232.27

9 Oriental Bank Of Commerce




Working Capital Demand Loan

408.80 11.00% Renewed on yearly basis.




1540.00

619.48 6 Month Libor + 3%



TOTAL 1925.00 872.45

As per Note (1)

12 State Bank Of India


mentioned below



75.00 69.91 12 Month Libor + 4.50%



TOTAL 840.00 48.65

14 HDFC Bank Ltd.

Hire Purchase Loan

4.40 1.71 5.00% 36 Installments of Rs. 13200/- each

Hypothecation of the Underlying Assets

67

Rs lakhs

Sr.

No.

Name of

the Lender

Facility

Sanction

ed

Balance

as on

31.03.06

Rate of

Interest

p.a

Repayment

Schedule

Security

15 HDFC Bank Ltd.

Hire Purchase Loan



16 HDFC Bank Ltd

Hire Purchase Loan

32.14 29.60 6.25% 48 Installments of Rs.75464/- each


Total 46.54 34.92

17 ICICI Bank Ltd.

Hire Purchase Loan



18 ICICI Bank Ltd.

Hire Purchase Loan



19 ICICI Bank Ltd.

Hire Purchase Loan



20 ICICI Ltd. Hire Purchase Loan



21 ICICI Ltd. Hire Purchase Loan

4.25 4.15 6.90% 48 Installment of Rs.10190/- each


TOTAL 24.40 6.98

22 SREI Infrastructure Finance Ltd.

Hire Purchase Loan

180.42 123.64 9.50% 57 Installments payable monthly



Hire Purchase Loan



68

(Rs lakhs)

Sr.

No.

Name of

the Lender

Facility

Sanction

ed

Balance

as on

31.03.06

Rate of

Interest

p.a

Repayment

Schedule

Security


Hire Purchase Loan




Hire Purchase Loan




Hire Purchase Loan




Hire Purchase Loan




Hire Purchase Loan




Hire Purchase Loan

33.70 30.56

8.07% 58 Installments payable monthly



Hire Purchase Loan




Hire Purchase Loan



69

(Rs lakhs)

Sr.

No.

Name of

the Lender

Facility

Sanction

ed

Balance

as on

31.03.06

Rate of

Interest

p.a

Repayment

Schedule

Security


Hire Purchase Loan




Hire Purchase Loan



Hypothecation of the Underlying


Hire Purchase Loan


Assets


Hire Purchase Loan




Hire Purchase Loan




Hire Purchase Loan




Hire Purchase Loan




Hire Purchase Loan




Hire Purchase Loan



70

Rs lakhs

Sr.

No.

Name of

the Lender

Facility

Sanction

ed

Balance

as on

31.03.06

Rate of

Interest

p.a

Repayment

Schedule

Security


Hire Purchase Loan




Hire Purchase Loan




Hire Purchase Loan




Hire Purchase Loan



TOTAL 931.15 691.34

NOTE - ( 1 ) Security for Working Capital (CASH CREDIT & WORKING CAPITAL DEMAND LOAN) :

Primary Security:

1. Hypothecation of stocks of raw material lying at various stores and depots of the Company and at various contract sites and book debts of the Company on pari passu basis with other consortium banks

Collateral Securities:

1. Second Pari passu charge over fixed assets of the company having a value of Rs. 5699 lakhs. First charge being in favour of KVB for its Term Loan. Second Pari passu charge on Level - 11, JMC House, Ambawadi, Ahmedabad.

2. First Pari Passu charge in favour of all working capital consortium member banks by way of Equitable

Mortgage on office premises at 3rd and 5th Floor, JMC House. Market Value 52.53 lakhs

3. Personal guarantee of Shri Hemant Modi, Shri I. K. Modi and Shri Suhas Joshi

71

DETAILS OF LOANS & ADVANCES Rs. lakhsParticulars As at 31st

March As at 30th

September As on 31st March

2006 2005 2004 2003 2002Advance recoverable in cash or in kind or for value to be received 433.63 416.50 359.29 342.90 453.01Advances to related parties 18.02 15.24 43.90 24.84 22.70Loans to employees 5.90 8.10 6.20 10.09 15.19Deposits 295.64 243.61 194.02 180.38 387.29Advance Income Tax 159.86 167.52 126.49 102.23 230.49Works Contract Tax / Sales Tax [ Net of Provision ] 0.00 1.34 86.43 89.31 23.56Pre – Paid Expenses 499.65 308.19 261.78 194.16 282.46Other Current Assets 69.42 44.97 13.76 5.45 12.73

Total 1482.12 1205.47 1091.87 949.36 1427.43 DETAILS OF LOANS AND ADVANCES GIVEN TO RELATED PARTIES: Rs. Lakhs

As at 31st March

As at 30th September

As at 31st March Name of the Party Nature

2006 2005 2004 2003 2002JMC Mining & Quarries Ltd. Subsidiary company - - - - 20.42 JMC Infrastructure Ltd. Associate company

14.30 15.24 - - -

SAI Consulting Engineers Pvt. Ltd.

Associate company

- - - - -

JMC Consultants & Developers Pvt. Ltd.

Associate company - - - - -

Kalpataru Power Transmission Ltd.

Promoter company - - - - -

J.M. Construction Associate firm

- - 43.90 24.84 2.28

AGGRAWAL - JMC JV Joint Venture

3.72 - - - -

TOTAL

18.02 15.24 43.90 24.84 22.70

72

AGE WISE ANALYSIS OF SUNDRY DEBTORS

Rs. lakhsAs at 31st March Description As at 31st

March, 2006

As at 30th September,

2005 2004 2003 2002 Debtors outstanding for a period exceeding 6 months **

2169.89 2074.90 3154.09 2054.15 1463.75

Debtors outstanding for a period not exceeding 6 months

5934.85 4846.87 3724.61 4824.38 4801.61

TOTAL 8104.74 6921.77 6878.70 6878.54 6265.36 BREAK-UP OF SUNDRY DEBTORS OUTSTANDING FOR MORE THAN SIX MONTHS Rs. lakhs

Description

As at 31st March,

2006


2005

As at 31st March,

2004 Debtors outstanding for a period exceeding 6 months But less than 12 months 480.40 646.55 798.48 Debtors outstanding for a period exceeding 12 months But less than 18 months 382.97 239.64 982.91 Debtors outstanding for a period exceeding 18 months But less than 24 months 110.69 141.81 537.03 Debtors outstanding for a period exceeding 24 months But less than 30 months 139.18 267.95 540.39 Debtors outstanding for a period exceeding 30 months But less than 36 months 273.16 556.94 65.86 Debtors outstanding for a period exceeding 36 months 783.50 222.01 229.43 TOTAL 2169.89 2074.90 3154.09

DEBTORS INCLUDES RECEIVABLE FROM JMC INFRASTRUCTURE LIMITED – A RELATED PARTY AS SET OUT BELOW:

Rs lakhs

Description As at 31st March,

2006


2005

As at 31st

March, 2004

As at 31st

March, 2003

As at 31st March,

2002 Debtors outstanding for a period exceeding 6 months

- 13.68 13.68 72.38 48.52

Debtors outstanding for a period not exceeding 6 months

13.68 - - 23.50 65.50

TOTAL 13.68 13.68 13.68 95.88 114.02

73

TAX SHELTER STATEMENT Rs. lakhsAssessment Year 2005-2006 2004-2005 2003-2004 2002-2003 2001-2002Financial year 2004-2005 2003-2004 2002-2003 2001-2002 2000-2001 Profit / (Loss) as per books of account (1064.51) (403.97) 204.50 338.96 162.22 Tax rate (including surcharge) % 36.93 35.88 36.75 35.70 39.55 Notional Tax Payable ( A ) (393.07) (144.93) 75.16 121.01 64.16 B) Permanent Difference (i) Wealth Tax 0.28 0.27 1.10 0.00 0.00 (ii) Dividend (0.21) (0.21) (0.21) (0.21) (0.34)(iii) Capital Gains/ Loss (197.21) 18.38 9.73 3.44 0.47 (different treatment in Tax) (iv) Donation 1.17 1.34 2.57 0.82 1.12 (v) Others (571.12) (229.60) 134.28 17.30 35.89 (vi) Excess Income Tax Provision of 0.00 (8.60) 0.00 0.00 0.00 Previous years Subtotal ( B ) (767.09) (218.42) 147.48 21.35 37.14 C) Timing Difference (i) Difference in Book & Tax

depreciation (253.09) (221.21) (217.13) (343.17) (298.98)(ii) Deferred revenue expenditure 0.00 2.60 3.28 3.28 3.28 (iii) Expenses u/s 43B 3.71 (10.12) 15.18 17.18 (iv) Pre-operative expenses and

Interest Capitalised claimed as deduction 0.00 0.00 0.00 0.00 0.00

(v) Other Timing Difference 4.84 0.00 0.00 0.00 0.00 Subtotal ( C ) (248.25) (214.90) (223.97) (324.71) (278.52)Net Adjustments (B+C) (1015.34) (433.32) (76.49) (303.36) (241.38)Tax Burden / (Savings) thereon (D) (374.91) (155.45) (28.11) (108.30) (95.47)Total Tax Burden / ( Savings ) (A+D) (767.98) (300.38) 47.05 12.71 (31.31)Tax Provision / Provision u/s 115JA / JB 0.00 0.00 24.67 27.71 16.38 Unabsorbed Depreciation and Business loss (2079.63) (837.13) 0.00 (44.00) (79.10)Loss under the head Capital gains to be carried forward 0.00 0.00 0.49 0.49 0.49

Notes The figures in the above statement are taken as per the Returns of Income filed. The above statement will not change because tax audit for P.Y.2005-06 (A.Y.2006-07) is not completed.

74

RELATED PARTY TRANSACTION The Company has entered into certain related party transaction .The related party transactions cover financial transactions carried out in the ordinary course of business and/or in discharge of contractual obligations. The details of the transactions as certified by the auditors of the company are given below. The following is the list of related parties with whom the company has entered into transactions.

RELATED PARTY DISCLOSURE

(A) Particulars of Subsidiary

Nature of Relationship

JMC Mining and Quarries Ltd. Wholly Owned Subsidiary Company (B) Associates Companies

JMC Infrastructure Ltd. Associate Company SAI Consulting Engineers Private Ltd. Associate Company J M Construction Associate Firm AGGRAWAL - JMC JV Association of Persons JMC Consultants & Developers Pvt. Ltd. Associate Company Kalpataru Power Transmission Ltd. Associate Company (C) Key Management Personnel Mr. Hemant Modi Vice Chairman Mr. Suhas Joshi Managing Director Mr. M. D. Khattar Managing Director Mr. Ajay Munot Director Mr. Kamal Jain Director (D) Relatives of Key Management Personnel Mr. I. K. Modi Mrs. Suverna I. Modi Mrs. Sonal H. Modi Mrs. Madhuri Joshi Mrs. Malti Joshi

75

Rs lakhs Sr No.

Nature of Transactions

A B C D A B C D A B C D

For the Six Months ended 31st March,2006

For the Eighteen Months ended 30th September, 2005 2003-2004

1 Purchase of Materials

42.42 - - - 198.58 - - - 160.25 - - -

2 Purchase of Fixed Assets

- - - - - - - - - 0.40 - -

3 Sale of Materials

- 4.54 - - - - - - - - - -

4 Sale of Fixed Assets

- - - - - - - - - - - -

5 Rendering of Services

- - - - - - - - -

Expenditure Incurred

- - - - - 60.93 - - - 48.98 - -

Income Earned 7.65 127.84 - - 26.40 0.74 - - - 0.83 - -

6 Interest Charges

- - - - - - - - -

Interest Paid - 36.95 - 0.17 - 62.69 - 0.77 - - 0.13 0.40

Interest Received

- - - - - - - - - - - -

7 Finance Provided - Investment

- - - - - - - - - - - -

Finance Received

- 674.64 - - - 1649.00 393.81 131.00 - - 4.00 -

Repayment of Finance

- 672.36 41.26 - - 997.00 100.49 - - - - -

8 Expenditure incurred on services received

25.42 47.12 - - 81.90 70.20 - - - - - -

9 Balance Payable by JMC as on Balance-Sheet Date

- - - - - - - - - - - -

In respect of finance received

- 660.52 327.06 162.90 - 658.24 368.32 162.90 - - 75.00 31.90

In respect of Current Liabilities

35.16 2105.79 - - 23.23 4.58 - - 82.63 - - -

10 Balance Receivable by JMC as on Balance-Sheet Date

-

148.11 - - - 28.92 - - - 57.57 - -

11 Guarantees given to Banks

79.10 - - - 79.10 - - - 79.10 - - -

12 Fixed Deposits matured and renewed during the year

- - - 2.75 - - - 3.75 - - 1.25 3.75

13 Fixed Deposits repaid during the year

- - - - - - - 6.00 - - - -

14 Remuneration paid to directors

- - 42.28 - - - 69.38 - - - 27.16 -

The above transactions are not significant in terms of their impact on the financial performance of the company. The transactions with key management personnel include payment of remuneration to the Vice Chairman and Managing Directors of the company, which is determined in accordance with the applicable provisions specified in the Companies Act.

76

MAJOR BORROWINGS

The top 25 borrowings of the Company as at March 31, 2006. Sr. No

Name of the Lender

Facility Balance as on

31.03.06

Rs. lakhs

Rate of Interest

p.a

Repayment Schedule

Date of Sanctioning / Borrowing

Whether Personal

Guarantee given by directors

Whether Affiliate/

Asso- ciate/company

/firm

Whether Rollover for

Default


Term Loan 1175.32 10% Repayment within 3 years in 12 quarterly

wherein 1 installment of

Rs.125 lakhs, 6 installments of Rs.150 lakhs

and 5 installments of Rs. 175 lakhs commencing

from 1.4.2005

23-Mar-02 Yes No No



843.63 6 Month Libor +

5%


18-Mar-05 Yes No No




3%


18-Mar-05 Yes No No

4 Kalpataru Power Transmission Ltd.

ICD 660.52 10% Repayable after Six Months

from the date of borrowing - 11/01/2005

On Various Dates

No Yes No


Working Capital Demand

Loan

408.80 11% Not Applicable

6 Andhra Bank Working Capital Demand Loan – FCNR


2%


18-Mar-05 Yes No No

7 Suhas Joshi Unsecured Loan

229.42 Interest free

Not Applicable On Various Dates

No No No


Short Term Loan

225.00 10% Repayable in 4 equal monthly installments

after a moratorium period of 8

months beginning from

13th, March 2006.

13-Jun-05 Yes No No

77

Sr. No

Name of the Lender


31.03.06

Rs. lakhs

Rate of Interest

p.a

Repayment Schedule


Whether Personal


Whether Affiliate/

Asso- ciate/compa

ny/firm


Default


Hire Purchase Loan

123.64 10% 57 Installments payable monthly

31-Dec-03 Yes No No

10 Hemant Modi Unsecured Loan

97.64 Interest free


No No No



74.72 12 Month Libor + 4.50%


18-Mar-05 Yes No No


Hire Purchase Loan


1-Aug-04 Yes No No

13 I. K. Modi Unsecured Loan

61.00 Interest free


No No No

14 Sonal Modi Unsecured Loan

60.50 Interest free


No No No


Hire Purchase Loan


31-Oct-04 Yes No No


Hire Purchase Loan


1-Jun-05 Yes No No


Hire Purchase Loan


10-Jun-04 Yes No No


Hire Purchase Loan


15-Aug-04 Yes No No

19 Madhuriben Joshi

Unsecured Loan

34.90 Interest free


No No No


Hire Purchase Loan


1-Jun-05 Yes No No

78

Sr. No

Name of the Lender


31.03.06

Rs. lakhs

Rate of Interest

p.a

Repayment Schedule


Whether Personal


Whether Affiliate/

Asso- ciate/compa

ny/firm


Default


Hire Purchase Loan


15-Dec-04 Yes No No


Hire Purchase Loan


22-Jun-04 Yes No No


Hire Purchase Loan


22-Jan-05 Yes No No


Hire Purchase Loan


1-May-05 Yes No No

79

PART B

JMC MINING AND QUARRIES LTD (Subsidiary of JMC Projects (India) Ltd.

Statement of Assets & Liabilities as at 31

st March, 2006, 30

th September, 2005 and 31

st

March, 2004, 2003 & 2002

Rs. lakhs

As at March 31st

Description As at 31

st

March ,

2006

As at 30th

September,

2005 2004 2003 2002

A Fixed Assets

Gross Block 225.58 212.50 188.74 176.38 164.52


Net Block 129.15 120.88 112.48 110.46 109.84

Capital Work in Progress - - - - -

Total 129.15 120.88 112.48 110.46 109.84

B Investments 2.47 2.47 1.98 1.98 1.98


D

Current Assets, Loans and

Advances

Inventories 51.24 42.84 19.88 17.54 10.76

Sundry Debtors 51.31 48.48 106.34 52.53 30.84



Total 115.15 104.86 133.48 76.19 111.22


Loan Funds

Secured 65.99 59.28 58.91 58.13 74.22

Unsecured 0.00 0.00 0.00 0.00 20.42

Total 65.99 59.28 58.91 58.13 94.64


G

Current Liabilities and

Provisions


Provisions 0.00 0.00 0.00 0.00 4.03

Total 59.86 53.06 81.12 30.42 36.00

80

Rs. lakhs

As at March 31st

Description As at 31

st

March ,

2006

As at 30th

September,

2005 2004 2003 2002

H Net Worth 116.58 112.26 104.08 96.91 90.10

Represented by :


Share Capital 50.00 50.00 50.00 50.00 50.00

Reserves 67.24 62.96 54.94 47.05 40.29

Balance in Profit & Loss Account - - - - -

Total 117.24 112.96 104.94 97.05 90.29

Less

J Miscellaneous Expenditure (to the extent not written off or adjusted)

0.66 0.70 0.86 0.14 0.19

K Net Worth 116.58 112.26 104.08 96.91 90.10

81

JMC MINING AND QUARRIES LTD (Subsidiary of JMC Projects (India) Ltd

Statement of Profit and Loss for the period ending on 31st March 2006 , 30

th September 2005 and

31st March of 2004, 2003 & 2002

Rs. lakhs

For the Year ended 31st

March

Description

For the Six

Months

Period

ended

31st

March,

2006

For the

Eighteen

Months

Period

ended 30th

September,

2005 2004 2003 2002

Income From Operations 236.86 608.11 358.57 272.50 199.63

Change In Inventory 7.58 14.58 0.70 5.88 2.08

Other Income 0.55 1.64 1.10 6.45 2.32

Total Income 244.98 624.33 360.37 284.83 204.03

Expenditure

Trading Purchase 0.00 5.30 0.46 0.13 1.47

Mining And Manufacturing Expenses 136.49 319.27 155.30 105.11 83.34

Payment to Employee 15.84 40.00 21.67 18.20 13.03

Office, Administration & Selling Expenses 77.77 222.70 153.83 129.98 68.26

Total Expenditure before Interest,

Depreciation & Tax 230.10 587.27 331.26 253.42 166.10


Depreciation, & Tax 14.88 37.06 29.11 31.41 37.93

Interest 3.43 12.37 8.27 14.02 10.00

Depreciation 4.80 15.36 10.35 11.23 15.60

Total 8.24 27.73 18.62 25.25 25.60

Net Profit/ (Loss) Before Tax 6.64 9.33 10.49 6.16 12.33

Taxation (Previous Year) 0.00 0.00 (0.35) (3.18) (0.05)


Deferred Tax Provision 0.73 (0.23) 0.66 0.87 (0.65)


Net Profit/ (Loss) After Tax 3.48 8.03 7.88 6.77 9.47

Prior Period Items 0.80 0.00 0.00 0.00 0.00

Net Profit/ (Loss) 4.28 8.03 7.88 6.77 9.47

82

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PARTS OF ACCOUNTS AS AT

MARCH 31, 2006

1. Significant Accounting Policies

a. Accounting Convention The accompanying financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles ("GAAP") under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards issued by the Institute of Chartered Accountants of India ("ICAI") and the provisions of the Companies Act, 1956.

b. Use of Estimates

The preparation of financial statements in conformity with GAAP requires the management to make estimates and assumption that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future period.

c. Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation. Cost of acquisition is inclusive of freight, duties, taxes and other directly attributable costs incurred to bring the assets to their working condition for intended use.

d. Depreciation The Depreciation on the tangible assets has been provided at the rates and in the manner prescribed in schedule XIV if the Companies Act, 1956 on written down value basis.

e. Inventories Inventories are valued at lower of cost or net realizable value. Cost of Inventories has been arrived at considering all cost of purchases, direct cost of production and other costs incurred in bringing them to their respective present location and condition.

f. Investments

Investments are valued at cost.

g. Provision for Taxation

i. Current Tax

Provision for Income -Tax is determined in accordance with the provisions of Income-Tax Act, 1961.

ii. Deferred Tax Provision

Deferred Tax is recognized, subject to consideration of prudence, on timing differences, being the difference between the taxable income and accounting income that originate in one period and are capable or reversal in one or more subsequent periods. It is calculated using the applicable tax rates and tax laws that have been enacted by the balance sheet date.

83

h. Borrowing Costs

Borrowing Costs that are attributable to the acquisition of qualifying assets are capitalized as a part of the cost of such assets till such time the assets is ready for its intended use. All other borrowing costs are charged to revenue.

i. Employee Benefits

Gratuity Liability has been covered by master policies of Life Insurance Corporation of India under irrevocable trust, annual premium whereof computed is charged to profit & Loss Account. Adjustments or refund thereof by LIC & shortfall in gratuity payable to employees, if any, are accounted as and when they arise. Contribution to provident fund accruing during each year is charged to Profit & Loss Account

2. The Company has changed its accounting year to end on 31st March from 30th September. Current

accounting year ending on 31st March, 2006 is therefore for a period of six months (From 1.10.2005 to 31.3.2006). Hence figures of expenses and income shown in Profit and Loss account, are not directly comparable with previous (accounting) year's figures which were for a period of 18 months.

3. Previous year's figures have been regrouped and re arranged wherever necessary. 4. In the Opinion of the Board, Current Assets, Loans and Advances are of the value stated in the Balance

Sheet, if realized in the normal course of business and provision for all known liabilities has been made in the books.

5. Balance of Debtors, Creditors Loans, Advances and other liabilities are as per books and subject to

confirmation from respective parties 6. Contingent Liability not provided for: Nil. 7. During the year, there was no import of raw materials, stores and spares or capital goods nor were there any

remittance in foreign currency on account of dividend. 8. It is not possible to identify SSI undertakings from amongst sundry creditors. Hence details of dues to SSI

undertaking are not given. 9. Deferred Taxation :

The deferred tax liability at the end of the year comprise of tax effect of following timing differences:

Rs.

As at

31/03/2006

As at

30/09/2005

A Deferred Tax Liability

Excess of net block over written down value as per provisions of I. Tax Act

433576 360639

433576 360639

B Deferred Tax Assets

433576 360639

84

10. Fringe Benefit Tax


11. Impairment of Assets

The management of the company has during the year carried out technical evaluation for identification of impairment of assets, if any in accordance with the Accounting Standard (AS) 28, issued by the Institute of Chartered Accountants of India. Based on the judgment of the management and as certified by the directors, no provision for impairment of the asset is considered necessary in respect of any of the assets of the company.

12 Quantitative information as required under para3, 4C and 4D of part II of Schedule VI are as under :

(Quantity in Brass )

Particulars

For the six

month

period

ended

31/03/2006

For the

eighteen

month period

ended

30/09/2005

a. Installed Capacity ( Based on 305 Working days, 8

hours Single Shift / Day ) 120000 p.a. 120000 p.a.

b. Actual Production

Rubble 39084 94228

Kapchi 12728 38217

Grit 7242 11802

Metal 4473 13320

Dust 6224 15405

c. Turnover ( Value in Rupees ) ( Quantity in Brass )

Product

For the six

month

period

ended

31/03/2006

For the

eighteen

month

period

ended

30/09/2005

For the six

month

period

ended

31/03/2006

For the

eighteen

month period

ended

30/09/2005

Rubble 2900060 4947408 6450 12519

Kapchi 8687217 22690929 11976 38340

Grit 2447722 7375438 4683 14071

Metal 2367665 6717093 3924 13244

Dust 393666 2170489 3901 14844

Rubble ( Trading) 0 0 0 0

Kapchi ( Trading) 0 4708 0 7

Grit ( Trading) 0 114597 0 261

Metal ( Trading) 0 72672 0 144

Dust ( Trading) 0 538600 0 2959

85

d. Details of Trading Purchase

( Value in Rupees ) ( Quantity in Brass )

Product

For the six

month period

ended

31/03/2006

For the eighteen

month period

ended

30/09/2005

For the six

month period

ended

31/03/2006

For the eighteen

month period

ended 30/09/2005

Rubble 0 0 0 0

Kapchi 0 3900 0 7

Grit 0 103818 0 261

Metal 0 69000 0 144

Dust 0 353407 0 2959

Note : 1) There is no opening or closing stock of trading activities for the year.

2) The figures of trading sales are included in the Clause -C above.

3) The turnover of Rubble excludes 30667 brass (Previous year 78133 brass) used for captive consumption.


e. Opening Stock

As at 1st

October 2005

As at 1st April

2004

As at 1st

October 2005

As at 1st April

2004

Rubble 1922506 251528 4943 1367

Kapchi 22732 51636 33 156

Grit 588194 1033713 854 3123

Metal 285833 112209 415 339

Dust 148600 60242 743 182


f. Closing

Stock

As at 31st

March 2006

As at 30th

September

2005

As at 31st

March 2006

As at 30th

September 2005

Rubble 1639028 1922506 6910 4943

Kapchi 303332 22732 785 33

Grit 1318822 588194 3413 854

Metal 372499 285833 964 415

Dust 91980 148600 3066 743

13 Auditor's Remuneration includes :

(Rs)

For the six months period

ended on 31/03/2006


period ended on 30/09/2005

Audit Fees

25000 40000

Tax Audit & Income Tax Matters

- -

Total

25000 40000

86

14 The basic & diluted Earnings Per Share are :

Particulars

For the period of six months

ended on 31/03/2006


period ended on

30/09/2005

Net profit/(loss) with exceptional item (Rs. in 000’s) (a) 428 803

profit/(loss) without exceptional item (Rs. in 000’s) (b) 348 803

No. of Equity Shares (000’s) (c) 500 500

Basic & Diluted EPS with exceptional Item (Rs.) (a/c) 0.86 1.61

Basic & Diluted EPS without exceptional Item (Rs.) (b/c) 0.70 1.61

Nominal value of shares (500,000 Equity Shares of Rs.10/- each ) (Rs. in 000’s)

5000 5000

87

PART C

JMC PROJECTS ( INDIA ) LIMITED

CONSOLIDATED STATEMENT OF ASSETS & LIABILITIES AS AT 31

ST MARCH, 2006,

30TH


MARCH, 2004, 2003, 2002

Rs. lakhs

As at 31st

March

As at 30th

September

As at 31st March

Particulars

2006 2005 2004 2003 2002

A Fixed Assets

Gross Block 8404.37 7467.31 6244.65 5605.53 5466.31


Net Block 5942.09 5198.78 4455.99 4114.01 4242.05

Capital Work in Progress 125.21 30.92 0.00 0.00 0.00

Total 6067.30 5229.70 4455.99 4114.01 4242.05

B Investments 3.62 3.62 3.58 3.83 3.84


D

Current Assets, Loans and

Advances

Inventories 1518.60 1475.63 960.72 555.34 733.68

Sundry Debtors 8156.04 6947.03 6902.19 6930.85 6296.04



Total 12047.94 10537.55 9702.80 8845.76 8935.50

Less


Loan Funds

Secured 4252.65 6069.14 6352.54 5674.60 5499.82

Unsecured 1521.55 1676.36 842.06 907.30 793.36

Total 5774.20 7745.50 7194.60 6581.90 6293.18


G Current Liabilities and Provisions


Provisions 338.64 262.39 0.00 26.21 55.76

Total 8571.42 4464.83 4736.80 3521.15 4292.82

H Net Worth 3789.50 3652.67 1695.41 2095.77 2455.00

Represented by :


Share Capital 1161.64 1161.64 464.65 464.65 464.65

Reserves 2628.52 2491.73 1231.62 1637.63 2012.54

Total 3790.16 3653.37 1696.27 2102.28 2477.19

Less

J

Profit & Loss Account ( Debit Balance ) 0.00 0.00 0.00 0.00 0.00

K

Miscellaneous Expenditure (to the extent not written off or adjusted) 0.66 0.70 0.86 6.51 22.19

L Net Worth 3789.50 3652.67 1695.41 2095.77 2455.00

88

JMC PROJECTS (INDIA ) LTD

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE PERIOD ENDED ON 31ST

MARCH, 2006, 30TH


MARCH, 2004, 2003, 2002

Rs. lakhs

For the six

months

period

ended on

31st March

For the

Eighteen

Months period

ended 30th

September

For the year ended 31st March Particulars

2006 2005 2004 2003 2002

Income

Contract Receipts 14436.48 35351.39 18568.22 21227.82 24419.95

Other Income 124.34 262.75 204.58 88.37 161.52

Total Income 14560.82 35614.14 18772.80 21316.19 24581.47

Expenditure

Cost of Materials 7098.03 17094.52 9711.17 11015.69 12448.32

Work Charges 3077.41 8868.03 3794.15 4317.90 5411.59

Construction Expenses 1458.67 4136.31 1728.89 1736.30 2269.21

Payment to Employees 1034.20 2352.54 1302.69 1331.56 1428.15

Other Expenses 957.65 1908.27 1457.09 1164.80 1200.40

Total Expenditure before Interest,

Depreciation, Tax & Exceptional

Items 13625.97 34359.67 17993.99 19566.25 22757.67


Depreciation, Tax & Exceptional

Items 934.85 1254.47 778.81 1749.94 1823.80

Interest 496.54 1701.46 1083.60 1099.11 1104.47

Depreciation 205.84 547.01 326.18 316.28 308.98

Total 702.38 2248.47 1409.78 1415.39 1413.45

Profit/(Loss) before Tax &

Extraordinary items 232.47 (994.00) (630.97) 334.55 410.35

Less: Extra-ordinary item of Expense - 966.70 - - -

Add: Extra-ordinary item of income - 209.00 - - -

Profit/(Loss) before Tax & Prior

period items 232.47 (1751.70) (630.97) 334.55 410.35

Prior Period Items 0.80 0.00 0.00 0.00 0.00

Profit/ (Loss) before Tax & Prior

Period items 233.27 (1751.70) (630.97) 334.55 410.35

Taxation (Previous Year) 0.00 0.00 (0.35) 13.79 0.06




Net Profit / (Loss) 136.79 (1136.09) (403.70) 210.73 352.58

89

JMC PROJECTS ( INDIA ) LTD

CONSOLIDATED STATEMENT OF CASH FLOW FOR THE PERIOD ENDING ON 31ST MARCH, 2006, 30TH SEPTEMBER, 2005 AND YEAR ENDED ON 31ST MARCH, 2004 & 2003

Rs. lakhsFor the year ended 31st March

Particulars For the Six Months

period ended 31st

March 2006

For the Eighteen Months

period ended 30th September

2005

2004 2003

CASH FLOW FROM OPERATING ACTIVITIES

Profit/ (Loss) Before Taxation & Exceptional Items 233.27 (994.00) (630.97) 334.55 Adjustment For : Interest / Depreciation / Other Non Cash Expenses 715.76 3271.91 1682.27 1526.87 Interest / Dividend / Other Adjustments (31.61) (265.87) (48.06) (49.15)OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES 917.42 2012.04 1003.24 1812.27 Changes in Working Capital ( Increase ) / Decrease 2587.77 (1958.49) 453.70 (762.94)CASH GENERATED FROM OPERATIONS 3505.19 53.55 1456.94 1049.33 Direct taxes paid (20.61) (12.08) (1.95) (51.49)CASH FLOW BEFORE EXCEPTIONAL ITEMS 3484.58 41.47 1454.99 997.84 Exceptional Items 0.00 (757.70) 0.00 0.00 NET CASH FROM OPERATING ACTIVITIES (A) 3484.58 (716.23) 1454.99 997.84 CASH FLOW FROM INVESTMENT ACTIVITIES : (Additions) / deductions to Fixed Assets / Other (1025.16) (1083.79) (647.92) (159.81)Adjustments NET CASH USED IN INVESTING ACTIVITIES (B) (1025.16) (1083.79) (647.92) (159.81)CASH FLOW FROM FINANCING ACTIVITIES Increase / ( Decrease ) in Share Capital/ Borrowings 0.00 3096.73 0.00 288.72 Adjustment to Net Worth (1980.31) 559.92 612.70 (1099.11)Interest Paid (496.54) (1701.46) (1083.60) (55.76)Dividend NET CASH USED IN FINANCING ACTIVITIES (C) (2476.85) 1955.19 (470.90) (866.15)Net Change in cash and cash equivalents ( A + B + C ) (17.43) 155.17 336.17 (28.12)Cash and Cash equivalents 896.70 741.53 405.36 433.48 (opening balance) Cash and Cash equivalents 879.27 896.7 741.53 405.36 (Closing balance) Difference in cash & cash equivalents (17.43) 155.17 336.17 (28.12)( CLG. - OPG. ) The Company has started preparing Consolidated Cash flow statement from the year ended on 31st March 2003.

90

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PARTS OF

CONSOLIDATED ACCOUNTS AS AT 31ST

MARCH, 2006

1 Significant Accounting Policies

i Consolidation of Accounts

The consolidated financial Statements are prepared in accordance with Accounting Standard (AS) 21 on Consolidated Financial Statements issued by Institute of Chartered Accountants of India. The Consolidated Financial Statements comprise the financial statements of JMC Projects (India) Ltd.(hereinafter referred to as 'holding company') and its subsidiary company, JMC Mining and Quarries Ltd.

ii Accounting Convention

The accompanying financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles("GAAP") under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards issued by the Institute of Chartered Accountants of India ("ICAI"), the provisions of the Companies Act,1956, and guidelines issued by the Securities and Exchange Board of India.

iii Revenue Recognition

a. Construction contracts

Running Account Bills are prepared on percentage of completion method based on completion of physical proportion of the contract work. RA Bills submitted to the contractees are treated as work completed at the end of the year. The income on account of claims / extra item works are recognized to the extent Company expects reasonable certainty about receipts or acceptance from the client.

b. Joint Venture Contracts

Contracts executed in Joint Ventures under Work Sharing Arrangement (Consortium) are accounted in accordance with the accounting policy followed by the company as that of an independent contract to the extent work is executed.

c. Other income

Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exist.

iv Fixed Assets Fixed Assets are stated at cost of acquisition less accumulated depreciation. Cost is inclusive of all

identifiable expenditure incurred to bring the assets to their working condition for intended use. Additional cost arising out of fluctuations in foreign currency is adjusted to the cost of the assets. Where an asset is scrapped or otherwise disposed of, the cost and related depreciation are removed from the books of accounts and the resultant profit or loss, if any, is reflected in the Profit and Loss Account. Advances paid towards acquisition of Fixed Assets, direct costs and related incidental expenses incurred on assets that are not yet ready for their intended use or not put to use as on the Balance sheet date are stated as Capital Work in progress.

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v Depreciation The depreciation on the Fixed assets has been provided at the rates and in the manner prescribed

in schedule XIV of the Companies Act, 1956 on straight line basis, in the case of holding Company and on written down value basis in case of subsidiary Company.

Depreciation on addition to assets or on sale/disposal of assets is calculated pro-rata from the date of such addition or upto the date of such sale/disposal as the case may be.

vi Impairment of Assets

The carrying amount of assets is reviewed at each balance sheet date if there is any indication of impairment of the carrying amount of the Company's assets. If any indication exists, the recoverable amount of such assets is estimated. An impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount.

vii Investments Investments are stated at cost. Provision for diminution in the value of long term investments is

made only if such a decline is other than temporary in the opinion of the management.

viii Retirement Benefits to Employees

a. Gratuity liability has been covered by Master Policies of Life Insurance Corporation of India under irrevocable trusts, annual premium whereof computed is charged to Profit & Loss Account. Adjustments or refund thereof by L.I.C. and shortfall in gratuity payable to employees, if any, are accounted as and when they arise.

b. Contribution to Provident Fund and Superannuation scheme accruing during each year as per the schemes is charged to Profit & Loss Account.

ix Expenses relating to Shares

Shares issue expenses are adjusted against Securities Premium Account.

x Inventories

Stores and Construction material are valued at lower of cost or net realizable value. Cost of inventories comprise of all costs of purchase, cost of conversion and other cost incurred in bringing them to their respective present location and condition. Cost is determined using FIFO method of inventory valuation.

Work in progress is valued at lower of cost and net realizable value. Cost includes direct materials and labour and proportion of manufacturing overheads wherever applicable. In case where work is completed but Running Account bill can not be raised on client due to contractual conditions, the work in progress is valued at contract rates.

xi Provision for Taxes

a Current Tax:

Provision for Income Tax is determined in accordance with the provisions of Income Tax Act, 1961.

b Deferred Tax Provision:

Deferred Tax charge or credit is recognized, on timing differences, being the difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. It is calculated using the applicable tax rates and tax laws that have been enacted by the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the asset will be realized in future. At each Balance -sheet date, recognized and unrecognized Deferred Tax Assets are reviewed.

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c Fringe Benefit Tax


xii Foreign Currency Transaction

a Transactions denominated in Foreign Currency are normally recorded at the exchange rate prevailing at the time of the transaction.

b In respect of transactions covered by forward exchange contracts, the difference between the forward rate and the exchange rate at the date of the transaction is recognized as income or expense over the life of the contract. Any income or expense on account of exchange rate difference either on settlement or on translation is recognized in profit and loss account.

xiii Accounting for Project Mobilization expenses

Expenditure incurred on mobilization and creation of infrastructure facilities for site is written off in proportion to work done.

xiv Borrowing Costs

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalized as a part of the cost of such assets till such period the assets are ready for use. All other borrowing costs are charged to revenue.

xv Earning Per Share

Earning Per Share is calculated by dividing the net profit or loss for the period attributable to equity share holders by the weighted average no. of equity shares outstanding during the period. For the purpose of calculating Diluted Earnings Per Share, the net profit or loss for the period attributable to equity shareholders and weighted average no. of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

xvi Other Accounting Policies

These are consistent with the generally accepted accounting standards.

2 Contingent Liabilities & Commitments

Rs. lakhs

As at 31st

March 2006

As at 30th

September 2005

A Bank Guarantees 3.20 3.20

B Guarantee given in respect of cash credit and loans advanced to the Subsidiary Company (Outstanding balance of Cash credit as on 31/03/2006 is Rs. 62.66 lakhs.)

79.10 79.10

C In respect of Letters of Credit : 241.26 573.03

D Claims against the Company not acknowledged as debts 536.29 536.57

E Estimated amount of orders to be remaining to be executed on capital account and not provided for (net of advances)

486.90 41.43

Note: The figures shown in "D" above does not include amount of claims raised by way of counter claims by clients against the claims raised by the Company.

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3

In the month of September, 2005 the Company has issued and allotted 69,69,825 fully paid equity shares of Rs. 10/- each for cash at a premium of Rs. 35/- per equity share at an issue price of Rs. 45/- per equity share aggregating to Rs. 3136.42 lakhs on right basis. The utilization of the fund raised through right issue upto 31st March, 2006 is as under.


Rs. lakhs Rs. lakhs

New office Premises 165.00 164.32 Purchase of Capital Equipments 900.00 634.15 Repayment of Debts 1,035.00 1,038.54 Reduction in working capital 985.00 981.46

Issue Expenses 51.42 39.68 Unutilised Balance Balance in Cash Credit Account with banks - 278.27

Total 3,136.42 3,136.42

4 Directors' Remuneration

Managerial Remuneration U/s 198 of the Companies Act, 1956 Rs. lakhs

Particulars

For the six months

period ended on

31/03/2006

For the eighteen

months period ended

on 30/09/2005

Salaries 37.80 60.55

Commission on Profit - - Contribution to Provident Fund 4.20 7.24 Perquisites 0.29 1.60

5 Auditor's Remuneration Rs. lakhs

Particulars

For the six months

period ended on

31/03/2006

For the eighteen

months period ended

on 30/09/2005

Audit Fees 4.24 5.29 Taxation matters 4.15 6.37 For Certification and Other Services 0.19 0.52 Reimbursement of Expenses 0.51 0.46

6 The Net Consolidated Deferred Tax Liability/ (Assets) as on 31st March, 2006 comprises of the

following : Rs. lakhs

Particulars As at 31st March,

2006

As at 30th

September, 2005

Deferred Tax Liabilities Depreciation Differences 942.86 982.53

(A) 942.86 982.53

Deferred Tax Assets Unabsorbed Depreciation 383.33 383.33 Business Loss to be carried forward to next period 575.79 691.33

(B) 959.12 1074.66

Net Deferred Tax (Assets) / Liabilities : (A-B) (16.26) (92.13)

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Recognition of Deferred Tax Asset for Unabsorbed Depreciation and Business Loss

Deferred Tax Asset has been recognized in respect of unabsorbed depreciation and business loss incurred during the period. Considering the current order backlog, the management of the Company expects virtual certainty of earning.

7 RELATED PARTY DISCLOSURE

(A) Particulars of Subsidiary / Associates Companies

Name of the Related Party Nature of Relationship

(1) JMC Infrastructure Ltd. Associate Company (2) SAI Consulting Engineers Private Ltd. Associate Company (3) J M Construction Associate Firm (4) JMC Consultants & Developers Pvt. Ltd. Associate Company (5) Kalpataru Power Transmission Ltd. Associate Company (6) AGGRAWAL - JMC JV Association of Persons (B) Key Management Personnel

Name of the Related Party Nature of Relationship

(1) Mr. Hemant Modi Vice Chairman (2) Mr. Suhas Joshi Managing Director (3) Mr. M. D. Khattar Managing Director (4) Mr. Ajay Munot Director

(5) Mr. Kamal Jain Director

(C) Relatives of Key Management Personnel

Name of the Related Party

(1) Mr. I K Modi (2) Mrs. Suverna I. Modi (3) Mrs. Sonal H. Modi (4) Mrs. Madhuri Joshi (5) Mrs. Malti Joshi

Rs. lakhs

(D) Transactions with Subsidiary / Associate

Companies

Associate Companies /

Firm / AOP

Associate Companies /

Firm

For the six months

period ended on

31/03/2006

For the eighteen

months period ended

on 30/09/2005

Purchase of Materials - -

Sub-Contract Charges Received 124.79 -

Sub-Contract Charges Paid - 60.93

Sale of Materials 4.55 -

Income Earned on Services Rendered 3.05 0.74

Expenditure incurred on Services received 47.12 70.20

Inter Corporate Deposit / Loans received during the period 674.64 1649.00

Inter Corporate Deposit / Loans given / repaid during the period 672.36 997.00

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Inter Corporate Deposit / Loans Payable at the end of period 660.52 658.24

Outstanding balance included in Current Assets 148.11 28.92

Outstanding balance included in Current Liabilities 2105.79 4.58

Interest paid 36.95 62.69

Rs. lakhs

(E) Transactions with persons referred to in

item (B) above

For the six months

period ended on

31/03/2006


period ended on

30/09/2005

Remuneration paid during the period 42.28 69.38 Loans Received during the period 0.00 393.81 Loans repaid during the period 41.26 100.49 Loans outstanding at the end of period 327.06 368.32

Rs. lakhs

(F) Transactions with persons referred to in

item (C) above

For the six months

period ended on

31/03/2006


period ended on

30/09/2005

Loans Received during the period - 131.00 Loans outstanding at the end of period 162.90 162.90

Fixed Deposits matured and renewed during the period 2.75 3.75

Fixed Deposits repaid during the period 0.00 6.00 Interest on Fixed Deposits 0.17 0.77

8 Disclosure as per Accounting Standard - 7 (Revised) Rs. lakhs

For the six months

period ended on

31/03/2006


period ended on

30/09/2005

(1) Amount of contract revenue recognised as

revenue in the period

14,199.62 35,023.75

(2) Disclosure in respect of contracts in

progress at the reporting date

(a) contract costs incurred and recognized profit

(less recognized losses upto the reporting date

15,912.92 14,116.19

(b ) Advances received 4,561.39 2,040.34

(c) Retention amount 842.84 406.91

Note: The information in point no. (2) above is provided only in respect of contracts received on or after 1st April 2004 and remained incomplete as on 31st March 2006.

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9 Hire Purchase Transactions Rs. lakhs

For the six months

period ended on

31/03/2006

For the eighteen

months period

ended on

30/09/2005

Hire Purchase Charges paid 37.85 79.48

Rs. lakhs

As at 31st March,

2006

As at 30th

September, 2005

Principal amount of Hire Purchase obligation

a. Due within one year of the Balance sheet date 289.70 252.57 b. Due in a period between one year and five years 445.97 557.49

10 Loans and Advances in the nature of Loans given to Subsidiary Company (JMC Mining and

Quarries Ltd):

Rs.

Outstanding as at 31st March, 2006 : NIL

Maximum Balance Outstanding during the period : NIL

11 SEGMENTAL REPORTING

The management information system of the Company recognizes and monitors "Construction" as the business segment.

12 Since the Company is engaged in construction activity, the provisions of Para 3 of Part II of

Schedule VI of the Companies Act 1956 regarding quantitative details, are not applicable to the company.

13 Company has entered into Joint Venture with Associated Environmental Engineers Pvt. Ltd. in

respect of execution of a contract. The Company's share of interest in the Joint Venture is 51%. The Joint Venture has no independent assets and liabilities except for Trade receivables from client and Payables to the venture partners in respect of work executed by them in their respective capacities. The Company has recognised the share of loss in JV firm to the extent of 51% i.e. Rs. 2.15 lakhs upto FY 2004-05. Due to non-availability of site by the client, the work has been suspended for more than 3 years. Therefore the company has decided to terminate JV. The Company has also entered into Joint Venture with M/s. Dineshchandra R Agrawal Infracon Pvt. Ltd. for the execution road projects awarded by NHAI. The Company's share of Profit / Loss in the JV is 50%. No share of Profit/Loss for the period is considered in the above financial statements.

14 During the six months period ended on 31st March, 2006, the Company has provided net amount of Rs. 105.37 lakhs towards defect liability period expenses and reversed the provisions of Rs. 27.76 lakhs made in the earlier period which is no longer required to be carried forward.

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15 Additional information pursuant to the provision of part II Schedule VI to the Companies Act,

1956 (wherever applicable).

Rs. lakhs

Particulars For the six months period

ended on 31/03/2006

For the

eighteen

months period

ended on

30/09/2005

A. Value of imports Calculation on CIF Basis: * Capital Goods 4.42 46.62

* Materials 60.42 54.48

B. Expenditure in Foreign Currencies

Subscription - - Travelling 0.52 2.33 Interest on Foreign currency working capital loan 118.23 283.14

16 The Management is of the opinion that as on the Balance sheet date, there are no indications of a

potential impairment loss on Fixed Assets, hence, the need to provide for impairment loss does not arise.

17 Consolidated Earnings Per Share : For the six

months period

ended on

31/03/2006

For the

eighteen

months

period ended

on 30/09/2005

Profit computation for both Consolidated basic and diluted earnings per share of Rs. 10/- each

(A) Consolidated Net Profit / (Loss) as per Profit & Loss Account available for equity shareholders ( Rs. lakhs)

136.80 (1136.09)

(B) Number of equity shares (Weighted average for P.Y.2004-05) for EPS computation (for basic and diluted EPS) (Nos.)

1,16,16,375 71,60,927

(C) Consolidated EPS ( Basic & Diluted ) (Rs.) 1.18 (15.87)

(D) Annualised ES ( Basic & Diluted ) (Rs.) 2.36 (10.58)

18 The Company has revised estimated useful life of new plant and machineries and has started charging

depreciation at the accelerated rate on such assets purchased during the period. This has resulted into additional depreciation charge of Rs. 8.33 lakhs and the profit for the period is understated to that extent.

19 The Company has 46,46,493 outstanding detachable warrants convertible into equity shares.

Two warrants shall entitle the holder to receive one equity share of Rs. 10 each during warrant Exercise period, which shall be the period between 12-18 months from the date of allotment of warrants i.e. 9th September, 2005. Warrant holders can exercise their right to apply for the equity shares at the Warrant Exercise Price at any time during this period. In such case Warrant Exercise Price shall be the price which is at a discount of 10% to the average daily closing market price of the shares during the three calendar months immediately preceding the month in which warrant conversion is exercised, or at floor price of Rs. 50 per share, whichever is higher.

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The Company also will have a one-time call option of exercising the warrants during the same period. If the call option is exercised by the Company, the Warrant Exercise Price would be fixed at Rs. 50 per share. In either of the above cases, unexercised warrants will get elapsed. However, if warrants are exercised in full, the paid up capital of the Company will increase by Rs. 232.32 lakhs.

20 Previous Year figures have been regrouped wherever necessary.

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MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATION You should read the following discussions of financial condition and results of operations together with audited unconsolidated financial statement for the period of six months ended on 31st March 2006, eighteen months ended on 30th September, 2005 and for the years ended on 31st March 2004 and 2003 under Indian GAAP including scheduled, annexure and notes thereto and the reports thereon, which appear on page 46 in this Letter of Offer. These financial statements are prepared in accordance with Indian GAAP, the Companies Act and SEBI Guidelines. Overview of the Business

Since 1986, the Company has been engaged in the construction of industrial, commercial, institutional and residential buildings. The major thrust has been in the areas of industrial plants which include automobiles, textiles, heavy engineering, chemicals, cement, pharmaceuticals, sugar, power plants etc. and institutional buildings comprising hospitals, software parks, hotels, educational institutes etc. Having started with a small presence in the state of Gujarat, the Company has established a significant presence in the Western, Southern and Northern parts of the country during the last few years. From 1999 onwards, the Company has made forays into infrastructure projects comprising roads, bridges, urban infrastructure developments, railway terminus etc. The company has been pre-qualified for road project upto Rs. 18,632 lakhs on stand alone basis. The enhanced bidding capacity is going to contribute towards the future growth of the Company. The company has been successful in getting orders from prestigious clients due to its commitment towards customer satisfaction through engineering excellence and quality construction. The company is certified under ISO 9001:2000 quality system by TUV Management Services of Germany. Compliance with high degree of safety standards has been one of the key drivers at work.

Significant developments subsequent to the last financial year

The Directors of the Company confirm that in their opinion, no circumstances have arisen since the date of the last financial statements as disclosed in the Letter of Offer and which materially and adversely affect or is likely to affect the trading or profitability of the Company, or the value of its assets, or its ability to pay its liabilities within the next twelve months.

Factors that may affect Results of the Operations

The following developments may have material and adverse effect on the business and profitability of the Company:

(a) Increase in prices of major inputs such as steel, cement and petroleum products

To the extent possible, the company has decided to avoid fixed price contracts and pursue only those projects where either steel / cement is supplied by the client free of charge or at basic rate or price escalation is provided in the contract. This will enable the company to minimize the impact of adverse price fluctuations in the future. The company also ensures the supply of these materials directly from the manufacturer and enters into MOU / Project specific Rate contracts.

(b) Increasing competition in the construction industry The company has adopted quite a selective approach in pursuing new business with adequate focus on risk-return analysis. The company identifies the new business areas or geographical locations for expansion thereby building up its order book.

(c) Change in political and regulatory environment:

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(d) General economic and business conditions

(e) Imposition of Service tax

The company ensures the reimbursement of service tax from the client as per the contractual condition. In the future bidding the company will make necessary provisions for the service tax liability.

(f) Introduction of Value Added Tax (VAT) in some of the states. This may have adverse impact on some of the ongoing fixed price contracts. However the Company will make necessary efforts to get reimbursement of additional tax from such clients to the extent possible.

Discussion on Results of Operations of JMC Projects (India) Limited: Rs. lakhs

For the financial years ended For six months

ended on 31st

March 2006

For eighteen months

ended on 30th

September’05.

March 31st,

2004

March 31st, 2003

Particulars

Amt. % Amt. % Amt. % Amt. %

INCOME

Contract Receipts 14200 100.00 35024 100.00 18370 100.00 20994 100.00

Other Income (Excl. extra-ordinary income)

131 0.92 287 0.82 203 1.10 88 0.04

TOTAL 14331 35311 18573 21082

EXPENDITURE

Material Consumption 7107 50.05 17397 49.67 9864 53.69 11015 52.46

Work Charges 3077 21.67 8868 25.32 3794 20.65 4318 20.56

Construction Expenses 1330 9.37 3817 10.90 1574 8.56 1631 7.77

Employee Cost 1018 7.17 2312 6.60 1281 6.97 1311 6.24

Other General & Administrative Exp.

880 6.20 1712 4.89 1303 7.09 1082 5.15

Profit before Interest, Depreciation, Tax and exceptional items

919 6.47 1205 3.44 757 4.12 1725 8.22

Interest & Finance Charges 493 3.47 1689 4.82 1075 5.85 1091 5.20

Profit / (Loss) before Depreciation, Tax & exceptional items

426 3.00 (484) (1.38) (318) (1.73) 634 3.02

Depreciation 201 1.42 532 1.52 316 1.72 305 1.45

Profit / (Loss) before Tax & exceptional items

225 1.58 (1016) (2.90) (634) (3.45) 329 1.57

Extra-ordinary items

Less: Extra-ordinary Expense - - 967 2.76 - - - -

Add: Extraordinary Income - - 209 0.60 - - - -

Profit / (Loss) before Tax 225 1.58 (1774) (5.06) (634) (3.45) 329 1.57

Current Tax - - - - - - 53 0.26

Deferred Tax 75 0.53 (627) (1.79) (230) (1.25) 71 0.34

Fringe Benefit Tax 18 0.12 10 0.03 - - - -

Net Profit / (Loss) 132 0.93 (1157) (3.30) (404) (2.20) 205 0.97

APPROPRIATIONS

Proposed Dividend - - - - - - 23 0.00

Dividend Tax - - - - - - 3 0.00

General Reserves - - - - - - 21 0.00

Profit / (Loss) carried forward to Balance Sheet.

132 0.93 (1157) (3.30) (404) (2.20) 158 0.01

101

FY 2006 (6 months) compared to FY 2005 (18 months)

Results of Operation

Revenues Turnover for the period FY 2005-06 has increased by 21.63% compared to turnover in FY 2004-05 on annualized basis. The major reasons for this increase are good order backlog position of Rs. 640 crore at the beginning of the accounting period, new order booking of approx. Rs. 300 crore and execution of few high value fast track projects during the period FY 2005-06. Other Income Other Income (excluding extra-ordinary income) as a percentage of Turnover has increased from 0.82% in FY 2004-05 to 0.93% in FY 2005-06. The increase was mainly on account of service tax input credit and income of rentals on machineries. Operating Margin

Operating margin (before considering extraordinary item of expense and income) as a % of Turnover has improved from 3.44 % in FY 2004-05 to 6.47% in FY 2005-06. This is mainly due to mix of projects executed during this period and various initiatives taken by the management for better operational controls and monitoring.

Costs & Expenses

Employee Costs The manpower costs as a % of Turnover has gone up from 6.60% in FY 2004-05 to 7.17% in the period FY 2005-06 due to increase in manpower strength and midterm revision in remuneration. The no. of employees has increased from 869 in September 2005 to 957 in March 2006.

Other Expenses

Other expenses include General and administrative expenses such as traveling and conveyance, communications, security, insurance, IT expenses, sundry expenses, Rates and taxes, Professional and legal charges etc. Other expenses as a % of Turnover has increased from 4.89% in FY 2004-05 to 6.20% in the period FY 2005-06 mainly due to increase in business volume as well as manpower and other resources.

Interest & Finance charges

Interest and finance charges as a % Turnover have improved from 4.82% in FY 2004-05 to 3.47% during FY 2005-06. Improvement in collection cycle, reduction in over all borrowings and conversion of Rupee denominated working capital into FCNR(B) loan have helped the Company in containing the interest cost. The reduction of interest charges is due to the repayment of certain of the high cost borrowings out of the right issue proceeds.

Depreciation Depreciation cost as a % of Turnover has reduced from 1.52% in FY 2004-05 to 1.42% during FY 2005-06 showing marginal improvement. The Company had to make substantial investment in plant & machinery required for execution of two major road projects and various building projects. The Company has started

102

charging accelerated rate of depreciation in respect of machineries / equipments purchased after 1st October, 2005 so as to charge-off the assets within its useful economic life.

Taxes on Income and Deferred Tax provision

As per the requirement of Accounting Standard 22, the Company has created Deferred Tax Liability of Rs. 0.75 crore and debited the same in the Profit and Loss A/c for FY 2005-06. This has the effect of reducing the Net Profit by the equivalent amount. As on 31st March, 2006, the balance of deferred tax asset stood at Rs. 0.20 crore. The recognition of deferred tax asset has been done due to reasonable certainty that the Company will be able to generate adequate net surplus in the future and the deferred tax asset will be realized to that extent. Fringe Benefit Tax

The Finance Act, 2005 has introduced a new levy, namely, Fringe Benefit Tax with effect from 1st April, 2005. As per the provisions of the Income Tax Act, 1961 and subsequent explanatory note issued by Central Board of Direct Taxes, the Company has ascertained and provided for Fringe Benefit Tax and the same is separately reflected in the Profit and Loss Account.

Financial Status

Net Worth

The net worth of the Company has increased by Rs.1.31 crore during the current period and stood at Rs. 37.22 crore as on 31st March, 2006. There was no change in the Share capital and Securities Premium Account during the period FY 2005-06.

Borrowings The overall total borrowings as on 31st March, 2006 stood at Rs. 57.08 crore as against Rs.76.86 crore as on 30th September, 2005. The reduction in borrowing was mainly on account of repayment as per payment schedules, repayment of the high cost borrowing out of Right Issue proceeds and faster collections from the clients. The ratio of long term debt to equity (after addition of non interest bearing unsecured loans from directors and relatives to the share holder’s funds) has improved from 0.56 as on 30th September, 2005 to 0.50 as on 31st March, 2006.

Capital Expenditure

During the period FY 2005-06, the Company made an additional investment of Rs. 9.51 crore in fixed assets (excluding Capital work in progress) out of which Rs. 7 crore were invested in machineries and equipments. Funding of the capital expenditure was made from the proceeds from issue of Right shares.

Current Assets The Company’s current assets primarily consist of Debtors, Inventories, Cash & bank balances and Loans & Advances. The Current Ratio as at 31st March 2006 has stood at 1.13 as compared to 1.29 at the end of previous year. Receivable in terms of number of Day’s Sales Outstanding (DSO) has improved from 3.57 months to 3.17 months. Receivable (excluding retention amount) outstanding beyond 6 months as a % of Total Receivable has come down from 29.98% to 26.76%. The management is taking all the required steps to expedite collections and improve liquidity. Loans and Advances have increased from Rs.12.05 crore as at 30th September, 2005 to Rs. 14.82 crore as at 31st March, 2006 due to increase in advances to creditors, earnest money deposits and Pre-paid expenses in the nature of Infrastructure cost.

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Order Bookings The net value of new orders booked during FY 2005-06 was approx. Rs. 300 crore and the value of orders on hand as on 31st March, 2006 stood at Rs. 795 crore including the order value of two road projects worth Rs. 418 crore in the name of Joint Venture. The Company has been successful in getting some major orders from prestigious clients such as Bombay Dyeing, Vardhman Fabrics, Prestige Group, Siemens etc.

FY 2005 (18 months) compared to FY 2004

Results of Operation

Revenues

The turnover for the period April 2004-September 2005 has increased by 27.45% compared to the turnover in FY 2003-04 on annualised basis. The major reasons for this increase are good order backlog position of Rs. 27600 lakhs at the beginning of the financial year and new order booking of Rs. 71500 lakhs during the last eighteen months. Other Income

Total Other Income for the period April 2004-September 2005 has increased to 496 lakhs from 203 lakhs in FY 2003-04. The increase was mainly on account of profit on sale of construction machinery and income of rentals on machinery. The other income includes extra-ordinary items of profit on sale of machinery and equipment amounting to Rs. 209 lakhs. Operating Margin

Operating margin (before considering extraordinary item of expense and income) as a % of Turnover has declined from 4.12% in FY 2003-04 to 3.44% for the period of April 2004-September 2005. This is due to increase in steel / cement prices, abnormal rise in price of aggregates in Delhi, Mumbai and Pune regions, delay in execution of Delhi Metro Rail project and Indore Flyover Project due to external factors, under utilization of Infrastructure machinery and equipment etc. In the case of a few running projects, the company had to bear Service tax and VAT due to fixed price contracts. The company has also ensured that in most of the new orders, either steel / cement is issued free of charge by the client or supplied by JMC at basic rate so as to avoid the risk of adverse fluctuations in the prices. Costs & Expenses Employee Costs

The manpower costs as a % of Turnover has marginally improved from 6.97% in FY 2003-04 to 6.60% in the period April 2004-September 2005. The no. of employees has increased from 746 in April 2004 to 869 in September 2005.

General and Administrative Expenses The Other expenses include traveling and conveyance, communications, security, insurance, IT exp., Sundry Exp., Rates and taxes, Bad debts etc. This expense as a % of Contract receipts has declined due to semi variable nature of a few expenses and change in the tax structure from Works Contract Tax to Value Added Tax. The incremental VAT paid on purchase of materials is reflected in material costs instead of Works Contract Tax expense under the heading Rates and taxes.

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Exceptional Item of Expenditure As a prudent and conservative accounting practice, during the period of April 2004-September 2005, the company has decided to write-off Rs. 967 lakhs as one time bad debts in respect of debtors which were outstanding for more than two years and disputed by clients. The total amount of bad debts written-off during the above period comes to Rs. 994 lakhs. However, the company will continue efforts for realizing the same wherever necessary. Interest & Financial charges

Interest and finance charges as a % Turnover have improved from 5.85% in FY 2003-04 to 4.82% during April 2004-September 2005. Even though credit utilization for working capital has gone up, lower rate of interest and additional conversion of Rupee denominated working capital into FCNR(B) loan have helped the Company in containing the interest cost. The interest charges have reduced to some extent due to repayment of certain high cost borrowings from the proceeds of the rights issue.

Depreciation

Depreciation cost has increased from Rs. 316 lakhs in FY 2003-04 to Rs. 532 lakhs during April 2004-September 2005. However, depreciation as a % of Turnover has improved from 1.72% in FY 2003-04 to 1.52% in the current financial period of eighteen months. The company had to make substantial investment in plant & machinery due to increase in number of building projects and specialized requirement for a few projects. Taxes on Income and Deferred Tax provision

As per the requirement of Accounting Standard 22, the Company has created Deferred Tax Asset of Rs. 627 lakhs and credited the same in the Profit and Loss A/c for the current year. This has the effect of reducing the Net Loss by the equivalent amount. The recognition of deferred tax asset has been done due to reasonable certainty that the company will be able to generate adequate net surplus in the future and the deferred tax asset will be realized to that extent. Fringe Benefit Tax

The Finance Act, 2005 has introduced a new levy, namely, Fringe Benefit Tax with effect from 1st April, 2005. As per the provisions of the Income Tax Act, 1961 and subsequent explanatory note issued by Central Board of Direct Taxes, the Company has ascertained and provided for Fringe Benefit Tax and the same is separately reflected in the Profit and Loss Account.

Net Worth

The infusion of fresh equity in the month of August’05 has led to an increase of Rs. 697 lakhs and total equity share capital remained at 1161 lakhs as on 30th September 2005. The securities premium has also increased by Rs. 2400 lakhs (net of right issue expenses adjusted against this account) as on 30th September 2005. Through right issue proceeds, the company has received Rs. 3136 lakhs Due to the net loss incurred for the period under review, the balance of Reserves and surplus has declined by Rs. 1157 lakhs against available balance of Rs. 1118 lakhs and resultant deficit of Rs. 39 lakhs has been reflected as a debit balance of Profit and Loss Account on the asset side of the Balance sheet.

Borrowings The overall total borrowings as on 30th September 2005 stood at Rs.7695 lakhs as against Rs.7136 lakhs as on 31st March’2004. The increase in borrowing was mainly on account of hire purchase loans for financing additional capital expenditure. Out of the right issue proceeds, some of the high cost borrowings were repaid, the details of which are separately provided in the notes attached to the financial statement. The working capital

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borrowing from banks has increased by Rs. 211 lakhs due to growth in turnover and inventory for the period April 2004-September 2005. The ratio of long term debt to equity (after addition of non- interest bearing unsecured loans from directors and relatives to the share holder’s funds) has improved from 1.60 as on March 31, 2004 to 0.56 as on September 30, 2005. Capital Expenditure During the period April 2004-September 2005, the company made an additional investment of Rs. 1370 lakhs in fixed assets (excluding Capital work in progress) out of which Rs. 1059 lakhs were invested in machinery and equipment. Funding of the capital expenditure was made mainly through hire purchase loans and proceeds from issue of Right shares. Current Assets The company’ current assets primarily consist of Debtors, Inventories, Cash & Bank balances and Loans & Advances. The Current Ratio as on September 30, 2005 has improved and stands at 1.29 as compared to 1.17 at the end of the previous year. Receivables in terms of number of Day’s Sales Outstanding (DSO) have improved from 4.57 months to 3.57 months. Receivables (excluding retention amount) outstanding beyond 6 months as a % of Total Receivables have come down from 35.85% to 29.98%. This is largely on account of reduction in debtors as a result of bad debts write-off and increased focus on faster collection. The management is taking all the required steps to expedite collections and improve liquidity. Loans and Advances have increased by Rs.113 lakhs as on September 2005 as compared to the amount as on March 31, 2004 due to increase in earnest money deposits, TDS on Income tax and Pre-paid expenses in the nature of Infrastructure cost.

Order Bookings

The net value of new orders booked during April 2004-September 2005 was Rs. 71500 lakhs and the value of orders on hand as on September 30, 2005 stood at Rs. 64000 lakhs including the order value of two road projects worth Rs. 41900 lakhs received in the name of Joint Venture. The Company has been successful in getting some major orders from clients such as Wipro, Welspun, Indian Steel Corporation, Maruti Udyog, HSCC etc. and repeat orders from Raheja Group, Prestige Group, Mantri Group, Videocon and Asian Paints.

FY 2004 compared to FY 2003

Significant developments subsequent to the last financial year

• Unprecedented hike in the price of steel

• Substantial increase in construction activities in South India especially Bangalore region

• Entry into new business segment i.e. Metro Rail project and Power plants

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Discussion on Results of Operations

Revenues Turnover for the year ended March 31, 2004 was lower by 12.50% at Rs. 18,370 lakhs. The major reasons for reduction in turnover are:

• In-ordinate delay in execution of few major projects due to external factors beyond the control of the Company.

• Extended monsoon in western and northern parts of the country

Operating Margin Operating margin as a % of total Income for the year remained at 4.12% showing reduction of 4.10 % over previous year. The decline in operating profit is mainly attributed to unabsorbed fixed expenses such as employee cost, interest and depreciation due to low turnover, unexpected and exorbitant increase in the price of basic materials such as steel / cement and the write-off of a few receivables. A few projects were in the nature of fixed price contracts and in some cases the escalation clause did not provide adequate protection against the steep increase in the price of steel. On account of increase in steel price alone, the Company had to incur additional cost of 190 lakhs. Costs & Expenses

Employee cost The cost of manpower marginally reduced by 2.27% from 1,311 lakhs in FY 2002-03 to Rs.1,281 lakhs in FY 2003-04. The manpower strength came down from 791 as on 31st March’03 to 741 as on 31st March’04.

Other Expenses

General and Administrative expenses other than bad debts increased by 7.45% compared to the previous year. The major factors which can be attributed for such an increase are:

• Increase in Insurance charges

• Increase in Work contract tax due to change in geographical mix of turnover. The Company has decided to write off Rs. 236.64 lakhs as bad debts which could not be recovered after continuous and reasonable follow-up.

Interest and Finance charges

Interest and Finance costs have reduced from Rs. 1,091 lakhs in the last year to Rs. 1,075 lakhs in the current year. The level of working capital requirement remained constant due to delayed processing of final bills and collection in respect of some major projects.

Taxes on Income and Deferred Tax provision

As per the requirement of Accounting Standard 22, the Company has created Deferred Tax Asset of Rs. 230 lakhs and credited the same in the Profit and Loss A/c for the current year. This has the effect of reducing the Net Loss by the equivalent amount. The recognition of deferred tax asset has been done due to reasonable certainty that the Company will be able to generate adequate net surplus in the future and the deferred tax asset will be realized to that extent.

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Net Worth During the year FY 2003-04, the status of Equity Share capital remained unchanged. The retained earnings decreased by Rs. 406 lakhs for the current year. Borrowings The overall total borrowings went up by Rs.618 lakhs and stood at Rs. 7136 lakhs as on 31st March, 2004 as against Rs.6518 lakhs on 31st March,2003. The term loans increased by Rs.675 lakhs which includes Rs.397 lakhs towards project specific long term working capital. The Company has a working capital arrangement for a fund based limit of Rs.4000 lakhs and non fund based limits of Rs. 9000 lakhs as on 31st March 2004. Capital Expenditure During the current year, the Company made an additional investment of Rs. 729 lakhs in fixed assets out of which Rs. 650 lakhs were invested in plant and machinery. Funding of the capital expenditure was made through term loans, hire purchase loans and internal accruals. Current Assets The company’s current assets primarily consist of Debtors, Inventories, Cash & Bank balances and Loans & Advances. The Current Ratio at the end of the year was marginally reduced and stood at 1.24 as compared to 1.30 at the end of the previous year. Inventory turn-around ratio has also declined from 17.47 to 13.26. Receivables in terms of number of Day’s Sales Outstanding (DSO) have deteriorated from 3.9 months to 4.57 months. Receivables outstanding beyond 6 months as a % of Total Receivables have gone up from 29.86% to 45.85%. This is mainly due to the retention money, delayed processing of final bills for major projects etc. The management is taking all the required steps to expedite collections and improve liquidity. Loans and Advances have increased by 15% at the end of the year due to increase in advance to suppliers, TDS on Income tax and Pre-paid expenses in the nature of Infrastructure cost. Order Bookings

The total value of new orders booked during FY 2003-04 was Rs. 29,500 lakhs and the value of orders on hand was 27,600 lakhs as on 31st March’04.

Material developments in Human Resource / Industrial Relations front, including number of people

employed. The company identified Human Resource as one of the key resources for consistent growth. The management has taken various steps, which include multi-skilling and providing the required on job and classroom training to employees. The company ensures that necessary training is conducted for its labour at site so that they may contribute effectively and grow in skill. The company visits various business management, construction management and engineering colleges to recruit the potential managers at their initial stage of career and ensures necessary induction to groom them as prospective managers.

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The turnover ratio of the Company is very low and the Company enjoys employee loyalty and sense of belonging. There is no legal case of employee grievances. For team building which is one of the key requirements for successful execution of the project, the Company organizes various cultural programmers at site, Regional offices and Head Office at regular intervals. The company has been very selective in bidding for projects considering the risk–returns expectations.

An analysis of reasons for the changes in significant items of income and expenditure is given hereunder:

Unusual or infrequent events or transactions: During the month of December’04, the company decided to write-off Rs. 966.70 lakhs as bad debts in respect of debts which were outstanding for more than 3 years and were disputed by clients. The company has made profit of Rs. 209 lakhs on sale of machinery during FY 2004-05. There have been no other unusual or infrequent transactions that have taken place during the last three

years.

Significant Economic changes that materially affected or are likely to affect income from continuing

operations:

Any major changes in policies of the Government would have significant impact on the profitability of the Company. Except the above, there are no significant economic changes that may materially affect or are likely to affect income from continuing operations.

Known trends or uncertainties that have had or are expected to have a material adverse impact on sales,

revenue or income from continuing operations:

Apart from the risks as disclosed under heading “RISK FACTORS” in this Letter of Offer, there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations. Future changes in relationship between costs and revenues, in case of events such as future increase in

labour or material costs or prices that will cause a material change are known: The material cost, labour cost and construction expenses contribute 80%-85% of the total revenue. Any significant change in the above cost components will change the relationship between cost and revenue. Keeping in mind the volatility of the cost components involved escalation costs are in built in the tenders quoted for contracts.

The extent to which material increases in net sales or revenue are due to increased sales volume,

introduction of new products or services or increased sales prices:

The increase in revenue is due to increase in the order book position. Total turnover of each major industry segment in which the Company operated:

The Company is operating only in one segment namely the construction industry. However, there are no published data available to the Company for total turnover of the Construction Industry.

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The extent to which business is seasonal:

The business of the Company is not seasonal in nature. However, the construction activities are affected sometimes, due to heavy rains. Any significant dependence on a single or few suppliers or customers:

The Company sources its raw materials from a set of known suppliers and is not under threat from excessive dependence on any single supplier. Moreover, in some cases the raw material is supplied by the clients. The Company has a diversified client base as it is engaged in construction activities for roads, bus terminus, infrastructure, institutional & industrial complexes, multiplexes and residential buildings catering to both PSUs and private sector and hence there is no dependence on any single customer.

Competitive conditions The Company faces stiff competition from larger and well-established players. The Company is moderate in size compared to the market leaders, which acts as deterrent for very large projects. However, the Company had bid for large projects in the past and bagged a few large projects in spite of big companies in the fray.

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UNAUDITED WORKING RESULTS

Information relating to the Company sales, gross profit, etc. as required by the Ministry of Finance Circular No. F2/5/SE/76 dated February 5, 1977 read with the amendments of even no. dated March 8, 1977 is as under:

Unaudited Working Results for the period April’06-July’ 06


Net sales / Income from operations 12254.16

Other income 39.61

Total expenditure 11237.49

Interest and finance charges 338.48

Profit/ (loss) before depreciation and tax 717.80

Depreciation 214.12

Profit / (loss) before tax 503.68

Provision for tax / Fringe Benefit Tax 170.08

Net profit / (loss) 333.60

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OUTSTANDING LITIGATIONS AND DEFAULTS

A. PROCEEDINGS INVOLVING JMC PROJECTS (INDIA) LIMITED (JMC)

I. Notices received by JMC

Sr.

No.

Noticer’s

Name

Date of

Notice

Claim

Amount

Rs. lakhs

(Rounded

off)

Charges /

Allegations Brief details of the case

1. M/s. Wonder Proof (WP)

03.05.04 &

28.06.04

5.34 • JMC had created pressure for issuance of warranty by WP.

• Non release of payments by JMC

WP was the subcontractor for waterproofing works at a site at Gurgaon. After the work-order was issued to WP by JMC, WP asked for rate revision, which was not approved by JMC. After completion of work, WP issued a notice to JMC for extra compensation towards rate revision & balance outstanding on 03/05/04. There after another notice dated 28.06.04 was issued by WP to JMC intimating about non-requirement of furnishing Performance Bank Guarantee to JMC for Warranty. Both the notices were replied by JMC on 28/07/04 inter alia, contending that:

• Warranty was necessary as per the Work Order placed by JMC on WP.

• Payments were withheld by JMC for non- compliance of submission of Performance Bank Guarantee by WP.

Thereafter JMC had addressed a legal notice dt. 24.12.2005 reminding WP to provide, in terms of sub-contract, a bank guarantee, for the amount of 10% of the costs of works, valid upto 180 days.

2. Shiva Buildtech Pvt. Ltd. (SBPL)

02.06.04 6.00 along with interest @ 18% per annum since

December 2002

• Non payment of outstanding dues

SBPL was the contractor for constructing the internal roads at a site at Gurgaon. SBPL raised bills against the work done by it. SBPL issued a notice dated 2.6.2004 for release of its dues. JMC replied to the said Notice on 29.7.2004, inter alia, disputing the amount so claimed and called upon SBPL for reconciliation of accounts.

3. Lok Housing and Construct-ion

17-12-03 &

08-07-04

7.06 along with interest @

• Non payment of outstanding dues

LHCL had supplied materials for the Works undertaken by it for JMC. Notice for release of outstanding

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Ltd. (LHCL)

24% per annum from

1.12.03

amounts was issued on 17.12.2003 by LHCL to which JMC replied on 31.12.2003. Along with the said reply, JMC sent a cheque dated 31.12.2003 for Rs. 37,178/-. Thereafter, LHCL replied to the letter dated 31.12.2003 written by JMC, on 8.7.2004, giving credit of Rs. 37,178/- and for Rs. 14,851/-, while demanding the balance outstanding amount. The said letter dated 8.7.2004, issued by LHCL, is stated to be a notice under Sections 433 and 434 of the Companies Act, 1956.

4. M/s Victor India (VI)

17.01.05 Aggregate amount of 12.64

• Recovery of outstanding dues

VI was awarded fabrication and erection work by JMC. VI issued a notice dated 17.1.2005 under section 433 and 434 of the Companies Act, 1956 for outstanding amount, allegedly on account of unpaid bills. JMC replied to the said notice on 26.2.2005 denying the allegations made by VI and further denying that any amount is payable. JMC has, in its reply, contended that an amount of Rs. 7,39,425/- is recoverable on account of over-payment to VI.

5.

M/s AOS Systems (AOS)

21.04.03 5.84 along with interest @ 18% per annum till payment

• Wrongful termination of contract

• Recovery of outstanding dues

AOS was awarded an order by JMC for supply of goods / materials. But due to defect in the goods/materials installed by AOS, AOS was asked to rectify the same by JMC. Due to non-compliance by AOS, JMC cancelled the order vide letter dated 20.2.03. In response, AOS gave a notice dated 21.04.03 calling upon JMC to pay alleged outstanding bill amounts. JMC replied to the said notice vide letter dated 14.05.2003 denying the contents and allegations of the notice. AOS, vide letter dated 21.5.2003 replied reiterating its demand. JMC gave further reply vide letter dated 19.7.2003 to AOS denying the liability. JMC has thereafter, vide its letters dated 19.2.2004 and 3.5.2004, asked AOS to remove the defective goods /materials supplied at the site, failing which, JMC would be constrained to dispose of the same at the risk and cost of AOS.

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6. T. Arjun Singh (Mr. Singh)

24.09.04 3.35 • Non Release of outstanding dues

• Some amounts wrongly debited by JMC without clarifications

• Non reimburse-ment of the compensati-on by JMC paid for the death of labourer at site by Mr. Singh.

Mr. Singh had done works at certain sites. As per Mr. Singh, the payments under different heads were not made to him by JMC. As a consequence, Mr. Singh gave a notice dated 24.9.2004 for payment of the alleged outstanding amounts.

7. M/s Ganapathy Electrical Engineering Company (Gana-

pathy)

12.10.04 1.34

• Non payment of outstanding amounts.

Ganapathy carried out electrical works at one of the sites. Ganapathy has given a notice for release of outstanding amounts. JMC has, vide its letter dated 15.03.2005, replied to the said notice, pointing out that as per discussions held between JMC and Ganapathy, the latter was to identify and mark the quantity and material described in their bill, to enable JMC to process their claim. Vide its letter dated 16.05.2005, to JMC, Ganapathy has stated that Rs. 1,34,026/- is balance outstanding and has further requested for payment of

the same.

8. The Regional Director, Employee State Insurance Corporation, Ahmedabad (ESIC)

28.9.04 NIL • Non-submission of declaration forms under Regulation No. 11, 12 and 14 of the ESI (General) Regulations, 1950.

• Non-submission of particulars in Form–01 as required under section 2A of the ESI Act, 1948 read with the ESI (General)

A Show cause notice dated 28.9.2004 from the Office of the Regional Director, ESIC was received by JMC, Mr. I. K. Modi, Mr. Hemant Modi, Mr. Suhas Joshi, Mr. Arun Gandhi, Mr. N. K. Patel and Mr. Ajay Mehta who are stated to be the principal employers of the factory / establishment of JMC requiring JMC to show cause as to why they should not be prosecuted for the charges, under sections 85/85-A/85-C of the ESI Act, 1948. It is also stated that under section 85-B of the ESI Act, the Corporation is entitled to recover the amounts payable under the ESI Act from the Employers. JMC replied on 8.10.2004, inter alia

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Regulations, 1950.

• Non-submission of return of contribution under Regulation No. 31 of ESI (General) Regulations, 1950

giving detailed reasons for not providing the information to the Area Inspector. JMC requested that an officer be deputed for inspection. Pursuant thereto, ESIC officials conducted inspection on 4th, 5th and 13th April 2005 and called upon JMC for certain compliances which JMC abided by way of deposit of Rs. 1,06,351/- and Rs. 4,817/- on April 20, 2005 and April 30, 2005 respectively. Subsequently, JMC, vide its letter dated May 6, 2005, has brought to the notice of ESIC, the aforesaid compliances and has requested that the show cause notice dated September 28, 2004 be withdrawn.

9.

Bharati Cellular Limited (BCL)

16.07.05 0.25 Notice for conciliation under provisions of Arbitration & Conciliation Act, 1996, seeking conciliation for dispute regarding non payment of outstanding amount.

BCL has alleged that an amount of Rs. 24,533.16 (after adjusting deposit, if any) is due and payable by JMC to BCL and that BCL had issued several reminders on this behalf. Vide the said letter, BCL sought conciliation in this regard on 08.08.2005, failing which BCL has threatened to initiate legal action.

JMC has replied, vide its letter dated 13.08.2005, interalia, denying any balance due to BCL as also the alleged correspondence.

10. Bharati Cellular Limited (BCL)

15.07.05 0.14 Notice under section 405, 406 & 420 of Indian Penal Code, 1860 relating to non payment of outstanding amount.

BCL has alleged that an amount of Rs. 13,845.13/- (after adjusting deposit, if any) is due and payable by JMC to BCL. Vide the said letter, BCL has called on JMC to pay the said amount within 7 days from the date of receipt of the notice, failing which, it shall initiate civil and criminal proceedings including orders for attaching income of JMC.

JMC has replied , vide its letter dated 13.08.2005, interalia, denying that the said connection was ever availed by JMC and has further contended that no balance is due as alleged.

11. New S. Kumar Roadlines (SK)

24.09.05 0.21 along with the running

interest @

Notice for recovery of outstanding amount

SK claims to have been awarded work order, whereunder, it had carried out transportation of certain goods consignments and claims that an

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18% from 7th July’ 05

amount of Rs. 21,000/- is outstanding since July-2005. Vide the said notice SK has called on JMC to pay the said amount along with running interest @ 18% from July-2005 within 7 days of the receipt of the notice.

JMC had sent its reply dated December 22, 2005 to SK’s advocate inter alia, denying the contents of the said notice as well as the alleged dues, by registered post AD. However, the said letter returned unserved. Therefore, JMC, vide its advocate’s letter dated December 31, 2005, forwarded a copy of the earlier reply, along with the copy of the Registered A. D. Slip, evidencing dispatch of the earlier reply to Mr. P. Sureshkumar Sharma, the Proprietor of SK.

12. Mr. P.L. Nachiappan. (PLN)

14.10.05 0.33 Alleged Non release of salary for March’02 and 14 days of salary of April ’02, local conveyance reimbursement from Jan’02 to April’02 @ 1250/- per month, leave travel allowance from 2000-01 to 2001-02, statutory bonus for 01-02, and notice cost.

PLN has stated that on account of his resignation due to family reasons, he has not received salary for the entire month for March’02 and 14 days of salary of April ’02, local conveyance reimbursement from Jan ’02 to April ’02 @ 1250/- per month, leave travel allowance for 2000-01 and 2001-02, statutory bonus for 01-02, and Rs. 1000 towards notice cost. JMC has vide its letter dated 25.11.2005 replied to the said notice whereby it has pointed out that vide its cheque no. 704988 dated 27.02.2003, JMC has already paid the net outstanding to the tune of Rs. 13,179/- and further that there are no dues of PLN outstanding against JMC.

13. Nrusingh Charan Swain (NCS)

11.11.05 0.48 Claim towards outstanding labour payment

NCS was a sub contractor under JMC at M/s. Pushpgiri Institute of Medical Science, Thiruvalla, Kerala and claims to have worked from 22.04.05 to 22.05.05 with 23 labourers. NCS claims that he was entitled to Rs. 53,700/- allegedly towards the payment of labour wages but was paid only Rs. 5,556/- on different occasions.

14. MHN Associates (MHN)

05.08.05 & 28.09.05

8.17 • Notice under section 138 and 142 of

MHN has issued a notice that for the material supplied, cheques had been issued by JMC, which were deposited

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Negotiable Instruments Act, 1881 for dishonour of cheque towards considera-tion of material supplied and work done

• for issuance of Form C in respect to Central Sales Tax.

by MHN but they were dishonoured. Furthermore, additional cheques of aggregate amount of Rs. 4 lakhs, given in lieu of the aforesaid cheques as also for additional work, too have bounced. Furthermore he has demanded the sums of Rs. 2,64,000/- and Rs. 1,53,000/- towards supply of certain material and for labour charges respectively. MHN has also sought issuance of Form C which JMC is alleged to have promised, whereby MHN could claim tax benefits. JMC has replied to the said notices by replies dated 05.09.2005 and 01.12.2005 and has denied liability as alleged.

15. M/s Natcoms Hiring Services (NHS)

07.04.05 0.19 • Claims towards outstanding charges for hiring de-watering pump.

NHS alleges that JMC has hired de-watering pumps for work undertaken at Bandra, Mumbai, Mhape, Navi Mumbai, BSM Site and D.Y. Patil College, Nerul, Navi Mumbai. Bills certified by JMC to the extent of Rs.69,099/- have been part paid by JMC to the extent of Rs.50,500/- leaving balance of Rs.18,599/- as outstanding.

16. H. R. Construction (HRC)

18.01.06 6.46 plus interest @ 18% per annum

• Non payment of alleged balance amount of Rs. 45,909 and Rs. 6,00,000 on account of alleged outstandings on bills and on account of total idling of labour, respectively.

HRC was deployed by JMC for execution of work at the Indore Municipal Corporation Site for work pertaining to 1200 m.m. dia R.C.C. Bored Case in situ piles at Manik Baugh Railways Crossing Bridge Indore, which HRC claimed to be completed. HRC, alleging a joint meeting between P. Joshi and K. C. Goyal of JMC, claimed an amount of Rs. 6 Lakhs towards idling of labours. Furthermore, independent of claim based on meeting, it has claimed that an amount of Rs. 45,909/- is due towards outstanding on its bills and called upon to pay the said amounts within 7 days of receipt of the notice along with interest @ 18% from January 2005 together with costs of the notice at Rs. 500/-.

JMC, vide its reply dated May 6, 2006, whilst denying the allegations / contents of the notice, has indicated

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that the said amount of Rs. 6 lakhs will be paid only if such claim is acceptable to Indore Municipal Corporation and that too after the payment from the Principal (i.e. Indore Municipal Corporation) is received and furthermore that the claim of Rs. 45,909/- needs reconciliation. HRC, vide its letter dated 12.07.2006, denied the stand of JMC stated in JMC’s letter dated 6.05.2006 and has reiterated its demand for payment of Rs. 6 lakhs plus Rs. 45,909/- and has stated that failing such payment, JMC shall be liable to pay interest @ 18% on the aforesaid sums. HRC has also stated that failing the receipt of payment from JMC, it shall file a suit for recovery for such amounts.

17. Messers Asian Heart Institute and Research Center (AHI)

21.03.06 --

• Notice calling on JMC inter

alia to rectify / repair water proofing and leakage problems, due to alleged poor workmanship and use of alleged sub-standard construction material by JMC.

• Threat of initiating Criminal Action and approaching media, including the print, television and such other agencies, with the aforesaid issue.

AHI had retained the services of JMC for execution of Structural and Civil Works for the sub structure and super structure for Hospital Block, at Bandra (E), Mumbai. However, after completion of the work, AHI, alleging poor quality of work, has called on JMC to inter alia rectify / repair the alleged water proofing and leaking problems at various floors. It has alleged that JMC is liable for breach of contract, supposedly on account of poor workmanship and sub-standard construction material allegedly used by JMC. AHI has also alleged that JMC has committed criminal breach of trust and fraud / cheating under sections 405, 406, 415, 417, 499 and 500 of the Indian Penal Code, 1908 and has threatened criminal action against JMC. JMC, vide its reply dated 12.4.2006 has denied its alleged liability and has contended that the works sought from JMC were not covered under the guarantee as they had occurred solely on account of decisions taken by AHI and for factors beyond purview and control of JMC. JMC has also stated that the waterproofing treatment has been damaged and tampered with by actions taken by AHI after completion of activity and hence the guarantee

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referred to by AHI has been rendered void. JMC has denied that it has committed breach of contract. JMC has stated that it had gone out of the way, though not bound contractually / legally, and had suggested remedial measures to address the problems faced by AHI. JMC has stated that the main cause for non commencement of the repair was the lack of taking a decision on the part of AHI. Furthermore, JMC has also cautioned AHI against false criminal litigation, and that such action shall be met with strong and appropriate resistance, entirely at the risk and cost of AHI. It has further cautioned AHI against the threatened false public maligning of JMC and that in such eventuality, JMC has stated that it shall be constrained to take appropriate and fitting action against AHI, including action for defamation.AHI, vide its letter dated 26.06.2006, has denied the contents of the reply by JMC and alleged that it had informed JMC of the leakages within reasonable time. AHI has also denied that it has done tampering of any kind on main terrace or on terrace gardens or on any of the floors. It has also denied that guarantee has become inoperative. It has called upon JMC to rectify / repair the water proofing, failing which it has threatened to commence repair works by itself, as also initiate legal proceedings, both civil and criminal, at the risks and costs / liability of JMC.

18. M/s. Metal Brites (MB)

04.05.06 7.53 plus interest @ 18% per

annum and the cost of notice to

the tune of Rs. 2,500/-

• Notice calling on JMC to pay alleged outstandings.

MB has alleged that it has completed aluminum and glass fabrication work at two projects undertaken by JMC at Chennai Mofussil Bus Terminal, Koyambedu (hereinafter, ‘CMB’) and National Institute of Fashion Technology, Taramani (hereinafter, ‘NFT’). However, the bills of MB, though raised, have not been cleared. MB has alleged that a balance of Rs.2,88,098 is due and payable out of the total amount payable for the bills in respect to CMB. It has also alleged that a sum of Rs.4,65,139 is payable out of the total amount payable for the

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bills in respect to NFT. Therefore, it has alleged that a total amount due to MB is Rs. 7,53,457/- (this alleged aggregate amount is wrongly mentioned in the notice as Rs.7,53,457/- instead of Rs.7,53,237/-). MB has also sought interest at the rate of 18% p.a. from the alleged due dates on which amounts as aforesaid allegedly became due along with cost of the notice to the tune of Rs.2,500/-. All of the aforesaid payments have been sought by MB within 15 days of the receipt of notice, failing which, MB has threatened to initiate legal proceedings, both civil and criminal. JMC vide its reply dated 5.07.2006, has replied to the said notice. JMC, by the said reply, has forwarded its Statement of Accounts for NFT and CMB, stating that the said Statement of Account has been prepared on the basis of details given by MB. The said annexures also had reasons for differences. The reply states that it is JMC who is to recover Rs. 2,50,674/- for CMB work and is to pay Rs. 25,698/- towards NFT Work. Hence, as per JMC, the net recoverable amount from MB is Rs. 2,24,976/-.

19. Office of the Regional Labour Commissioner (C), New Delhi

16.03.06 1.32 • Claim towards non payment to Dilip Yadav & 13 others from 08.10.2005 to 06.02.2006

The subject notice has been issued by the Office of the Regional Labour Commissioner (C), New Delhi on receipt of complaint from one Mr. Dilip Yadav and others. In the said complaint, it has been alleged that Mr. Dilip Yadav and 13 others had not been paid a sum of Rs. 1,32,491, being the balance outstanding of their alleged dues for work done from 8.10.2005 to 6.2.2006 for work done by them towards the digging, etc. of Sewer lines for DMRC project from Moti Nagar to Tilak Nagar. The Labour Office, vide the subject notice, has called upon JMC to offer its comments and attend its office with records and registers related to the complaint. JMC, in this connection, has addressed a letter to M/s. AIM Construction (the

120

Labour Contractor), with a copy marked to the Asst. Labour Commissioner, seeking the details of the dispute regarding the payment to the workers.

20. Letter from the Office of the Assistant Labour Officer, Balugaon, Dist. Khurda, Orissa.

12.01.06 5.51 • Claim towards non payment of arrears to 60 workers.

The letter has been addressed to the Managing Director of JMC. The letter states that two groups of workers had filed separate complaints before the Office of the Assistant Labour Officer, Balugaon, Khurda alleging that the Labour Contractor, one Mr. Dhrub Guru, had not paid their wages to the tune of Rs.2,87,454 and Rs.2,63,942 in respect to the work done by them at Surya Park Site and the Digital Site of JMC, respectively. The notice further records that in course of inquiry / discussion, the Labour Contractor alleged that it had not received payment to the tune of Rs.6,48,550/- from JMC. The notice records that letters issued to Project Manager of JMC, forwarding details of alleged claims of the workers and the alleged dues of the Labour Contractor, remained unattended, and hence the subject letter. The letter calls upon JMC to look into the matter and send authorised representative, conversant with the facts accompanied by supportive documents to the office of the District Labour Office for finalizing the claim of the workers. It further records that in case such representative does not appear at the office of the Asst. Labour Officer, then it would be presumed that JMC has nothing to say in the matter and in that eventuality, appropriate further action shall be taken. JMC has thereafter addressed a letter to Mr. Dhruva Guru (the Labour Contractor), with a copy thereof marked to the Office of the Assistant Labour Officer, Balugaon, Khurda, informing that JMC has settled all its payments and that a certain difference of payments to the tune of Rs. 10,322/- has also been deposited JMC has thereafter requested Mr. Guru to settle his labour dues.

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Thereafter JMC has written a letter dated 21.01.06 to the Assistant Labour Officer (Khurda) Bhubaneshwar, mentioning inter alia, that Rs. 10,322/- apart from the earlier payment, have been forwarded to the Labour Officer and that no further amount remains outstanding towards the said contractor. The said letter also states that the matter be dropped accordingly.

21. Office of the Senior Labour Inspector, 18th Circle, Bangalore.

11.04.05 --

• Non compliance of provisions relating to inter state migrant labour

• Copies of forms etc., required to be filed in compliance of regulatory requirements concerning labour sought, on the assumption that such compliance has not been made.

Senior Labour Inspector, 14th Circle and 18th Circle and Labour Inspector, 18th Circle carried out an inspection of the records pertaining to the labour, who were working with the JMC at its site at Bangalore namely, M/s. RGA Software Systems (P) Ltd., Surya Sapphire, Surya Park-III, Bangalore. The inspection report of the even date pointed out certain lapses by JMC under the Inter State Migrant Workmen Act, 1979, including but not limited to non availability of full wages and return journey fare to the (Inter State) Migrant Workmen as also the non availability of facilities such as drinking water, rest room etc. The report mentions of certain applications concerning Mr. Druva Guru (refer item no.A.I.20). Certain other records too were sought but apparently not produced. In pursuance of the said report dated 11.04.05, a notice of even date came to be issued whereby JMC was called on to produce records, mostly forms prescribed under legislations pertaining to contract labour and records pertaining to contract labour within 7 days of the date of the notice. JMC, vide its reply dated 05.05.2005 has stated that the principle employer has obtained certificate of registration from concerned Assistant Labour Commissioner and that JMC has obtained the contract labour license from the concerned Assistant Labour Commissioner. It has contended that it does not employ any Migrant Worker and therefore the issue of compliances

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of the requirement of Interstate Migrant Workmen Act does not arise. Furthermore, the letter states that various facilities, such as drinking water, rest room etc. are being provided to the labour. Vide a further letter dated 01.07.05, JMC has clarified that the claim of Dhruva Guru is exaggerated and that the mode of payment to Labour Contractor is on ‘piece rated’ basis and hence the question of overtime does not arise. JMC has reiterated that it does not employ any interstate migrant worker. Furthermore, a Demand Draft of Rs. 10,322/- being the amount of the difference of the minimum wages of the workers working at the site and amount actually paid was also forwarded to the Labour Officer with a request to distribute the same amongst the labour.

22. S. K. Nayak 10.12.05 0.95 • Non payment of alleged security deposits.

S. K. Nayak got certain work orders as PRW (Piece Rate Worker) on various site of JMC. Vide the notice, Mr. Nayak has contended that security deposit deducted from his bills has not been remitted to him and on this count he has claimed an aggregate amount of Rs. 95,463.45. JMC, vide its reply dated 05.01.2006 has contended that only a meager sum of Rs. 308 is outstanding in his account, which shall be released after Mr. Nayak’s acceptance of the same with No claim declaration as per the format.

II. OUTSTANDING LITIGATIONS filed against JMC.

(a) Civil Cases.

Sr.

No Case No Parties

Court / Place

of Institution

Amount

claimed (Rs.

in

(lakhs)

(Rounded off)

Brief details of the case

1. Special 1 Hemant H. Court of Civil 12.98 M/s. Victor India (VI) through its

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Civil Suit Nos. 5 & 6 of 2005

Sajnani V/s. JMC & anr.

2 Hemant H. Sajnani V/s. JMC & anr.

Judge (S.D.)

at Gandhidh-

am;

and,

Court of Civil Judge (S.D.) at Anjar, Kutch respectively

(being the aggregate amount in both the suits) with further interest @ 12% per annum on principal.

proprietor Mr. Sanjani (the Plaintiff), was awarded fabrication and erection work at different sites. The Plaintiff filed the present suits, inter alia, contending that the Plaintiff’s machineries have been illegally detained and for outstanding payments by JMC. Subsequently, pursis dated 10.2.05 for compromise regarding detention of machineries were filed in the said suits by the respective parties whereon the Court passed order dated 10.2.2005 granting the said pursis in both the suits. The Plaintiff, under the said orders, has been permitted to take away the machineries. Recently the Plaintiff has made applications in each of the said suits under Order 38 Rule 5 of Civil Procedure Code, 1908 praying for deposit of claim amount or attachment of properties lying at the site described in the said Applications. Subsequent to the filing of said applications, JMC has filed an application for rejecting the plaint under Order 7 Rule 11 of Civil Procedure Code, 1908 in both the suits. VI has filed its reply to the said applications in both the suits whereby it has contended that the said applications filed by JMC are solely to delay the proceedings and have denied all the averments in the said applications and have prayed for dismissal of the said applications. Pending such hearing, one of the suits, namely Special Civil Suit Nos. 5 of 2005 has been transferred to the Court of Civil Judge, (S.D.) at Gandhidham. The said applications and suits are pending.

2. Civil Suit No. 7307/ 2000

P.C. Austin V/s. JMC & anr

The Court of City Civil Judge at Bangalore

1.13 Reinstatement with back wages & cost

Mr. Austin has filed a civil suit before the City Civil Judge, Bangalore. Mr. Austin has prayed for declaration that his termination order be declared illegal, and has further sought reinstatement with all benefits and arrears of salary, damages plus bonus for 1997-98,

124

annual benefits for 1997-98 & 1998-99, one month’s salary towards notice pay, earned leave for 15 days, interest @ 12% on alleged arrears as aforesaid and charges of legal notice, in all aggregating to Rs. 1,12,778. JMC has filed its written statement on 02-08-2001 wherein it has been

inter alia contented that the Hon’ble Court does not have the jurisdiction to try the suit, that Mr. Austin was earlier appointed as Assistant Engineer on probation and later on as Construction Engineer on probation, that he was serving only on probation and has further denied all the claims prayed for by Mr. Austin. Issues have been framed..The matter was to come up for cross examination of the witness on 31.07.2006. On the said date, after conclusion of the cross examination, the matter was adjourned to 17.08.2006 for arguments. However on 17.08.2006, the advocate for Austin, took time to produce documents and filed an application for the same on 28.08.2006. On 31.8.2006, JMC Filed its reply to the application of Austin, opposing such production of document and on the said date the matter came to be adjourned to 7.09.2006. However, instead of 7.09.06, the matter came to be notified on 08.09.06, when the Hon’ble judge permitted Austin to produce the document and the next date of hearing is 29.09.2006

3 Civil Revision No. 58/2006 & CMP No. 243 in CR 58 of 2006.

Aargee Consultants Pvt. Ltd. (Aargee) V/s. JMC

High Court of Himachal Pradesh at Shimla

N.A.

Aargee was awarded a sub-contract for executing certain works awarded to JMC under contract by Hospital Services Consultancy Corporation (India) Ltd. (HSCC). Disputes arose between Aargee and JMC. JMC terminated the sub-contract awarded to Aargee for the reasons mentioned in its termination notice dated 8.8.2005. Thereafter Aargee had preferred a suit for declaration and consequential relief of permanent

125

prohibitory and mandatory injunction that Aargee was and continues to be the sub-contractor of JMC at the construction site of 500 bedded hospital of Dr. Rajendra Prasad Medical College, Tanda, Himachal Pradesh. JMC had filed an application under Order 7 Rule 10 read with section 151 of Code of Civil Procedure 1908 challenging the jurisdiction of the Court and has also filed application under section 8 read with section 5 of the Arbitration & Conciliation Act, 1996. The application under Section 8 read with section 5 of the Arbitration & Conciliation Act, 1996 filed by JMC came to be allowed vide order dated 21.01.2006. The subject Civil Revision Application has been filed against the said order. Aargee has also preferred a CMP No. 243 of 2006 in Civil Revision No. 58 of 2006 whereby it has prayed for stay of the said order dated 21.01.2006 till pendency of the present petition. The Hon'ble Court has vide its order dated 18.05.2006, passed in the Civil Misc. Petition filed with the subject Civil Revision Application, stayed the making of award by the Arbitrator. JMC has caused its appearance in the matter and has filed its reply to the Civil Miscellaneous Application vacating / opposing the grant of interim relief for stay of the operation of the order dated 21.1.2006 and has also prayed that the Civil Revision No. 58 be dismissed with cost. The matter is pending.

4 Special Civil Suit No. 658 of 2005

Cognizant Technology Solutions India Pvt. Limited

The Court of Civil Judge Sr. Div. Pune, at Pune

NA (as the suit

prayer is for declaration and

CTS had awarded a contract to JMC for construction of Civil and Plumbing works at the office building of CTS at Hinjawadi, Pune.

126

(CTS) V/s. JMC

permanent restrainment)

Disputes arose between JMC and CTS in respect to the amount payable by CTS to JMC. CTS has therefore filed the subject suit seeking declaration that JMC is not entitled to claim more than an aggregate of Rs. 7,62,592/- from CTS for the aforesaid contract and further permanently restraining JMC from demanding any further amount from CTS. JMC has objected to the jurisdiction of the Court by an application dated 19.9.2005, preferred under Section 8 read with Section 5 of the Arbitration and Conciliation Act, 1996, contending inter alia, that in view of arbitration clause mentioned in the Contract Document, the disputes raised by CTS before the Court can only be adjudicated by an Arbitration Tribunal. Vide the said application, JMC has sought the disputes raised in the suit to be referred for arbitration. CTSL has not filed its reply to the application dated 7.10.2005 and the matter was adjourned to 28.07.2006. which was further adjourned to 16.09.2006 and the case is pending

5 Suit No. 4/ 90

Rajkumar and another V/s. Delhi Administra-tion and others.

In the Court of Civil Judge, Delhi.

--

Owing to certain disputes that arose between the purported owners of land, measuring Two Bighas and forming a part of Kh. No. 205/2, namely Shri Rajkumar and one Jaswant Singh had with Delhi Administration and others, a suit, being Suit No. 4 of 1990 came to be filed before the Civil Judge, Delhi. The suit, as filed, did not have JMC as a party defendant. However, an application dated 6.1.2003 under Order 1 Rule 10 of the Code of Civil Procedure, 1908 (‘the Code’) read with Section 151 of the Code, came to be filed wherein it is alleged that JMC is constructing on the disputed land, under a contract awarded to it by Delhi State Industrial

127

Development Corporation, Technical Center Building, Warzipur, Delhi (DSIDC). Vide the said application, it has been prayed inter alia, that JMC and DSIDC be added as party defendants to the suit and that both JMC and DSIDC be restrained from the alleged construction on the disputed land. The application is pending.

6. Suit No. 29/06

M/s. Avtar Singh, Contractors (ASC) V/s. JMC

The Court of Additional District Judge, Delhi

3.30 along with pendentalite

interest therein w.e.f. 01.04.06

and costs

ASC was awarded sub contract by JMC at M/s. Power Welfare Organization Site at Gurgaon, Haryana. It is alleged by ASC that in order to avoid delay in execution of the project, a 5% incentive was promised (quantified at Rs. 1,25,000/- approx) provided the work was completed in time. ASC alleges that the work was finished before time but JMC did not pay the promised incentive. Furthermore, of the amount alleged to be due after completion of the work, i.e. Rs.5,83,634/-, balance outstanding of Rs. 2,83,634 is allegedly due and payable and thus, a total amount of Rs. 4,08,634 was due and payable. Thereafter, it is alleged that on 15.09.04, ASC was handed over a cheque for an amount of Rs. 1,72,000/- vide cheque no. 213301 of the even date, as full and final amount payable. ASC had the cheque cleared. ASC has denied that the matter was settled for the said amount of 1,72,000/- citing certain exchange of notices between the parties, wherein JMC has alleged that the account has been settled for all times to come. The suit is for the recovery of the alleged balance outstanding amount of Rs.2,64,216/-, along with interest amount of Rs. 65,389/- (@ 18% from the period of 15.09.04 to 31.3.06) and thus the amount comes to Rs. 3,29,605/- and further interest pendentelite. JMC has filed its Written Statement

128

dated 25th July 2006 in the matter on 29th July, 2006 inter alia disputing the pecuniary and territorial jurisdiction of the Hon'ble Court to try the suit and that the claim is barred by the Law of Limitation. JMC has brought on record the settlement between the parties for an amount of 1,72,000/- and disputed the levy of interest at the rate of 18% by ASC as also the consequent adjustments made by ASC on the basis of levy of 18% and has asserted that there is nothing due from JMC to ASC. JMC has prayed for dismissal of the suit. Thereafter, the Hon'ble Court framed the issues on 8th August, 2006. Now the suit will be listed for evidence on 6.10. 2006

7. Summary Suit No. 1028 of 2006

Lok Housing and Constructi-on Ltd. (LHCL) V/s. JMC

High Court of Judicature at Bombay.

4.3 plus interest at the rate of 18% @ annum from 1.1.04 to 28.02.2006 amounting to approx. 1.49 lakhs and additional interest @ 24% from date of filing of Suit till realization.

LHCL has preferred the summary suit claiming an aggregate amount of Rs.5,78,438/- alleging that a sum of Rs.4,30,000/- has been admitted as payable by JMC to it in respect of goods sold (i.e. 6" solid blocks) by LHCL to JMC. LHCL has also claimed Rs.1,48,438/- towards interest at the rate of 18% per annum from 1.01.2004 to 28.02.06 on the amount claimed by it.

(b) Labour Matters

Sr.

No

Reference

No Parties

Place and

Court of

Institution

Amount

Involved/

Claims made


1. Ref. L.C. No. 1260 of 2000

JMC through its Manager (First Party) & Pravin-puri N. Gosai (Second Party)

Labour Court, Ahmedabad

• Rs. 3,55,600 (amount is calculated from the date of termination upto 31.03.2006)

• Reinstatem

Mr. Pravinpuri Gosai has alleged that his services were terminated by JMC on 14.12.1999. He has sought, inter alia re-instatement with back wages and costs. JMC has filed its Written Statement, contending, inter alia, that the Reference is not maintainable as Mr. Gosai is not a workman, as defined under the

129

ent with back wages from 14.12.1999, and increments / emoluments as if the Second Party is in continuous service.

Industrial Disputes Act, 1947. The matter is came up on 25.08.2006 for recording the evidence of the Second Party. Vide consent / compromise terms dated 1.09.2006, Mr. Gosai has accepted Rs.20,000/- towards full and final settlement of all his claims, withdrawn the recovery application of his own accord and has expressly waived his demand for reinstatement. The said consent terms have been filed in the Court on that very date and the Hon'ble Court has kept the matter for passing appropriate orders.

2. WC 123 of 1998

Pratap- bhai Odhar-bhai Rabari (POR) v/s. JMC and anr.

Workmen Compensat- ion Commiss- ioner, Ahmedabad

Rs. 2,50,000 along with compound interest @18% per annum from 4.3.1996, 50% penalty thereon and for costs.

The case was filed by POR,who was working as a sub-contractor’s employee at M/s Hindustan Erection Co. site. He has claimed compensation for 100% disability pursuant to an accident. JMC has filed Written Statement dated 8.1.1999. Vide the said written statement JMC has denied that POR is its workman and also denied that the said accident happened while POR was on official duty. The matter came up for taking evidence on 30.08.2006. The same has been postponed to 11.10.2006

3. Recovery Application No. 1485 of 1998

Pratap Odhar-bhai Rabari v/s. JMC & another.

Presiding Officer, Labour Court, Ahmedabad

Rs. 1,01,640/- plus Rs.5000/- as costs and interest @18% per annum from due date till actual realization.

Mr. Pratap Odharbhai Rabari, claiming to be the sub contractor’s workman, has filed the Recovery Application alleging that he was illegally terminated by JMC. JMC has filed Written Statement dated 28.9.1998 denying the allegations and contending, inter alia, that he is not JMC’s workman. The matter came up for taking evidence on 08.08.2006. It was postponed to 12.09.2006. However it has been further postponed 07.11.06.

4. Recovery Application No. 1486 of 1998

Ramesh-bhai alias Karshanbhai Odhar-bhai v/s. JMC &


Rs. 1,19,015/- plus Rs. 5000/- as costs and interest @ 18% per annum

Mr. Rameshbhai, claiming to be the sub contractor’s workman, has filed the Recovery Application alleging that he was illegally terminated by JMC. JMC has filed

130

anr. from due date till actual realization.

Written Statement dated 28.9.1998 denying the allegations and contending, inter alia, that he is not JMC’s workman. The matter came up on 07.07.2006 for recording evidence. However the union objected to the appearance of the Company advocate under section 36 of the ID Act 1946. The matter has been reserved for orders in respect of the said objection.

5. Ref. L.C. No. 1267 of 1998

JMC & ors (First Party) & Pratap-bhai Odhar-bhai Rabari & anr (Second Party)


Rs. 2,06,526/-(amount is calculated from the date of termination upto 31.03.2006) Reinstatement with back wages and incidental benefits

Mr. Pratapbhai Rabari claiming to be contractor’s workman has, in the subject reference, alleged that he was illegally terminated. He has sought, inter alia, reinstatement with back wages. JMC has filed Written Statement dated 11.07.2005 denying the allegation and contending, inter alia, that he was not JMC’s workman. The came up on 04.08.2006 for recording evidence. The same has been postponed to 11.10.2006

6. Ref. L.C. No. 261 of 2002

JMC (First Party) and Ramji-bhai Ganga-ram Gohil (Second Party)


Rs. 2,70,000/- (amount is calculated from the date of termination upto 31.03.2006) Reinstatement with back wages, incidental benefit and costs of Rs.10,000/-

Ramjibhai Gohil claims that he was working as civil supervisor and his services were illegally terminated. He has inter alia, sought reinstatement with back wages and benefits. JMC has filed Written Statement dated 11.10.2005 denying the allegations and has contended inter alia that the Second Party workman, had gone on leave from 07.04.01 and since abstained from reporting back on duty. The matter was adjourned to 15.09.2006 for recording evidence.

7. Ref. L.C. No. 1590 of 2001

JMC (First Party) and Pravin-bhai N. Patel (Second Party)

Presiding Officer, Labour Court Ahmedabad

Rs. 1,48,500/- (amount is calculated from the date of termination upto 31.03.2006) Reinstatement with back wages and costs.

Pravinbhai N. Patel has approached the Labour Court and has prayed for his reinstatement and backwages with effect from 31.08.2001 alleging inter alia, that he has been terminated without giving notice and has further prayed that his termination be declared illegal. He has also prayed for costs of the litigation. JMC has filed its Written

131

Statement dated 18.10.05 denying the averments and contended that Mr. Pravinbhai N. Patel has only been working with JMC as casual driver for short periods at various points of time aggregating to 6 to 8 months. The Matter is pending and adjourned to 23.08.2006. It has been further adjourned to 15.11.2006 for recording evidence.

8. Ref. No. 957 / 2002

JMC (First Party) and Bhavars-inh P. Rajput (Second Party)


Rs. 2,00,560/- (amount is calculated from the date of termination upto 31.03.2006) Reinstatement with back wages, incidental benefit and costs

Reference has been made before the Labour Court, Ahmedabad, pursuant to allegations made by Mr. Bhavarsinh P. Rajput that his services have been terminated since 10.6.2002. He has prayed for reinstatement with back wages, incidental benefits and declaratory relief that the alleged termination is illegal. JMC has filed its Written Statement dated 24.01.05 denying that it has terminated him and that he is voluntarily abstaining from work since 10.06.2002. JMC has also shown its willingness to permit him to continue working with JMC. The matter came up for further hearing on 21.08.2006 and was postponed to 21.09.2006

9. Recovery Application No. 857 / 2002

Bhavars-inh P. Rajput V/s. JMC


Rs. 3,97,477.84 and costs.

Mr. Bhavarsinh P. Rajput has filed the said Recovery Application before the Labour Court at Ahmedabad, claiming an amount of Rs. 3,97,477.84 being the aggregate amount of wage, retrenchment allowance, gratuity, dress and shoes allowance, raincoat, leave encashment, overtime and bonus allegedly due to him. JMC has filed Written Statement dated 09.02.2005 denying his claim. The matter is pending at that stage and coming up for further hearing on 05.10.2006 for recording evidence.

10. Recovery application

Bhavars-inh P. Rajput


Rs. 29,322/- (Salary for the

Mr. Bhavarsinh P. Rajput has filed the said Recovery Application

132

No. 1048/05 (first Party) V/s. JMC (Second Party)

months of May, June, July, August ’05 , allegedly being the amounts due but remaining unpaid together with cost and interest @ 18%.

before the Labour Court at Ahmedabad, claiming an amount of Rs. 29,322/- being the aggregate amount due to him for the month from May to August 05 with 18% interest. JMC has filed written statement in the matter on 8.12.05, denying the claims of Mr. Bhavarsinh P. Rajput. The matter was adjourned to 19.09.06 for recording evidence.

11. Ref No. 501/04

JMC (First Party) & Amritb- hai Madhav- lal Patel (Second Party)


Rs. 2,38,920/-(amount is calculated from the date of termination i.e. 10-8-1999 upto 31-3-2006) and for increments & emoluments as if Second Party is in continuous service and Rs.5000/- towards costs.

Mr. Amrit M. Patel has prayed for his reinstatement & back wages and incidental benefits from 10.08.99 alleging inter alia, that he has been terminated verbally and has further prayed that his termination be declared illegal. JMC has filed written statement on 09.02.2006 denying, amongst other things, his claim. The came up for further hearing on 18.08.2006. It has been adjourned to 10.11.2006.

12. Workmen’s Compensa-tion Non-fatal Case No. 32 / 2004

Satyana-rayan Ozha (SO) V/s. JMC

Court of Commission-er for Workmen’s Compensati-on, at Bhavnagar.

Rs. 6,90,080/- along with interest at the rate of 18% per annum payable from the date of accident & penalty equivalent to 50% of the compensation amount.

SO has alleged that he met with an accident on 13.07.99. SO, in his application, alleges that he being a project engineer, is a workman in terms of the Workmen’s Compensation Act. He claims that he has sustained multiple fracture on his body due to an accident which he claims to have met while on official duty. He alleges that as a result of the said accident, he has suffered 100% permanent disability and has therefore claimed Rs. 6,90,080/- along with interest at the rate of 18% per annum payable from the date of accident. He has alleged that the compensation, allegedly payable by JMC (the Opponent), has not been deposited by JMC within 30 days with the Commissioner and for the said reason, he has prayed that JMC may be called upon to pay penalty equivalent to 50% of the compensation amount.

133

The matter is pending and the next hearing is on 27.09.2006

13. Recovery Application No. 435/06

Rakesh G. Patel (RP) V/s. JMC


Rs. 1,08,455/- and costs to the tune of Rs. 5000

RP filed the subject application in the Labour Court, Ahmedabad, claiming an amount of Rs. 1,08,455/- allegedly being, the aggregate of Rs. 87,731.83 towards over time, Rs. 10,724.00 towards leave encashment and Rs. 10,000/- towards deduction of the employers share to PF contribution from his salary. Apart from the above, he has also prayed for costs to the tune of Rs. 5000/-. A copy of the said recovery application has been served on JMC vide notice, dated 13.4.2006. The matter is now coming up on 21.09.2006.

14. Recovery Application No. 11 / 2006

Sukhab-hai Rama-bhai (SR) V/s. JMC

Labour Court, Godhara

Rs. 27,03,640/- plus Rs. 500 towards costs and interest

SR has filed the recovery application claiming to be a labourer. Whilst giving the breakup of his claim against JMC, he has alleged that out of his alleged aggregate dues of Rs. 5,56,410/- only an amount of Rs. 3,80,000/- has been paid and a balance of Rs. 1,16,410/- is allegedly outstanding. To the said alleged outstanding, he has made further claims of Rs. 44,050/-, Rs. 33,180/- and Rs. 16,724/- towards plastering and attendance which aggregates to a sum of Rs.2,70,364/-. SR has claimed an amount of Rs. 27,03,640/- being ten times the amount of the claim calculated as aforesaid and interest thereon plus Rs. 500 towards costs. The matter is coming up before the Labour Court on 23-11-2006 for further proceedings.

134

(c) Criminal Case

Sr.

No

Reference

No Parties

Place and

Court of

Institution

Amount

Involved/

Claims made


1. Criminal Case No. 2678 of 1999

Gover-nment Labour Officer (Compl-ainant) V/s. JMC & others (Accus-ed)

Judicial Magistrate, First Class, Ahmedabad

Fine of Rs. 10,000/- upto Rs. 20,000/- Violation of Section 3 of Child Labour (Prohibition and Regulation) Act, 1986 and rules framed thereunder.

The Government Labour Officer has alleged that he found child workers on a JMC site. JMC has denied any violation of the said Act. The examination-in-chief of the complainant has been concluded. The cross-examination has been partly done on 15.10.2003. An application has been filed on behalf of JMC dated 16.10.2003 seeking certain particulars, documents, on which the prosecution (complainant) seeks to rely, so that cross-examination could be done in respect thereof. Further cross-examination has been postponed. The next hearing of the case was on 01.09.2006 It was further postponed to 16.10.2006

2. C. Case No. 29219 of 2005

M.H. Ramesh, Proprie-tor, MHN Associa-tes (MHR) V/s. JMC and others.

Court of XIII Add. Chief Metropolitan Magistrate, At Bangalore.

Rs. 4,00,000/- being the amount of the dishonoured cheque; and, compensation amount.

MHN Associates, through its, Proprietor, M.H. Ramesh, claims that JMC had issued two post dated cheques for the aggregate amount of Rs. 4,00,000/- towards certain work orders duly completed by MHR. MHR claims that the cheques were presented on 24.07.2005 but came to returned on 26.07.2005 with an endorsement, ‘Payment stopped by Drawer’. MHR states that it issued a notice of demand on 05.08.2005 which has been served on JMC but JMC has not paid the said amount of Rs. 4 lakhs and therefore he has filed this complaint. Apart from the amount under the cheques, MHR has claimed compensation amount out of fine amount under section 357 of CrPC. Summons having been served, the General Manager has appeared in the Court on 11.7.2006 and his bail

135

application has been allowed on giving of personal bond of Rs. 20,000/-. The matter is now posted on 17.10.2006.

(d) Past Criminal Cases.

Sr.

No

Reference

No Parties

Place and

Court of

Institution

Court Verdict Brief details of the case

1. Summary Case No. 900/98

Registrar of Compa-nies, Ahmed-abad V/s JMC & others

Court of Addl. Chief Metropolitan Magistrate, Ahmedabad

Fine imposed on JMC & other accused.

The Registrar of Companies had issued a show cause notice to JMC and its directors under Section 383(1A) of the Companies Act, 1956 stating that despite the paid up capital of JMC being higher than Rs. 50 lakhs, JMC did not have a whole time Company Secretary. JMC, vide its reply dated 5.10.1998 stated inter alia, that it was looking for Whole time Company Secretary through internal sources and also through some agencies and had published newspaper advertisement, but had so far failed to find a suitable candidate. Thereafter, the Registrar of Companies, Gujarat filed a complaint, before the Court of Addl. Chief Metropolitan Magistrate, Ahmedabad, on the aforesaid grounds against JMC and two of its directors, namely, Mr. Hemant Modi and Mr. Ajay Mehta. The Hon'ble Court, vide its order dated 13/12/1999, ordered a fine of Rs. 742 each to JMC and Mr. Hemant Modi and a fine of Rs. 375 to Mr. Ajay Mehta, which were paid on the same day. In addition to the same, Mr. Hemant Modi was ordered to pay a sum of Rs. 100 towards costs, which too was paid on the same day.

(e) Other Cases

JMC is one of the Defendants / Opponents in 10 (ten) Motor Accident Claim Petitions pending before Various Motor Accident Claims Tribunals. In each of the matters, the Vehicle involved, which is of the

136

ownership of JMC, is insured with Insurance Company. The total claim of the aforesaid ten Petitions is Rs. 74,59,999/-. The Insurance Company has certified that the subject Vehicle is covered by the Insurance Policy and that the said Insurance Company will pay the award, if any, if passed by the Tribunals.

III. OUTSTANDING LITIGATIONS filed By JMC. (a) Civil Cases

Sr.

No Reference No Parties

Place and

Court of

Institution

Amount

Involved

Rs. lakhs

(Rounded

off)


1. Writ petition No. 43652 & 43714 of 2002

JMC V/s. The State of Tamil Nadu, and others

High Court of Judicature at Madras

426.90 being aggregate amount claimed as Seigniorage fee payable to the Government including penalty under Tamil Nadu Minor Mineral Concession Rules, 1959.

JMC was awarded contract by Chennai Metropolitan Development Authority (CMDA), inter alia, for supply and filling with approved quality gravel transported to site and spread evenly in layers for the construction of Chennai Mofussil Bus Terminal. However, as the gravel being mined by JMC for the site was inadequate, additional quantity of gravels was purchased from other suppliers with the concurrence of CMDA. The authorities required JMC to pay the Seigniorage fee for the said additional quantities. As per the Tamil Nadu Minor Mineral Concession Rules, 1959, Seigniorage fee for mining is to be paid by the person who mines. Hence the subject Petition. JMC has thereby challenged communications dated 2.4.2002 and 9.5.2002, imposing Seigniorage fee of Rs.4,26,90,555/- being 15 times of Rs.28,46,037/-, inter alia, on the ground that no fee is payable at all by JMC, apart from the same being unreasonable. The interim orders prayed for by JMC are declined by the High Court and the Writ Petitions are pending for final hearing.

2. Special Civil Application No. 3331 of 2001

JMC and another v/s State of Gujarat,

High Court of Gujarat at Ahmedabad

2.0 (being the amount paid by JMC

By the said Special Civil Applic- ation, JMC has challenged the action of District Assistant Geologist, Mehsana in seeking to compel JMC

137

Industries & Mines Department and Anr.

under protest to the Assistant Geologist.)

to pay royalty in respect of Ordinary Earth being excavated for the execution of the project of widening and strengthening of Ahmedabad- Mehsana Highway inspite of the fact that Government Resolution dated 25-01-1991 exempts Ordinary Earth being used for such projects, from payment of royalty. The Petition was admitted on 26.11.2001 and interim relief is continued till further orders. The said matter is pending.

3. Special Civil Suit no. 126/ 2002

JMC V/s. M/s A.G. Wable Construct-ions & Heavy Machineries (A.G.

Wable)

Court of Hon'ble Civil Judge (Senior Division), Pune

28.52 plus further interest @15% p.a. from date of institution of suit till realization.

JMC had issued Work Order dated 23/11/98 to A.G. Wable for approx Rs. 90 lakhs for carrying out road works at one of its contracting site. A. G. Wable requested JMC for advance payment of Rs. 20 lakhs, for purchasing materials, which was paid by JMC. However, A. G. Wable slowed down the work and subsequently stopped the work altogether in April 1999. A. G. Wable, on 5th June, 1999, expressed its inability to continue the work and agreed to return the advance payment made. However, as A. G. Wable failed to remit the said amount, the subject suit was filed. A. G. Wable has filed the Written Statement and Counter claim for Rs. 30,79,200.78/- against JMC. Against the said Counter Claim of A. G. Wable, JMC has filed a written statement on 27.02.03, denying inter

alia, the liability of JMC to pay any amounts claimed under the counter claim of A. G. Wable. The said matter is pending.

4. Regular Long Cause Suit No.1024 / 2005

JMC V/s. M/s Victor India (Victor)

Ahmedabad / City Civil Court at Ahmedabad

5.00 being the excess amount paid to Victor

JMC, inter alia, having made certain excess payments to Victor, has filed a summary suit dated 28.04.05 for recovery of such excess amount paid against the works done by Victor at Indian Steel Corporation Limited site. Summons for Judgment dated 30.07.05 was filed by JMC. Victor filed Leave to Defend and the Hon’ble City Civil Court granted

138

Unconditional Leave to Defend vide its order dated 24.2.2006. Subsequently, the Suit has been treated as Regular Long Cause Suit. Victor has also filed its purshis dated 31.3.2006 stating that its Leave to Defend may be considered as its Written Statement to the Suit. Now the matter shall come up for final hearing in due course.

5 Regular Long Cause Suit No. 1010 / 2005

JMC V/s. M/s Victor India (Victor)

Ahmedabad / City Civil Court at Ahmedabad

3.04 being the excess amount paid to Victor

JMC, inter alia, having made certain excess payments to Victor, has filed Summary Suit dated 28.04.05 for recovery of such excess amounts paid against the works done by Victor at Welspun India Limited site. Summons for Judgment dated 30.07.05 was filed by JMC. Victor filed Leave to Defend and the Hon’ble City Civil Court granted Unconditional Leave to Defend vide its order dated 24.2.2006. Subsequently, the Suit has been treated as Regular Long Cause Suit. Victor has also filed its purshis dated 31.3.2006 stating that its Leave to Defend may be considered as its Written Statement to the Suit. Now the matter shall come up for final hearing in due course.

6. Civil Miscellaneo-us Application No. 463 of 2005

JMC V/s. Aargee Consultants Pvt. Ltd. (Aargee)

City Civil Court at Ahmedabad

33.11 for seeking orders permitting JMC to use electrical goods lying in joint custody of parties at the construction site of 500 bedded hospital of Dr. Rajendra Prasad Medical College, Tanda,

Aargee was awarded a sub-contract for executing certain works awarded to JMC under contract by Hospital Services Consultancy Corporation (India) Ltd. (HSCC). Disputes arose between Aargee and JMC. JMC terminated the sub-contract awarded to Aargee for the reasons mentioned in its termination notice dated 8.8.2005. Certain electrical goods which effectively were purchased by JMC, though such payments were made on behalf of Aargee were lying in the joint custody of Aargee and JMC. The present proceedings have been preferred under section 9 of Arbitration & Conciliation Act, 1996 in order to seek the inventory thereof and for further reliefs to enable JMC to use those goods for completion of time bound project. The City Civil Court vide its order dated 17.10.2005 was pleased to pass orders

139

Himachal Pradesh.

appointing Court Commissioner for the purpose of taking inventory of the electrical goods lying at Hospital Site at Tanda. Thereafter, the inventory was taken by the Court Commissioner on 20.10.2005 and has also filed its report of even date before the Hon’ble Court. Aargee has filed its objection on 28.11.2005 to the said report of Court Commissioner and the same has been replied to by JMC vide its reply dated 2.12.2005 and to the said reply, Aargee has filed its rejoinder dated 5.12.2005. Aargee has also filed its reply dated 2.12.2005 to the Application under section 9 of Arbitration & Conciliation Act, 1996. Aargee by way of an application dated 12.1.2006, sought appointment of Court Commissioner alleging inter alia, that the inventory which was taken earlier was not precise. JMC has filed on 04.08.2006, its reply to the application of Aargee for appointment of commissioner, inter alia contending that the application is preferred to delay the proceedings and that JMC in any case is only seeking permission to use the goods which have been described in the inventory. Aargee has filed its rejoinder dated 26.08.2006, disputing the contents of the reply Aargee has also preferred application dated 16.1.2006 for cross-examination of the Court Commissioner appointed by the Hon'ble Court vide its order dated 17.10.2005, as well as certain personnel of JMC who were present at the HSCC site while inventory had been taken. Pursuant thereto, the advocate for JMC conducted the examination-in-chief of the Court Commissioner and the advocate for Aargee has concluded the cross examination. JMC has also filed an application dated 27.2.2006 stating inter alia that its principal, HSCC, has requested it to shift the goods lying at the GF OPD Portion at the Hospital Site to some other convenient place and therefore the goods be permitted to be moved. Since it is these goods in which the inventory has been taken under the orders of the Hon'ble Court, the said application seeking permission of the Hon'ble Court to move the goods, has been preferred. Aargee has replied to the same objecting to the prayer , to which JMC has filed on 04.08.2006 its rejoinder dated 03.08.2006.. On 20.06.06, Aargee has filed an application seeking the

140

dismissal of subject section 9 application on the ground that the JMC has not sought appointment of arbitrator and therefore the subject matter may be dismissed and has sought stay of further proceedings in CMA 463 of 2005 pending disposal of the said application. JMC . filed reply to the same inter alia

stating that it has already proposed the name of sole arbitration. In the meantime, Aargee has filed rejoinder to the said reply of JMC. Thereafter, vide its letter dated August 17, 2006, Aargee has conveyed its non-acceptability to the name of Sole Arbitrator proposed by JMCThe matter is coming up on 15.09.06 for arguments on all of the aforesaid applications in the main matter

7. Civil Suit No. 1632 of 2006

JMC V/s. RITES Limited (Rites)

High Court of Delhi at Delhi.

353.74 lakhs with interest at 18% @ annum from date of filing of suit till payment; declaratory relief that the disputes between the parties need not be arbitrated; permanently restraining the Arbitral Tribunal from proceeding with arbitration between the parties; and, termination of arbitral proceedings commenced before the Arbitral Tribunal.

Rites had invited a tender for construction of its office complex, which ultimately came to be awarded to JMC for a price of Rs. 15.16 Crores. The completion of the project got delayed due to various factors not attributable to JMC. Hence work could not be completed in the time stipulated under the contract. JMC asked for extension of time on various occasions, however, the said requests were not responded to within the time frame provided under the contract. Rites claimed compensation for delay without adequate justification. On the other hand, JMC has claimed that an aggregate amount of Rs. 353.74 lakhs is payable by Rites to JMC towards various claims of JMC. JMC further states that there exists a narrow and limited Arbitration Agreement between the parties. JMC had initiated arbitration but as claims falling under ‘excepted matters’ are not arbitrable and because, according to JMC, bulk of the claims of JMC constitute excepted matters, JMC has resorted to filing of the subject suit. Vide the said suit, JMC has prayed inter alia for termination of arbitral proceedings and for decree of Rs. 353.74 lakhs with 18% interest from the date of filing of the suit till the

141

date of decree and payment and also for the termination of the arbitral proceedings pending between the parties. The Hon'ble Court has issued notice subject to JMC filing original documents in the matter and the matter is adjourned to 27.11.2006.

(b) Arbitration Matters (Claimant: JMC)

Sr.

No

Respondent’s

name

Important dates &

information

Brief details of the Case Claim Amount

Rs. lakhs

(Rounded off)

1. Bharat Heavy Plates and Vessels Limited

(BHPV)

• Date of Notice invoking Arbitration by JMC : 23.05.2003

• Date of Reply to Arbitration Notice by BHPV: 23.06.2003

• Name of Arbitrator/s: Mr. Dalava Subramaniyam

• Date of Statement of Claim : 9.8.2004

• Date of Counter filed by BHPV: 17.02.2005

JMC was awarded the civil and structural work (the Work) for BHPV at Mumbai in February 2000 with a stipulated completion period of 11½ months. The said Work was delayed due to the delay in providing drawings and materials by BHPV. As a consequence JMC had to incur extra expenditure. During pendency of JMC’s representation for consideration of its claims for delay in payment, overheads incurred during the extended period etc., BHPV unilaterally decided and levied Liquidated Damages on JMC for the delay in completion of work. JMC thereafter invoked the Arbitration clause leading to the present proceedings.

BHPV has filed a reference to Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985. BHPV also preferred an application for staying the arbitration proceedings in view of the said reference. However, the Arbitral Tribunal rejected the same on 4.2.2005. BHPV has approached the High Court of Judicature of Andhra Pradesh at Hyderabad challenging the order dated 4.2.2005. The Hon’ble High Court by its order dated 11.3.2005 has suspended the operation of the impugned order dated

143 along with interest @18% per annum from 21.2.2002 till realization and for costs.

142

4.2.2005. Subsequent to the same, JMC has filed a counter affidavit in the said writ petition to vacate the stay granted and to dismiss the writ petition with costs. JMC has also filed a Vacate Stay Petition to vacate the stay granted in the writ petition. The hearing of the Writ Petition was concluded and the matter was reserved for orders. Subsequently, the Court has desired re-hearing and the matter is now pending for hearing.

2. BASF India Limited, (ACCO Industries Private Limited merged into BASF India Limited) (BASF)

• Date of Notice invoking Arbitration by JMC: 18.04.2002

• Date of Reply by BASF to Arbitration Notice of JMC: 22.05.2002

• Name of Arbitrator/s: Mr. Justice Arvind Savant (Retd.)

• Date of Statement of Claim filed by JMC: 24.07.2004

• Date on which Counter Claim was filed by BASF: 15.10.04

• Amount of Counter-Claim: Rs. 670.21 lakhs plus interest at @ 18% p.a. till payment.

JMC was awarded the Civil and Structural work (the Work) by ACCO Industries Private Limited at Mumbai in February 2000 with a stipulated completion period of 6 months. But the Work was delayed due to the delay in providing drawings and other details and in handing over of site by ACCO. As a consequence JMC had to incur extra expenditure. JMC invoked the arbitration clause. The arguments by JMC and the arguments in reply by BASF have been concluded. The arguments in rejoinder shall be addressed in the next arbitral meet scheduled on 24th / 25th October 2006

85 along with interest @ 15% per annum till payment and costs.

3. M/s RITES Limited

(RITES)


• Date of Reply to Arbitration Notice by RITES: 14.07.2004

• Name of Arbitrator/s: Mr. Sanjay Singhal, Mr.

JMC was awarded the Civil and Structural work (the Work) for RITES at Gurgaon on 8-8-2000 with a stipulated completion period of 21 months. The Work was delayed inter

alia due to delay in handing over of the site and in providing drawings and details by RITES. JMC invoked the arbitration Clause. JMC has filed its Statement of Claims

354 along with interest @ 15% per annum till payment and for costs.

143

Arbind Kumar, Mr. Narayan Swamy

• Date on which Statement of Claim was filed by JMC: 20.09.2004

• Date on which Counter-Claim was filed by RITES: 10.11.2004

• Amount of Counter-Claim: Rs. 5 lakhs as cost of reference.

to which RITES filed its counterclaim. JMC, has filed an application, for the Hon’ble Arbitrators to decide the question of their jurisdiction in respect of the claims which are not arbitrable and which falls under ‘Excepted Matters’. Subsequently, the Arbitrators, vide hearing dated April 8, 2005 have asked RITES to intimate, within two weeks as to which claims of JMC does RITES consider as “excepted matters”. Further to their decision, JMC would be asked to convey their comments within next two weeks. Thereafter, JMC, vide its letter dated 03.5.2005, has written back to RITES / the Arbitral Tribunal pointing out inter alia, that once both the parties have agreed that all the claims are ‘excepted matters’ and thus outside the scope of Arbitration Clause, the Arbitration Proceedings get terminated. JMC has prayed that Arbitral Tribunal pass award in terms of the aforesaid position emerging from the Minutes of Meeting for the hearing dated 8.4.2005. The Arbitral Tribunal by its order dated 29.09.2005 declined to give detailed ruling with regard to admissibility of hearing of Claims No. 1 and 2. It further ruled that after detailed hearing, the Tribunal would deliberate whether conducting more hearings would be necessary. JMC by its letter dated 14.11.2005 has requested the Arbitral Tribunal that the Tribunal may decide and communicate its order regarding arbitrability of claim no. 1 and 2. The Arbitral Tribunal pronounced its ruling of arbitration on 8.12.2005 holding that the claims no. 1 and 2 are arbitrable and ‘fall within the jurisdiction of the Arbitral Tribunal’. Pursuant thereto, RITES has preferred an application whereby it has prayed that the aforesaid ruling be reviewed

144

in view of terms of the Contract. The application is pending. In the meantime, RITES, vide its letter dated 13.03.06, has communicated to JMC that one of the Arbitrators constituting the Arbitral Tribunal has tendered his resignation. Therefore, RITES has sought reconstitution of the Arbitral Tribunal.

4. L&T Limited, ECC Division

(L&T)


• Date of Reply to Arbitration Notice by L&T: 31.12.03

The work for construction of Ahmedabad-Mehsana Road, (from km 47.70 to km 70.6) was awarded to JMC by L&T in July-2000 with a stipulated completion period of 24 months. Apparently, during the period of execution, JMC was instructed to execute certain tasks that were beyond the items specified in Bill of Quantities and the project was delayed due to the reasons not attributable to JMC. JMC claimed reimbursement of escalation as per the escalation formulae given in the contract. The claim of JMC was not honoured and hence JMC, after appointing an arbitrator of its own, preferred Arbitration Petition No. 5 of 2004 before the High Court of Gujarat for appointment of the second arbitrator. However, the Hon’ble High Court by its order dated 30.06.2005 appointed Retd. High Court Judge, Mr. Justice N. G. Nandi, as Sole Arbitrator. The Sole Arbitrator had entered upon reference and fixed the first hearing on 08.01.2006. However, the Hon'ble Retr. Mr. Justice N. G. Nandi expressed his inability to conduct the arbitration in view of his appointment as the President of Gujarat State Consumer Dispute Redressal Commission. JMC has now filed an application dated 23.3.2006 for appointment of Sole Arbitrator before the Hon'ble High Court of Gujarat. The Hon'ble Court, vide its order dated 24.08.2006, has appointed Hon'ble Mr. Justice M. S. Parikh (Retd.) to act as sole arbitrator

1057

145

between the parties. The next meet of arbitral tribunal is scheduled on 23.09.2006.

5. Indian Institute of Management Kozhikode (IIMK)


• Dates of agreement of the parties to the appointment of the Sole Arbitrator, 20.03.2006 and 28.03.2006.

• Name of Arbitrator/s:

• Er.E. Kurien Mathew

• Date of Claim Statement filed by JMC: 09.05.2006.

• Date of Statement of Defense filed by IIMK: 24.06.2006

• Amount of Counter Claim Rs.389.84 lakhs.

JMC was awarded the structural work for the construction of campus building (Phase-1), covering civil, internal plumbing, internal electrical, external sanitary and water supply works. for a contract value of Rs.17,87,59,782/- with a stipulated completion period of 15 months. The said work was interalia delayed due to encountering of hard rock not originally envisaged in Bill of Quantity and introduction of 5 extra buildings

JMC has submitted final bill including all its claims. However, the same has not been granted by IIMK. As a consequence, Arbitration has been invoked by JMC and Arbitrator came to be appointed. JMC has filed its Claim Statement on 09.05.06. IIMK has filed its Statement of Defence dated June 24, 2006 disputing the claim of JMC and have raised Counter Claim. JMC has filed its rejoinder cum reply to the Statement of Defence of IIMK on 14.08.2006 inter alia praying for rejection of the submissions, including the Counter Claim, made in the Defence Statement. JMC, vide the said rejoinder cum reply, reiterated its claim for unresolved issues as per its Statement of Claim and has prayed for allowing the same. On the preliminary meeting held on 31.08.2006, it has been inter alia decided the next date of arbitral meets are scheduled on 17th, 18th and 19th October, 2006.

604.49 lakhs with an interest rate of 18% p.a. from the date of entitlement. costs.

146

(c) Taxation Matters

Sr.


Place and

Court

/Tribunal of

Institution

Tax Amount

Involved

Rs. lakhs

(Rounded Off)


1. Appeal filed on 16.12.1999

JMC Income Tax Appellate Tribunal, Ahmedabad

NIL Assessing Officer arrived at amount eligible under section 35D of the Income Tax Act, 1961 (IT Act) at 2.5% of the cost of the Project for the Assessment year 1995 - 1996. Amount eligible as per the Assessing Officer is Rs.12,25,000/- while the amount eligible as per JMC is Rs. 23,63,224/-.

Against the order of the Assessing Officer, JMC preferred an Appeal before Commissioner of Income Tax (Appeals), Ahmedabad (CIT). CIT confirmed the order passed by the Assessing Officer. Against the order of CIT, JMC has preferred the present appeal, which is pending. No tax is payable by JMC for the Assessment Year 1995-1996 as JMC has incurred loss in the said Assessment Year. For all subsequent years, amount claimed under section 35D of the IT Act is as per Assessing Officer.


JMC Commissio-ner of Income Tax (Appeals), Ahmedabad

NIL The Assessing Officer has disallowed delayed payment of Provident Fund and Gratuity in the order for the Assessment Year 2002-2003. JMC has preferred appeal before Commissioner of Income Tax (Appeals) against the

147

said order. The said appeal is pending. No tax is payable by JMC as there was a loss during the same year.

B. PROCEEDINGS INVOLVING THE PROMOTERS AND GROUP COMPANIES.

1. Mr. Hemant Modi

• Mr. Hemant Modi has received Notice dated 28.9.2004 from the Regional Director, Employee State Insurance Corporation, Ahmedabad. For details please refer to Item A. I. 8, above.

• Criminal Case No. 2678 of 1999 has been filed by Government Labour Commissioner against Mr. Hemant Modi for alleged violation of the provision of Child Labour (Prohibition and Regulation) Act, 1986. For details please refer to item A. II. (c). 1, above.

• Criminal Complaint case no. 270/2002 has been filed by Mr. Mantu before the Judicial Magistrate (1st Court) at Malda alleging that cheque no. 457936 dated 13/10/2001, for an amount of Rs. 4,19,327 issued by JMC, has returned unpaid. It has been alleged by Mr. Mantu that JMC, pursuant to alleged receipt of purported notice issued in terms of section 138 of Negotiable Instruments Act, 1881, did not make good the said amount and hence Mr. Mantu has filed the compliant. Mr. Hemant Modi filed application for exemption from personal attendance by way of an application under Section 205 of CrPC. The same came to be rejected by an order dated 28.2.2006 (hereinafter the impugned order). Mr. Modi filed CRR No. 798 of 2006 against the impugned order before the Hon'ble High Court at Calcutta. The Hon'ble High Court was pleased to grant the said CRR No. 798 of 2006 vide its order dated 24.04.2006, thereby setting aside the impugned order with a condition that Mr. Modi must appear in the Court whenever specifically called upon to do so. Thereafter Mr. Mantu has preferred an application seeking modification and / or variation of the order dated 24.04.2006, passed in CRR No. 798 of 2006. The said application is pending . The Criminal Complaint No. 270/2002 shall now be listed on 19.09.2006.

• Summary Case No. 900/98 had been filed by Asst. Registrar of Companies, Ahmedabad for violation of Section 383(1A) of the Companies Act, 1956 as despite the paid up capital of JMC was higher than Rs. 50 lakhs, it did not have a whole time Company Secretary. For details please refer to item A. II. (d). 1, above.

2. Mr. Suhas Joshi

• Mr. Suhas Joshi has received Notice dated 28.9.2004 from the Regional Director, Employee State Insurance Corporation, Ahmedabad. For details please refer to Item A.I.8, above.

148

3. KALPATARU POWER TRANSMISSION LIMITED (KPTL)

A. OUTSTANDING LITIGATIONS filed against KPTL

1. Foreign Matters

Sr.


Place and

Court of

Institution

Amount

Involved

Rs. lakhs

(Rounded

Off)


1. Case No. 2003/569

Makro Enerji Tele- Koinunikasyan Insaat Taahhut Ve Tic Ltd. Sti (Makro) v/s. KPTL – Barmek Consortium

Ankara 8TH Principal Court of Law’s Commercial Bench

154 equivalent to 469 billion Turkish Lira. Conversion rate: 1.36 million Turkish Lira =1 USD = Rs. 44.61 Conversion date: 31.03.2006

The case is filed by Makro, sub-contractor of Barmek, inter alia, for an Injunction on payments by TEIAS to KPTL – Barmek Consortium for its alleged outstanding dues from Barmek. Ankara Court granted Injunction restraining payment by TEIAS to KPTL – Barmek Consortium. An out of court understanding/ settlement was arrived at, between Barmek and Makro, pursuant to which, the Injunction on payments from TEIAS to KPTL - Barmek Consortium was lifted on 7.11.2003. Incidentally, Makro has given a “No Dues / No Claims” Certificate to KPTL. Subsequently Barmek could not discharge its obligation of payment as per settlement, therefore, Makro again requested Ankara Court for an Injunction. Ankara Court, by order dated 21.1.2004, granted an Injunction, subject to the condition of deposit of 15% of the Claim amount, i.e. 70 Billion Turkish Lira by Makro. A reply on merit has been filed on behalf of KPTL in October 2003, inter alia, contending that KPTL, though a member of the consortium, is not liable to make payment of dues of the other member, i.e. Barmek, since its role is restricted to supply of transmission line and parts thereof.

149

However, till date, Makro has failed to comply with the said Injunction order, and hence, the order dated 21.1.2004 is currently not enforceable.

2. Taxation Matters

(a) Central Excise and Sales Tax

Sr.


Place and

Court/

Authority of

Institution

Amount

Involved Rs.

lakhs

(Rounded Off)


1. Show Cause Notice –V.73/15-58/OA/2003-04 dated 4.10.04

KPTL and Mr. Kamal Jain.

Office of the Additional Commissioner of Central Excise, Ahmedabad - III, Ahmedabad.

43.01 with penalty and interest recoverable under Central Excise Act, 1944 read with Central Excise Rules,1944.

KPTL has received Show Cause Notice from the Additional Commissioner of Central Excise Division - III, Ahmedabad for denial of Modvat Credit of Rs.43,01,225/- availed on materials supplied by M/s Sunrise Structurals & Engg. Works, Nagpur (Sunrise) on behalf of Maharashtra Steel Re-rolling Mills Pvt. Ltd. The contention of the Department is that though Sunrise was a defunct unit, it has wrongly paid the excise duty to the Government.

The said notice, is also issued to Mr. Kamal Jain, of KPTL asking him to show cause as to why penalty should not be imposed against him under Rule 209 of the Central Excise Rules, 1944. On 14.3.05, KPTL has filed detailed reply along with annexures asking for the show cause notice to be dropped. Personal hearing has taken place on 15.3.05 and the matter is awaiting decision.

2. Show Cause Notice No. SCN/KPTL/ST/GNR/2004 dated 27.1.05

KPTL Assistant Commissioner, Central Excise, Service Tax Cell, Gandhinagar.

1536 along with penalty and interest on delayed payment under the Finance Act, 1994.

The present show cause notice is issued, requiring KPTL to show cause as to why the services for erection, testing and commissioning, the payment for which is received as ‘job work receipt’ amounting to Rs. 2,38,40,51,691/-, rendered by KPTL to various parties including

150

foreign bodies, should not be treated as taxable service under the category of ‘Consulting Engineer’ more particularly in view of Circular no. 49/11/2002-ST dated 18.12.2002 issued by Central Board of Excise & Customs, New Delhi and not be assessed for Service Tax amounting to Rs.15,35,83,991/- and penalty under sections 69, 75(a), 76 and 78 of the Finance Act, 1994 and penalty under section 77 of the Finance Act, 1994 for a period from 1999 to 9.9.04 should not be imposed.

The said show case has been replied to by KPTL on 5th May’05 wherein KPTL has denied all the charges made by the department and submitted detailed reasons and documentary proof of validity of its claim. Personal hearing has also been asked for. On 29.10.2005, a corrigendum to earlier show cause notice has been issued whereby the authority to whom KPTL has been asked to show cause has been changed from “Assistant Commissioner, Central Excise, Div - Gandhinagar” to “Commissioner, Central Excise, Ahmedabad - III”.

3 Show cause notice [C.No. IV-16 (ST)241/SKR/2006/96] dated 18.04.2006

KPTL Assistant Commissioner, Central Excise Division, Sikar

3.43 along with interest

The subject show cause has been issued to several companies including KPTL whereby each of them are alleged to have short paid their service tax liability.

KPTL has filed replies disputing the said liability. The matter is pending.

3. Labour Matters

Sr.

No

Reference

No Parties

Place and

Court of

Institution

Claims made Brief details of the case

1. Ref (LCA) No. 1801 of 2001

KPTL (First Party) V/s.

Labour Court, Ahmedabad.

Rs. 3,05,760/ (computed for the period between

Case referred to the Labour Court at the instance of the Second Party, seeking reinstatement with full back wages and all other statutory

151

Panchal Kanti-bhai Kalidas (Second Party)

01.08.01 and 31.3.06) Reinstatement with back wages and costs.

benefits, on the ground of illegal termination. The witness of the First Party is to be cross-examined by the Second Party and the came up for the said purpose on 19.07.2006. However it was postponed to 18.10.2006.

2. Ref (LCA) No. 428 of 2001

KPTL (First Party) V/s. Bhavsar Kamlesh-kumar Shantilal (Second Party)


Rs. 2,52,101/- (computed for the period between 18.05.00 and 31.03.2006) Reinstatement with back wages along with interest @ 18% per annum and costs.

Second Party sought conciliation before the Conciliation Officer, seeking reinstatement with back wages. Subsequently, as per the settlement arrived before the Conciliation Officer, he was reappointed by KPTL. He left the job and at his instance, the subject proceedings, have been referred to the Labour Court, for, inter alia, reinstatement with back wages. KPTL has submitted its written statement before the Labour Court, denying the claim of Bhavsar Kamleshkumar Shantilal. The matter came up for hearing on 8.08.2006 for examination of witnesses. It was further postponed to 10.10.2006

3. Ref (LCA) No. 1123 of

2005

KPTL (First Party) V/s.

Prahlad-singh

Bhikusi-ngh

Vaghela (Second Party)


Rs. 1,38,320/- (computed for the period between 1.12.1999 to 31.3.2006) Declaratory Relief that termination is illegal, reinstatement with back wages, incidental benefit and Rs. 5000/- towards costs.

Second Party has alleged that he had worked with KPTL for about a period of 9 years. He has further alleged that KPTL never used to pay even the incidental benefits such as yearly increments, privilege leave and Bonus Leave. He alleges that he was terminated when he demanded incidental benefits as aforesaid. Therefore the subject matter was filed. KPTL has filed its Written Statement dated 13.04.2006 denying the claim. The matter is pending.

152

4. Arbitration Matters

Sr.

No

Claimant’s

name

Important dates &

information Brief details of the case

Amount

Involved

(Rs lakhs)

(Rounded

off)

1. Power Grid Corporation

of India Limited, New

Delhi (PGCIL)

Date of Notice invoking Arbitration by PGCIL: 6.10.1999 Date of Order of Delhi High Court, in Arbitration Application No. 543 of 1999 under section 11 of the Arbitration Act, 1996: 29.3.2001 Arbitral Tribunal consists of: Hon’ble Mr. Justice V.A. Mohta (Retd), Hon’ble Mr. Justice B.J. Diwan (Retd.) and Shri Madan Lal Date on which Statement of Claim was filed by PGCIL: 28.11.2001 Date on which Written Statement and Counter Claim was filed by KPTL: 25.03.2002

PGCIL has invoked the Arbitration clause, vide its notice dated 6.10.1999 claiming the balance of Excise Duty amount to be refunded plus interest due thereon on account of non-payment / delayed payment which works out to Rs. 12,58,772/- as principal balance Excise Duty and Rs. 2,23,49,527/- as interest compounded from the date of Gate Pass till 25.10.2001, along with pendentelite and future interest @ 18% per annum, on the alleged ground of wrongful withholding of Excise Duty amount. KPTL has raised a counter claim of Rs. 13,30,290/- being the amount of deposit lying with PGCIL. KPTL has inter alia raised the defense that the claim is per-se barred by limitation and the Excise duty refunded to KPTL is not further refundable to PGCIL as the same was paid by KPTL at a fixed rate. On 6.3.2005, the Arbitral Tribunal has passed an order recommending the parties to settle the matter since the matter involves highly arguable issues and as the parties are enjoying good commercial relations. The Tribunal has also suggested a formula i.e. KPTL pays the principal amount of Excise Duty actually received by it with simple interest from the 28.11.2001 i.e. date of statement of claim.

236 with interest and further interest pendentelite and future interest @ 18% per annum.

5. Past Criminal Case

Sr.

No

Reference

No Parties

Place and

Court of

Institution

Charge/

Allegation Brief details of the case

1. C. R. 101 /2004

Labour Enforc-

Sub-Divisional Judicial

Section 23 and 24 of the

During inspection by Labour Enforcement Officer on

153

ement Officer (Central), Silguri –vs- KPTL & ors.

Magistrate, Alipurduar, Silguri, West Bengal.

Contract Labour (Regulation and Abolition) Act, 1970 and Rules framed thereunder.

29.8.2003 of the Project premises of KPTL, the Officer claims to have noticed certain lapses amounting to infringement of the provisions of Contract Labour (Regulation and Abolition) Act, 1970 and the Rules. The subject proceedings were initiated in respect of the aforesaid controversy. By order dated 1.2.2006 the Magistrate has imposed fine of Rs.200 each on the accused persons.

B. OUTSTANDING LITIGATIONS filed by KPTL:

Sr.


Place and

Court of

Institution

Amount

Involved

/Claims

made Rs.

lakhs

(Rounded

Off)


1. - KPTL Council of States, Ankara, Turkey

136.18 equivalent to 400.00 Billion Turkish Lira Conversion Rate: 1.36 million Turkish Lira = 1 USD = Rs. 44.61 Conversion Date: 31.03.2006

KPTL in consortium with one Barmek Insaat VE Tesisat A. S. executed a project at Turkey for TEIAS. Pursuant to the supplies made by KPTL from India, TEIAS deducted Withholding Tax at Source, which as per KPTL is contrary to the terms of the Agreement between the Republic of India and the Republic of Turkey for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (DTAA). The 4th Taxation Court, vide order-dated 24.6.03, has held that KPTL is entitled for refund of the amount that has been withheld. The Directorate of Baskent Tax Office, Ankara, filed appeal being Docket No. 2003/1710 in Council of State, Fourth Department.

154

The Appellate Court, vide its order dated 29-6-2004 dissolved the impugned order dated 24.6.03 on the ground that the requisite procedure was not followed. However, the Appellate Court has deemed proper not to decide the question of rejection and return of income tax and fund shares collected through deductions. KPTL has thereafter obtained opinion of ISMET CEMAL Y LMAZ, Certified Public Accountant, at Ankara wherein it is suggested that KPTL may reopen the case. KPTL filed Revision Application No. 20438 on 24.2.2005 before the High Court, 4th Division, Ankara. The High Court took a decision to transfer the case to Ankara Tax Court No. 2 as it is not competent to deal in tax matters. Vide its Decision No. 2006/132, the Ankara Tax Court No. 2 has decided the case against KPTL. The Court has however expressly provided that Application to appeal in front of Council of State is possible within 30 days. Against the said decision KPTL has filed an appeal to Council of State.


KPTL v/s. State of Andhra Pradesh

Sales Tax Appellate Tribunal, Andhra Pradesh

1.19 The Dy. Commissioner (CT) Hyderabad (Rural) Division, Hyderabad for the year 1998-1999 proposed to revise the final assessment order of the Commercial Tax Officer, Saroornagar Circle, Hyderabad and issued a Pre-Revision show cause notice to KPTL proposing to levy the Turnover Tax on the work contract receipts. KPTL could not file their written objections to the said

155

Pre-Revision Show Cause notice within the stipulated time and the Dy. Commissioner without giving further opportunity passed an order levying Turnover Tax on KPTL to the tune of Rs.1.19 lakhs which was communicated to KPTL on 2.8.2004. KPTL has filed the said appeal against the proceedings of the Dy. Commissioner under Andhra Pradesh General Sales Tax Act, 1957. The said appeal is pending for hearing.


KPTL v/s. State of Andhra Pradesh

Sales Tax Appellate Tribunal, Andhra Pradesh

0.13 The Dy. Commissioner (CT) Hyderabad (Rural) Division, Hyderabad for the year 1997-1998 proposed to revise the final assessment order of the Commercial Tax Officer, Saroornagar Circle, Hyderabad and issued a Pre-Revision Show Cause notice to KPTL proposing to levy the turn over tax on the work contract receipts. KPTL could not file its written objections to the said Pre-Revision Show Cause notice within the stipulated time and the Dy. Commissioner without giving further opportunity, passed an Order levying Turnover Tax on KPTL to the tune of Rs. 0.13 lakhs which was communicated to KPTL on 2.8.2004. KPTL has filed the said appeal against the proceedings of the Dy. Commissioner under Andhra Pradesh General Sales Tax Act, 1957.

156

The said appeal is pending for hearing.

4. Municipal Appeal No. 289/2002.

Meghji Mathuradas Manubai, wife of Meghji Mathuradas and Zaverbai, widow of Madhavji Mathuradas and Charandas Meghji Trust V/s. 1. Brihanmu-

bhai Mahagar-agr Palika

2. Municipal Commissi-oner of Greater Mumbai

Court of Small Causes at Bombay.

Under the impugned orders the ratable value has been assessed at Rs. 38.92 lakhs which is under challenge.

This appeal has been filed by Meghji Mathuradas Manubai & ors against an order of the Investigating Officer dated January 8, 1999 in relation to the determination of ratable value of certain properties of KPTL being assessed by Brihanmumbai Mahanagar Palika under the provisions of Bombay Municipal Corporations Act. Under the impugned orders the ratable value has been assessed for the aggregate value of Rs.38,92,150/- which is under challenge. The said matter is pending.


KPTL v/s. Commissi- oner of Customs, Mumbai

Custom, Excise and Service Tax, Appellate Tribunal, Mumbai

57.11 By final assessment order of Bill of Entry No. 569052 dated 19.2.2003, full exemption from Countervailing duty was granted to KPTL. The Department appealed against the same by filing Appeal No. 96/2005 (JNCH) before the Commissioner of Customs (Appeals) JNCH, Nawa Shiva.

By order dated 5.8.05, the Commissioner of Customs (Appeal) JNCH, Nava Shiva has set aside the order of the lower authority and allowed the appeal of the Department. KPTL has challenged the order before the Customs, Excise and Service Tax Appellate Tribunal by filing appeal on 16.11.2005.

157

The said matter is pending for hearing.

6. IT Appeal

No. 705 / A / 06 filed on

20.03.2006

KPTL V/s. Assistant Commission-er of Income Tax

Income Tax Appellate Tribunal, Ahmedabad.

0.35 The Assessing Officer disallowed Rs. 38,561/- in respect of Creditors which are outstanding for more than 3 years, lump sum amount of General Expenses upto Rs. 1,75,000/-. Assessing Officer recalculated deduction under Section 80HHC after considering the amount of Sales Tax of Rs. 3,12,52,922/- and Excise Duty of Rs. 4,60,28,346/- as a part of total turnover and excluded interest on margin money amounting to Rs. 10,41,933/- for calculating deduction under Section 80IB of Income Tax Act. KPTL had filed an appeal against the order of Assessing Officer before the Commissioner (Appeals) on 29.04.2005. The Appeal came to be partly allowed. Against the said order, KPTL has filed the subject appeal, which is pending.

7. SLP (C) No. ……/ 2006 (CC 21/06)

KPTL V/s. Bharatbhai Kantilal Kadiya and anr.

Supreme Court of India

1.49 Reinstatem-

ent with back wages.

Mr. Bharatbhai Kadiya had filed, a case before the Labour Court praying for reinstatement with back-wages.

Labour Court by its order dated 29.6.2002 directed KPTL to reinstate Mr. Bharatbhai Kadiya with full back wages.

KPTL challenged the said order by way of a Special Civil Application No. 10588 / 02, before the High Court of Gujarat. The High Court dismissed the above

158

application vide order dated 25-6-2004, against which KPTL filed Letters Patent Appeal. The said appeal too came to be dismissed vide judgement and order dated 04.10.2005 whereon the Hon’ble Court dismissed the said Letters Patent Appeal. Against the said order, the subject Petition for Special Leave to Appeal has been filed. The Hon’ble Supreme Court, vide its order dated 13.01.2006, was pleased to issue notice to the Respondents as to why the matter be not remanded to the Division Bench of the High Court for decision on merits in view of the averments in the Writ Petition that it was a petition under Article 226 and 227 of the Constitution of India. The Hon’ble Supreme Court also granted stay of the direction regarding the reinstatement and payment of the back wages.

8. Application No. ST/ S / 962 / 06 & Appeal No. ST / 70 / 06

KPTL V/s. Commissio-ner of Central Excise, Ahmedabad

Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench at Mumbai.

120 The Commissioner, Central Excise, Ahmedabad-III, vide his order dated 20.12.2005 disposed of a show cause notice holding that KPTL is liable to pay Rs. 1,13,60,559/- as service tax and the service tax already paid by KPTL shall be adjusted against the said amount. KPTL had already paid, abeit under protest, a service tax of Rs. 1,16,26,813/-. An amount of Rs. 2,66,254/- had been paid over and above what was due. However, the Commissioner has imposed a penalty of Rs. 120 lakhs under section 78 of the

159

Finance Act, 1994 holding that the amounts were paid belatedly and a further sum of Rs. 29,200/- has been imposed as penalty under section 76 of the Finance Act, 1994.

KPTL has appealed against the said order dated 20.12.2005.

The Customs, Excise and Service Tax Appellate Tribunal, by its order dated 20-04-2006, has dispensed with the condition of pre-deposit of penalty amount and allowed the stay petition.

4. KALPATARU CONSTRUCTIONS PRIVATE LIMITED (KCPL)

A. OUTSTANDING LITIGATIONS filed by KCPL

Sr.

No

Reference

No Parties

Court /

Place of

Institution

Amount of

claim involved

(Rs. in

lakhs)

(Rounded off)

Brief details of the Case

1. Not Applicable

Arbitration Proceed-ings between KCPL and The Seva Samiti Co- op Housing Society Limited (‘the

Housing

Society’).

Hon’ble Arbitrator Shri Jai Chinai / Mumbai.

The financial implications cannot be quantified for the present.

KCPL had entered into a Development Agreement dated 15th May 1983 and Supplementary Agreement dated 15th May 1983, with the Housing Society for developing certain leasehold land provided by the Bombay Municipal Corporation (as the Lessor) to the Housing Society (as the Lessee). The members of the said Society, had since not been co-operating and were hindering / obstructing the construction activity and were not cooperative in respect of procuring permissions and sanctions required from Municipal Authorities.

160

KCPL thereafter preferred Arbitration Petition No. 36 of 2002 seeking appointment of arbitrator before the Hon’ble High Court of Judicature at Mumbai. An Arbitrator came to be appointed in terms of the minutes of the order dated the 20th August 2002. At present the Arbitration is at a deadlock as the Society has not paid the fees to the Arbitrator.

2. First Appeal No. 2185 of 2005 in L.C. Suit No.7318 of 1986

KCPL V/s Ladharam Ahuja and two others (Original Plaintiffs) and Ors.

The High Court of Judicature at Bombay.

Not Applicable KCPL has preferred the appeal along with Civil Application No. 4719 of 2003, for Stay, against the order and decree dated 9.5.2003, passed by the Bombay City Civil Court, inter alia, directing that Plaintiffs to the suit to deposit amount of Rs. 2,40,000/- with Seva Samiti Co-operative Society (Society), within 6 months, pursuant to which the Society and KCPL were to give possession of the suit property to the Plaintiffs. The Appeal has been filed on the grounds, inter alia, that the City Civil Court at Bombay had no jurisdiction to try the suit and that the suit was barred by limitation. The appeal came to be admitted on 19.06.06 and stay has been granted.

3. Municipal Appeal No. 281 of 2002

1. Seva

Samiti

Co op

Housing

Society

Limited.

2. KCPL V/s. Brihanm-umbai Mahanag-ar Palika and anr.

Court of Small Causes at Bombay.

No additional liability involved as KCPL has already paid the property taxes ‘under protest’ from time to time.

This appeal has been filed against an order of the Investigating Officer dated September 20, 2001 in relation to the determination of ratable value of a building No. 10-A of the Seva Samiti Co-operative Housing Society Limited. The Appeal has not yet come up for hearing. The final outcome of this case would be that either the court adjudicates the rateable value lesser than Rs. 30,36,275/- and refund is ordered or the case will be dismissed, in which case, no additional liability will accrue.

161

4. Municipal Appeal No. 284 of 1999

1. Seva Samiti Co-op. Housing Society Ltd.

2. KPCL V/s Brihanm-umbai Mahanag-ar Palika and Anr.

Court of Small Causes at Bombay

No additional liability involved as KCPL has already paid the property taxes “under protest” in the year from time to time.

This Appeal has been filed against orders of the Investigating Officer dated 08.2.99 and 18.2.1999 in relation to the determination of rateable value of certain lands under construction at the Seva Samiti Co-op Housing Society Limited. The Appeal is pending. The final outcome of this case would be that either the court adjudicates the rateable value lesser than Rs.6,23,850/- and refund is ordered or the case will be dismissed, in which case, no additional liability will accrue.

B. OUTSTANDING LITIGATIONS filed against KCPL

Sr.

No

.

Reference No Parties

Court /

Place of

Institution

Amount of

claim

involved (Rs.

in)

(lakhs)

(Rounded

Off)


1. Income Tax Appeal Nos. 47, 51, 52, 55, 56, 57, 58 of 2004 and 560 of 2003

Commissi-oner of Income Tax , Mumbai - III v/s. KCPL

The High Court of Judicature at Bombay.

553.57 The present Appeals have been filed challenging orders of the Income Tax Appellate Tribunal, Mumbai, Benches ‘E’ holding, inter alia, that interest income earned by KCPL from work in progress should be taxed as interest from other sources while interest on borrowings which were utilized for giving as advances to sister concerns had to be set off against interest received in terms of provisions of Section 57 (ii) of the Income Tax Act, 1961. The Appeals have been admitted and the same are pending.

2. Short Cause Suit No.3489, 3490, 3491, 3492 and 3493 all of 1986.

1. Asana-nd A. Sudi (Plainti-ff) v/s. Seva Samiti Co-op Housing

The City Civil Court at Bombay.

Presently cannot be

quantified in terms of money.

The Plaintiffs have filed the suit, inter alia, seeking a declaration that Seva Samiti Co-operative Society Housing Society Limited (the ‘Society’), Madhoban Consultants Private Limited and KCPL are jointly and severally

162

Society & ors.

2. Chanc-hal

Dhara-mpal Talwar & Anr (Plainti-ff) v/s. Seva Samiti Co-op Housing Society & ors.

3. Upkars-

ingh Dilipsi-ngh Mehta (Plainti-ff) v/s. Seva Samiti Co-op Housing Society & ors.

4. Khusals-

ingh Dilips-ingh Mehta (Plaint-iff) v/s. Seva Samiti Co-op Housing Society & ors.

5. Dwark-

adevi G. Wahi (Plainti-ff) v/s. Seva Samiti Co-op Housing Society & ors.

liable to perform their obligations under the Income Tax Act, Maharashtra Co-operative Societies Act, Maharashtra Ownership Flats Act in the Scheme of the Society. It is alleged that Madhoban Consultants Pvt. Ltd. (MCPL), allegedly the developer of the property of the Society, prior to the work being handed over to KCPL, had taken Rs. 25,000/- from the Plaintiff in S.C. Suit No. 3489 of 1986, S.C. Suit No. 3490 of 1986 and S.C. Suit No. 3493 of 1986 and Rs. 15,000/- from the Plaintiff in S.C. Suit No. 3491 of 1986 and S.C. Suit No. 3492 of 1986 as deposits in the year 1977, on the pretext to provide newly constructed shops. KCPL, entered into Development Agreement and Supplemental Agreement, both, dated 15.5.1983, and paid to the Society a sum of Rs.30,00,000/-, in terms of the Agreement. KCPL has filed its Written Statements and denied that the Plaintiffs are entitled to the prayers sought in the suit. KCPL has raised preliminary contentions, inter alia, that the suit is barred by law of limitation. The suits are pending for hearing.

3. L.C. Suit No. 5841 of 2002

Sardar Wariamsi-

City Civil Court at

NA Sardar Wariamsingh Matta (Plaintiff) had filed a suit against

163

ngh Matta V/s. KCPL & ors.

Bombay the Seva Samiti Cooperative Housing Society and KCPL. The Plaintiff has also filed Notice of Motion No. 4795 of 2002 for preventing development of a portion of the plot by the Society. The Bombay City Civil Court vide Order dated 28.10.2002 has recorded statement of KCPL that while granting the commencement certificate and plan, due care has been taken to protect Plaintiff’s interest and that the construction would not obstruct the access to the Plaintiff’s shop. Vide Order dated 23.4.2003, the City Civil Court has recorded that KCPL has also offered a shop at the ground floor on plot no. 368 admeasuring 337 sq. meters to the Plaintiff. The Hon’ble Court has left the same for the Plaintiff to consider it. The Notice of Motion No. 4795 of 2002 was disposed off vide Order dated 14.7.2004, directing that the possession of the Plaintiff is protected until KCPL offers alternate accommodation. The Suit is pending.

4. R.A. D Suit No.4238 of 1985

1. Tej Pradip Dalal

2. Rikeen

Pradip Dalal

3. Mandira

Pradip Dalal

V/s.

1. KCPL 2. Mukul

Harki-sonda-ss


No liability involved

This suit is filed praying, inter alia, for a declaration that the Plaintiffs along with Defendant No.2 are entitled to tenancy rights of the suit premises, including permanent injunction against Defendant No.2 from surrendering its tenancy rights to KCPL. KCPL is a formal party as owner of the entire building of which the suit premises is one of the flats. The suit was decreed in favour of the Plaintiffs vide Ex-parte decree dated 30.9.2000. The Defendant No.2 preferred a Misc. Notice, praying for permission to defend the suit. Similarly Misc. Notice No. 179 of 2002 was filed by KCPL also and the same came to

164

be allowed and the Order dated 30.9.2000 was set aside. KCPL has filed Written Statement, inter

alia, stating that the suit is barred by limitation and that KCPL became owners of the suit property in the year 1986. The suit is pending.

5. KALPATARU PROPERTIES PRIVATE LIMITED (KPPL) (formerly known as Kalpataru

Constructions Overseas Pvt. Ltd.) A. OUTSTANDING LITIGATIONS filed by KPPL

Sr.

No

Reference

No Parties

Court / Place

of Institution

Amount of

claim

involved

(Rs. in)

(lakhs)

(Rounded

off)


1. ITA /7160/ M/02

KPPL V/s. Deputy Commissi-oner of Income Tax, Range 3(2), Mumbai.

The Income Tax Appellate Tribunal (ITAT), Mumbai.

9.44 The Income Tax Officer (ITO) has disallowed Rs. 19,78,127/- as interest paid on certain advances made to associate concerns of KPPL for the Assessment Year 1999 – 2000 holding that the same were advanced free of interest. In addition thereto, ITO also disallowed Rs. 200,000/- for Administrative expenses, Rs. 1,26,254/- for Share issue expenses and Rs.25,00,000/- as capital gains on sale of shares. KPPL challenged the same before the Commissioner of Income Tax (Appeal) (CIT), inter alia on the ground that it had sufficient surplus funds, which it had received interest free and thus, lent it without seeking interest. The CIT upheld the disallowance made by ITO. The claim, thus is Rs. 9,43,628/- being the income tax (on various disallowances) and interest thereon. Hence KPPL has preferred the subject appeal before the ITAT against the order of Deputy Commissioner of Income Tax dated 2/9/2002. The matter was heard on 17th August 2006 and is awaiting final orders

165

B. OUTSTANDING LITIGATIONS filed against KPPL.

Sr.

No

Reference

No Parties

Court / Place

of Institution

Amount of

claim

involved

(Rs.in

lakhs)

(Rounded

off)


1. Summary Suit No.3373 of 2001

Tristar Consultan-ts (Tristar) V/s KPPL

High Court of Judicature at Bombay

3.42 plus interest @18% per

annum.

Tristar, who are recruiting agency have filed a Summary Suit for Rs.3,41,981/- with interest @ 18% per annum on the principal sum, on an alleged contention that KPPL was bound by a contract dated 18.5.1998 with one M/s Boyden International, pertaining to recruitment of employees, to make certain payments, which were not made. KPPL has filed Written Statements, inter alia, contending that the suit is not maintainable as M/s Boyden had also filed Summary Suit No. 3212 of 2000 on identical grounds and for identical claims which was withdrawn without liberty to file fresh suit. In the circumstances, it is not open to Tristar to file suit on the same cause of action.

The Suit is pending hearing and final disposal.

2. Appln. (WCA) No.721/C-214 of 2001

Ramacha-ndra Venkatesh Valmiki (Applican-t) V/s. 1. KPPL 2.Mr. Zafar Bhati (Opposite Party)

Court of Commissioner for Workmen’s Compensation Act, Bandra, Mumbai

2.73 (the claim amount),

together with interest at the rate of 12%

from 28.6.2000 till

realisation and penalty as awarded

by the Court.

This case is filed purportedly under the provisions of Workmen’s Compensation Act, 1923, for claiming compensation and damages alleged caused due to injury to the Applicant. He has contended that he was employed by the Opposite Party No. 2 (contractor) as helper and suffered from a fall from the 6th Floor of new building, while he was working as a helper. KPPL (builders and Opposite Party No. 1) have filed a written statement contending inter alia that they have no privity of contract with the Applicant. It is also contended that the Applicant has failed to justify his claim.

166

The case is pending. The contingent liability of KPPL could be Rs.2,72,988/- (the claim amount), together with interest at the rate of 12% from 28.6.2000 till realisation and penalty as awarded by the Court. The matter is fixed for trial and KPPL’s affidavit of evidence is to be filed.

3. Appeal No. (L) 2723 of 2005 in Injunction Notice No. 46 of 2002 in RAD Suit No. 230 of 2002 & Appeal (L) No. 2724 of 2005 in Injunction Notice No. 47 of 2002 in RAD Suit No. 231 of 2002

M/s S.K. Kabbur Pvt. Ltd. & anr. v/s. Arun Bros. and KPPL & M/s S.K. Kabbur Pvt. Ltd. & anr. v/s M/s Atul Arun Printing Press and KPPL


NA Two suits were filed by Arun Bros and M/s. Atul Arun Printing Press (hereinafter collectively referred to as ‘the Plaintiffs’) for declaration that the Plaintiffs are lawful sub-tenants of M/s S.K. Kabbur Pvt. Ltd. in respect of the suit premises. KPPL, vide its affidavits in the suits, each dated 13.06.2002, has contended it has no legal right or interest in the suit premises and that it has been wrongfully joined in suit.

The Plaintiffs had also filed Injunction Notice Nos. 46 and 47 of 2002 in the respective suits. The said injunction notice in the suit of the Plaintiffs have been made absolute by the Court wherein no action can be taken against them to dispossess.

Appeals, challenging the said order have been filed in both the matters, which are pending.

4. R.A.D. Suit No.1647 of 2002

Prakash Anand Butani V/s. KPPL and anr.

Small Causes Court, Bombay

NA One Mr. Prakash Butani, conductor of Milk Centre business on behalf of one Sindhi Nagar Consumer Co-op. Society [a Society floated by The Seva Samiti Co op Housing Society Limited (hereinafter ‘the Housing Society’)] filed a Suit to claim tenancy in respect of Milk Centre business. KPPL is developing the property on behalf of the Housing Society and the said Mr. Butani is claiming tenancy rights on the property. Mr. Butani preferred an injunction application praying for orders restraining KPPL from disturbing his possession. The Society and KPPL have filed joint Written Statement, inter alia,

167

stating that the Plaintiff is not a tenant and the suit is misconceived. The Hon’ble Court had dismissed the said injunction application preferred by Mr. Butani. An Appeal was preferred challenging the said order, by Mr. Butani. However, the same was withdrawn as not pressed, vide Order dated 23.1.2003. The suit is pending.

5. Special Leave Petition (C) No. 1393-94 of 2006

Shree Ram Mills Ltd., vs KPPL & Vijay Infrastructure Technologies Pvt.Ltd.

Supreme Court of India

NA KPPL had entered into an MoU dated 28.6.2004 and an Addendum to the said MoU dated 10.12.2004 with Shree Ram Mills Limited and Vijay Infrastructure Technologies Private Limited for sale of a plot admeasuring 20,955.40 sq. mtrs out of Shree Ram Mills Limited’s property situated at Worli for a consideration of Rs.105.30 crore.

Dispute arose between the parties and KPPL invoked arbitration and filed an application under section 9 of the Arbitration and Conciliation Act, 1996. The High Court of Judicature at Bombay passed an order in the Petition that Shree Ram Mills Limited should maintain status quo in respect of the said land.

An Appeal was filed under Section 37 of the Arbitration & Conciliation Act, 1996 (the ‘Arbitration Act’) against Order dated 19.7.2005 passed by the Bombay High Court in Arbitration Petition No. 78 of 2005 granting certain interim relief under section 9 of the Arbitration Act.

The Division Bench of Bombay High Court in Appeal No. 6458 of 2005, vide Order dated 27.10.2005 modified the Order dated 19.7.2005 and directed Shree Ram Mills Limited to maintain status quo with regard to the disputed property.

168

Shree Ram Mills Limited, being dissatisfied with the said order of the Division Bench filed a Review Petition before the same bench. The Review Petition has been dismissed by the Hon'ble Court vide its order dated 16.12.2005. Aggrieved by the said orders Shree Ram Mills Limited has preferred SLP before the Hon’ble Supreme Court of India. The Supreme Court of India has directed that SLP be listed beyond vacation i.e. sometime in July, 2006 for admission & disposal.

Meanwhile, KPPL appointed Sr. Advocate Rafiq Dada as their Arbitrator and the Shree Ram Mills Limited appointed Hon’ble Mr. Justice Y. V. Chandrachud (retired) as their Arbitrator and the said Arbitrators, in turn have appointed Hon’ble Mr. Justice R. S. Pathak (Retired) as the third Arbitrator.

6. K. C. Holdings Private Limited : Nil 7. JMC Infrastructure Limited : Nil 8. JMC Consultants & Developers Private Limited : Nil 9. M/s. J. M. Construction : Nil 10. SAI Consulting Engineers Private Limited : Nil C. PROCEEDINGS INVOLVING DIRECTORS OF JMC. 1. Mr. Vijay Choraria : Nil 2. Mr. Hemant Modi:

• Mr. Hemant Modi has received Notice dated 28.9.2004 from the Regional Director, Employee State Insurance Corporation, Ahmedabad. For details please refer to item A.I.8, above.

169

• Criminal Case No. 2678 of 1999 has been filed by Government Labour Commissioner against Mr. Hemant Modi for alleged violation of the provision of Child Labour (Prohibition and Regulation) Act, 1986. For details please refer to item A. II. (c).1, above.

• Criminal Complaint case no. 270/2002 has been filed by Mr. Mantu before the Judicial Magistrate (1st Court) at Malda alleging that cheque no. 457936 dated 13/10/2001 for an amount of Rs. 4,19,327 issued by JMC, has returned unpaid. It has been alleged by Mr. Mantu that JMC, pursuant to alleged receipt of purported notice in terms of section 138 of Negotiable Instruments Act, 1881, did not make good the said amount and hence Mr. Mantu has filed the compliant. Mr. Hemant Modi filed application for exemption from personal attendance by way of an application under Section 205 of CrPC. The same came to be rejected by an order dated 28.2.2006 (hereinafter the impugned order). Mr. Modi filed CRR No. 798 of 2006 against the impugned order before the Hon'ble High Court of Calcutta. The Hon'ble High Court was pleased to grant the said CRR No. 798/2006 vide its order dated 24.04.2006, thereby setting aside the impugned order with a condition that Mr. Modi must appear in the Court whenever specifically called upon to do so. Thereafter Mr. Mantu has preferred an application seeking modification and / or variation of the order dated 24.04.2006, passed in CRR No. 798 / 06. The said application is pending . The Criminal Complaint No. 270/2002 shall now be listed on 19.09.2006.


3. Mr. Suhas Joshi:

Mr. Suhas Joshi has received Notice dated 28.9.2004 from the Regional Director, Employee State Insurance Corporation, Ahmedabad. For details please refer to item A. I. 8 above.

4. Mr. N. K. Patel

Mr. Patel has received Notice dated 28.9.2004 from the Regional Director, Employee State Insurance Corporation, Ahmedabad. For details please refer to item A. I. 8 above.

5. Mr. Ajay Munot

Complaint No. 379 of 2003 has been filed by the Senior Inspector of Factories and Boilers, Sri Ganganagar against Mr. Ajay Munot before Civil Judge (J. D.) and Judicial Magistrate, First Class, Padampur, District Sri Ganganagar, Rajasthan, for alleged violation of sections 21 and 61 of the Factories Act, 1948 in view of the death of a workman due to alleged non-fencing of the conveyor belt in the factory premises of KPTL at Padampur. The amount involved would be the penalty / fine that may be imposed by the Court subject to the ceiling prescribed under the Factories Act. The said complaint is pending.

6. Mr. Kamal Jain

Show cause notice dated 4.10.2004 has been issued to Mr. Kamal Jain by the Office of the Commissioner of Central Excise, Ahmedabad III. The amount involved is Rs. 43 lakhs and odd. For details please refer to item B.3.A.2.(a).1, above.

7. Mr. M. D. Khattar : Nil 8. Mr. M. G. Punatar : Nil

170

D. PROCEEDINGS INVOLVING JMC MINING AND QUARRIES LIMITED (Wholly Owned

Subsidiary of JMC) (JMC Mining)

1. a. Notices received by JMC Mining

Sr.

No.

Noticer’s

Name

Date of

Notice

Claim Amount

Rs. lakhs

(Rounded off)

Charges /

Allegations Brief details of the Case

1. a) Ramabhai Raijibhai Macchi b) Shanabhai Raijibhai Macchi

6/10/2004 1.20 and costs

• Quarries and Mining -damage crops and are hazardous to health.

• Violating order of injunction

• Non payment of alleged outstanding of Rs. 1,20,000/-

The Noticers’ have claimed that they own agricultural lands adjoining JMC Mining’s mines and quarries and have alleged that the mining and quarrying operations have inter alia caused severe damage to standing crops in the fields adjacent to the mines and is also hazardous to the health of their family and other villagers. They have alleged that JMC Mining is violating the interim temporary injunction passed in T. Civil Suit No. 43 of 2004 by Court of Civil Judge (JD) at Dakore, Thasra. Noticers have demanded payment of alleged due of Rs. 1,20,000/- from JMC Mining. JMC Mining, in its reply, dated 26.10.2004 asserted its right to win black trap under a lease, that it regularly pays royalty, rent, dead rent, for the mining operations and that mining does not cause health hazards or damage farming. It has also denied to have violated injunction passed in T. Suit No. 43 of 2004.

b. Issued by JMC Mining.

Sr.

No.

Notice

issued to

Date of

Notice

Claim Amount

Rs. lakhs

(Rounded off)

Charges /

Allegations Brief details of the Case

1. Surya B. Shah (SBS) and Nitin B. Shah (NBS) of Nidhi Enterprise.

23.08.06 1.45 and costs

Dishonour of cheque

JMC Mining, vide the said statutory notice under Section 138 r/w Section 142 of the Negotiable Instruments Act, 1881, has stated that the Noticees are trading in the name of Nidhi Enterprise. The notice further states that a cheque (no. 680811) for the amount of Rs. 1,45,476/- was issued

171

by SBS to JMC Mining for making payment in relation to certain purchases made by SBS and NBS from JMC Mining. However, the cheque has came to be dishonoured and has been returned to JMC Mining with an ‘insufficient opening balance’ endorsement. Vide the notice, JMC Mining has demanded that it be paid Rs. 1,45,476/- within 15 days of the receipt of the notice or else it shall initiate both criminal and civil proceedings for the recovery of the said amount. The notice also states that the costs of Rs.750/- shall be borne by SBS and NBS.

2 OUTSTANDING LITIGATIONS filed against JMC Mining

(a) Civil Cases

Sr.

No

Reference

No Parties

Court / Place of

Institution

Amount

Involved

(Rs.in)

(lakhs)

(Rounded Off)


1. T. Civil Suit No. 43 of

2004

Heirs of Deceas-

ed Bijalbhai Gobarbh

ai Macchi (Plaint-

iffs) V/s JMC Mining and anr.

Civil Judge (Junior

Division) at Dakore, Thasra

N.A. The Plaintiffs have filed the subject suit, seeking a Declaration and Permanent Injunction against JMC Mining prohibiting JMC Mining or its agents / workers from entering the property described in the suit, i.e. 11 Acers land at Hissa No. 99 of Agricultural Land No. 6 at Thasara. JMC Mining, in its Written Statement dated 26.10.04 has produced necessary lease orders from the Government as also the copies of Village Form 7/12 in which the right of JMC Mining over its land is duly reflected. It has inter alia, challenged the locus standi of the Plaintiffs and has contended that the land of the Plaintiffs are not near the land of JMC Mining. The Civil Judge by its order dated 5.10.2004 granted a temporary injunction restraining JMC Mining

172

from entering the suit property. The Suit and the Notice of Motion Application was heard on 31.08.2006 and orders are awaited

(b) Other Cases.

JMC Mining is one of the Defendants / Opponents in 2 (two) Motor Accident Claim Petitions pending before two Motor Accident Claims Tribunals. In both the matters, the Vehicle involved, which is of the ownership of JMC Mining, is insured with Insurance Company. The total claim in both the Petitions is Rs.9,00,000/-. The Insurance Company has certified that the subject vehicle is covered by the Insurance Policy and the said Insurance Company would pay the amount as per the verdict of the Tribunals as per applicable rules.

3. OUTSTANDING LITIGATIONS filed by JMC Mining

Sr.


Court / Place of

Institution

Amount

Involved (Rs.

in

(lakhs)


1. T. Civil Suit No. 22/2004

JMC Mining

v/s Rama-bhai R

Macchi, & ors.

(Defen-dants)

Civil Judge (Junior

Division) at Dakore, Thasra.

NA Suit filed by JMC Mining for an order inter alia, restraining Defendants, their agents, assignees, etc. from entering unauthorizedly the premises / lands of JMC Mining and restraining them from making illegal monetary demands. It was contended by JMC Mining that the said Defendants were inter alia creating nuisance and obstructing the way to the quarry and also giving threats and harassing the employees of JMC Mining. The suit is preferred to seek declaratory reliefs

JMC Mining also filed an application under Order 39 Rule 1 & 2 read with Section 151 of the Civil Procedure Code, 1908, seeking ad-interim reliefs in line with the prayers to the suit.

The Hon’ble Court, vide its order dated 11.6.2004 granted ex-parte ad-interim relief which was subsequently vacated vide Order dated 08.10.04.

2. Appeal from Order No. 148

JMC Mining

Fast Track District Court at

NA Appeal from Order is filed against the Order dated 08.10.04 passed

173

of 2004 v/s Rama-bhai R Macchi, & ors

Nadiad. by the Civil Judge (Junior Division) at Dakor, at Thasra in T. Civil Suit No. 22 of 2004. The summons in the matter has been served and the matter has been posted on 22.09.2006 for arguments.

3 Criminal Case No. 1349 of

2003

JMC Mining

v/s

M/s Shivam Engine-ers and

ors.

Court of Metropolitan Magistrate, Ahmedabad

1 A cheque, issued by M/s. Shivam Engineers, for Rs.1 lac bearing no. 270705 dated 16.5.03 was returned unpaid by Bank of India, Khanpur, Ahmedabad on the ground of ‘insufficient funds’. JMC Mining served a notice u/s 138 of the Negotiable Instruments Act, 1881, to which no reply was received. Hence, Criminal Case was filed before the Metropolitan Magistrate, Ahmedabad. Summons have been served on the parties by way of Registered Post A. D. on 21.09.04. However the accused have not remained present and warrants have been issued. The matter is pending.

4. T. Criminal Case No. 1010

of 2005

JMC Mining

v/s

Jatin bhai Dave, Prop.

Akshar Amrut

Enterpr-ise.

Court of Judicial Magistrate, First Class, Dakore, [Camp. Thasra]

1.35 A cheque for Rs.1,34,827/- bearing no. 735179 dated 14.09.05, issued by the accused and signed by the accused as proprietor of Akshar Amrut Enterprise had been issued to JMC Mining for valid consideration. On presentation of the cheque with ICICI Bank Limited, the said cheque was returned unpaid on the ground of ‘Funds insufficient’. JMC Mining served a notice u/s 138 of the Negotiable Instruments Act, 1881, to which no reply was received. Hence, the subject Criminal Case was filed, praying that the accused be held guilty in terms of the provisions of the Negotiable Instruments Act and that the accused may be made liable to pay an aggregate amount equivalent to twice the amount of the cheque.

The Hon'ble Court had issued bailable warrants but the Accused did not remain present on 6.09.2006 and therefore the Court has issued fresh Bailable Warrant against the Accused and adjourned the matter to 18.10.2006.

174

E. PROCEEDINGS INVOLVING DIRECTORS OF JMC MINING:

1. Mr. Hemant Modi

• Mr. Hemant Modi has received Notice dated 28.9.2004 from the Regional Director, Employee State Insurance Corporation, Ahmedabad. For details please refer to Item A. I. 8, above.

• Criminal Case No. 2678 of 1999 has been filed by Government Labour Commissioner against Mr. Hemant Modi for alleged violation of the provision of Child Labour (Prohibition and Regulation) Act, 1986. For details please refer to item A. II. (c). 1, above.

• Criminal Complaint case no. 270/2002 has been filed by one Mr. Mantu before the Judicial Magistrate (1st Court) at Malda alleging that cheque no. 457936 dated 13/10/2001, for an amount of Rs. 4,19,327 issued by JMC has returned unpaid. It has been alleged by Mr. Mantu that JMC, pursuant to alleged receipt of purported notice issued in terms of section 138 of Negotiable Instruments Act, 1881, did not make good the said amount and hence Mr. Mantu has filed the compliant. Mr. Hemant Modi filed application for exemption from personal attendance by way of an application under Section 205 of CrPC. The same came to be rejected by an order dated 28.2.2006 (hereinafter the impugned order). Mr. Modi filed CRR No. 798/2006 against the impugned order before the Hon'ble High Court at Calcutta. The Hon'ble High Court was pleased to grant the said CRR No.798/06 vide its order dated 24.04.2006, thereby setting aside the impugned order with a condition that Mr. Modi must appear in the Court whenever specifically called upon to do so. Thereafter Mr. Mantu has preferred an application seeking modification and / or variation of the order dated 24.04.2006, passed in CRR No. 798 / 06. The said application is pending The Criminal Complaint No. 270/2002 shall now be listed on 19.09.2006.


2. Mr. Suhas Joshi

• Mr. Suhas Modi has received Notice dated 28.9.2004 from the Regional Director, Employee State Insurance Corporation, Ahmedabad. For details please refer to Item A.I.8 above.

3. Mrs. Sonal Modi : Nil

4. Mr. Kamal Jain

• Show cause notice dated 4.10.2004 has been issued to Mr. Kamal Jain by the Office of the Commissioner of Central Excise, Ahmedabad III. The amount involved is Rs. 43 lakhs and odd. For details please refer to item B.3.A.2.(a).1, above.

175

F. NAMES OF SMALL SCALE UNDERTAKINGS OR OTHER CREDITORS TO WHOM JMC

OWES A SUM EXCEEDING RS. 1 LAKH WHICH IS OUTSTANDING MORE THAN 30 DAYS

(AS ON 31-7-2006).

Name Of Creditors

Name Of Creditors

Kalpataru Power Transmission Ltd. Taj Enterprise

Puzzolana Machinery Fabricators Padiyar Water Proofing

Jmc Mining & Quarries Ltd. Managalmurti Transport

Dutta D.S. Aeman Saw Mills

Mechtech Engineers Vaibhav Construction (Eng. & Contractors

Jbc Overseas Ayeasha Enterprises

Kartik Construction Saif Traders

Suvidha Engineers India Ltd. Chakrabarthy M

Sara Enterprises Devendra Kumar

Tulsyan Nec Ltd. R. R. Services

Fosroc Chemical (I) Ltd. Bharat Tarpaulin Company

Ijm Concrete Products Pvt. Ltd. Technical Fire Protection Services

Rocks & Logs (India) Pvt. Ltd. Sri Sai Construction

Kone Elevator India Ltd. Paras Metallurgicals

Protex Engineering Ltd. Bhavani Marbles

Economic Traders Sudhir Kumar

Arbuda Const.Co. Rajubhai V. P Deep Enterprises (Indore)

Kumaran Enterprises Bokadia Electric Company

Hectafine Constech India Pvt. Ltd. Access Floor International

K. R. Anand V. S. T. Lorry Service

Action Construction Equipment Ltd. South India Spun Pipe Company

Aim Construction Company V. S. T. Blue Metals

Amcon Constructions M. A. Biradar

Vishal Ply Hindustan Engineers

Nina Industries Sohams Foundation Engineering Pvt. Ltd.

Sunny Transport (Navi Mumbai) Kore's Sanitation

A-1 Engineers & Contractors Kay - Kay Equipment

Nico Building Systems Ispat Infrastructure India Pvt. Ltd.

Rashtriya Ispat Nigam Ltd. (Vizag) Aqua Technologies

Shyam Narayan & Bros. Expert Construction Co.

Sanskriti Sanitation New Hindustan Water Proofing

Steel Centre Central Sales Corporation

I.S.Steel Syndicate Engineering Works

R. K. Fabricators Mehta Engineers

Vijayalaxmi Corporation Satav Infrastructures Pvt. Ltd

Shree Shakti Enterprises Ramneek Singh

Industrial Plants & Waste Treatement Cor The Oriental Waterproofing Co.

Shree Shyam Electrocraft Pvt. Ltd. National Electrical

Shankar B. D. Umiya Trading Co. (Gandhinagar)

Amber Electrotech Ltd. All India Water Proofing Co.

Pragati Constructions Vijaynath Interiors

Karagwal Carrier J. I. Ruwala & Co.

The Structural Water Proofing Co. Ram Earth Mover

N. N. Enterprises K. Chandrasekaran

Rmc Readymix (India) Ltd. Surendra Brothers

176

Name Of Creditors

Name Of Creditors

Damani Dyestuff Ltd. Hanuman Welding Co.

Siva R Mehta Brothers

Tamta Construction Pvt. Ltd. Murugan

Johnson Enterprise Ltd. Cosmos Detectives & Security Services(Re

Nexo Industries Ltd. Green Gold Timber (P) Ltd.

Epl India Ltd. (Solahart) Buildline Engineers

Essae Digitronics Pvt. Ltd. Kunal Advertising

Indo-Stones Interlink Enterprise

Sudhir N.Doshi And Co. R.K.Transport

Neeraj Kumar Vikas Electric & Hardware Store

Harsons & Associates G. R. Construction

Global Fire Protection Co. Ganesh Transport

Vikram Contractor Co . R.K.Martha

Shiv Shakti Trading Co. Mudgal Construction Company Ltd.

Amber Electronics Modern Equipments

Larsen & Toubro Limited (R.M.C) Shiva Steel Tubes

Wonder Proof P. Venkatesh

Manish Engineers And Contractors Padiyar Waterproofing Technologies(P)Ltd

Sathyanarayan Singh Chaudhary Associates

Sukri Paints & Chemical Pvt. Ltd. National Motor Transport

Shiva Enterprises (Chennai) Radheyshyam Biswal

Praveen Singh Gada Dhar

Unik Carriers Multi Color Steels (India) Pvt. Ltd.

Shram Tech General Engineering Tools Suppliers

M. Abbulu Yogesh Rajendrabhai Pandey

R. R. Agencies Laxmi Transport Company (Mumbai)

Eta Engineers (P) Ltd. Garg Builders

J. Chakara Borty Saurabh N. Soparkar

Sachida Enterprises Shital Singhs (P) Ltd.

Manoj Singh Blast Coats

Ved Prakash Mahendra Corporation

Prakash Transport ( Kadi ) Grasim Industries Ltd.(Rmc)

Sri Sai Marketing Percept Engineers Pvt. Ltd.

Hexagon Engineers Limited Kavita Transport

Angel Industrial Coating Sahu S.K

Sharma Supply Agency Ranjit Pattanayak

Kanasu Enterprises A S Enterprises

Yashpal Infrastructural Enterprises Newkem Engineers Pvt. Ltd.

B. K. Associates Rajan

Percept Engineers Pvt. Ltd. K. B. Patel & Co.

Steel Sales Corporation Wakhare Transport

Jain Plywoods Agarwal Timber Estate

Ramnivas Mistry Al-Glaze Corporation

Siddharth Enterprises Karnataka Timber Depot

Chand Building Material Carrier Ansh Trading Company

Nav Bharat Trading Co. Malini & Mangai

Stup Consultants Ltd. P. Manickam & Co.

Asiad Water Proofing Shree Gayatri Engineers

Makintosh Engineering Services Sri Gagapathi Marble Art

177

Name Of Creditors

Name Of Creditors

S. S. Concepts Sudarshan Prasad

Salamat Enterprises Kishore Routh

Raja Rajeswari Victoria Construction Chemicals

Travel Corporation (India) Pvt. Ltd. Vijay Furnitures & General Contractor

Grace Castings Pvt. Ltd. Sangam Paints & Hardware Stores

Queen Transport Sunrise Carrier

Simplex Concrete Piles (I) Ltd. Nimai Paria

Max International Power Tools & Tackles

Santhosh Transport Lumbini Filling Station

Royal Engineering Works Ahmedabad Intelligence Security Services

Sreenath Agencies The Structural Water Proofing

Migrani Envirotech Engineers Pvt. Ltd. Super Lac

Girija Granite & Earthmovers M. L. Sharma & Co.

K. Chakravorthy Md. Ahmed

Vipul Water Proofing Atlas Pest Control Service

Jalaram Transport (Mumbai Shri Dharati Stone Quarry

Dhimant Trading Co. Garg Minerals

Gulati Enterprises Venkateshwara Trims & Profiles

Bhadoria Engineering Services Pvt. Ltd. Bipin Kumar Parida

P. V. Baldaniya Config Systems

Focus Ventures Shades N Shelters

Shaffi Timber Co. Sun Shine Structure

Ramaas Enterprises Umapathi Timber

Bhagwati Trading & Co. (Hyderabad) Chandrashekar S. Patil

R. A. Construction Goodwill Trading Co.

Aneja Construction Pvt. Ltd Gayathri Stone Crusher

Nirav Corporation Radhika Construction

Manibhadra Earth Movrs Pvt.Ltd M. S. Chauhan (Uttar Pradesh)

Smps Consultants S. N. Hardware

Apex Engineers (P) Ltd. Paras Industrial Products

Vijay Transport Shree Ganesh Transport

Sai Krishna Enginering Pvt. Ltd. Abbot Electronics Pvt. Ltd.

W. Rehman Arpitha Enterprises

Tony Transport Shree Khodiyar Transport

Shree Ganpati Enterprise Shree Aatmiya Transport

J.K. Electricals Nishant Transport

G.K.S. Associates Sanjay Tekale Asso.

Awadesh Kumar Lokesh K.

Raju Fabricators

178

GOVERNMENT APPROVALS

The Company has obtained the following approvals and registrations from various authorities:

1. State Sales Tax (VAT) Registration No. 24073602135 effective from 01.07.2002 and Central Sales Tax (TIN), Registration No. 24573602135 effective from 02.04.88 issued by the Govt. of Gujarat, Department of Sales Tax.

2. State Sales Tax Registration No. 3361245 effective from 01.04.1995 and Central Sales Tax, Registration No. 673559 effective from 07.12.94 issued by the Govt. of Tamil Nadu, Department of Sales Tax.

3. State Sales Tax Registration (VAT) No. 29710327239 effective from 08.10.1996 and Central Sales Tax,

Registration No. 00955206 effective from 08.10.1996 issued by the Govt. of Karnataka, Department of Sales Tax.


Registration No. VSP / 08 / 2 / 1937 effective from 16.02.1996 issued by the Govt. of Andhra Pradesh, Department of Sales Tax.

5. State Sales Tax Registration No. 411038 / S / 731 effective from 01.04.1999 and Central Sales Tax,

Registration No. 411038 / C / 621 effective from 01.04.1999 issued by the Govt. of Maharashtra, Department of Sales Tax.

6. State Sales Tax Registration No. 08903903774 effective from 01.04.1999 and Central Sales Tax,

Registration No. 08903903774 effective from 03.08.1999 issued by the Govt. of Rajasthan, Department of Sales Tax.


Registration No. KOCI-2774 effective from 28.02.2003 issued by the Govt. of Orissa, Department of Sales Tax.

8. State Sales Tax Registration No. 33210291 effective from 20.09.1999 and Central Sales Tax, Registration No. 33215291 effective from 20.09.1999 issued by the Govt. of Kerala, Department of Sales Tax.

9. State Sales Tax Registration No. GRE/HGST/1821356 effective from 18.08.2000 and Central Sales Tax, Registration No. GRE/CST/1821356 effective from 18.08.2000 issued by the Govt. of Haryana, Department of Sales Tax.

10. State Sales Tax Registration No. DA/6803 effective from 23.09.2002 and Central Sales Tax, Registration

No. DA/CST/6247 effective from 23.09.2002 issued by the Govt. of Daman, Department of Sales Tax. 11. State Sales Tax Registration ( TIN) No. 23384104166 effective from 13.12.2002 and issued by the Govt. of

Madhya Pradesh, Department of Sales Tax. 12. State Sales Tax (TIN) No. 07392011601 effective from 21.10.2003 issued by the Govt. of Delhi,

Department of Sales Tax. 13. State Sales Tax Registration No. KAN-IV-9160 effective from 20.06.2003 and Central Sales Tax,

Registration No. KAN-CST-7134 effective from 20.06.2003 issued by the Govt. of Himachal Pradesh, Department of Sales Tax.

179

14. ISO 9001:2000 awarded by TUV Management Service GmbH, Germany Certificate No. 12 100 10994 / 1 TMS dated 22.09.2005 for all construction of industrial, institutional and infrastructure projects.

15. Permanent Account Number (PAN) issued by the Director of Income Tax (Systems) bearing number

AAACJ3814E.

16. TAN No AHMJ00518A issued by Income Tax Department. 17. Service Tax Registration No. AAACJ3814EST001 with effect from 05.02.2003 issued by Office of the

Assistant Commissioner, Service Tax, Ahmedabad. 18. ISIN No. INE890A01016 for Equity Shares and INE 890A13011for warrants issued by NSDL and CDSL 19. Certificate of Incorporation No. 04-8717 dated 5th June, 1986 and fresh Certificate of Incorporation dated

4th February, 1994 upon change of name to JMC Projects (India) Limited by the Registrar of Companies, Gujarat Dadra & Nagar Haveli., on conversion to Public Limited Company

20. Certificate of Importer Exporter Code (IEC) obtained from Government of India, Ministry of Commerce IEC No. 0894009508 dated 08.11.1994.

21. RBI Approval dated June 20, 1994 for allotment to NRI/FII/OCB in the Initial Public Offering of the

Company in September, 1994. 22. Certificate of registration of trade mark dated December 19, 2003, section 23(2), Rule 62(1), trade mark no.

722765, J. NO. 1288(SII), class 16 as of date October 22, 1996

23. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 certificate no.,

GJ/18823/ENF.IV/2953. 24. Employees’ State Insurance Corporation code no. 3720945-90 25. Group Gratuity Scheme Master Policy No. GGI/CA/601126 26. Super Annuation Scheme Master Policy No. GS/CA/601493

No further consent of the Government of India is required for the present Issue. It must be distinctly understood that the Government of India / RBI does not take any responsibility for the financial soundness of any scheme or project or for the correctness of any statements made or any opinions expressed with regard to them. The Company can undertake the activities proposed by it in view of the present approvals and no further approvals from any Government Authorities/RBI are required by the Company to undertake the proposed activities.

180

STATUTORY AND OTHER INFORMATION

Authority for the Issue

The present issue of Equity Shares is being made pursuant to the Board Resolution passed at the Board of Directors meeting held on May 2, 2006, the shareholders approval obtained at the AGM held on June 17, 2006. The rights issue price and ratio has been decided at the Rights Issue Management Committee meeting held on September 5, 2006

Prohibition by SEBI

Neither the Company, nor its Directors or the Promoter Group Companies, or companies with which the Company’s Directors are associated with as directors nor promoters have been prohibited from accessing or operating in the capital markets under any order or direction passed by SEBI. Further none of the directors or person(s) in control of the Promoters (as applicable) has been prohibited from accessing the capital market under any order or direction passed by SEBI. Eligibility for the Issue

JMC Projects (India) Ltd. is an existing Company registered under the Companies Act, 1956 whose Equity Shares are listed on BSE. It is eligible to offer this Issue in terms of Clause 2.4.1 (iv) of the SEBI DIP Guidelines. The Company, its Promoter, its Directors or any of the Company’s associates or group companies are currently not prohibited from accessing the capital market under any order or direction passed by SEBI. Further the Promoters, their relatives (as per Companies Act,1956), Issuer, group companies, associate companies are not detained as willful defaulters by RBI / Government authorities and there are no violations of securities laws committed by them in the past or pending against them. Disclaimer Clause

AS REQUIRED, A COPY OF THIS DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO THE

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI). IT IS TO BE DISTINCTLY

UNDERSTOOD THAT THE SUBMISSION OF THIS DRAFT LETTER OF OFFER TO SEBI

SHOULD NOT, IN ANY WAY BE DEEMED/ CONSTRUED THAT THE SAME HAS BEEN

CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPOSIBILITY 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 THIS DRAFT LETTER OF OFFER. THE LEAD MANAGER INGA

ADVISORS PRIVATE LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THIS

DRAFT LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH

SEBI GUIDELINES FOR DISCLOSURE AND INVESTOR PROTECTION IN FORCE FOR THE

TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED

DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE

CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY

RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT

INFORMATION IN THE DRAFT LETTER OF OFFER, THE LEAD MANAGER IS EXPECTED TO

EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS

RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE THE LEAD

MANAGER INGA ADVISORS PRIVATE LIMITED HAS FURNISHED TO SEBI A DUE DILIGENCE

CERTIFICATE DATED JULY 18, 2006 IN ACCORDANCE WITH SEBI (MERCHANT BANKERS)

REGULATIONS 1992 WHICH READS AS FOLLOWS:

1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO

LITIGATION LIKE COMMERCIAL DISPUTES, DISPUTES WITH COLLABORATORS,

181

ETC. AND OTHER MATERIALS MORE PARTICULARLY REFERRED TO IN THE

ANNEXURE HERETO IN CONNECTION WITH THE FINALISATION OF THE DRAFT

LETTER OF OFFER PERTAINING TO THE SAID ISSUE;

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE

COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES,

INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS

OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS

MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE

COMPANY;

3. WE CONFIRM THAT:

a) THE DRAFT LETTER OF OFFER FORWARDED TO SEBI IS IN CONFORMITY

WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

b) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS

ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY SEBI, THE

GOVERNMENT, AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF

HAVE BEEN DULY COMPLIED WITH;

c) THE ISSUER COMPANY HAS BEEN FILING PERIODIC STATEMENTS IN

REGARD TO FINANCIAL RESULTS AND SHAREHOLDING PATTERN WITH

BOMBAY STOCK EXCHANGE LIMITED, THE DESIGNATED STOCK EXCHANGE

AND REGISTRAR OF COMPANIES, GUJARAT, DADRA & NAGAR HAVELI FOR

THE LAST THREE YEARS AND SUCH STATEMENTS ARE AVAILABLE ON

WEBSITES OF THE DESIGNATED STOCK EXCHANGE AND ON A COMMON E-

FILING PLATFORM. THE ISSUER COMPANY HAS NOT BEEN ABLE TO FILE

THE FINANCIAL RESULTS FOR THE QUARTERS SEPTEMBER 05, DECEMBER

05 AND MARCH 06 AS THERE IS NO COLUMN PROVIDED IN EDIFAR FOR

INSERTION OF AUDITED DATA FOR 18 MONTHS PERIOD. THE ISSUER

COMPANY WILL UPLOAD THE INFORMATION ONCE THE PROBLEM IS

RECTIFIED.

d) THE ISSUER COMPANY HAS IN PLACE AN INVESTOR GRIEVANCE HANDLING

MECHANISM WHICH INCLUDES MEETING OF ‘SHAREHOLDERS’ /

INVESTORS’ GRIEVANCE COMMITTEE’ AT FREQUENT INTERVALS,

APPROPRIATE DELEGATION OF POWER BY THE BOARD OF DIRECTORS OF

THE ISSUER COMPANY WITH REGARD TO SHARE TRANSFER AND CLEARLY

LAID OUT SYSTEMS AND PROCEDURES FOR TIMELY AND SATISFACTORY

REDRESSAL OF INVESTOR GRIEVANCES.

e) 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 4. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN

THE DRAFT LETTER OF OFFER ARE REGISTERED WITH SEBI AND TILL DATE SUCH

REGISTRATION IS VALID

The filing of this Draft Letter of Offer does not, however, absolve the Company from any liabilities under Section 63 or Section 68 of the Companies Act, 1956 or from the requirement of obtaining such statutory or other clearance as may be required for the purpose of the proposed Issue. SEBI further reserves the right to take up, at any point of time, with the Lead Managers any irregularities or lapses in this Draft Letter of Offer.

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Caution

The Company and the Lead Manager accept no responsibility for statements made otherwise than in this Letter of Offer or in any advertisement or other material issued by the Company or by any other persons at the instance of the Company and anyone placing reliance on any other source of information would be doing so at his own risk. The Lead Manager and the Company shall make all information available to the Equity Shareholders and no selective or additional information would be available for a section of the Equity Shareholders in any manner whatsoever including at presentations, in research or sales reports etc. after filing of this Letter of Offer with SEBI.

Disclaimer with respect to jurisdiction

This Letter of Offer has been prepared under the provisions of Indian Laws and the applicable rules and regulations there under. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Ahmedabad, India only.

Disclaimer Clause of BSE

“The Bombay Stock Exchange Limited (‘the Exchange’) has given, vide its letter dated August 29, 2006, permission to the Company to use the Exchange’s name in this Letter of Offer as one of the Stock Exchanges on which this Company’s securities are proposed to be listed. The Exchange has scrutinized this Draft Letter of Offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. BSE does not in any manner –

a. warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer;

b. warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or

c. take any responsibility for the financial or other soundness of this Company, promoters, management or any scheme or project of this Company;

And it should not, for any reason be deemed or construed that this Letter of Offer has been cleared or approved by BSE. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.” Filing

This Draft Letter of Offer was filed with SEBI, Mittal Court, ‘A’ Wing, Nariman Point, Mumbai 400 021. All the legal requirements applicable till the date of filing the Draft Letter of Offer with the Stock Exchanges have been complied with. A copy of the Draft Letter of Offer, required to be filed under SEBI DIP Guidelines was filed with the Designated Stock Exchange. Listing

The existing Equity Shares of the Company are listed on BSE. The Company has made application to BSE for permission to deal in and for an official quotation in respect of the Equity Shares being offered in terms of this

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Letter of Offer. The Company has received in principle approval from BSE vide letter dated August 29, 2006. The Company will apply to BSE for listing of the Equity Shares to be issued pursuant to this Issue.

If the permission to deal in and for an official quotation of the securities is not granted by BSE within 42 days from the Issue Closing Date, the Company shall forthwith repay, without interest, all monies received from applicants in pursuance of this Letter of Offer. If such money is not paid within eight days after the Company becomes liable to repay it, then the Company and every Director of the Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under the Section 73 of the Act.

Consents Consents in writing of the Auditor, Lead Manager, Legal Advisor, Registrar to the Issue and Banker to the Issue to act in their respective capacities have been obtained and such consents have not been withdrawn up to the time of delivery of this Letter of Offer for registration with the Stock Exchange. The Auditors of the Company have given their written consent for the inclusion of their Report in the form and content as appearing in this Letter of Offer and such consents and reports have not been withdrawn up to the time of delivery of this Letter of Offer for registration to the Stock Exchanges The company certifies that to the best of its knowledge there are no other consents required for making this Issue. However, should the need arise, necessary consents shall be obtained by it.

Expert Opinion, if any

Except in the sections titled ‘Financial Statements’ and ‘Outstanding Litigations and Defaults’ on pages 46 and 111 respectively of this Letter of Offer, no expert opinion has been obtained by the Company in relation to this Letter of Offer. Expenses of the Issue

The expenses of the Issue payable by the Company including, fees and reimbursement to the Lead Manager, Registrar to the Issue, printing and distribution expenses, publicity, listing fees, stamp duty and other expenses are estimated at Rs. 50 lakhs which is around 1.08 % of the total Issue size and will be met out of the proceeds of the Issue. Stock Market data for Equity Shares of the Company

Please refer to page 186 of the Letter of Offer for further information pertaining to stock market data for the Equity Shares of the Company. Underwriting Arrangements

The present Rights Issue is not underwritten and no underwriting arrangements are necessary

Impersonation

As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of subsection (1) of Section 68A of the Companies Act, 1956 which is reproduced below: “Any person who- a. makes in a fictitious name an application to a Company for acquiring, or subscribing for, any shares

therein, or

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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”

Important

• The present Rights Issue is pursuant to the resolutions passed by the Board at its meeting held on May 2, 2006, the shareholders approval was obtained at the Annual General Meeting held on June 17, 2006.

• This Offer is open to the Equity Shareholders of the Company whose names appear on the Register of Members of the Company as on Record date i.e. September 21, 2006.

• The shareholders will be sent the abridged Letter of Offer. Please read the abridged Letter of Offer carefully. The instructions contained in the accompanying Composite Application Form (CAF) are an integral part of the conditions of this abridged Letter of Offer/LOO and must be carefully followed; otherwise, the application is liable to be rejected.

• The shareholders will be sent the abridged Letter of Offer. Requests for the Letter of Offer must be addressed to the Registrar. All inquiries in connection with the abridged Letter of Offer/LOO or the accompanying CAF and requests for split forms must be addressed (quoting the Registered Folio Number, the CAF Number and the name of the first shareholder as mentioned on the CAF and superscribed “JMC – Rights Issue” on the envelope) to the Registrar to the Issue at the following address:

Intime Spectrum Registry Limited Unit- JMC Projects (India) Ltd.- Rights Issue C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup (West) Mumbai – 400 078 Tel: 91 22 2596 0320 Fax: 91 22 2596 0329 e-mail: [email protected]

• In case the original CAF is not received, or is misplaced by the applicant, the Registrar will issue a duplicate CAF on the request of the applicant who should furnish the Registered Folio Number and his/her full name and address it to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not utilise the original CAF for any purpose including renunciation, even if it is received subsequently. If the applicant violates any of these requirements, he/she shall face the risk of rejection of both the applications.

• It is to be specifically noted that the issue of Equity Shares is subject to Risk Factors appearing on page vi of this Letter of Offer.

• The Issue will remain open for 30 days. However, the Board will have the right to extend the Issue period as it may determine from time to time but not exceeding 60 days from the Issue Opening Date.

• All information shall be made available to the Investors by the Lead Managers and the Issuer, and no selective or additional information would be available by them for any section of the Investors in any manner whatsoever including at road shows, presentations, in research or sales reports, etc.

• The Lead Manager and the Company shall update this Letter of Offer and keep the public informed of any material changes till the listing and trading commences.

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Investor Grievances and Redressal System

The Company has adequate arrangements for redressal of investor complaints Applications for transfer of shares in physical form are processed by the Company’s Registrar & Transfer Agent M/s. Pinnacle Shares Registry Pvt. Ltd. The Share Transfer Committee constituted for transfer/transmission of shares, issue of duplicate shares and allied matters considers and approves the share transfer once in a fortnight subject to transfer instrument being valid and complete in all respects. Demat requests are processed and completed within an average period of 14 days from the date of receipt of documents, provided they are in order A Shareholders/Investor Grievances Committee has been constituted consisting of three directors; Narsinhbhai Patel (Chairman), Suhas Joshi and Kamal Jain. The committee resolves investors’ complaints like transfer of shares, non-receipt of balance sheets, non- receipt of declared dividends, etc. The Company endeavors to redress all complaints within 10 days of the receipt of the complaint. The Company has received 11 investor complaints from SEBI. The Company has initiated steps to resolve these pending complaints Changes in Auditors during the last three years

There have been no changes in the Statutory Auditors of the Company over the last three years. Capitalization of Reserves or Profits

The Company has not capitalised any of its reserves or profits for the last five years. Revaluation of Fixed Assets

There has been no revaluation of the Company’s fixed assets for the last five years.

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STOCK MARKET DATA

The Company’s shares are listed on BSE and are actively traded on the BSE.

i. The details of the share prices (adjusted) on the Stock Exchange, Mumbai during the last 3 calendar years are as follows

Year

High

(Rs.)

Date of

High

Volume On

date of high

Low

(Rs.)

Date of low Volume On

date of low

Average

price for

the year

(Rs.)

2003 21.00 22-Dec-03 106522 8.43 20-Mar-03 298 14.72

2004 40.90 15-Dec-04 345851 7.45 23-Mar-04 4475 24.18

2005 95.90 8-Jun-05 56264 29.66 25-Jan-05 21016 62.78

ii. The details of the share prices on the Stock Exchange, Mumbai during the last 6 months are as follows:

Month

High

(Rs.)

Date of

High

Volume

on date

of high

Low (Rs.) Date of low Volume

on date of

low

Average

price for

the

month

(Rs.)

Volume

for the

month

March 06 253.55 31-Mar-06 83401 123.80 1-Mar-06 18741 188.68 1949086

April 06 292.30 5-Apr-06 58959 222.05 20-Apr-06 40987 257.18 897079

May 06 271.75 12-May-06 153479 168.20 30-May-06 55133 219.98 810930

June 06 182.85 1-June-06 25438 101.00 16-Jun-06 24228 141.93 621733

July 06 135.05 3-July-06 15123 84.05 24-July-06 13425 109.55 366975

Aug 06 142.90 16-Aug-06 27297 106.25 4-Aug-06 64218 124.58 446447

iii. Week-end prices for the last four weeks on the BSE

Week

ending on

Closing price

(Rs)

High Price

(Rs)

Volume on high

price date

Date of High

Price

Low Price

(Rs)

Volume on

low price date

Date of Low

price

18 Aug 06 127.10 142.90 27297 16 Aug 06 121.00 23498 18 Aug 06

25 Aug 06 127.40 135.90 21063 22 Aug 06 121.00 6125 21 Aug 06

1 Sept 06 123.00 135.00 19816 29 Aug 06 121.30 11091 31 Aug 06

8 Sept 06 139.20 147.40 31328 8 Sept 06 122.50 15733 4 Sept 06

The market price (closing price) was Rs. 138.40 on September 6, 2006, the trading day immediately following the day on which the Meeting was held, September 5, 2006 to finalise offer price for Rights Issue.

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TERMS OF THE ISSUE

The Equity Shares being issued are subject to the terms of this Letter of Offer, the enclosed Composite Application Form, the Memorandum and Articles of Association of the Company, the approvals from the RBI and provisions of the Companies Act, 1956, guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued by Government of India and/or other statutory authorities and bodies from time to time, terms and conditions as stipulated in the allotment advice or letter of allotment or security certificate and rules as may be applicable and introduced from time to time.

Authority to the Issue

The present issue of Equity Shares is being made pursuant to the Board Resolution passed at the Board of Directors meeting held on May 2, 2006, the shareholders approval obtained at the AGM held on June 17, 2006.

Basis of the Issue

The Equity Shares are being offered on Rights basis to all the existing Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held in the electronic form and on the Register of Members of the Company in respect of Equity Shares held in the physical form at the close of business hours on the Record Date i.e. September 21, 2006 fixed in consultation with the BSE (the Designated Stock Exchange). Rights Entitlement As your name appears on the Register of Members of the Company as an Equity Shareholder on September 21, 2006, being the Record Date, you are being offered the Equity Shares as shown in Part A of the enclosed Composite Application Form. The Company has 46,46,493 outstanding warrants which are convertible into 23,23,247 equity shares at the option of the warrant holder during the conversion period (September 9, 2006 and March 8, 2007). The Company also has a one time call option during the conversion period. As per the terms of the warrant conversion, allotment of these shares would commence only in October 2006. The rights entitlement has been computed on 116,16,375 equity shares, the outstanding share capital as on the record date (September 21, 2006).

Entitlement Ratio

The Equity Shares are being offered on rights basis to the existing Equity Shareholders of the Company in the ratio of Two (2) Equity Shares for every Five (5) Equity Shares held as on the Record Date.

Fractional Entitlement

For the Equity Shares being offered on rights basis under this Issue, if the shareholding of any of the Equity Shareholders on the record date is less than Five (5) or is not in the multiples of Five (5) then any fractional entitlement of such holders for Equity Shares shall be rounded off to the next higher integer. The additional Equity Shares needed for such adjustment will be adjusted from the Promoter / Promoter group’s entitlement.

Market lot The market lot for the Equity Shares in dematerialised mode is one. In case of physical certificates, the Company would issue one certificate for the Equity Shares allotted to one folio (“Consolidated Certificate”).

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Arrangement for disposal of odd lot

Since the shares of the Company are tradable in compulsory demat segment, the minimum trading lot is one Equity Share. Since the Company has made arrangements for fractional entitlements to be converted to whole integers, the Company has not made any arrangements for disposal of odd lots. For shareholders seeking allotment in physical form, one single consolidated certificate shall be issued against their entitlement unless otherwise desired by the shareholder(s). The Company shall split the shares and return the same to the shareholder, into lots as specified and specifically requested in writing by the shareholder (who holds physical certificates) within 7 days from the date of receipt of such request by the Company without any charge.

Shareholder Eligibility

Vide notification dated 18th June, 2003, bearing number FEMA 94/2003, RBI has granted general permission to Indian companies to issue rights/bonus Equity Shares to existing non-resident shareholders. OCBs vide A.P (DIR Series) Circular No. 44, dated December 8, 2003 shall be ineligible to apply / renounce in the issue. Further, any renunciations by Non-Resident(s) are also subject to the renouncer(s)/renouncee(s) obtaining the necessary approval of the RBI under the provisions of the Foreign Exchange Management Act, 2000, and other applicable laws and such permission should be attached with the CAF. The shareholders of the Company would be entitled to apply for Equity Shares to the extent of their entitlement as detailed in Part A of the attached CAF. The shareholders can also apply for Equity Shares renounced in their favour by any other shareholder. Non Resident shareholders are allowed to apply for additional Equity Shares. Investors are advised to ensure that any application from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under the relevant regulations or statutory guidelines.

Minimum Subscription

If the Company does not receive the minimum subscription of 90% of the Issue, the entire subscription shall be refunded to the applicants within forty-two days from the date of closure of the Issue. If there is a delay in the refund of subscription by more than eight days after the Company becomes liable to repay the subscription amount, i.e. forty-two days after closure of the Issue, the Company will pay interest for the delayed period, at the rates prescribed in sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956. The Issue will become undersubscribed after considering the number of shares applied as per entitlement plus additional shares. The undersubscribed portion shall be applied for only after the Issue Closing Date. The Promoter or any other person shall subscribe to such undersubscribed portion as per the relevant provisions of the law. Allotment to the Promoter of any unsubscribed portion, over and above their entitlement shall be done in compliance with the Listing Agreement and other applicable laws prevailing at that time relating to continuous listing requirements. Issue Price

As per clause 3.1.1 of the Guidelines, a listed company whose equity shares are listed on a Stock Exchange, may freely price its equity shares and any security convertible into equity at a later date, offered through a Public or Rights issue. Each Equity Share shall have the face value of Rs.10/-. Each Equity Share is being offered at a price of Rs.100/- each (including a premium of Rs. 90/- per share).

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Terms of Payment and appropriation The entire issue price i.e., Rs. 100/-per Equity Share shall be payable on application. Rights of the Equity Shareholders

1. Right to receive dividend, if declared. 2. Right to attend general meetings and exercise voting rights, unless prohibited by law. 3. Right to vote on a poll either personally or by proxy. 4. Right to receive offer for rights shares and be allotted bonus shares, if announced; 5. Right to receive surplus on liquidation. 6. Right of free transferability; and 7. Such other rights, as may be available to a shareholder of a Public Ltd. Company under the Companies Act,

1956. Ranking of Equity Shares

The Equity Shares being issued in the Rights Issue shall be subject to the Memorandum and Articles of Association of the Company and shall rank pari-passu in all respects with the existing Equity Shares of the Company including dividends. Company undertakes that at any given time there shall be only one denomination for the Equity Shares respectively of the Company issued under this Rights Issue and that it will comply with such disclosure and accounting norms as specified by SEBI from time to time.

Acceptance of Offer

You may accept this offer either in full or in part. Please fill up Part A of the CAF for the number of Equity Shares which you would like to subscribe to and submit the same together with the application money in the prescribed manner to the Bankers to the Issue mentioned on the reverse of the CAF or to the Registrars to the Issue, as the case may be, before the close of banking hours on October 30, 2006. Additional Equity Shares

You are eligible to apply for additional shares provided you have applied for all the equity shares offered to you without renouncing them in full or in part. The application for additional equity shares shall be considered and allotment shall be made at the sole discretion of the Board and in consultation if necessary with the designated stock exchange. This allotment of additional equity shares will be made on an equitable basis with reference to number of shares held by you on the record date. Renouncees can apply for additional shares.

Renunciation

As an Equity Shareholder, you have the right to renounce your entitlement of Equity Shares in full or in part in favour of one or more person(s). Your attention is drawn to the fact that the Company shall not allot and/or register any Equity Shares in favour of: (i) more than three persons including joint holders; (ii) any Trust or Society (unless the same is registered under the Societies Registration Act, 1860 or any

other applicable Trust Laws and is authorised under its Constitution to hold Equity Shares of a Company);

(iii) Partnership firm(s) or their nominee(s); (iv) Minors (unless guardian)

190

(v) Hindu Undivided Families (HUFs) Further, any renunciations by Non-Resident(s) to a resident or by a resident to non resident or by non

resident to a non resident are also subject to the renouncer(s)/renouncee(s) obtaining the necessary

approval of the RBI under the provisions of the Foreign Exchange Management Act, 2000, and other

applicable laws and such permission should be attached with the CAF. Note: The renouncee cannot further renounce his entitlement. Procedure for Renunciation (a) To renounce the whole offer

If you wish to renounce this offer indicated in Part A, in whole, please complete Part B of the Composite Application Form. 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 joint renouncees, all joint renouncees must sign this part of the CAF.

(b) To renounce in part

If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of two or more renouncees, the CAF must be first split into requisite number of forms. For this purpose you shall have to apply to the Registrar to the Issue. Please indicate your requirement of split forms in the space provided for this purpose in Part D of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on October 16, 2006. On receipt of the required number of split forms from the Registrar to the Issue, the procedure as mentioned in para (a) above shall have to be followed.

In case the signature of the shareholder(s) who has renounced the Rights Equity Shares does not match with the specimen registered with the Company, the application will be rejected.

(c) Renouncee(s)

The person in whose favour the instruments are renounced should fill in and sign Part C and submit the entire CAF to the Bankers to the Issue on or before October 30, 2006 along with the application money. Split forms cannot be re-split.

Only the person or persons to whom Equity Shares have been offered shall be entitled to obtain split forms. Renouncee(s) shall not be entitled to obtain split forms.

Change and/or Introduction of additional holders If you wish to apply for Equity Shares jointly with any other person or persons, not more than three, who is/are not already joint holders with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure, as stated above, shall have to be followed.

Please note that: (i) 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.

191

(ii) Request for split forms, one for each of the renouncee(s) and one for the renouncer, should be made for all the Equity Shares applied for.

(iii) Only the person to whom this Letter of Offer has been addressed shall be entitled to apply for split

forms. Forms once split cannot be split again. (iv) Renouncee(s) cannot apply for split forms. (v) Split form(s) will be sent to the applicant(s) by post at the applicant's risk.

How to Apply Applications should be made only on the enclosed CAF provided by the Company. The enclosed CAF should be completed in all respects, as explained in the INSTRUCTIONS indicated in the CAF before submitting it to the Bankers to the Issue or the Registrars to the Issue. Different parts of the CAF should not be detached under any circumstance. Detailed instructions as to how to apply have been given in the CAF. You may exercise any of the following options with regard to the Equity Shares/offered to you, using the enclosed CAF:

Options available Action required

1 Accept entitlement in full Fill in and sign ‘Part A’ of the CAF

2. Accept entitlement in full and apply for additional Equity Shares

Fill in and sign ‘Part A’ of the CAF after indicating in Block IV the number of additional Equity Shares applied for.

3. Accept entitlement in part without renouncing the balance.

Fill in and sign ‘Part A’ of the CAF, after indicating in column No. III the number of Equity Shares accepted.

4. Renounce the entitlement in full to one person (renouncee) (joint renouncees are considered as one renouncee) (joint renouncees cannot exceed more than three) without applying for Equity Shares

Fill in and sign ‘Part B’ of the CAF indicating the number of Equity Shares renounced and hand over the entire CAF to the renouncee. The renouncee must fill in and sign ‘Part C’ of the CAF.

5. Accept entitlement in part and then renounce the balance to one or more renouncers or renouncees the entire entitlement in favour of more than one renouncee

Fill in and sign ‘Part D’ of the CAF for split forms after indicating the required number of split forms and send the entire CAF to the Registrars so as to reach them on or before the last date for receiving requests for split forms indicated in the CAF. On receipt of the split forms take action as indicated below: i) For the Equity Shares, if any, which you want to

accept, fill in and sign ‘Part A’ of one Split CAF. ii) For the Equity Shares you want to renounce, fill in and

sign ‘Part B’ in the required number of CAFs indicating the number of Equity Shares renounced to each renouncee.

iii) Each renouncee should then fill in and sign ‘Part C’ of the respective split CAF for the Equity Shares accepted by each renouncee.

6. 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.

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MODE OF PAYMENT

For Resident Shareholders Only one mode of payment per application should be used. Payment should be made in cash/or by cheque/demand draft drawn on any bank (including a co-operative bank) which is situated at and is a member or sub-member of the banker’s clearing house located at the centre where the application is accepted. A separate cheque/draft must accompany each application form. Outstation cheques/drafts will not be accepted and application(s) accompanied by such cheques/drafts will be rejected. The Registrars to the Issue will not accept cash along with the CAF. All cheques/ drafts accompanying the CAF should be drawn in favour of the Bankers to the Issue (specified on the reverse of the CAF), crossed "A/C Payee only" and marked “JMC - RIGHTS ISSUE". No receipt will be issued for application money received. The Bankers to the Issue/Registrars to the Issue will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF. Applicants residing at places other than places where the bank collection centres have been opened by the Company for collecting applications, are requested to send their applications together with Demand Draft (net of DD and postal charges) drawn in favour of “JMC-

RIGHTS ISSUE" and marked “A/c payee only” payable at Mumbai, directly to the Registrars to the Issue by REGISTERED POST so as to reach them on or before the closure of the Issue. The Company or the Registrar to the Issue will not be responsible for postal delays, if any.

Application by Non-Resident Shareholders

As regards the application by Non-Resident shareholders, the further conditions as given below shall apply. As per notification No. FEMA 20/2000-RB dated May 3, 2000 of the RBI, the RBI has given general permission to Indian companies to issue Rights/Bonus shares to non-resident Indians. Hence the Company does not need an in-principle permission from RBI for Issue of shares to Non-Resident Indians, on a repatriable basis, up to their entitlement. Payment by NRIs/FIIs must be made by demand draft/cheque payable at Mumbai in any of the following ways:

Application with repatriation benefits

(i) By Indian Rupee drafts purchased abroad and payable at Mumbai; OR (ii) By cheque/draft on a Non-Resident External Account (NRE) or FCNR Account

maintained in Mumbai; OR (iii) Rupee draft purchased by debit to NRE/FCNR Account maintained elsewhere in

India and payable in Mumbai; (iv) FIIs registered with SEBI must remit funds from special Non-Resident Rupee deposit account.

Application without repatriation benefits

As far as NRIs holding shares on non-repatriation basis is concerned, in addition to the ways specified above, payment may also be made by way of cheque drawn on Non - Resident (Ordinary) Account maintained in Mumbai or Rupee Draft purchased out of NRO Account maintained elsewhere in India but payable at Mumbai In such cases, the allotment of Equity Shares will be on non-repatriation basis. All cheques/drafts submitted by NRIs/FIIs should be drawn in favour of "JMC - RIGHTS ISSUE-NRI"

payable at Mumbai and must be crossed "A/c Payee only" for the amount payable. The CAF duly completed together with the amount payable on application must be deposited with the collecting bank indicated on the reverse of the CAF before the close of banking hours on October 30, 2006, the issue closing date. A separate cheque or bank draft must accompany each application form.

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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 will be liable to be rejected. Note: In case where repatriation benefit is available, dividend and sales proceeds derived from the investment in shares can be remitted outside India, subject to tax, as applicable according to Income-tax Act, 1961. In case shares are allotted on non-repatriation basis, the dividend/sale proceeds of the Equity Shares cannot be remitted outside India. In case of applications received from Non-Residents, 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 remittance and subject to necessary approvals.

General Instructions for applicants 1. Please read the instructions printed on the enclosed CAF carefully. 2. Application should be made on the printed CAF, provided by the Company 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 this Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest within the time specified 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, Bank Account Details must be filled in block letters.

3. Applicants are advised to provide information as to their savings/current account number and name of the

Bank, branch with whom such account is held in the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the names of the payees.

4. The CAF together with cheque/demand draft should be sent to the Banker to the Issue or to the Registrar to

the Issue and not to the Lead Manager to the Issue. Applicants residing at places other than cities where the branches of the Banker to the Issue have been authorised by the Company for collecting applications, will have to make payment by Demand Draft payable at Mumbai and send their application forms to the Registrars to the Issue BY REGISTERED POST after deducting DD and Postal Charges. If any portion(s) of the CAF is/are detached or separated, such application is liable to be rejected.

5. The payment against the application should not be effected in cash if the amount to be paid is Rs 20,000/- or

more. In case payment is effected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon. Payment against the application if made in cash, subject to conditions as mentioned above, should be made only to the bankers to the Issue.

6. Application for a total value of Rs. 50,000 or more i.e. where the total number of securities applied for

multiplied by the Issue Price is Rs. 50,000 or more, the applicant or in case of application in joint names, each of the applicants should mention his/her PAN number allotted under the IT act and also submit a photocopy of the PAN card(s) or a communication along with the application for the purpose of verification of the number. Applicants who do not have a PAN are required to provide a declaration in Form 60/Form 61 prescribed under the I.T. Act along with the application. CAFs without this photocopy/PAN communication/declaration will be considered incomplete and are liable to be rejected.

7. Thumb impressions and signatures other than in English, Hindi, Marathi or any other language specified in

the 8th Schedule to the Constitution of India, must be attested by a Magistrate or a Notary Public or a

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Special Executive Magistrate under his/her official seal. The shareholders must sign the CAF as per the specimen signatures recorded with the Company.

8. In case of an application under Power of Attorney or by a Body Corporate or by a Society, a certified true

copy of the relevant Power of Attorney or relevant resolution or authority to make investment and sign the application along with the copy of the Memorandum & Articles of Association and/or bye laws must be lodged with the Registrars to the Issue giving reference of the serial number of the CAF within 7 days of closure of the Issue. In case the above referred documents are already registered with the Company, the same need not be furnished again; however, the serial number of registration or reference of the letter, vide which these papers were lodged with the Company must be mentioned just below the signature(s) on the application. In no case should these papers be attached to the application submitted to the Bankers to the Issue.

9. In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per

the specimen signature(s) recorded with the Company. Further, in case of joint applicants who are renouncees, the number of applicants should not exceed three. In case of joint applicants, reference, if any, will be made in the first applicant's name and all communication will be addressed to the first applicant.

10. Application(s) received from Non-Residents, 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, dividend, export of share certificates, etc. In case a Non-Resident shareholder has specific approval from the RBI, in connection with his/ her shareholding, the person should enclose a copy of such approval with the CAF.

11. A separate application can be made in respect of each scheme of an Indian Mutual Fund registered with the

Board and that such application shall not be treated as multiple applications. The applications made by the AMCs or Custodians of a Mutual Fund shall clearly indicate the name of the concerned scheme for which Application is being made

12. All communication in connection with application for the Equity Shares, including any change in address of

the shareholders should be addressed to the Registrars to the Issue quoting the name of the first/sole applicant shareholder, folio numbers and CAF number.

Nomination Facility

The applicant may indicate the name of the nominee in the CAF, in respect of the Equity Shares that may be allocated to him or for the existing shares. As per Section 109A of the Companies Act, a holder of shares may, at any time, nominate, in the prescribed manner, a person to whom his Equity Shares in the Company shall vest, in the event of his death. Please ensure that the Bank account details in the application form are filled in the space provided for the purpose. Applications without these details are liable to be rejected.

Application on Plain Paper

Where a shareholder has neither received the original CAF nor he/she is in a position to obtain duplicate form, he/she may send his/her application on a plain paper to the Registrars to the Issue by registered post. Such application should contain necessary particulars like the name, address, ratio of Rights Issue, Issue price, number of shares held, folio number, number of Equity Shares entitled and applied for, additional Equity Shares applied for, if any, amount paid with application, particulars of cheque, particulars of the applicant’s bank account to be provided for printing on the refund orders etc. In case where the total value of application is for Equity Shares of a total value of Rs. 50,000/- or more, details of Income Tax Circle/Ward/District for the applicant and for each applicant in case of joint names. PAN or Form 60 or Form 61 as may be applicable duly filled along with a copy of any one of the following documents

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in support of the address: (a) Ration Card (b) Passport (c) Driving License (d) Identity card issued by any institution (e) Copy of electricity bill or telephone bill showing residential address (f) Any document or communication issued by any authority of the Central Government, State Government or local bodies showing residential address (g) Any other documentary evidence in support of the address given in the declaration. The applicants are specifically requested not to submit the GIR number instead of the PAN number as their application is liable to be rejected. The cheque(s)/ demand draft(s) accompanied with such applications should be payable at par at Mumbai. The applications received through the registered post shall be dealt with by the Registrar to the Issue in the normal course. No such plain paper application will be entertained if it is received after the closure of the issue. Attention of the shareholders is drawn to the fact that shareholders making applications otherwise than on the standard form shall not be entitled to renounce their rights and should not utilise the standard form for any purpose including renunciation even if it is received subsequently. If the shareholder, making an application on plain paper, violates any of these requirements he shall face the risk of forfeiture of amounts remitted along with the application forms.

Last date for Application The last date for submission of CAF is October 30, 2006. The Board will have the right to extend the said date for such period as it may determine from time to time but not exceeding sixty days from the date the issue opens. If the CAF together with the amount payable is not received by the Banker to the Issue/Registrar to the Issue on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board, the offer contained in this Letter of Offer shall be deemed to have been declined and the Board shall be at liberty to dispose off the Equity Shares hereby offered, as provided under the heading "Basis of Allotment".

Option to Investors to apply for Equity Shares in dematerialised form Applicants have the option to receive the Equity Shares of the Company in the electronic form under the depository system. The Company has entered into a tripartite agreement with Pinnacle Shares Registry Pvt. Ltd, the Registrar and Transfer Agent and CDSL and NSDL dated December 17, 1999 and December 23, 1999 respectively, for dematerialisation of the securities being offered through this Rights Issue, to enable an investor to receive and trade in securities in dematerialized (electronic/demat) form, instead of holding Equity Shares being issued in the form of physical certificates. In this Rights Issue, an option is being provided to the shareholders to receive their Rights Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant instead of receiving these Equity Shares in the form of physical certificates. Investors can opt for this facility by filling up the relevant particulars in the CAF. Applicants may note that they have the option to subscribe to the rights Equity Shares in demat or physical form, or partly in demat and physical form, in the same application in the space provided for the purpose. Separate applications for demat and physical are NOT to be made. If such applications are made, the applications for physical shares will be treated as multiple applications and rejected accordingly. In case of partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, will be allotted in physical shares. Investors may please note that the Equity Shares of the Company can be traded on the Stock Exchange

only in demat form.

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Procedure for opting for this facility for allotment of Equity Shares arising out of this Issue in 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 exhibited in the records of the Company. In case of joint holding, the Beneficiary Account should be opened carrying the names of the holders in the same order as with the Company). In case of Investors having various folios in the Company with different joint holders, the investors will have to open separate accounts for such holdings. This step need not be adhered to by those shareholders who have already opened such Beneficiary Account(s). For shareholders holding shares in dematerialised form as on 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 Rights 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 this Issue can be received in a dematerialised form even if the original Equity Shares of the Company are not dematerialised. Nonetheless, it should be ensured that the Depository Account is in the name(s) of the shareholders and the names are in the same order as in the records of the Company. Responsibility for correctness of applicant’s age and other details given in the CAF vis-à-vis those with the applicant’s Depository Participant would rest with the applicant. Applicants should ensure that the names of the applicants and the order in which they appear in CAF should be the same as registered with the applicant’s Depository Participant. If incomplete/incorrect Beneficiary Account details are given in the CAF or where the investor does not opt to receive the Rights Equity Shares in dematerialised form, the Company will issue Equity Shares in the form of physical certificate(s). The Rights Equity Shares allotted to investors opting for dematerialised 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 Registrars to the Issue but the confirmation of the credit of the Rights Equity Shares to the applicant’s Depository Account will be provided to the applicant by the applicant’s Depository Participant. Renouncees can also exercise this option to receive Equity Shares in the dematerialised form by indicating in the relevant block and providing the necessary details about their Beneficiary Account.

Basis of Allotment for Equity Shares The Board subject to provisions contained in this Letter of Offer and the Articles of Association of the Company in consultation with the Executive Director/Managing Director of the designated Stock Exchange along with the Lead Merchant Banker and the Registrar to the Issue shall be responsible to ensure that the basis of allotment is finalized in a fair and proper manner and will proceed to allot the Equity Shares in the following order of priority: (a) Full allotment to those shareholders who have applied for their rights entitlement in full or in part. Also

to the renouncee(s) who has/ have applied for Equity Shares renounced in their favour, in full or in part. (b) Allotment to shareholders who having applied for all the Equity Shares offered to them as rights have

also applied for additional equity shares. The allotment of such additional Equity Shares will be made as far as possible on an equitable basis with reference to the number of equity shares held on the Record Date in consultation with the designated Stock Exchange.

(c) Allotment to renouncees who having applied for all the Equity Shares renounced in their favour have applied for additional shares, provided there is a surplus remaining after (a) and (b) above.

(d) Allotment to any other person as the Board may in its absolute discretion deem fit provided there is a surplus available after making full allotment under (a), (b), and (c) above.

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The application for additional Equity Shares shall be considered and allotment shall be made at the absolute discretion of the Board or Committee of Directors of the Company authorised in this behalf by the Board having the power to reject any such application for additional Equity Shares without assigning any reasons and in the event of oversubscription, the allotment will be subject to the clause mentioned under ‘Basis of Allotment’ and if necessary shall be made in consultation with the “Designated Stock Exchange”. The allotment of additional Equity Shares will be made as far as possible on an equitable basis with reference to the number of Equity Shares held by you on the Record date. In the event of under-subscription, the unsubscribed portion shall be disposed off by Board of Directors authorised in this behalf by the Board upon such terms and conditions and to such person/persons and in such manner as the Board may in its absolute discretion deem fit. The word “undersubscribed” above shall mean undersubscribed as defined in Regulation Number 3 (1) (b) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

Disposal of Application and Application Money No separate receipt will be issued for the application money received. However, the Bankers to the Issue/Registrars to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgement slip at the bottom of each CAF. The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part, and in either case, without assigning any reason. In case an application is rejected in full, the whole of the application money received will be refunded within the time specified without interest and after deducting bank charges. 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 without interest and after deduction of bank charges to the applicant within six weeks from the close of the Issue.

Utilisation of Proceeds

The subscription received against the Rights Issue will be kept in specific bank accounts and the Company would not have access to these funds unless it satisfies Bombay Stock Exchange Limited, the designated Stock Exchange, with suitable documentary evidence that the minimum subscription of 90% of the Issue amount has been received.

Allotment and Refund Orders Share certificate / letter of allotment or letter of regret together with refund order exceeding Rs 1,500, if any, will be dispatched by registered post at the sole/first named applicant’s address within 42 days from the date of the closing of the Issue. Refund orders up to Rs 1,500 will be dispatched under certificate of posting. Adequate funds will be made available to the Registrars for this purpose. If such money is not repaid within 8 days from the day the Company becomes liable to pay it, the Company shall pay that money with interest as stipulated under Section 73 of the Act. Applicants residing at 15 centers where clearing houses are managed by the Reserve Bank of India (RBI), will get refunds through ECS only (Electronic Clearing Service) except where Applicants are otherwise disclosed as applicable/eligible to get refunds through direct credit and RTGS. The applicants can also opt for refunds by cheques or pay orders drawn on the bank(s) appointed by the Company as refund bankers. Such instruments will be payable at par at the places where applications were accepted and will be marked account payee and will be drawn in the name of Sole/First Applicant. Bank charges, if any, for encashing such cheques or pay orders will be borne by the applicants.

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In case of those shareholders who have opted to receive their Equity Shares in dematerialised form through electronic credit under the depository system, an advice regarding the credit will be sent separately. In case the Company issues Letters of Allotment, the corresponding Security 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, 1956 or other applicable provisions, if any. Allottees are requested to preserve such Letters of Allotment, which would be exchanged later for the Security Certificates. For non-resident applicants, refunds, if any, will be made as under: Where applications are accompanied by Indian rupee drafts purchased abroad and payable at Mumbai, India, refunds will be made in convertible foreign exchange equivalent to Indian rupees to be refunded. Indian rupees will be converted into foreign exchange at the rate of exchange, which is prevailing on the date of refund. The exchange rate risk on such refunds shall be borne by the concerned applicant and the Company shall not bear any part of the risk. Where the applications made are accompanied by NRE/FCNR/NRO cheques, refunds will be credited to NRE/FCNR/NRO accounts respectively, on which such cheques were drawn and details of which were provided in the CAF. Mode of making refunds

The payment of refund, if any, would be done through various modes in the following order of preference: 1. ECS – Payment of refund would be done through ECS for applicants having an account at any of the

following fifteen centres: Ahmedabad, Bangalore, Bhubaneshwar, Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna and Thiruvananthapuram. 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 payment of refunds is mandatory for applicants having a bank account at any of the abovementioned fifteen centres, except where the applicant, being eligible, opts to receive refund through NEFT, direct credit or RTGS.

2. NEFT (National Electronic Fund Transfer) – Payment of refund shall be undertaken through NEFT wherever the applicants’ bank has been assigned the Indian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character Recognition (MICR), if any, available to that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the applicants have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the applicants through this method.

3. Direct Credit – Applicants having bank accounts with the Refund Banker(s), in this case being, [•] shall be eligible to receive refunds through direct credit. Charges, if any, levied by the Refund Bank(s) for the same would be borne by the Company.

4. RTGS – Applicants having a bank account at any of the abovementioned fifteen centres and whose refund amount exceeds Rs. 1 million, have the option to receive refund through RTGS. Such eligible applicants who indicate their preference to receive refund through RTGS are required to provide the IFSC code in the Bid-cum-application Form. In the event the same is not provided, refund shall be made through ECS. Charges, if any, levied by the Refund Bank(s) for the same would be borne by the Company. Charges, if any, levied by the applicant’s bank receiving the credit would be borne by the applicant.

5. For all other applicants, including those who have not updated their bank particulars with the MICR code, the refund orders will be despatched under certificate of posting for value up to Rs. 1,500 and through Speed Post/ Registered Post for refund orders of Rs. 1,500 and above.

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Printing of Bank Particulars on Refund Orders As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the applicant’s bank account are mandatory and are to be provided for printing on the refund orders. Bank account particulars will be printed on the refund orders which can then be deposited only in the account specified. The Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud.

Interest in Case of Delay in Dispatch of Allotment Advice/ Refund Orders

The Company agrees that: (i) Allotment of securities hereby offered shall be made within a period of 30 days of the date of closure of

the issue. (ii) If Allotment is not made and /or Share certificate / letter of allotment or letter of regret together with

refund order are not dispatched within 8 days from the day the Company becomes liable to pay it, the Company shall, as stipulated under sections 73(2)/73 (2A) of the Companies Act, 1956, pay that money with interest at the rate of 15% p.a..

Dispatch of Allotment Advice/ Share Certificates/ Refund Orders Particulars of the applicant’s Savings/Current Bank Account may be given in the space provided thereof in the application form so as to enable the Registrars to the Issue to print the same on the refund order, if any. As regards allotment/refund to Non-Residents, the following further conditions shall apply: In case of NRIs, who remit their application monies from funds held in NRE/FCNR accounts, refunds and/or payment of dividend and other disbursement, if any, shall be credited to such accounts, details of which should be furnished in the CAF. Subject to the approval of the RBI, in case of NRIs/Non Residents, who remit their application monies through Indian Rupee draft purchased from abroad, refund and/or payment of dividend and any other disbursement, shall be credited to such accounts, details of which should be furnished in the CAF. Subject to the approval of RBI, in case of NRIs/Non Residents, who remit their application monies through Indian Rupee draft purchased from abroad, refund and/or payment of dividend and any other disbursements will be made net of bank charges/commission in U.S Dollars, at the rate of exchange prevailing at such time. The Company will not be responsible for any loss on account of exchange fluctuations for converting the Indian Rupee amount into U.S Dollars. The share certificates for the Equity Shares will be sent by registered post at the address of the NRI / non-resident applicant.

Undertakings by the Company

The Company has given undertakings that: 1. The complaints received in respect of the Issue shall be attended to by the Company expeditiously and

satisfactorily. 2. All steps for completion of the necessary formalities for listing and commencement of trading at BSE where

the securities are to be listed will be taken within seven working days of finalization of basis of allotment. 3. The funds required for dispatch of refund orders/ allotment letters/ certificates by registered post/ECS shall

be made available to the Registrar to the Issue. 4. The certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within the

specified time. 5. No further issue of securities affecting equity capital of the Company shall be made till the securities

issued/offered through the Issue are listed or till the application moneys are refunded on account of non-listing, under-subscription etc except in case of the conversion of outstanding warrants into equity shares. These were allotted in the Rights Issue vide Letter of Offer dated June 20, 2005. The warrant conversion period commenced on September 9, 2006 and will close on March 8, 2007. In case any warrant holder

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exercises his option or the Company makes a call option to convert the warrant into equity shares, the Company will issue and allot equity shares to such warrant holders.

6. Other than the disclosures made in the instant Letter of Offer, nothing material has changed in respect of disclosures made by the Company at the time of their previous rights issue vide Letter of Offer dated June 20, 2005.

7. The Company will make a copy of the offer document of the immediately preceding rights issue, available to the public as specified under clause 5.6.2(ii) and also as a document for public inspection.

8. The Company accepts full responsibility for the accuracy of information given in this Letter of Offer and confirms that to the best of its knowledge and belief, there are no other facts, the omission of which makes any statement made in this Letter of Offer misleading and further confirms that it has made all reasonable enquiries to ascertain such facts.

9. All information shall be made available by the Lead Managers 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.

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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The documents can be viewed during the Issue period between 10.00 a.m to 4.00 p.m at the Registered Office of the Company and at the office of the Lead Manager mentioned in this Letter of Offer. 1. Memorandum of Understanding dated July 11, 2006 between the company and Inga Advisors Private

Limited, Lead Manager to the Issue 2. Memorandum of Understanding dated July 7, 2006 with Intime Spectrum Registry Limited, Registrar to the

Issue 3. Memorandum of Understanding dated March 25, 2003 with Pinnacle Shares Registry Pvt. Ltd., Registrar to

the Company 4. Tripartite Agreement dated December 23, 1999 between the Company, NSDL & Pinnacle shares Registry

Pvt. Ltd., Registrar to the Company 5. Tripartite Agreement dated December 17, 1999 between the Company, CDSL & Pinnacle shares Registry

Pvt. Ltd., Registrar to the Company Documents for Inspection

1. Memorandum & Articles of Association of JMC Projects (India) Ltd., as amended from time to time 2. Initial certificate of incorporation of JMC Projects (India) Ltd. dated June 5, 1986 and subsequent

certificates of incorporation consequent to change of name of the company 3. Fresh certificate of Incorporation dated February 4, 1994 consequent upon change of name on conversion to

a public limited company. 4. Certified copy of the Board resolution held on May 2, 2006 for the proposed Rights Issue 5. Resolution passed under 81(1A) of the Act, at the Annual General Meeting of the Company held on June

17, 2006 6. Initial listing agreement entered into with Bombay Stock Exchange Limited 7. Application made to the BSE for listing 8. Working Capital facilities sanction letters from Oriental Bank of Commerce, The Karur Vysya Bank Ltd.,

State Bank of India and Andhra Bank 9. Consent letter, NOC, Loan Sanction letter from UTI Bank Ltd and all related documents 10. Sanction letter for Bridge Loan from Karur Vysya Bank 11. Consent from the directors, compliance officer, Auditor, Lead Manager, Registrar to the Issue, Bankers to

the Issue, Bankers to the Company and Legal Advisor to the Company to act in their respective capacities 12. Consent letters from Oriental Bank of Commerce, The Karur Vysya Bank Ltd., State Bank of India Andhra

Bank for the Rights Issue 13. Auditor’s report dated July 6, 2006 included in the offer document and copies of the balance sheet referred

to in the said report

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14. Certificate dated July 5, 2006 and July 17, 2006 for Outstanding Litigations and Defaults from Singhi & Co., Legal Advisors to the Issue

15. MOU dated October 1, 2004 for sale of shares in JMC Projects (India) Ltd. 16. Share Purchase Agreement dated October 14, 2004 & Addendum dated February 11,2005 17. Letter of Offer dated November 9, 2004 by KPTL for the open offer of shares in the Company 18. Remuneration agreement entered into between the company and Mr. Hemant Modi, Vice Chairman, Mr.

Suhas Joshi, Managing Director and Mr. M .D. Khattar, Managing Director 19. Prospectus of the Initial Public Offering made in the year 1994 by the company 20. Annual Reports of JMC Projects (India) Ltd. for the financial years 2005-06, 2004-05, 2003-04, 2002-03

and 2001-02. 21. Purchase orders and quotations for equipment 22. Certificate from Auditors for Deployment of Funds 23. Due diligence certificate dated July 18, 2006 to SEBI from Inga Advisors Private Limited 24. Copy of in-principle approval from BSE dated August 29, 2006 25. SEBI observation letter dated August 31, 2006. 26. Rights issue offer document dated June 20, 2005

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DECLARATION

No statement made in this Letter of Offer shall contravene any of the provisions of the Companies Act, 1956

and the rules made thereunder. All the legal requirements connected with the said issue as also the guidelines,

instructions etc issued by SEBI, Government and any other competent authority in this behalf have been duly

complied with.

Yours faithfully

For JMC Projects (India) Limited

Signed by Directors, Company Secretary

Mr. Vijay Choraria, Chairman Mr. Hemant Modi, Vice Chairman Mr. Suhas Joshi, Managing Director Mr. M.D. Khattar, Managing Director Mr. Narsinhbhai Patel, Director Mr. Ajay Munot, Director Mr. Kamal Jain, Director Mr. Mahendra G Punatar, Director * Mr. Ashish Shah, Company Secretary Place: Ahmedabad Date: September 14, 2006

*Through his constituted attorney Mr. Kamal Jain.

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