INDIA SECURITIES LIMITED 2

iii)The excess or deficit , if any, of the value ofthe assets over the value of the liabilities of theTransferor Company, as recorded pursuant to thisScheme after taking into consideration:(a)(b)The cancellation of the value of investmentsin the Transferor Company appearing in thebooks of the Transferee Company; andThe cancellation of inter-company balancesbetween the Transferor Company andTransferee Company;Shall be recorded as and credited to theCapital Reserve or debited to Goodwillas the case may be in the books of theAmalgamated Company in accordance withpara 37 of Accounting Standard 14.iv) Notwithstanding the above, the TransfereeCompany, in consultation with the auditors, isauthorised to account any of these balances in anymanner whatsoever, if considered more appropriatein accordance with Accounting Standard 14.w) Upon the Scheme becoming effective, the TransferorCompany shall, without any further act or deed, standdissolved without winding up.x) This Scheme is specifically conditional upon and subjectto the sanction of the High Court of Judicature at Madrasbeing obtained under Sections 391 to 394 and otherapplicable provisions of the Act, if so required on behalf ofthe Transferee Company and the Transferor Company.14. The main benefits of the Scheme of Amalgamation will be asfollows:14.1 Transferor Company is wholly owned by TransfereeCompany and the amalgamation will result in reduction inthe shareholding layers and facilitate direct control overassets of Transferor in the hands of Transferee Company.14.2 Interests of any creditor of Transferor Company orshareholder or creditor of Transferee Company shall not beprejudiced as a result of the Scheme. The Amalgamationwill not impose any additional burden on the members ofTransferor Company or Transferee Company.15. The Scheme would not be prejudicial to the interests of thecreditors (secured and unsecured) of any of the Companies. Thelatest audited accounts for the year ended 31 st March 2010 of thecompanies indicate that they are in a solvent position and wouldbe able to meet liabilities as may arise in the course of business.Hence, the amalgamation will not cast any additional burden onthe shareholders of either Company, nor will it affect the interest ofany of the shareholders or creditors.16. In compliance with the Listing requirements, the ApplicantCompany has duly submitted a copy of the proposed Scheme tothe Bombay Stock Exchange Ltd., not less than one month beforefiling the application before the Hon’ble Court. The said stockexchange has accorded its consent to the Scheme vide its letterdated 7th June, 2011.17. Under Section 391 of the Companies Act, 1956, the proposedScheme will have to be approved by a majority in numberrepresenting three-fourths in value of the Equity Shareholderspresent and voting either in person or by proxy at the meeting. Aproxy form is enclosed. It is hoped that in view of the importanceof the business to be transacted, you will personally attend themeeting. The signing of the form or forms of proxy will, however,not prevent you from attending and voting in person, if you sodesire.18. The Resolution proposed to be considered in the above meeting,is given hereunder:“RESOLVED THAT the Scheme of Amalgamation of ETHLCommunications Holdings Limited with India Securities Limited,placed before the meeting and initialled by the Chairman for thepurpose of identification, be and is hereby approved.RESOLVED FURTHER that the Board of Directors of the Companybe and is hereby authorised to make and / or consent to anymodifications, alterations or amendments in the scheme, whichmay be deemed to be necessary by them or which are desired,directed or imposed by the Hon’ble High Court of Judicature atMadras or any other authority and to take all such steps as maybe necessary and desirable to implement the Scheme and to giveeffect to this resolution.”19. No investigation proceedings have been instituted or are pendingunder Sections 235 to 251 of the Companies Act, 1956, in respectof the Transferee Company or the Transferor Company.20. The Scheme does not in any way violate or override orcircumscribe the provisions of the Securities and ExchangeBoard of India Act, 1992, the Securities Contracts (Regulation)Act, 1956, the Depositories Act, 1996, the Companies Act, 1956,the rules, regulations and guidelines made under these Actsand the provisions of the Listing Agreement or the requirementsof the Stock Exchange where the equity shares of the ApplicantCompany are listed. Disclosure under Sections 391 to 394 of theCompanies Act, 1956, as required by the Securities and ExchangeBoard of India is enclosed as an addendum to this statement andshall be deemed to form part of this explanatory statement.21. (a) The Directors of the Applicant Company have no interestin the Scheme except as shareholders in general, theextent of which will appear from the Register of Directors’Shareholding maintained by the Transferor Company andthe Transferee Company, which are as follows:The Directors of the companies concerned are:ETHL CommunicationsHoldings Limited[Transferor Company]India Securities Limited[Transferee Company]1. Shri V. G. Raghavan 1. Shri S. V. Venkatesan2. Shri Amit Gupta 2. Shri M. P. Mehrotra3. Shri Girish Sathe 3. Shri Vikash Saraf7