i. The Offer is subject to approval of Reserve Bank of India under the Foreign Exchange Management Act, 1999, for transferring 54,18,838 equity shares of Rs.10/- each fully paid and 73,96,600 Preference Shares of Rs.10/- each fully paid, by Network Foods International Limited to the Acquirers.

j. Mr. Chan Chong Lum and Mr. Sushil Premchand will resign from the Board of Directors of the Target Company and both the Acquirers i.e., Shri Alapati Ramakrishna and Shri Devabhuktuni Durga Prasad will be inducted as Directors of the Target Company

a. A Public Announcement, as per Regulation 15 (1) of the Regulations, was made in the following Newspapers, announcing the intention of the Acquirers to acquire 25,68,210 Equity Shares representing 20.00 % of the subscribed Capital (20.01% of the voting Capital & 20.00 % of the paid up capital) of LCC through an Open Offer.

The above Public Announcement and Revised Public Announcement were issued in all the editions of Business Standard, Andhra Bhoomi and Hyderabad Edition of Daily Hindi Milap.

The Public Announcement made on 27^th August, 2003 and Revised Public Announcement made on 4^th September, 2003 is also available on the SEBI website at www.sebi.gov.in

b. The Acquirers proposes to acquire the Fully paid Equity Shares, at a price of Re. 1.00/- (Rupee One only). The Offer is made only for fully paid up shares and no partly paid up share will be acquired

c. The consideration will be paid in Cash.

d. This is not a competitive bid.

e. This Offer is not conditional as to any minimum level of acceptance.

f. The Acquirers do not hold any Equity Shares in the Target Company as on date of the Public announcement, i.e. Wednesday, 27^th August 2003.

g. The Acquirers have not acquired any Shares since the date of PA.

h. The Acquirers have not been allotted any Equity Share of LCC by way of allotment in a public or rights or preferential issue during the twenty six week period prior to the date of Public Announcement. The Acquirers have also not acquired any Share of LCC, in any manner during the preceding 12 months from the date of this Public Announcement.

a. The Specified date for determining the eligibility of Shareholders for participating in this Offer is Saturday, September 20,2003.

b. The Specified date is only for the purpose of determining the names of the Shareholders as on such date, to whom the Letter of Offer would be sent and all owners (registered or unregistered) of Shares of Lotus Chocolate Company Limited anytime before the closure of the Offer, are eligible to participate in the Offer

a. Shri Alapati Ramakrishna is an Engineering Graduate. He worked as a Plant Engineer with Kesoram Cement Ltd., for about 4 years, worked as Mechanical Engineer with Gulf Cement Company, UAE, which was managed by Ube Industries, Japan for about 13 years. He also worked as General Manager with National Council for Cement & Building Material for about 2 years. He promoted a Niharika Polymers Pvt. Ltd., which is manufacturing, dealing etc of packing materials of all types of Jars, bottles, bags, boxes etc. Accordingly he worked as an Engineer in various positions in Japan, Dubai and Saudi Arabia for 14 years and has been in manufacturing field since 1999 in India. The Networth of Shri Alapati Ramakrishna as on 25-08-2003 is Rs. 2,02,81,862/- ( Rupees Two Crore Two Lakh Eighty One Thousand Eight Hundred and Sixty Two only) as certified by A.P.P.Kasipathi Partner of M/s. Yaji Associates, Chartered Accountants, 10-3-281/1/301, 3^rd Floor, K.H.R.Buildings, Humayun Nagar, Mehedipatnam, Hyderabad-500 028, Ph No. (040) 2353 2597/8, (Membership No.19442)

b. Shri Devabhuktuni Durga Prasad is a Chartered Accountant. He worked as Accounts Officer and Systems Analyst with Associate Cements Company Limited for about 4 years and also worked as Finance Manager for Fujairah Cement Industries, Fujairah, UAE, which is one of the largest cement manufacturers in UAE. He has an overall experience of 25 years in the field of Finance, Investments, Accountancy and Stock Broking both in India and Abroad. He is a partner of M/s Durga Prasad & Co, member of the National Stock Exchange of India Limited since 29-02-1996. The Networth of Shri Devabhuktuni Durga Prasad as on 24-08-2003 is Rs.2,63,11,849/- ( Rupees Two Crore Sixty Three Lakh Eleven Thousand Eight Hundred and Forty Nine only/-) as certified by G. Jagadeswara Rao, Partner of M/s. S.R.Mohan & Co., Chartered Accountants, III Floor, North Block, Raghava Ratna Towers, Chirag Ali Lane, Hyderabad � 1, Ph No. (040) 23201123/1223, Fax. No (040) 23205535, (Membership No.21361)

c. Brief information on the Acquirers is given hereunder:

d. Since the acquirers are not having any shares in LCC, the disclosures under Chapter II of Regulations are not applicable.

e. There is no formal agreement entered into between the acquirers with regard to the offer/ acquisition of shares.

f. (i) Shri Devabhuktuni Durga Prasad has promoted M/s Durga Prasad Securities Private Limited. M/s Durga Prasad Securities Private Limited was incorporated on February 16, 2000 and the Company is yet to commence its operations.

As certified by G. Jagadeswara Rao, Partner of M/s. S.R.Mohan & Co., Chartered Accountants, III Floor, North Block, Raghava Ratna Towers, Chirag Ali Lane, Hyderabad � 500 001, (Membership No.21361), the Auditors of the Company, the first Balance Sheet of M/s Durga Prasad Securities Private Limited, was prepared as on 31/03/2002. The financial details of M/s Durga Prasad Securities Private Limited as taken from the said certificate, are as under:

(Rs In Lacs)

Particulars	31.03.2003	31.03.2002
Equity capital	0.25	0.25
Reserves (excluding revaluation reserves)	0	0
Total Income	0	0
Profit After Tax (PAT)	0	(0.05)
Earnings Per Shares (EPS)	0	0
Net Asset Value	8	8

(ii) M/s Durga Prasad & Co., a partnership firm, wherein Shri Devabhuktuni Durga Prasad is a partner, is a member of the National Stock Exchange of India Limited, which has been dealing as a stock broker since 29-02-1996. The financial details of M/s Durga Prasad & Co., as taken from the financial statements as filed with the Income Tax Department, are as under:

(Rs In Lacs)

(iii) Shri Alapati Ramakrishna has promted M/s Neeharika Polymers Private Limited. M/s Neeharika Polymers Private Limited was incorporated on 18.09.1997 and it is mainly engaged in manufacturing, dealing etc of packing materials of all types of Jars, bottles, bags, boxes etc.

The financial details as taken from the Audited Balance Sheets, of M/s Neeharika Polymers Private Limited are as under

( Rs in Lacs)

The above companies/firm are not sick industrial companies.

a. The Offer to the Shareholders of LCC is for substantial acquisition of Shares by the Acquirers accompanied with change in Management of the Target Company.

b. The acquirers do not have any specific future major expansion plan as on the date of Public Announcement.

c. As on the date of Public Announcement, the acquirers do not have any intention to make any major change to the existing line of business of the Target Company, or to dispose off or otherwise encumbrance of any assets of Target Company in succeeding two years except in ordinary course of business of the target company. They undertake that they shall not sell, dispose of or otherwise encumber any substantial assets of the target company except with the prior approval of the shareholders.

a. Securities & Exchange Board of India (SEBI) / The Stock Exchanges have not initiated any enquiries, or awarded any penalties against the Acquirers, other ventures of the Acquirers/Group/associate Companies or Companies in which the Acquirers are interested. No such action is also taken against the Target Company.

b. M/s Durga Prasad & Co., a partnership firm, wherein Shri Devabhuktuni Durga Prasad is a partner, is a member of the National Stock Exchange of India Limited, which has been dealing as a stock broker since 29-02-1996. Except the said firm no other Company/venture promoted by the Acquirers or belonging to the Group is registered with SEBI as a market intermediary.

c. Securities & Exchange Board of India (SEBI) / The Stock Exchanges have not initiated any enquiries, or not taken any action against M/s Durga Prasad & Co. The said firm, in the normal course of trade has paid necessary penalties to the National Stock Exchange of India Limited (NSEIL) for non-compliance of its Rules, Regulations and By-laws

If pursuant to this Offer and/or acquisition of shares from the open market or through negotiation or otherwise, the public shareholding falls to 10% or less of the voting capital of the Target Company, then in accordance with Regulations, the Acquirers undertake to disinvest through an offer for sale or by a fresh issue of capital to the public, which shall open within a period of 6 months from the date of closure of public offer, such number of shares so as to satisfy the listing requirements.

4. BACKGROUND OF THE TARGET COMPANY

a. LCC was incorporated as a Public Limited Company on 3^rd October, 1988, at Hyderabad under the Companies Act, 1956.

b. The Registered Office of LCC is situated at #403, 4^th Floor, Diamond House, Punjagutta, Hyderabad � 500 082

c. LCC was originally promoted by Sri Vijayaraghavan Nambiar, an engineer with post graduation in industrial management and past experience in manufacturing cocoa products and chocolates, Smt. T. Sarada, a renowned actress of Indian Cinema and APIDC, an AP state owned corporation for promoting industries. In September, 1993 the company offered its controlling stake to the tune of 30.77 Lacs equity shares to Sunshine Allied Investments Limited (SAIL), Singapore. In May 1994 SAIL brought in an additional Rs. 206.13 Lacs for 17.2 Lacs equity shares at a premium of Rs. 2/- towards equity capital, thereby the holding became 51%. There upon LCC became subsidiary of SAIL. On 12-8-1995 the SAIL has changed its name from Sunshine Allied Investments Limited to Pengkalen Investments Limited. On 05-09-1997 Pengkalen Investments Limited changed its name to Network Foods International Limited. The promoter group presently holds 67,02,858 Equity Shares of Rs. 10/- each in LCC, constituting approximately 52.20 % of the issued and paid up Equity Capital and 73,96,600 Preference Shares of Rs. 10/- each constituting 100.00 % of the preference Capital.

d. The Authorized Capital of LCC as on date is Rs. 2200 Lacs comprising of Rs 1400 Lacs Equity Share Capital divided into 140 Lacs Equity Shares of Rs. 10/- each and of Rs 800 Lacs Preference Share Capital divided into 80 Lacs Preference Shares of Rs 10/- each. The Issued & Subscribed Capital is 1,28,41,049 Equity Shares of Rs. 10/- each aggregating to Rs. 1284.10 Lacs and 73,96,600 Preference Shares of Rs. 10/- each aggregating to Rs. 739.66 Lacs. The Paid up Capital of LCC as on 31st December 2002 is Rs. 2023.46 Lacs since there are calls in arrears to the tune of Rs.0.30 Lacs on 6000 Equity Shares.

e. LCC has, as its main objects, business of manufacturing, buying, selling, import and export of all kinds of chocolate produc3ts, chocolate confectionary, derivatives of cocoa and beverages etc.

f. LCC is engaged in manufacture of Chocolates/ Cocoa Products.

g. No action has been taken by the Stock Exchanges or SEBI against the Acquirers, LCC.

Paid up Equity Shares of Target company	No .of Shares/ voting rights	% of shares/voting rights
Fully paid up equity shares	1,28,35,049/1,28,35,049	99.95%/100%
Partly paid up equity shares	6,000/NIL	0.05%/NIL
Total paid up equity shares	1,28,41,049/1,28,35,049	100%/100%
Total voting rights in Target company	1,28,41,049/1,28,35,049	100%/100%

As per Article 87 " No member shall be entitled to vote either personally or by proxy for another Member at any General Meeting or a class of shareholders either upon a show of hands or upon a poll in respect of any shares registered in his name on which any class or other sums presently payable by him have been paid or in regard to which the Company has exercised, any right of lien."

4.3 There are no outstanding instruments in the nature of warrants/fully convertible debentures/partly convertible debentures etc., which are convertible into equity at any later date.

4.4 The Seller, Promoters and other major shareholders have complied with the applicable provisions of Chapter-II of SEBI (SAST) Regulations. However the Company has defaulted in filing declarations under Regulations 6 & 8 of SEBI (SAST) Regulations. The Company has filed all pending declarations under Regulations 6 & 8 under the SEBI (Regularization Scheme) 2002.

4.5. LCC has been complying with the listing requirements of the Stock Exchanges without default except the following:

1. The intimation for Book Closure for the year 2000 and 2001 was given for a period less than 30 days. The company received a Show cause notice from BSE in this respect. The Company has given necessary replies and no punitive action in this regard has been taken by BSE.
2. The Listing Fee for the year 2003-2004, of BSE and HSE, has not yet been paid. No punitive action in this regard has been taken by the respective Stock Exchange.

4.6. As on the date of Public Announcement i.e 27/08/2003, composition of Board of Directors of LCC is Shri. R. Badrinarayanan (Managing Director), Shri. Sushil Premchand, Shri. Chan Chong Lum, Dr. Easo John, Ms. T. Sarada, and Shri J. Harinarayan, IAS. As informed by the Company vide its letter dated 06/09/2003, Mr Badrinarayan has tendered his resignation on 03/09/2003, from the position of Managing Director, and Dr. Easo John has tendered his resignation on 01/09/2003 from the directorship. There are no directors representing the acquirers on the Board of Directors of LCC

4.7. No merger/ demerger, spin off have taken place during the last 3 years and also no change of name was made since the incorporation of LCC.

Brief Audited financial details of LCC for the last 3 years are furnished as under :

(Amount Rs. In lacs)

Profit & Loss Statement	31.12.2000 (Audited)	31.12.2001 (Audited)	31.12.2002 (Audited)	30.06.2003 (Provisional)
Income from operations	1315.46	1010.12	511.56	98.49
Other Income	37.60	47.04	218.87	99.68
Total Income	1353.06	1057.16	730.43	198.17
Total Expenditure.	1357.37	1527.83	726.49	222.71
Profit/(Loss) Before Depreciation Interest and Tax	(4.31)	(470.67)	3.94	(24.54)
Depreciation	92.35	99.70	105.12	52.39
Interest	70.53	62.87	50.56	19.46
Profit Before Tax	(167.19)	(633.24)	(151.74)	(96.39)
Provision for Tax	0	0	0	0
Profit After Tax	(167.19)	(633.24)	(151.74)	(96.39)

Balance Sheet Statement	31.12.2000 (Audited)	31.12.2001 (Audited)	31.12.2002 (Audited)	30.06.2003 (Provisional)
Sources of funds :
Paid up share capital	2023.46	2023.46	2023.46	2023.46
Reserves and Surplus (excluding revaluation reserves)	394.68	394.68	394.68	394.68
Networth*	582.13	250.04	81.46	(14.94)
Secured loans	626.38	531.97	531.27	506.81
Unsecured loans	231.06	248.48	249.41	248.81
Total	3275.58	3198.60	3198.83	3173.76
Uses of funds :
Net fixed assets	927.71	859.22	759.28	707.45
Investments	0.25	0.26	0.16	0.16
Net current assets	511.60	171.02	102.70	33.07
Total miscellaneous expenditure not written off	1836.02	2168.09	2336.69	2433.08
Total	3275.58	3198.60	3198.83	3173.76

Other Financial Data	31.12.2000 (Audited)	31.12.2001 (Audited)	31.12.2002 (Audited)	30.06.2003 (Provisional)
Dividend (%)	0	0	0	0
Earning Per Share (Rs)	(1.30)	(4.93)	(1.18)	(0.75)
Return on Networth (%)	(28)	(253)	(186)	(645)
Book Value Per Share$	2.88	1.23	0.40	(0.07)

$= For calculating book value of Share if contingent liability for accrued unpaid preference dividend as detailed above is reduced, the networth for financial year ending 31.12.2000, 31.12.2001 & 31.12.2002 would be Rs. 405.22 Lakhs, Rs. (0.83) Lakhs & Rs. (243.37) Lakhs respectively . Accordingly the Book Value per Share would be Rs. 2.00, Rs. (0.004) & Rs. (1.20) respectively.

During the year ended 31^st December 2001 preliminary expenses and Share issues expenses of Rs 15.67 lacs and deferred revenue expenditure of Rs 366.67 lacs was written �off as per the advise made by NFIL( holding Company) in line with the International accounting guidelines(SAS-34) in Singapore. This has resulted in loss for the said year being increased by Rs 275.64 Lacs.

The above information is based on the Annual Audited Accounts for the year ended 31^stDecemeber 2000, 31^st December 2001, 31^st December 2002. The unaudited (provisional) finanancial statements for the half year ended 30.06.2003 was certified by the management of LCC and auditors of LCC, M/s K. Vijayaraghavan & Associates.

The number of Shareholders in the �Public Category� as on Record Date (i.e. 20-09-2003) is 17,207

5. OFFER PRICE AND FINANCIAL ARRANGEMENTS

5.1. Justification of Offer price

a. The Equity Shares of LCC are listed at BSE and HSE. The Equity Shares are not admitted as permitted security in any other Stock Exchange.

b. The annualized trading turnover of Equity Shares of LCC, during the preceding 6 calendar months prior to the month in which Public Announcement was made. i.e. during February 2003 to July 2003 (both inclusive) is 1,95,659 Equity Shares ,at BSE and there is no trading on HSE . The Shares are thus infrequently traded at BSE and HSE in terms of Regulation 20(5).

c. The trading data is as under:

Name of stock exchange(s)	Total no. of shares traded during the 6 calendar months prior to the month in which PA was made.	Total No.of listed Shares	Annualized Trading turnover (in terms of % to total listed shares)
The Stock Exchange, Mumbai	1,95,659	1,28,41,049	3.05
The Hyderabad Stock Exchange Limited	NIL	1,28,41,049	NIL

The trading volume data of BSE has been taken from the Stock Exchange's official website www.bseindia.com.

d. Since the Equity Shares of LCC are infrequently traded as per explanation (i) under Regulation 20(5) at the BSE during the 6 calendar months preceding the month in which the Public Announcement is made, the Offer price has been justified, taking into account, the following parameters, as set out under Regulations 20(5).

Thus the offer price of Re 1.00/- (Rupee One only) is justified in terms of Regulation 20(5) of the Regulations. LCC has 6,000 shares with calls in arrears of Rs. 5/- each aggregating to Rs. 30,000/-. The offer is only for fully paid up shares and no partly paid up share will be acquired.

Note: While calculating the above parameters the accumulated unpaid preference dividend is not considered. If it is considered, the Return on Networth, Book Value per share, Earning Per Share would be negative

e. There is no non-compete agreement for payment to any person.

f. The Offer price is justified in terms of Regulation 20 (11) of the Regulations

g. This is not a competitive bid.

h. In the event of any further Acquisition by the Acquirers after the Public Announcement and any time till Wednesday, 5^th November, 2003 and in the event of such acquisition price being higher than the price offered under this Offer, the Offer price will be revised upwardly to ensure that the price offered under this Offer is not less than the highest price paid for any such acquisitions. Any such upward revision will be notified through an announcement in all dailies where the original Public Announcement was made.

i. The last date for any upward revision is Wednesday, 5^th November 2003

5.2. Financial arrangements :

a. Assuming full acceptance, the total funds requirements to meet this Offer is Rs. 25,68,210/- (Rupees Twenty Five Lacs Sixty Eight Thousand Two Hundred and Ten only).

b. In accordance with Regulation 28 of the SEBI (SAST) Regulations, the Acquirers have created an Escrow Account in the form of Cash for Rs.3,60,150 (Rupees Three Lacs Sixty Thousand One Hundred and Fifty only), on August 26, 2003, being more than 25% of the total consideration payable under the Offer, with The State Bank of India, Secunderabad Branch, Hyderabad- 500 003 and a lien has been marked on the said account in favor of CIL Securities Ltd., Manager to the Offer.

Pursuant to the increase in Offer Price, the Acquirers have deposited the additional sum of Rs. 2,82,000/- in the said escrow account, on September 15, 2003, thereby total amount in the said account increased to Rs.6,42,150 (Rupees Six Lacs Forty Two Thousand One Hundred and Fifty only) and a lien has been marked on the said account in favor of CIL Securities Ltd., Manager to the Offer.

c. The Acquirers have authorized CIL Securities Ltd., Managers to the Offer to realize the value of the Escrow Account in terms of the Regulations.

d. The Acquirers shall arrange to pay the consideration on or before Friday, 12^th December, 2003. Payment will be made to the person named by the acceptors in the relevant box in the Acceptance Form by "Account Payee" crossed Cheque/ Pay Orders/ Demand Drafts as indicated in the form of acceptance. If no such details are filled in by the acceptor(s), then the same will be sent by registered post/certificate of posting to the Sole/ First holder at their registered address at the Equity Share holder�s own risk.

e. CIL Securities Limited, Managers to the Offer states that they have satisfied themselves that the Acquirers have adequate financial resources to fulfill the obligations under the open offer. The consideration shall be paid by the Acquirers from own sources. No borrowing from Banks/Financial Institutions is being envisaged for the purpose. All the funds shall be domestic and no foreign funds shall be utilized.

f. As per Certificate dated 25/08/2003, issued A.P.P.Kasipathi Partner of M/s. Yaji Associates, Chartered Accountants, 10-3-281/1/301, 3^rd Floor, K.H.R.Buildings, Humayun Nagar, Mehedipatnam89, Hyderabad-500 028, Ph No. (040) 2353 2597/8, (Membership No.19442) the Net Worth of Shri Alapati Ramakrishna as on 25.07.2003 is Rs. .2,02,81,862/- (Rupees Two Crore Two Lac Eighty One Thousand Eight Hundred and Sixty Two only).

g. As per Certificate dated 25/08/2003, issued G. Jagadeswara Rao, Partner of M/s. S.R.Mohan & Co., Chartered Accountants, III Floor, North Block, Raghava Ratna Towers, Chirag Ali Lane, Hyderabad �500 001, Ph No. (040) 23201123/1223, Fax. No (040) 23205535, (Membership No.21361) the Net Worth of Shri Devabhuktuni Durga Prasad as on 24-08-2003 is Rs. Rs.2,63,11,849/- ( Rupees Two Crore Sixty Three Lac Eleven Thousand Eight Hundred and Forty Nine only/-).

h. G. Jagadeswara Rao, Partner of M/s. S.R.Mohan & Co., Chartered Accountants, III Floor, North Block, Raghava Ratna Towers, Chirag Ali Lane, Hyderabad �500 001, Ph No. (040) 23201123/1223, Fax. No (040) 23205535, (Membership No.21361) , vide their Certificate dated 01/09/2003, have certified that Shri Durga Prasad Devabhaktuni (one of the acquirers) have adequate liquid resources to implement the Offer, including the expenses thereof.

i. A.P.P.Kasipathi Partner of M/s. Yaji Associates, Chartered Accountants, 10-3-281/1/301, 3^rd Floor, K.H.R.Buildings, Humayun Nagar, Mehedipatnam, Hyderabad-500 028, Ph No. (040) 2353 2597/8, (Membership No.19442), vide their Certificate dated 01/09/2003, have certified that Shri Alapati Ramakrishna (one of the acquirers) have adequate liquid resources to implement the Offer, including the expenses thereof.

j. CIL Securities Limited, Manager to the Offer states that they have satisfied themselves about the ability of the Acquirers to implement this Offer in accordance with the regulations.

k. The payment of consideration/ dispatch of unaccepted shares/ crediting of unaccepted shares in dematerialized form to the Beneficiary account shall be made on or before Friday, 12^th December 2003.

6. TERMS AND CONDITIONS OF THE OFFER

a. This Offer will open on Wednesday, 15^th October, 2003 and will close on Thursday, 13^th November, 2003. The Equity Shares offered under this Offer should be free from all liens, charges, equitable interests, encumbrances and are to be offered together with, if any, of all rights of dividends, bonuses or rights from now on and hereafter.

b. Specified date is only for the purpose of determining the names of the Shareholders as on such date, to whom the Letter of Offer would be sent and all owners (registered or unregistered) of Shares of LCC anytime before the closure of the Offer, are eligible to participate in the Offer.

c. This Offer is made to all Shareholders of LCC, (except the Acquirers and parties to the agreement) whose name appear in the Register of members of the Company on Saturday, September, 20, 2003, the Specified Date. This Offer is also open to persons (except the Acquirers and parties to the agreement) who own Equity Shares in LCC any time prior to the closure of the Offer but are not registered Shareholders as on the "Specified date". Those Shareholders of LCC who have sold or otherwise disposed off their holding in full or part and receiving this Offer are requested to hand over this Letter of Offer or a copy thereof to the broker or purchaser of the Shares to enable them to participate in the Offer. Such unregistered Shareholders who have acquired Equity Shares of LCC till date of closure of the Offer can participate in the Offer. Shareholders who have sent their Shares for transfer and have not received them back may send in their application alongwith valid transfer deeds indicating the Distinctive Numbers, Folio number of transferee, number of Shares etc. and the date on which the Shares were sent for transfer.

d. Accidental omission to despatch this Letter of Offer to any person to whom this Offer has been made to or non-receipt of this Letter of Offer by any such person shall not invalidate this Offer in anyway. In case of non-receipt of this Letter of Offer, the eligible person may approach the Manager to the Offer mentioned in this Letter of Offer and obtain copies of this Letter of Offer and Acceptance Form. In case the eligible member is located at place(s) other than where the office of the Manager to the Offer is situated, he/she/they may make an application on a plain paper stating his/her/their name, address, number of Equity Shares held , Distinctive numbers and Folio number etc. The executed documents should reach the Managers latest by 5.00 p.m. on Thursday, 13^th November, 2003, being the date of closure of the Offer.

e. Those Shareholders who have not received the Letter of Offer may apply on plain paper as detailed above enclosing the Share Certificates and valid transfer forms. The Shareholders shall also have the facility of downloading the Letter of Offer and Acceptance Form from SEBI website (www.sebi.gov.in.) and the downloaded Application Forms can be used.

f. Unregistered Shareholders / those applying on plain paper / downloaded forms / whose Shares are pending transfer will not be required to provide any Indemnity Bond / Letter.

g. There are no Locked In Shares.

h. The Offer is subject to approval of Reserve Bank of India under the Foreign Exchange Management Act, 1999, for transferring 54,18,838 equity shares of Rs.10/- each fully paid and 73,96,600 Preference Shares of Rs.10/- each fully paid, by Network Foods International Limited to the Acquirers.

i. The Offer is subject to the approval of the Reserve Bank of India ("RBI") under the Foreign Exchange Management Act, 1999 for acquiring shares tendered by non-resident shareholders including NRIs/FIIs and OCBs. In case of acceptances from NRI/OCB/FIIs shareholders, the Acquirer would after closure of the offer, make the requisite applications to RBI to obtain its approval for transfer of such shares of LCC to the Acquirer. There are no other statutory approvals required to acquire shares that are tendered pursuant to this offer.

j. Partly Paid Shareholders are not eligible to participate in the Offer.

7. PROCEDURE FOR ACCEPTANCE AND SETTLEMENT

7.1 ACCEPTANCE OF THE OFFER

b. The Equity shareholders holding shares in physical form/ beneficial owners holding shares in dematerialized form, may please note that the Form of Acceptance, Share Certificates/ copy of the delivery instructions and other documents shall be sent only to the Managers to the Offer and not to the Acquirers, Target Company and Sellers.

c. If the number of Equity Shares Offered by the Shareholders is more than the Offer size, then the acquisition from each Shareholder will be as per Regulation 21 (6) of the SEBI (SAST) Regulations, on proportionate basis. The Acquirers accept all valid fully paid up Shares tendered and no partly paid up share will be accepted. In case, the number of valid fully paid Shares are more than the number of Shares proposed to be acquired, then, the fully paid Shares will be acquired on a proportionate basis, in such a way that acquisition from a Shareholder shall not be less than marketable lot or the entire holding, if it is less than the marketable lot. In case, the number of valid fully paid Shares are less than the number of Shares proposed to be acquired, then the Acquirers will acquire the fully paid Shares on firm basis. The market lot for LCC's Shares is 100 for Shares in physical form and 1 for Shares held in dematerialized form.

d. The acceptance will be made in consultation with the Manager to the Offer.

a. Shareholders holding Shares in physical form and wishing to tender their Equity Shares will be required to send their form of acceptance, original Share certificates and transfer deeds to the Managers to the Offer: Cil Securities Ltd., at their Regd Office at #214, Raghava Ratna Towers, Chirag Ali Lane, Abids, Hyderabad � 500 001 Telephone Nos. (040) 2320 2465/3155.Fax No. (040) 2320 3028. (Contact Person: Shri B.M. Maheshwari), either by hand delivery on weekdays or by Registered Post, on or before the closure of the Offer i.e. Thursday, 13^th November, 2003, in accordance with the instructions specified in the Letter of Offer and in the Form of Acceptance.

b. In case of non-receipt of the letter of Offer, the eligible person may send his consent on plain paper stating the name, address, number of Shares held, distinctive numbers, certificate numbers and the number of Equity Shares Offered along with the Share certificates, duly signed transfer forms and other required documents to the Managers to the Offer before the closure of the Offer.

c. In case the Share certificate(s) and the transfer deeds are lodged with LCC / its transfer agents for transfer and have not been received back, then the acceptance shall be accompanied by (i) the Share Transfer deed(s) and (ii) the acknowledgement of the lodgment with, or receipt issued by LCC/ its transfer agents for the Share certificate(s) so lodged. Where the transfer deed(s) are signed by a Constituted Attorney, a certified copy of the Power of Attorney shall also be lodged. In the case of bodies corporate/Limited Companies, certified copies of Memorandum & Articles of Association and a copy of the Board Resolution authorizing the signatory shall also be sent alongwith.

d. Persons who hold the Equity Shares of LCC on the Specified Date, but who are not registered as Shareholders on the Specified Date are also eligible to participate in the Offer. All such persons should send their applications in writing to the Managers to the Offer along with necessary proof of ownership and other documents as specified above.

A) Registered Share Holders should enclose:

a. The enclosed Acceptance Form duly completed and signed in accordance with the instructions contained therein and signed by the Equity Shareholders of LCC in the same order in which they hold Equity Shares and shall be sent to the Managers to the Offer. This order cannot be changed or altered nor can any new name be added for the purpose of accepting the Acquirers� Open Offer.

b. Original Equity Share Certificate(s) .valid transfer deed (s) duly filled in and signed (by all the Equity Shareholders in case the Equity Shares are held jointly ) as per the specimen signatures lodged with LCC and duly witnessed.

a. Form of Acceptance-cum-acknowledgement duly completed and signed in accordance with instructions contained therein,

signed by the unregistered Shareholder(s).

b. Original Share certificates

c. Original broker contract note of a registered broker of a recognized Stock Exchange

d. Valid Share transfer deed as received from the market. The details of the buyer should be left blank. If the details of buyer are filled in, the tender will not be valid under the Offer. All other requirements for valid transfer will be pre-conditions for valid acceptance.

a. Beneficial owners (holders of shares in Dematerialized Form) who wish to tender their shares will be required to send their Form of Acceptance-cum-acknowledgement along with a photocopy of the delivery instructions in "Off �market" mode or counterfoil of the delivery instruction in "Off �market" mode, duly acknowledged by the Depository Participant (DP) in favour of a special depository account opened by the Manager to the Offer, in accordance with instruction specified in the Letter of Offer and in the Form of Acceptance-cum-acknowledgement. The details of the special depository account is given below:

DP Name	CIL Securities Limited
DP ID	13500
Client Name	Cil Sec Ltd Escrow A/c - LCC Open Offer
Client Id	1201350000016670

b. All beneficiary owners maintaining account with NSDL are required to fill in an additional inter-depository slip maintained with the DP while giving instructions to their respective DP.

c. In case of non receipt of the Letter of Offer, beneficial owners may send their applications in writing to the Managers to the Offer, on a plain paper stating the name, address, number of shares held, number of shares offered, DP name, DP ID, beneficiary account number and photocopy of the delivery instruction in "Off-market", or counterfoil of the delivery instruction in Off-market" mode, duly acknowledged by the DP, in favour of the special depository account, so as to reach the Managers to the Offer on or before the closure of the Offer.

d. The Form of acceptance and other documents required to be submitted, herewith, will be accepted by Cil Securities Limited, Managers to the offer at their Regd Office at #214, Raghava Ratna Towers, Chirag Ali Lane, Abids, Hyderabad � 500 001. Telephone Nos. (040) ) 2320 2465/3155.Fax No. (040) 2320 3028. (Contact Person: Ms. Shri B.M. Maheshwari), between 11 A.M. to 5 P.M. on working days, during the period, the Offer is open.

a. In case of acceptance on proportionate basis, the unaccepted Share Certificates, Transfer deeds and other documents, if any, will be returned by Registered Post at the Share holder�s / unregistered holder�s sole risk as per the details furnished in the form of acceptance-cum-acknowledgement. Shares held in demat form to the extent not accepted will be returned to the beneficial owner to the credit of the beneficial owner�s DP Account with the respective DP as per the details furnished by the beneficial owner in the form of acceptance cum acknowledgement.

b. The Acquirers shall arrange to pay the consideration on or before Friday, 12^th December 2003. Payment will be made to the person named by the acceptors in the relevant box in the Acceptance Form by "Account Payee" crossed Cheque /Pay Order/ Demand Draft, as indicated in the form of acceptance. If no such details are filled in by the acceptor(s), then the same will be sent by registered post to the Sole/ First holder at their registered address at the Equity Share holder�s own risk.

c. In terms of Regulation 22(12) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997, in the case of non receipt of statutory approvals, SEBI has the power to grant extension of time for the purpose of making payment subject to, the Acquirers agreeing to pay interest to the Shareholders for delay beyond 30 days from date of closure of the Offer.

d. The Equity Shares Certificate(s) and the transfer deed (s) or Shares transferred to the Special Depository Account together with the Acceptance Form submitted by the acceptors of the Offer, will be held by the Managers in trust for the acceptors of the Offer until the Acquirers complete the offer obligations in terms of regulations.

a. The Shareholders, who are desirous of withdrawing their acceptances tendered in the Offer, can do so upto 3 Working days, prior to the date of closure of the Offer in terms of Regulation 22(5A) of SEBI (SAST) Regulations.

b. The Withdrawal option can be exercised by submitting the Form of Withdrawal attached to the Letter of Offer duly filled in, with relevant particulars, so as to reach the Manager to the Offer on or before Monday, November 10, 2003. In case of non-receipt of Form of Withdrawal, the Withdrawal option can be exercised by making an application on plain paper alongwith the following details:

In the case of Shares held in physical Form: Name, Address, Distinctive numbers, Folio nos., No. of Shares tendered/ withdrawn ,

In the case of Shares held in Demat Form: Name, Address, Photocopy of Delivery instruction duly acknowledged by the DP, No. of Shares tendered/ withdrawn ,

c. The Share Certificates in respect of Shares withdrawn by Shareholders will be returned by Registered Post/Credited back to the same beneficiary account from where the Shares were delivered " OFF MARKET".

a. The instructions, authorizations and provisions contained in the Acceptance Form constitute part of the terms of the Offer.

b. Barring unforeseen circumstances, the Acquirers would endeavor to obtain all the approvals before the last date indicated for communicating rejection/acceptance and payment of consideration for applications accepted i.e. Friday, 12^th December 2003.

c. The Manager to the Offer shall submit a final report to SEBI within 45 days of closure of the Offer in accordance with Regulation 24 (7) of the Regulations.

d. The acceptance of this Offer is entirely at the discretion of the Equity Shareholders of LCC.

e. The Acquirers or Manager to the Offer accept no responsibility for any loss of Equity Share Certificates, Offer Acceptance Forms etc. during transit and the Equity Shareholders of LCC are advised to adequately safeguard their interest in this regard.

f. This is not a conditional Offer and there is no stipulation as to the minimum level of acceptance.

g. The Public Announcement, Letter of Offer and the Form of Acceptance and Withdrawal will also be available on the SEBI website: www.sebi.gov.in. In case of non-receipt of the Letter of Offer, all Shareholders including unregistered Shareholders, if they so desire, may download the Letter of Offer and the Form of Acceptance from the SEBI website for applying in the Offer.

h. The acceptance of this Offer by the Shareholders of LCC must be absolute and unqualified. Any acceptance of this Offer which is conditional or incomplete in any respect will be rejected without assigning any reason whatsoever.

i. The Share Certificates in respect of Shares unaccepted will be returned by Registered Post/Credited back to the same beneficiary account from where the Shares were delivered " OFF MARKET".

Copies of the following documents will be available for inspection at Registered Office of Managers to the offer at214, Raghava Ratna Towers, Chirag Ali Lane, Abids, Hyderabad � 500 001, during normal business hours (11.00 AM to 5.00 PM) on all working days during the period from the date of this Letter of Offer till date of closure of the Offer

a. Copy of agreement dated 22.08.2003 entered between NFIL and Acquirers.

b. Copy of MOU dated August 25, 2003, between the Acquirers and Manager to the Offer.

c. Copy of the Agreement dated September 05, 2003 for opening of Special Depository Account

d. Audited Annual Reports of LCC for the last three years, 2000, 2001, 2002 & Limitedly reviewed Accounts for the half year ended 30.06.2003.

e. Copies of Certificates dated 25/08/2003, issued by A.P.P.Kasipathi Partner of M/s. Yaji Associates, Chartered Accountants, 10-3-281/1/301, 3^rd Floor, K.H.R.Buildings, Humayun Nagar, Mehedipatnam, Hyderabad-500 028, Ph No. (040) 2353 2597/8, (Membership No.19442), certifying the Net Worth of Shri. Alapati Ramakrishna.

f. Copies of Certificates dated 25/08/2003, issued by G. Jagadeswara Rao, Partner of M/s. S.R.Mohan & Co., Chartered Accountants, III Floor, North Block, Raghava Ratna Towers, Chirag Ali Lane, Hyderabad � 500 001, Ph No. (040) 23201123/1223, Fax. No (040) 23205535, (Membership No.21361) , certifying the Net Worth of Shri. Devabhuktuni Durga Prasad.

g. Copy of Certificate dated 01/09/2003, issued by Mr. G. Jagadeswara Rao, Partner of M/s. S.R.Mohan & Co., Chartered Accountants, III Floor, North Block, Raghava Ratna Towers, Chirag Ali Lane, Hyderabad � 1, Ph No. (040) 23201123/1223, Fax. No (040) 23205535, ( Membership No.21361) , certifying that Shri Durga Prasad Devabhaktuni (one of the acquirers) have adequate liquid resources to implement the Offer, including the expenses thereof.

h. Copy of Certificate dated 01/09/2003, issued by Mr. A.P.P.Kasipathi Partner of M/s. Yaji Associates, Chartered Accountants, 10-3-281/1/301, 3^rd Floor, K.H.R.Buildings, Humayun Nagar, Mehedipatnam, Hyderabad-500 028, Ph No. (040) 2353 2597/8, (Membership No.19442), certifying that Shri Alapati Ramakrishna (one of the acquirers) have adequate liquid resources to implement the Offer, including the expenses thereof.

i. Copy of letter dated September 15, 2003, from State Bank of India, Secunderabad Branch, Hyderabad- 500 003,confirming the opening of Escrow Account and certifying that lien has been noted in favor of CIL Securities Limited, Manager to the Offer.

j. Copy of Letter addressed by Shri. Alapati Ramakrishna and Shri. Devabhuktuni Durga Prasad, giving unqualified authority to Manager to the Offer to dispose off funds held in Escrow Account and copy of letter addressed to State Bank of India, Secunderabad Branch, Hyderabad- 500 003 in this regard.

k. Copies of the Public Announcements made in newspapers on August 27,2003.

l. Due Diligence letter dated 06.09.2003 submitted to SEBI by CIL Securities Ltd., Manager to the Offer

m. SEBI Observation letter No.DCR/MM/03/18488 dated 29^th September 2003

The Acquirers accepts full responsibility for the information contained in this Letter of Offer and Form of Acceptance. All information contained in this document is as on the date of the Public Announcement, unless stated otherwise.

The Acquirers shall be jointly and severally responsible for ensuring compliance of the Regulations.

Signed by the Acquirers

Sd/- Sd/-

Shri. Devabhuktuni Durga Prasad Shri. Alapati Ramakrishna

Place: Hyderabad

Date: 01/10/2003

1. Form of Acceptance cum Acknowledgement.

2. Form of Withdrawal