INDEX

Sr. No.	Subject	Page No.
1.	Disclaimer clause	3
2.	Details of the offer	3
3.	Background of the Acquirer	3
4.	Rationale for the Offer	7
5.	Delisting Option to PAIL	7
6.	Background of the Target Company/ PAIL	8
7.	Offer Price	11
8.	Financial Arrangement	13
9.	Terms & Conditions of the offer	14
10.	Procedure for acceptance and settlement of the offer	14
11.	Documents for inspection	15
12.	Declaration by the Acquirer	16

DEFINITIONS

Acquirer/NAIPL	:	New Ambadi Investments Pvt. Ltd.
Date of Public Announcement	:	12/12/2002
Date of Revised Public Announcement	:	07/02/2003
Letter of Offer/LOO	:	This Letter of Offer dated 07/02/2003
Persons Eligible to participate in the Offer	:	Equity shareholders of Parry Agro Industries Ltd. (other than ‘Acquirer’ and ‘other Persons in the promoter group’) whose names appear on the Register of the Members of Parry Agro Industries Ltd. at the close of business hours on 09/01/2003 (the “Specified Date”) and also to those persons who own the shares at any time prior to the closure of the offer, but are not the registered equity shareholders.
SEBI	:	Securities and Exchange Board of India
Specified Date	:	09/01/2003, Thursday
The Regulations / SEBI (SAST) Regulations 1997	:	Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 1997 and subsequent amendments thereof.
Target Company or PAIL	:	Parry Agro Industries Ltd.
Manager to the Offer/ Merchant Banker	:	Keynote Corporate Services Ltd.
Book Value per share/BV	:	[(Share Capital + Reserves (net of revaluation reserves) - (Miscellaneous expenses to the extent not written off)]/No. of equity shares

1. DISCLAIMER CLAUSE

IT IS TO BE DISTINCTLY UNDERSTOOD THAT FILING OF LETTER OF OFFER WITH SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED, VETTED OR APPROVED BY SEBI. THE LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI FOR A LIMITED PURPOSE OF OVERSEEING WHETHER THE DISCLOSURES CONTAINED THEREIN ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE REGULATIONS. THIS REQUIREMENT IS TO FACILITATE THE EQUITY SHAREHOLDERS OF PARRY AGRO INDUSTRIES LTD. TO TAKE AN INFORMED DECISION WITH REGARD TO THE OFFER. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR FINANCIAL SOUNDNESS OF THE ACQUIRER OR THE COMPANY WHOSE SHARES/CONTROL IS PROPOSED TO BE ACQUIRED OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ACQUIRER IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THIS LETTER OF OFFER, THE MERCHANT BANKER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT ACQUIRER DULY DISCHARGE THEIR RESPONSIBILITY ADEQUATELY. IN THIS BEHALF, AND TOWARDS THIS PURPOSE, THE MERCHANT BANKER KEYNOTE CORPORATE SERVICES LIMITED HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED 23/12/2002 TO SEBI IN ACCORDANCE WITH THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS 1997 AND SUBSEQUENT AMENDMENT(S) THEREOF. THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE ACQUIRER FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE OFFER.

2. DETAILS OF THE OFFER

2.1 Background of the offer

New Ambadi Investments Pvt. Ltd.. (hereinafter referred to as ‘NAIPL’ /‘Acquirer’) hold 3,13,882 equity shares of Rs. 10/- each being 8.36% of the issued and paid up equity share capital of Parry Agro Industries Ltd. (hereinafter referred to as ‘PAIL’ or ‘Target Company’) . The Acquirer is a part of the promoter group of PAIL. The Acquirer alongwith the other persons in the promoter group is holding 28,89,344 equity shares of Rs. 10/- each of PAIL forming 76.91% of the paid up equity share capital of the Company.

The Acquirer is one of the majority shareholders of PAIL within the promoter group and proposes to acquire all the outstanding equity shares. The persons in the promoter group, other than the Acquirer, are not acquiring any shares under the offer and hence for the limited purpose of this offer will be treated as ‘Persons Deemed to be Acting in Concert’ (hereinafter referred to as ‘PDAC’) with the Acquirer. Names of the PDACs and their individual holding in PAIL have been disclosed on page no. ~~____~~ 12 & 13 of this Letter of Offer.

a. NAIPL having its registered office at Tiam House Annexe, No.2, Jehangir street, Chennai – 600 001, is making a voluntary offer pursuant to Regulation 11(2) of the SEBI (SAST) Regulations, 1997 to acquire 8,67,472 equity shares of Rs. 10/- each representing 23.09% of the issued and paid up equity share capital of Parry Agro Industries Ltd. from the remaining equity shareholders (other than the Acquirer and other persons in Promoter group), being the balance outstanding equity shares in the Company, at a price of Rs. 70/- per share in cash. The offer is being made by the Acquirer with a view of further consolidating their holdings in PAIL. As a consequence of the voluntary offer the public shareholding of PAIL may reduce to less than 10% of the total paid up equity share capital of the Company. In such a case the Acquirer will request PAIL to approach the stock exchanges where the equity shares are listed for delisting of the shares.

b. The offer is not subject to any minimum level of acceptance.

c. Neither the Acquirer nor PAIL are included in the list of persons / entities debarred from dealing in securities under Section 11 B of the SEBI Act, 1992.

d. There will be no change in control of management or in the Board of Directors of PAIL pursuant to this offer.

2.2 Details Of The Proposed Offer

a) The Acquirer had announced their intention to make a voluntary public offer to the existing equity shareholders of PAIL at a price of Rs. 65/- per share through a public announcement which was published on 12/12/2002 in compliance with Regulation 15 of the Regulations in all editions of ‘Financial Express’ being English National Daily, ‘Jansatta’ being Hindi National Daily, ‘Mumbai Tarun Bharat’ being Marathi Daily and ‘Kerala Kaumudi’ being regional language daily with wide circulation where registered office of PAIL is located. A copy of the Public Announcement is also available on the SEBI website at www.sebi.gov.in.

Subsequently the Acquirer revised the offer price from Rs. 65/- per share to Rs. 70/- per share and a public announcement for the same in terms of Regulation 26 of the Regulations has been made on 07/02/2003 (Friday) in the same newspapers where original Public Announcement was made. Copy of the same is also available on the SEBI website at www.sebi.gov.in.

b) The Acquirer hereby announce a voluntary offer under the Regulations, to acquire by tender upto 8,67,472 fully paid-up equity shares of Rs.10/- each of PAIL representing 23.09% of its paid up equity share capital from the remaining equity shareholders of PAIL (other than the Acquirer and other persons in promoter group) on the terms and subject to the conditions set out in this Letter of Offer, at a price of Rs. 70/- (Rupees Seventy Only) per fully paid-up equity share (the “Offer Price”) payable in cash (the “Offer”). There are no partly paid-up shares of PAIL.

c) The equity shares of PAIL are listed on the stock exchanges at Mumbai (BSE), Cochin and Chennai. The equity shares of the Company are infrequently traded on The Stock Exchange, Mumbai in terms of explanation (i) to Regulation 20(5) of the SEBI (SAST) Regulations, 1997 and are not traded on the other exchanges. The offer price of Rs. 70/- per share has been determined as per Regulation 20(5) of the Regulations.

d) The equity shares of PAIL to be acquired, pursuant to the Offer, shall be free from all liens, charges and encumbrances and together with all rights attached thereto, including the rights to all dividends or other distributions hereinafter declared, made or paid.

3. BACKGROUND OF ACQUIRER/ NAIPL

a) NAIPL is a wholly owned subsidiary of M/s New Ambadi Estates Pvt. Ltd., which belongs to the Murugappa Group of Companies. NAIPL having its registered office at Tiam House Annexe, No.2, Jehangir Street, Chennai -600001 was incorporated as a Private Limited Company on 22/08/1979 under the Companies Act, 1956. The company is engaged in investment activity.

b) The Board of Directors of NAIPL as on date of Public Announcement is as follows:

Name & Designation

Address

Qualification

Other Directorships

Mr. G. Swaminathan

Director

‘Ananthi Bhuvaneshwari’

G-1, 6^th Main Road

New Colony, Chrompet,

Chennai – 600044.

B.A., ACS

Ø Kulasekharam Investments Pvt. Ltd.

Ø Thangamalai Tea Factory Pvt. Ltd.

Mr. Sebestian Thomas

Director

3A, Lavanya, 12, 4^th Seaward Road,

Valmiki Nagar,

Thiruvanmiyur,

Chennai – 600 041

M.Sc.

(Plant Physiology)

Nil

Name & Designation

Address

Qualification

Other Directorships

Mr. R. Surendran

Director

‘Srinity’

4/44, I Main Raod,

AIBEA Nagar,

Thiruvanmiyur,

Chennai – 600 041.

B.Sc., ACA

Ø Ambadi Trading Co. Ltd.

Ø Tichain Investments Pvt. Ltd.

Ø Presmet Pvt. Ltd.

Ø Kartik Investments Trust Ltd.

None of the Directors of NAIPL are on the Board of PAIL.

c) The issued and the paid up equity share capital of the Company comprises of 2,40,000 equity shares of Rs.10/- each aggregating to Rs.24.00 lacs. The equity shares of NAIPL are not listed on any exchange. The brief audited financial details of the NAIPL for the past three years and unaudited financial details for the 6 months ended on 30/09/2002 are given below:

(Rs. in Lacs)

Profit and Loss Account (As on 31^st March)	1999-2000	2000-01	2001-02	6 months ended 30/09/2002 (Unaudited)
Income from operations	136.20	109.08	224.88	61.42
Other Income	-	-	-	-
Total Income	136.20	109.08	224.88	61.42
Total Expenditure	3.22	5.71	9.57	5.00
Profit before Depreciation, Interest & Tax	132.98	103.37	215.31	56.42
Depreciation	0.43	0.42	0.36	0.16
Interest	128.45	115.92	100.70	50.00
Profit Before Tax	4.10	(12.97)	114.25	6.26
Provision for tax	-	-	2.36	-
Profit After Tax	4.10	(12.97)	111.89	6.26

(Rs. in lacs)

Balance Sheet as on 31^st March	1999-2000	2000-01	2001-02
Liabilities
Paid up share capital	24.00	24.00	24.00
Reserves & Surplus (Excluding revaluation reserves)	71.64	58.67	170.56
Networth	65.64	82.67	194.56
Loan funds	578.13	402.39	271.50
Current Liabilities and Provisions	493.55	530.73	458.84
Total	1167.32	1015.79	924.90
Assets
Net Fixed Asset	1.93	1.28	0.92
Investment	733.32	732.72	663.90
Current Assets	432.07	281.79	260.08
Total miscellaneous expenses not written off - Profit & Loss A/c	-		-
Total	1167.32	1015.79	924.90

Other financial data	1999-2000	2000-01	2001-02
Dividend (%)	Nil	Nil	Nil
Earning Per Share (Rs.)	1.71	-	46.62
Return on Networth (%)	6.25	Negative	57.51
Book Value Per Share (Rs.)	27.35	34.45	81.07

d) The Acquirer has complied with provisions of Chapter II of SEBI (SAST) Regulations, 1997

BACKGROUND OF NEW AMBADI ESTATES PVT. LTD.

a. New Ambadi Estates Private Limited ( “NAEPL”) was incorporated on 22/05/1942.It is the holding company of NAIPL, the Acquirer.The registered office of the Company is situated at TIAM House Annexe, 2, Jehangir Street, Chennai- 600 001. The company is an agricultural company involved in production and sale of Rubber, Algae and chemically modified Rubber.

b. The Board of Directors of NAEPL as on date of Public Announcement is as follows:

Name & Designation	Address	Qualification		Other Directorships
M. V. Murugappan Chairman	8, Boat Club Road, Chennai – 600028.	B. Sc. (Hon.)		Chairman Ø The Coromandel Engg. Co. Ltd. Ø Southern Energy Development Corp. ltd. Ø Coromandel Bathware Ltd. Ø Carborandum Universal Ltd. Director Ø Valli Engineering & Investments Pvt. Ltd. Ø The Adyar Property Holding co. Ltd. Ø CUMI America Inc., USA.
M.A. Alagappan Director	10, Chittaranjan Road, Teynampet, Chennai – 600 018.	B.Com		Chairman Ø Cholamandalam Investment and Finance Co. Ltd. Ø Cholamandalam General Insurance Co. Ltd. Executive Chairman Ø Tube Investments of India Ltd. Director Ø AVT Natural Products Ltd. Ø IFF India Ltd. Ø Cholamandalam AXA Risk Services Ltd. Ø Cholamandalam Factoring Ltd. Ø Cholamandalam Trustee co. Ltd.
M. M. Murugappan Director	“Coromandel House”, 14, Boat Club Road, Chennai – 600028.	Master of Science & Chemical Engineering, University of Michigan.	Chairman Ø Wednt India Ltd. Ø Murugappa Morgan Thermal Ceramics Ltd. Director Ø Carborandum Universal Ltd. Ø M M Muthiah Research Foundation Ø Mahindra & Mahindra Ltd. Ø Sterling Abrasives Ltd. Ø MEL Systems & Services Ltd. Ø Infotech Enterprises Ltd. Ø CUMI America Inc., USA Ø Net Access (India) Pvt. Ltd. Ø Parry Nutraceuticals Ltd. Ø Parry Agro Industries Ltd. Ø Parry Murray & Co. Ltd., UK Ø Parry Confectionery Ltd. Ø Tube Investments of India Ltd. Ø Parry & Co. ltd. Ø The Mofussil Warehouse & Trading Co. Ltd. Ø Ambadi Enterprises Ltd. Ø Parry Engineering & Industries Ltd.

Name & Designation	Address			Qualification	Other Directorships
M. M. Venkatachalam Director		20/1, Valliammai Achi Road, Kotturpuram, Chennai – 600085.	B.Sc. Agri. M.B.A. (George Washington university, USA)		Managing Director Ø Laserwords Pvt. Ltd. Director Ø M M Muthiah Sons Pvt. Ltd. Ø Cholamandalam Factoring Ltd. Ø Coromandel Bathware Ltd. Ø Polutech Ltd. Ø Parry Investments & Finance Co. Ltd. Ø Cholamandalam Distribution Services Ltd. Ø Cholamandalam Securities Ltd. Ø Ramco System Ltd.
M.A.M Arunachalam Director		4, Chittaranjan Road, Teynampet, Chennai – 600 018.	B.Com. M.B.A.		Director Ø Placon (India) Pvt. Ltd. Ø Coromandel Bathware Ltd. Ø Coromandel Engineering Co. Ltd.
N. K. Rawlley Director		Ratan chand Rawlley 60, Poorvi Marg (Rear) Vasant Vihar New Delhi – 110 057.	Matriculation		Nil

c. The issued and the paid up equity share capital of the Company comprises of 17,62,304 equity shares of Rs.10/- each aggregating to Rs.176.23 lacs. The equity shares of NAEPL are not listed on any exchange. The brief audited financial details of the NAEPL for the past three years and unaudited financial details for the nine months period ended on 31/12/2002 are given below:

(Rs. in Lacs)

Profit and Loss Account (As on 31^st March)	1999-2000	2000-01	2001-02	9 months ended 31/12/2002 (Unaudited)
Income from operations	627.13	887.30	786.61	602.32
Other Income	321.82	277.28	269.26	-
Total Income	948.95	1164.58	1055.87	602.32
Total Expenditure	665.33	820.73	745.53	466.33
Profit before Depreciation, Interest & Tax	283.62	343.85	310.34	136.99
Depreciation	63.65	60.79	97.19	43.71
Interest	57.07	43.78	24.56	67.50
Profit Before Tax	162.90	239.38	188.59	25.78
Provision for tax	0.00	10.00	0.03	-
Profit After Tax	162.90	229.28	188.56	25.78

(Rs. in lacs)

Balance Sheet as on 31^st March	1999-2000	2000-01	2001-02
Liabilities
Paid up share capital	976.23	976.23	976.23
Reserves & Surplus (Excluding revaluation reserves)	1240.10	1322.25	1377.40
Networth	2216.33	2298.48	2353.63
Loan funds	247.80	161.93	455.31
Current Liabilities and Provisions	539.40	615.78	490.05
Total Assets	3003.53	3076.19	3298.99
Net Fixed Asset	864.72	826.25	755.10
Investment	836.01	843.61	679.64
Current Assets	1302.80	1406.33	1864.25
Total miscellaneous expenses not written off - Profit & Loss A/c	-	-	-
Total	3003.53	3076.19	3298.99

Other financial data	1999-2000	2000-01	2001-02
Dividend (%)	12.5%	20%	20%
Earning Per Share (Rs.)	9.24	13.01	10.70
Return on Networth (%)	7.35	9.98	8.01
Book Value Per Share (Rs.)	80.37	85.03	88.16

d. NAEPL has complied with provisions of Chapter II of SEBI (SAST) Regulations, 1997

e. New Ambadi Investments Pvt. Ltd., the Acquirer, is a wholly owned subsidiary of NAEPL. NAEPL is holding 9,20,320 equity shares of Rs. 10/- each of PAIL constituting 24.50% of the paid-up equity share capital of the Company. NAEPL does not propose to acquire any shares of the Target Company in the present offer.

DISCLOSURE REGARDING MAJOR SHAREHOLDERS OF PAIL FORMING PART OF PDACs

Kulasekharam Investments Pvt. Ltd.,Teeaye Investments Limited, E. I. D. Parry (India) Ltd., Carborundum Universal Ltd. and Cholamandalam Investment and Finance Company Ltd. are the other major shareholders of PAIL within the promoter group. These companies are deemed to be acting in concert with the Acquirer. Brief details of these companies in terms of the Regulations are disclosed below:

A. Kulasekharam Investments Pvt. Ltd.

Date of Incorporation	:	04 /03/1994
Nature of Business	:	Investment in Shares and Securities

The issued and paid up share capital of the Company is Rs. 22.97 lacs and the Networth of the Company as on 31/03/2002 is Rs. 89.40 lacs. As per the audited results for the year ended on 31/03/2002 the Company has reported a PAT of Rs. 10.01 lacs and a Return on Networth of 11.19%. The Book Value of the shares is Rs. 38.92 per share and the EPS is Rs. 4.36. The company has recorded a PAT of Rs. 6.40 lacs and an EPS of Rs. 2.79 per share for the nine months period ended on 31/12/2002 as per the unaudited financial results. The equity shares of the Company are not listed on any exchange.

The Company is not a sick industrial unit within the meaning of clause (O) of subsection (1) of the section 3 of the Sick Industrial Companies (Special Provisions ) Act, 1985.

B. Teeaye Investments Ltd.

Date of Incorporation	:	11/02/1983
Nature of Business	:	Investment in shares and securities

Teeaye Investments Limited is a wholly owned subsidiary of Tube Investments of India Limited. The issued and paid up share capital of the Company is Rs. 2432.00 lacs and the Networth of the Company as on 31/03/2002 is Rs. 3095.92 lacs. As per the audited results for the year ended on 31/03/2002 the Company has reported a PAT of Rs. 105.31 lacs and a Return on Networth of 3.40%. The Book Value of the shares is Rs.12.73 per share and the EPS is Rs. 0.43.

The Company is not a sick industrial unit within the meaning of clause (O) of subsection (1) of the section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

C. EID Parry (India) Ltd.

Date of Incorporation

22/09/1975

Nature of Business

The Company is a diversified company comprising of four major business segments namely Farm Inputs, Sugar, Parryware and Bio Products.

The issued and paid up share capital of the Company is Rs. 1784.00 lacs and the Networth of the Company as on 31/03/2002 is Rs. 37384.00 lacs. As per the audited results for the year ended on 31/03/2002 the Company has reported a PAT of Rs.3483.00 lacs and a Return on Networth of 9.32%. The Book Value of the shares is Rs. 209.55 and the EPS is Rs. 19.42.The company has recorded a PAT of Rs. 1209.00 lacs and an EPS of Rs. 6.77 per share for the nine months period ended on 31/12/2002 as per the unaudited financial results. The equity shares of the company are listed on the Stock Exchange, Mumbai (BSE), The National Stock Exchange of India Limited (NSE) and the Madras Stock Exchange (MSE).

The Company is not a sick industrial unit within the meaning of clause (O) of subsection (1) of the section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

D. Carborundum Universal Ltd.

Date of Incorporation

21/04/1954

Nature of Business

The Company offers ceramic materials-based solutions for industrial applications. The major business segments are Abrasives, Ceramics and Electrominerals.

The issued and paid up share capital of the Company is Rs. 933.54 lacs and the Networth of the Company as on 31/03/2002 is Rs. 12989.98 lacs.As per the audited results for the year ended on 31/03/2002 the Company has reported a PAT of Rs. 2152.23lacs and a Return on Networth of 16.57% . The Book Value of the shares is Rs. 135.45 per share and the EPS is Rs. 23.05.The company has recorded a PAT of Rs. 3067.00 lacs and an EPS of Rs.19.2 per share for the nine months period ended on 31/12/2002 as per the unaudited financial results. The equity shares of the company are listed on the Stock Exchange, Mumbai (BSE), The National Stock Exchange of India Limited (NSE) and the Madras Stock Exchange (MSE).

The Company is not a sick industrial unit within the meaning of clause (O) of subsection (1) of the section 3 of the Sick Industrial Companies (Special Provisions ) Act, 1985.

E. Cholamandalam Investment and Finance Company Ltd.

Date of Incorporation	:	17/08/1978
Nature of Business	:	Financial Services

The issued and paid up share capital of the Company is Rs. 1693.36 lacs and the Networth of the Company as on 31/03/2002 is Rs.15785.37 lacs. As per the audited results for the year ended on 31/03/2002 the Company has reported a PAT of Rs. 1878.01 lacs and a Return on Networth of 11.89%. The Book Value of the shares is Rs.93.22 per share and the EPS is Rs. 11.09. The company has recorded PAT of Rs. 1968.00 lacs and an EPS of Rs. 11.67 per share for the nine months period ended on 31/12/2002 as per unaudited financial results.The equity shares of the company are listed on the Stock Exchange, Mumbai (BSE), The National Stock Exchange (NSE), The Madras Stock Exchange (MSE) and the Coimbatore Stock Exchange (CoSE).

The Company is not a sick industrial unit within the meaning of clause (O) of subsection (1) of the section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

4. Rationale for the offer

a) NAIPL along with other persons in the promoter group is holding 76.91% of the equity share capital of PAIL. NAIPL wish to further consolidate their holding by making the said voluntary offer to the remaining equity shareholders of the company. Since the promoters are already holding more than 75% of the equity share capital of PAIL the said offer to the equity shareholders of PAIL is being made under Regulation 11(2) of the Regulations.

b) Acquirer shall not dispose off or otherwise encumber any substantial asset of PAIL except with the prior approval of the shareholders of PAIL.

5. Delisting option to PAIL

a) The Acquirer along with other persons in promoter group is holding 76.91% of the equity share capital of PAIL. The present offer is not subject to minimum level of acceptance and the offer is for all the outstanding equity shares of PAIL. The public shareholding in PAIL may reduce to 10% or less of the voting capital of the Company after the present offer. In such a case the Acquirer and the PDACs undertake to make an offer to buy the outstanding shares remaining with the equity shareholders in accordance with the guidelines specified by SEBI in respect of delisting of securities.

b) After completion of the subsequent offer, the Acquirer will request PAIL to approach the Stock Exchanges where the shares are listed for delisting the shares.

6. Background of PAIL

a) PAIL is a Murugappa group company. PAIL was originally incorporated as a public limited company in the name of C.W.S. (India) Ltd. on 24/09/1977 under Companies Act, 1956 and subsequently changed its name to Parry Agro Industries Ltd w.e.f. 21/01/1993. The Company has its registered office at 26/1847, Bristow Road, Willingdon Island, Kochi – 682 003. The Company is operating in auction tea market.

b) The issued and paid up equity share capital of PAIL comprises of 37,56,816 equity shares of Rs.10/- each aggregating to Rs.375.68 lacs. The equity shares of PAIL are listed on The Stock Exchange, Mumbai (BSE), Cochin Stock Exchange, and Madras Stock Exchange (MSE). The equity shares of PAIL are infrequently traded on the BSE in terms of explanation (i) Regulation 20(5) of the SEBI (SAST) Regulations, 1997 and are not traded on the other exchanges where they are listed.

Paid up equity share capital of the Company	No. of shares / voting rights	% of shares / voting rights
Fully paid up equity shares	37,56,816	100
Partly paid up equity shares	NIL	NIL
Total paid up equity shares	37,56,816	100
Total voting rights in the Target Company	37,56,816	100

There are no partly paid up equity shares in PAIL.

c) 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. There are no equity shares under lock-in period. There has been no merger / demerger or spin off in the Company during the past three years.

d) The Company had made an announcement for buy back of its equity shares under the authority of Special Resolution passed by the equity shareholders at price of Rs. 70/- per share. As the proposed buy-back would have resulted in reducing the non-promoter shareholding below the threshold limit prescribed in terms of criteria for continuous listing , the SEBI had advised the Company not to proceed with the then proposed buy-back of equity shares.

e) The composition of the Board of Directors as on the date of Public Announcement (12/12/2002) is as follows:

Name	Designation	Address
Mr. M.V.Subbiah	Chairman	10, Boat Club Road, Chennai – 600028.
Mr. M.M. Murugappan	Director	14, Boat Club Road, Chennai – 600028.
Mr. P.K. Kurian	Director	I.S. Press Road, Kochi – 682018
Mr. Venugopal C. Govind	Director	‘Sriniketan’, Nettepandom Road, Kochi – 682016.
Lt. Gen.(Retd.) A. S. Kalkat	Director	E-229, East of Kailash, New Delhi – 110065.
Mr. Ravi Sam	Director	89, Venkataswamy Raod, R.S. Puram, Coimbatore - 641002.
Mr. Ramesh Rajah	Director	No.2011, High Point Building, 45, Palace Road, Bangalore – 560001.
Mr. Ram Bajekal	Wholetime Director	No.21, Arunachalam Road, Kotturpuram, Chennai -600085.

f) The Company has been complying with the provisions of the listing agreements entered into with the Stock Exchanges and no penal action has been taken against the Company. There had been a delay in complying with the provisions of Chapter II of the SEBI (SAST) Regulations, 1997. However the Company has completed all the formalities required under the SEBI Regularization Scheme, 2002 and has complied with the provisions of Chapter II of the SEBI (SAST) Regulations, 1997 as on date.

g) The brief audited financials of the Target Company for the past three years & un-audited financial results for nine months ended 31/12/2002 are as follows:

Profit & Loss Account

(Rs. in lacs)

Particulars (for the period ended 31^st March)	1999-2000	2000-2001	2001-2002	Unaudited Results for 9 months Ended 31.12.2002 As Published
Income from operations	8997.14	8364.59	8271.01	6151.00
Other income	815.43	584.75	881.08	585.00
Total	9812.57	8949.34	9152.09	6736.00
Expenditure	7888.62	7869.92	8142.75	6219.00
Profit/ (Loss) before Interest, Depreciation & Tax	1923.95	1079.42	1009.34	517.00
Interest	704.66	713.71	663.79	763.00
Depreciation	181.40	202.31	207.26	162.00
Profit / (Loss) Before Tax	1037.89	163.40	138.29	(408.00)
Provision for Taxation	520.00	50.00	15.00	-
Profit / (Loss) After Tax	517.89	113.40	123.29	(408.00)

(Rs. in Lacs)

Balance Sheet As on 31^stMarch (Audited)	1999-2000	2000-2001	2001-2002
Sources of funds
Paid up share capital	375.68	375.68	375.68
Reserves and Surplus (excluding revaluation reserves)	4882.58	4838.76	4602.64
Networth	5258.26	5214.44	4978.32
Preference share capital	-	2000.00	2000.00
Revaluation Reserves	5886.25	5853.79	5784.63
Secured loans	2278.22	4837.83	4362.21
Unsecured loans	4074.00	222.00	488.68
Deferred Tax Liability	-	-	154.40
Total	17496.73	18128.06	17768.24
Use of funds
Net fixed assets	8814.64	8789.40	8682.11
Investments	7449.02	7428.57	6348.85
Net current assets	1233.07	1910.09	2737.28
Total miscellaneous expenditure not written off	-	-	-
Total	17496.73	18128.06	17768.24

Other Financial Data	1999-2000	2000-2001	2001-2002
Dividend (%) · Equity · Preference	- -	- 10.25	- 10.25
Earning Per Share (Rs.)	13.79	3.02	3.28
Return on Networth (%)	9.85	2.17	2.48
Book Value Per Share (Rs.)	139.97	138.80	132.51

h) Pre and Post- Offer equity shareholding pattern of the Target Company is as follows:

Shareholder’s category	Shareholding & voting rights prior to the offer. (A)		Shares / voting rights agreed to be acquired which triggered off the Regulations. (B)		Shares/voting rights to be acquired in open offer (Assuming full acceptances) (C)		Share holding / voting rights after the acquisition and offer (D)
	No.	%	No.	%	No.	%	No.	%
1. Promoter Group
a) Acquirer M/s New Ambadi Investment Pvt. Ltd.	3,13,882	8.36	-	-	8,67,472	23.09	11,81,354	31.45
b) PDACs*	25,75,462	68.55	-	-	-	-	25,75,462	68.55
Sub Total 1(a + b)	28,89,344	76.91	-	-	8,67,472	23.09	37,56,816	100.00
2. Parties to agreement other than (1) (a)	-	-	-	-	-	-	-	-
3. Public (other than Acquirer and other persons in promoter group)
a) FIs/MFs/FIIs/ Banks, SFIs	2515	0.07	-	-	-	-	Nil	Nil
b) Others	8,64,957	23.02	-	-	-	-	Nil	Nil
Sub-total 3 (a + b)	8,67,472	23.09	-	-	-	-	Nil	Nil
Total (1+2+3)	37,56,816	100.00	-	-	8,67,472	23.09	37,56,816	100.00

* Details of Persons Deemed to be Acting in Concert and their individual shareholding in PAIL are as follows:

Sr. no	Name	No. of Shares	% of Shareholding
1	New Ambadi Estates P. Ltd.	920320	24.50
2	Kartik Investments Trust Ltd.	84	0.01
3	Teeaye Investments Ltd.	181431	4.83
4	M.M.Muthiah Research Foundation P. Ltd.	10125	0.27
5	A.M.M.Arunachalam & Sons P. Ltd.	21150	0.56
6	A.M.M.Vellayan Sons P. Ltd.	375	0.01
7	Ar.Lakshmi Achi Trust	325	0.01
8	Cholamandalam Investments & Finance Company Ltd.	169317	4.51
9	Carborundum Universal Ltd.	312739	8.32
10	Breeze Investments P. Ltd.	5000	0.13
11	E.I.D. Parry India Ltd.	234850	6.25
12	Kulasekharam Investments Pvt. Ltd.	227370	6.05
13	Ambadi Enterprises Ltd.	1600	0.04

Sr. no	Name		No. of Shares	% of Shareholding
14	M.A.Alagappan		44750	1.19
15	Lalitha Vellayan		8150	0.22
16	M.V.Subbiah		17775	0.47
17	M.V.Murugappan		36325	0.97
18	M.M.Murugappan		37025	0.99
19	M.M.Venkatachalam		36975	0.98
20	A.Vellayan		20350	0.54
21	S.Vellayan		26075	0.69
22	A.Venkatachalam		20500	0.55
23	Meenakshi Murugappan		12900	0.34
24	Lakshmi Venkatachalam		18575	0.49
25	Lakshmi Ramaswamy		525	0.01
26	Ar.Annapurani		499	0.01
27	C.Chockalingam		525	0.01
28	Ms.M.Vellachi (D/O.M.V.Murugappan)		2325	0.06
29	Valli Subbiah		525	0.01
30	Sivagami Natesan		525	0.01
31	M.A.Alagappan		200	0.01
32	A.M.Meyyammai		2300	0.06
33	M.A.M.Arunachalam		18500	0.49
34	Lakshmi Chockalingam		450	0.01
35	A.A.Alagammai		3300	0.09
36	Arun Alagappan		4000	0.11
37	Lakshmi Ramaswamy		450	0.01
38	A.Vellayan & A.Venkatachalam		1500	0.04
39	M.V.Ar.Meenakshi		1700	0.05
40	Mar.V.Arunachalam (Rep.A.Vellayan)		1000	0.03
41	Mar.V.Narayanan (Rep.A.Vellayan)		1000	0.03
42	Meyyammai Venkatachalam		2600	0.07
43	Mar.A.V.Arunachalam (Rep.A.Venkatachalam)		2000	0.05
44	M.V.Valli Murugappan		9900	0.26
45	M.V.Seetha Subbiah		4200	0.11
46	Mar.M.M.Muthiah (Rep.M.M.Murugappan)		3000	0.08
47	Mar.M.M.Veerappan (Rep. M.M.Murugappan)		3000	0.08
48	Mar.M.V.Muthiah (Rep.M.M.Venkatachalam)	2000		0.05
49	Mar.M.V.Subramanian (Rep.M.M.Venkatachalam)	2000		0.05
50	M.M.Seethalakshmi	26800		0.71
51	M.A.M.Arunachalam	32800		0.87
52	M.A.Alagappan & Valli Alagappan	4050		0.11
53	M.A.Alagappan & M.A.M.Arunachalam	26600		0.71
54	Valli Alagappan, L..Alagappan & M.A.Alagappan	2025		0.05
55	R.Vislakshi & Valli Meyyappan	13000		0.35

Sr. no	Name			No. of Shares	% of Shareholding
56	M.A.Alagappan		2000		0.05
57	M.V.Murugappan		5000		0.13
58	M.V.Subbiah		5500		0.15
59	M.M.Murugappan	3700			0.10
60	M.M.Venkatachalam	3700			0.10
61	M.A.Alagappan & M.M.Venkatachalam (Murugappa & Sons)	200			0.01
62	M.M.Venkatachalam & Arun Alagappan - Kadamane Estates	217			0.01
63	Parry Agro Industries Ltd. Employees Share Pur.Sch.	16160			0.43
64	P.K.Kurian	400			0.01
65	Venugopal C.Govind	100			0.01
66	K.A.Ayappa	1000			0.03
67	Ram Bajekal Jointly With Mrs.Sarojini Bajekal	100			0.01
	Total	25,75,462			68.55

7. OFFER PRICE

Justification of Offer Price:

The equity shares of PAIL are listed on The Stock Exchange, Mumbai (BSE), The Stock Exchange, Cochin (CSE) and Madras Stock Exchange (MSE). The annualised trading turnover of the equity shares of the Company on the on the Stock Exchange, Mumbai (BSE) is as shown below:

Name of stock exchange	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)
BSE	47,161	37,56,816	2.51
CSE	Not Traded	37,56,816	N.A.
MSE	Not Traded	37,56,816	N.A.

The equity shares of PAIL are infrequently traded on the BSE in terms of explanation (i) to Regulation 20(5) of the SEBI (SAST) Regulations, 1997 and are not traded on the other exchanges where they are listed.

The offer price of Rs. 70/- per share, has been determined taking into account the following factors:

A. Parameters as per Regulation 20(5) of the Regulations

a) The Acquirers have not acquired any shares through agreement hence there is no negotiated price.

b) The Acquirers have not acquired any equity shares by way of allotment in public or rights or preferential issue during the twenty-six weeks period prior to the date of public announcement.

c) Other parameters as per audited results of PAIL for the year ended 31/03/2002 reveals EPS: Rs.3.28, RONW: 2.48%, BV per share: Rs.132.51, P/E: 13.14 (Based on last traded share price of Rs.43.10 per share on BSE as on 10/12/2002).

The target Company has incurred a loss of Rs. 408.00 lacs during the 9 months period ended on 31/12/2002 as per unaudited financial results declared by the Company. EPS for the period as per the unaudited results is NIL and hence P/E ratio for the period cannot be computed.

Other parameters of PAIL as compared to the parameters of Industry segment (Tea) are as follows:

Parameter	Industry Average	Industry Highest	PAIL*	PAIL at a offer price of Rs. 70/-
Return on Networth (%)#	1.88	53.14	2.48	2.48
Book Value per Share (Rs.)	70.29	168.30	132.51	132.51
Price to Book Value (times)@	0.43	1.14	0.33	0.53
EPS (RS.)#	3.87	13.92	3.28	3.28
Price/Earnings (times)#@	15.70	39.39	13.14	21.34

(source: Capital Market Volume XVII/19 dated 08/12/2002 and www.bseindia.com)

# Based on figures for Trailing Twelve Months (TTM) ended on 30/09/2002.

* Based on audited balance sheet as on 31/03/2002.

@ Based on last traded share price as on 10/12/2002

The offer price of Rs 70/- is at a PE Multiple of 21.34 times, which is 35.92% more than the average PE of the industry segment in which Company operates.

The offer price of Rs 70/- per share represents a Price to Book Value (PBV) of 0.53 times, which is higher by 23.26% than the average industry PBV, which stands at 0.43 times.

As compared to the last traded price of the Company on BSE (date 10/12/2002) of Rs.43.10, the offer price of Rs. 70/- per share represents a premium of 62.41% over the last traded price of the target Company.

The following table presents the Book Value per share and market price of the companies in the industry segment.

Name of company	Price (Rs.) as on 10.12.2002	Book value (Rs.)	PBV
Bombay Burmah	38.10	66.40	0.57
Assambrook	15.65	68.70	0.23
Tyroon Tea Co.	5.25	30.10	0.17
Goodricke Group	30.00	33.30	0.90
Gillanders Arb	22.00	105.20	0.21
B & A	8.20	59.30	0.14
Jay Shree Tea	37.40	106.70	0.35
Harrisson Malyalam	10.40	30.10	0.35
DPIL	31.00	56.10	0.55
Sterling Biotech	29.75	26.20	1.14
T & I Global	5.15	29.80	0.17
George William	55.85	74.70	0.75
Warren Tea	44.25	90.50	0.49
Assam Company	18.45	50.40	0.37
Ledo Tea	23.75	45.60	0.52
Tata Tea	174.85	168.30	1.04
AFT Industries	47.65	137.40	0.35
Dhunseri Tea	15.00	84.20	0.18
Norben Tea	2.20	10.30	0.21

The profitability of the target company has been continuously falling in last 5 years. During the period of last 9 months ended on 31.12.2002, PAIL has incurred a loss of Rs. 408.00 lacs. Considering this an offer price of Rs. 70/- per share which represents PBV of 0.53 times as against average industry PBV of 0.43 times is justified.

B. The percentage of annualised trading turnover as against total equity shares listed is mere 2.51%. The average of weekly high and low of the closing prices of the equity shares of PAIL on BSE where equity shares of PAIL are most traded during the 26 weeks prior to the date of Public Announcement is Rs.50.88 per share which has been arrived at as follows:

Sr. No.	Date	High	Low	Average
1	12.06.2002 - 18.06.2002	60.00	57.25	58.63
2	19.06.2002 - 25.06.2002	69.95	58.00	63.98
3	26.06.2002 - 02.07.2002	70.10	62.00	66.05
4	03.07.2002 - 09.07.2002	67.30	64.10	65.70
5	10.07.2002 - 16.07.2002	65.05	62.75	63.90
6	17.07.2002 - 23.07.2002	62.75	62.75	62.75
7	24.07.2002 - 30.07.2002	57.40	57.40	57.40
8	31.07.2002 - 06.08.2002	NT	NT	NT
9	07.08.2002 - 13.08.2002	51.70	47.20	49.45
10	14.08.2002 - 20.08.2002	50.90	49.35	50.13
11	21.08.2002 - 27.08.2002	51.00	48.00	49.50
12	28.08.2002 - 03.09.2002	49.50	44.60	47.05
13	04.09.2002 - 10.09.2002	49.05	49.05	49.05
14	11.09.2002 - 17.09.2002	44.50	44.50	44.50
15	18.09.2002 - 24.09.2002	48.00	47.00	47.50
16	25.09.2002 - 01.10.2002	50.00	50.00	50.00
17	02.10.2002 - 08.10.2002	45.05	45.05	45.05
18	09.10.2002 - 15.10.2002	40.55	40.55	40.55
19	16.10.2002 - 22.10.2002	46.95	41.00	43.98
20	23.10.2002 - 29.10.2002	45.00	43.90	44.45
21	30.10.2002 - 05.11.2002	44.00	42.00	43.00
22	06.11.2002 - 12.11.2002	50.40	42.25	46.33
23	13.11.2002 - 19.11.2002	49.30	46.00	47.65
24	20.11.2002 - 26.11.2002	48.60	47.00	47.80
25	27.11.2002 - 03.12.2002	49.00	41.15	45.08
26	04.12.2002 - 10.12.2002	44.75	40.10	42.43
Avg. Price				50.88

NT: Not Traded

As compared to the average Price for 26 weeks prior to the date of Public Announcement of Rs.50.88 the revised offer price represents a premium of 37.58%.

C. M/s Sunderji Gosar & Co., Chartered Accountants, (Membership No. 103588), having their office at 301, Hind Rajasthan Building, 95 Dadasaheb Phalke Road, Near Dadar Rly. Station (CR), Mumbai – 400014 have justified vide their certificate dated 22/01/2003 the offer price of Rs. 70/- per share after applying the basis of calculation under realizable book value concept, the erstwhile CCI formula and the valuation methodology as laid down by the Supreme Court of India in the case of Hindustan Lever Union Vs Hindustan Lever Limited, 1995. The brief details of the same are as follows:

Realisable Book Value/ Net Asset Value

The net realisable Book Value of PAIL has been arrived at taking the following factors into consideration:

Particulars	Audited Figures as on 31/03/2002 (Rs. in lacs)
Equity Share Capital	375.68
Reserves & Surplus (Excluding Revaluation Reserves)	4602.64
Networth as per books considering “going concern concept” (A)	4978.32
Book Value/Net Asset Value (NAV)* per share (Rs.)	132.51

*NAV = Equity share capital + Reserves & Surplus

No. of equity shares

For arriving at net realisable book value following amounts/liabilities have been considered and accordingly reduced from the networth.

Particulars		Amount (Rs. in lacs)
Investments of coffee property in the partnership firm with continuous losses due to poor realization resulting in erosion in value of investment.		864.76
Assets employed in non-core Algae business (Spirulina)		795.61
Claims against the Company quasi-contractual in nature though not acknowledged as debt but likely to have financial bearing considered at 50% of amount of contingent liability		156.53
Value of Plant & Machinery out of the assets comprising of Plant & Machinery not in operation and non-parity of cost of production and value of assets installed.		544.50
Total	(B)	2361.40
Net Realisable Networth	(A-B)	2616.92
Net Realisable Networth per share (Rs.)		69.66

Thus the realizable book value as on 22/01/2003 as certified by Chartered Accountant is Rs.69.66 per share.

While a number of valuation approaches are feasible, the guidelines of the erstwhile Controller of Capital Issues (CCI) substantially addresses the parameters contained in Regulations in respect of infrequently traded shares.

Profit Earning Capacity Value (PECV)

a. We have considered the last three years (2000 – 2002) Audited Profit & Loss Statements for assessing the average profits.

b. It is noticed that the profits of the company are declining consistently year to year during last five years. For the nine months period ended on 31/12/2002 the company has reported a loss of Rs. 408.00 lacs. Hence PECV is Negative.

c. As PECV is negative, the fair value is assessed to be 50% of NAV as per CCI guidelines.

d. Even if PECV based on EPS for year ended 31/03/2002 is considered the PECV at 8% capitalisation as provided by CCI formula is Rs.41.00 per share.

Fair Value in terms of Supreme Court’s Decision

Considering the decision of the Hon’ble Supreme Court in Hindustan Lever Employee Union v/s. Hindustan Lever Limited (1995), 83 Com Case 30, the Fair value of listed company can be assessed based on following weightages :

Parameter		Weight
Market Based Value	:	2
Earning Based Value	:	2
Net Asset Value	:	1

The Net Asset Value of PAIL being Rs.132.51, the Earning Based Value Per Share (PECV) Rs.41.00 and Average Market Price for the last 26 weeks of Rs.50.88, the Value Per Share applying this method of Valuation would be in the range of Rs.63.25 per share.

D. Considering profitability for the last three years as per audited accounts (2000 – 2002) the weighted Average EPS works out to Rs.4.94. Capitalising the same at 8% as per CCI formula PECV works out to Rs. 61.75.Taking this into account with NAV of Rs. 132.51 and the Market Based Value of Rs. 50.88 the Fair Value in terms of the Supreme Court ruling is Rs. 71.55 per share. However based on the nine months unaudited figures the Company has reported a loss of Rs. 408.00 lacs .The EPS based on annualised financial figures is negative and hence PECV is negative. Based on NAV of Rs. 132.51, Market Based Value of Rs. 50.88 and Nil PECV the Fair Value in terms of the Supreme Court ruling would be Rs. 46.85 per share.

E. The company has reported a loss of Rs 408.00 lacs (Rs. Four Hundred & Eight Lacs Only) for nine months period ended on 31/12/2002. The return on net worth and the EPS has shown a declining trend in the current year. The company is operating in auction tea market which has been severely hit by falling tea prices (tea prices moved down from a high of Rs 68/kg in 1998 to a low of Rs 40/kg in Sep 2002) in CTC segment. As a result there has been a fall in Profit Earning capacity of the company.

F. The Acquirer and Persons deemed to be Acting in Concert have not acquired any equity shares of PAIL during the 12 months period prior to the date of Public Announcement.

G. The voluntary offer by the promoters at a price of Rs.70/- per share is justified in view of the fact that the Company, in January 2002 had announced a buy-back of equity shares in terms of SEBI(Buy Back of Securities) Regulations, 1998 at a price of Rs.70/- per share. However the company had not proceeded with the offer. Further the financial parameters of the company have shown a decline in the subsequent period and hence price of Rs. 70/- per share is justified.

If the Acquirer or the PDACs acquire any equity share of PAIL after the date of the Public Announcement upto 7 working days prior to the closure of the offer at a price higher than the offer price, then the highest price paid for such acquisition will be payable for all the shares tendered in the offer and accepted under the offer.

8. FINANCIAL ARRANGEMENT

a) Assuming full acceptance, the total monetary value of the offer would be Rs. 607.23 lacs. The Acquirer had opened an Escrow Account in the form of Bank Guarantee in favour of the Manager to the Offer for an amount of Rs.141.00 lacs being 25% of the total monetary value of the offer at the original price of Rs. 65/- per share. After the upward revision of the offer price to Rs. 70/- per share, the Acquirer has enhanced the bank guarantee by Rs. 11.00 lacs in favour of the Manager to the Offer. The said bank guarantee of a total of Rs 152.00 lacs has been issued by HDFC Bank Ltd., Annasalai Branch, Chennai and is valid till 10/04/2003. As per Regulation 28 (10), the Acquirer has deposited with HDFC Bank Ltd. a sum of Rs.5,64,000/- (Rupees Five Lacs Sixty Four Thousand Only) being 1% of the total consideration payable as and by way of security for fulfillment of the obligations under the Regulation. An additional deposit to the extent of Rs. 45,000/- (Rupees Forty Five Thousand Only) has been deposited being 1% of the additional consideration payable on account of revision of offer. Thus the total cash deposit of Rs. 6,09,000 /- being more than 1% of the total consideration has been made by the Acquirer. The Acquirer has empowered the Manager to the Offer to realize the value of the aforesaid Escrow Account in terms of the Regulation 28.

b) The Acquirer has adequate and firm financial resources to fulfill the obligations under the open offer. The source of funds is through the internal resources of the Acquirer. The combined networth of holding company M/s New Ambadi Estates Pvt. Ltd. and the acquirer is Rs.2548.19 lacs as on 31.03.2002 as per audited financial results. M/s Sundaram & Srinivasan, Chartered Accountants and Statutory Auditor of NAIPL having their office at 23, C.P. Ramaswami Road, Alwarpet, Chennai – 600 018 (Membership No.FCA13291) have certified vide their certificate dated 09/12/2002 that the company has firm financial arrangements to fulfill the financial obligations under the offer. The funds for complying with the said offer are from the domestic resources and not from any foreign funds.

c) The Manager to the Offer is satisfied about the ability of the Acquirer to implement the offer as firm financial arrangement through verifiable means are in place to fulfill the offer obligation.

9. TERMS AND CONDITIONS OF THE OFFER

a) Eligibility for accepting the Offer: The offer is being made to the equity shareholders of PAIL (other than ‘Acquirer’ and ‘other Persons in promoter group’) whose names appear on the Register of the Members of PAIL at the close of business hours on 09/01/2003 (the “Specified Date”) and also to those persons who own the equity shares at any time prior to the closure of the offer, but are not the registered equity shareholders.

b) Statutory Approvals: As on the date no approvals, statutory or otherwise, are required under the Companies Act 1956, Monopolies and Restrictive Trade Practices Act, 1969, the Foreign Exchange Management Act. 1999 and /or any other applicable laws and from any bank and/ or financial institutions for the said acquisition.

c) Subject to the conditions governing this Offer as mentioned in the Letter of Offer, the acceptance of this offer by the equity shareholders of PAIL must be absolute and unqualified. Any acceptance to this offer which is conditional and incomplete in any respect will be rejected without assigning any reason whatsoever.

10. PROCEDURE FOR ACCEPTANCE AND SETTLEMENT.

10.1 Procedure for accepting the offer by eligible persons

The equity shareholders of PAIL who qualify and who wish to avail of this Offer (hereinafter referred to as “Acceptor”) will have to deliver the relevant documents as mentioned at point (a), (b), and (c) below as applicable to the Registrar to the Offer Integrated Enterprises (India) Ltd. (SEBI Reg. No. INR000000544) at the Collection Centers given in ‘Table A’ given at the end of this Letter of Offer by hand delivery or Registered Post between 10.30 am. to 4.30 pm on all working days(i.e. Monday to Saturday) other than public holidays.

a) For equity shares held in dematerialized form:

For the purpose of the offer a Special Depository Account has been opened with HDFC Bank Ltd. in the name and style of ‘Parry Agro Industries Ltd. – Open Offer – Special Depository Account’. Equity Shareholders holding the shares in dematerialized form will have to deliver the following documents:

i. Form of acceptance cum acknowledgement duly completed and signed in accordance with the instructions contained therein, as per the records of the Depository.

ii. Photocopy of the delivery instruction slip in “off-market” mode or counterfoil of the delivery instruction slip in “off-market” mode, duly acknowledged by the relevant Depository Participant (DP).

iii. For each delivery instruction the beneficial owner should submit separate Form of Acceptance.

iv. The details of the special depository account opened for this purpose are as under:

Name of Depository	NSDL
DP Name	HDFC Bank Ltd.
DP ID	IN300476
Beneficiary ID	40230814
Beneficiary	‘Parry Agro Industries Ltd. – Open Offer – Special Depository Account’

Equity shareholders having their beneficiary account in Central Depositary Services Ltd. (CDSL) will have to use inter depositary delivery instructions slip for the purpose of crediting their equity shares in favour of the special depository account with NSDL.

b) For equity shares held in physical form

Registered equity shareholders should enclose:

i. Form of Acceptance cum acknowledgement duly completed and signed in accordance with the instructions contained therein, by all equity shareholders whose name appears on the share certificates.

ii. Original share certificate(s)

iii. Valid share transfer form(s) duly signed as transferors by all registered equity shareholders (in case of joint holdings), in the same order and as per the specimen signatures registered with and duly witnessed at the appropriate place.

c) Unregistered owners of equity shares should enclose:

i. Form of acceptance cum acknowledgement duly completed and signed in accordance with the instructions contained therein.

ii. Original share certificate(s)

iii. Original broker contract note of a registered broker of a recognized stock exchange.

iv. Valid share transfer form(s) as received from the market. The details of the buyer should be left blank. If the details of the buyer are filled in, the tender will not be valid under the offer. Acquirer name will be subsequently filled in upon verifying the validity of the share transfer form.

v. No indemnity is needed from unregistered equity shareholders.

vi. Persons who have sent their shares for transfer or dematerialisation shall be suitably intimated of the ongoing offer and they may also apply in the said offer on plain paper as per the procedure for unregistered shareholder.

NO DOCUMENT SHOULD BE SENT TO THE ACQUIRER OR TO PAIL (THE COMPANY)

10.2 OFFER PERIOD

This Offer will remain open on all working days (excluding Public Holidays) between 18/02/2003 to 19/03/2003 (both days inclusive). The equity shareholders of PAIL who wish to avail this offer shall be required to send their acceptance in the manner stated above so as to reach the Registrar to the Offer on or before 19/03/2003.

The form of acceptance alongwith the Share Certificate(s) and other documents delivered shall become acceptance on the part of the shareholder, but will become a fully valid and binding contract between shareholder and Acquirer only upon the fulfillment of all conditions mentioned herein.

On fulfillment of the conditions herein mentioned, the Acquirer will pay the Offer price by crossed Account Payee Pay Orders/ Demand Drafts which will be sent by Registered Post to the equity shareholders of PAIL, whose acceptance to the offer are accepted by the Acquirer, at the address registered with the Company. The Pay Orders/ Demand Drafts will be drawn in the name of first named shareholder in case of joint shareholding. In case of unregistered owners of the shares, payment will be made as per mandate given by such owner. The unregistered owner may give a mandate for drawing the pay order / demand draft in the name of the person whose bank details may be furnished by him in the Form of Acceptance for incorporating in the Pay Order / Demand Draft.

10.3 WITHDRAWAL OPTION

The equity shareholders who are desirous of withdrawing their acceptances tendered in the offer, can do so upto three working days prior to the date of the closure of the offer i.e. on or before Wednesday, 12/03/2003. The withdrawal option can be exercised by submitting the ‘Form of Withdrawal’ (separately enclosed with Letter of Offer) to the Registrar to the Offer, Integrated Enterprises (India) Ltd. so as to reach them on or before 12/03/2003.

In case of non-receipt of ‘Form of withdrawal’, the withdrawal option can be exercised by making an application on plain paper along with the following details:

a) In case of physical shares: Name, Address, distinctive numbers, folio nos., number of shares tendered/withdrawn, and

b) In case of dematerialised shares: Name, Address, number of shares tendered/withdrawn, DP name, DP ID, Beneficiary account number and a photocopy of the delivery instruction in “off market” mode or counterfoil of the delivery instruction in “ off market” mode, duly acknowledged by the DP in favour of the Special Depository Account.

The form of Withdrawal can also be downloaded from SEBI’s website www.sebi.gov.in or obtained from the Manager/ Registrar to the Offer.

10.4 Procedure for acceptance of the offer by the equity shareholders who do not receive the Letter of Offer and procedure for settlement

In case of non-receipt of the offer document, the unregistered equity shareholders who wish to accept the offer should communicate their acceptance in writing on a plain paper stating the name, address, no. of shares held, distinctive numbers, folio number, no. of shares offered to the Registrar to the Offer together with relevant share certificate(s), the transfer deed(s) in case of physical mode / delivery instruction slip in case of dematerialized mode and the original contract note issued by share broker of a recognized stock exchange through whom they acquired the equity shares before the close of the Offer, i.e. 19/03/2003. Such equity shareholders may also download a copy of the form of acceptance cum acknowledgement from SEBI’s website at www.sebi.gov.in and use the same.

11. GENERAL

a) The Acquirer shall upto 07/04/2003 complete all procedure relating to the offer including payment of consideration to the equity shareholders who have accepted the offer and for the purpose open a Special Account as provided under Regulation 29 of SEBI (SAST) Regulations 1997.

b) This offer is a voluntary offer to buy all the outstanding shares of the Company. Thus all the equity shares tendered will be accepted. Rejection, if any, will only be on technical grounds which will be intimated to the equity shareholders / applicants by Registrar to the Offer enabling them to rectify the same and tender the shares in the subsequent offer as mentioned under para. 5 (a) of this Letter of Offer.

c) Any unaccepted shares / documents shall be returned to the equity shareholders by Registered Post at their sole risk. The share certificates tendered by the acceptor would be held in trust by the Registrar to the Offer till the Acquirer complete the offer obligation in term of the Regulations.

d) The instruction, authorization and provisions contained in the form of acceptance cum acknowledgement constitute part of the terms of the Offer.

e) Acquirer is confident of completing all the formalities pertaining to the acquisitions of said equity shares, by 07/04/2003.In the event of any delay in making the payment beyond 07/04/2003 the Acquirer shall be liable to pay interest @10% p.a. on the offer price.

f) The directors of the Acquirer would be severally and jointly responsible for ensuring compliance with the Regulations.

12. DOCUMENTS FOR INSPECTION

The following documents are regarded as material documents and are available for inspection at the office of the Acquirer from 11.00 a.m. to 3.00 p.m. on any working day until the Offer closes.

1. Copy of MOU dated 04/12/2002 between Keynote Corporate Services Ltd., Manager to the Offer and Acquirer

2. Copy of MOU dated 11/12/2002 between Integrated Enterprises (India) Ltd., Registrar to the Offer and the Acquirer.

3. Memorandum and Articles of Association of PAIL.

4. Copies of Annual Report of PAIL for the financial years 1999-2000, 2000-01 & 2001-02.

5. Provisional results of PAIL for nine months period ended 31/12/2002 as published in the newspapers.

6. Copy of shareholding pattern of the Company as on 30/09/2002.

7. Memorandum and Articles of Association of New Ambadi Investments Pvt. Ltd.

8. Copies of Annual Report of NAIPL for the financial years 1999-2000, 2000-01 & 2001-02.

9. Biodata of Directors of NAIPL.

10. Copy of certificate dated 09/12/2002 issued by M/s Sundaram & Srinivasan, Chartered Accountant and Statutory Auditor of the Company, regarding networth of NAIPL.

11. Copy of certificate dated 22/01/2003 issued by Sunderji Gosar & Co., Chartered Accountants, justifying the valuation of equity shares of PAIL.

12. Copies of undertaking from Acquirer & Target company.

13. Copy of Public Announcement as published in the newspaper on 12/12/2002 and on 07/02/2003.

14. Copy of letter dated 09/12/2002 from HDFC Bank Ltd., regarding opening of Special Depository Account in the name and style of “Parry Agro Industries Ltd.-open offer-Special Depository Account”.

15. Copies of Fixed Deposit Receipts issued by HDFC Bank Ltd. for deposit of Rs.5,64,000/- and Rs. 45,000/- in terms of the Escrow requirements.

16. Copy of Bank Guarantee dated 10/12/2002 issued by HDFC Bank Ltd., Anna Salai Branch, Chennai for Rs. 152.00 lacs in terms of Escrow Account.

17. Letter No. TO/RC/2698/03 dated 04/02/2003 received from Securities and Exchange Board of India in terms of provisions of Regulation 18(2) of the Regulations.

13. DECLARATION BY THE ACQUIRER

Directors of NAIPL, the ‘Acquirer’ accept full responsibility for the information contained in the Public Announcement and Letter of Offer and would be severally and jointly responsible for ensuring compliance with the obligations of Acquirer as laid down in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto.

For NEW AMBADI INVESTMENTS PVT. LTD.

Sd/-

___________________

(Authorised Signatory)

Place : Chennai

Date : 07/02/2003

COLLECTION CENTERS OF REGISTRAR TO THE OFFER, INTEGRATED ENTERPRISES (INDIA) LTD.

Eligible persons accepting the offer may deliver documents mentioned in the Letter of Offer as applicable at any of the collection centers of the Registrar to the offer mentioned below by hand delivery or registered post between 10.30 a.m. and 4.30 p.m. on all working days (i.e. Monday to Saturday) other than public holidays.

Table A

Collection Center

Address

Tel. No.

Contact Person

Chennai

2^nd Floor, Kences Towers,

1, Ramakrishna Street,

North Usman Road, T. Nagar,

Chennai- 600 017.

(044)

28140801-03

Mr. Velumani

Mumbai

59, Sonawala Building,

Gr. Floor, Mumbai Samachar Marg, Fort, Mumbai – 400023.

(022) 22662825

22662728

Mr. Manoj Pathak

Kolkatta

Trikut, Flat no. 1-B,

4C Lansdowne Place,

Opp.Road of Ramakrishna Mission Hospital, Kolkatta- 700029.

(033)

24746400

24745296

Ms. Sabiratha

Mr.R. Manohar

Delhi

16/11, Arya Samaj Road,

R.D.Chambers (III Floor)

W.E.A. Karol Bagh,

New Delhi – 110005.

(011)

25789552

25787056

Mr. Sujit Kumar

Ahmedabad

21, ‘NIRMAN’, Gr. Floor,

Behind Navarangpura Bus Stop,

Navrangpura,

Ahmedabad – 380009

(079)

6443289

Mr. Natarajan

Kochi

41/427, “Seema”

Nr. Abad Metro Hotel,

Rajaji Road,

Ernakulam – 682035

(0484)

371494

Mr. Shaji Joseph V.

Bangalore

30 & 31-1, Ramana Residency,

4^th Cross, Sampige Road,

Malleswaram,

Bangalore- 560003.

(080)

3446386

3461470

Mr. Somasundaram

Hyderabad

5-9-24/80, Hill Fort Road,

Next to Aligarh Club & UNI Sankya, Basher Bagh,

Hyderabad – 500063.

(040) 23220625

23223614

Mr. Thyagarajan

Coimbatore

Janaki Apts., Gr,Flr. 29/176,

Ramalingam Road (West),

R.S. Puram, Coimbatore-641002.

(0422) 2471944

2471505

Ms. Vidya Diwakar

Madurai

82, 1^st floor, Vakkil New Street,

Madurai – 625001

(0452) 2630305

2620560

Mr. Sashi Kumar

Trichy

Chitra Complex- No.11,

Gr. Floor, Near Chatram Bus Stand, Trichy – 620002.

(0431) 2703670

2764468

Mr. Sreenivasan

The form of Acceptance cum Acknowledgement form & Form of Withdrawal alongwith other documents may be submitted on any date during the offer period.

K E Y N O T E

Name of the Contact Person: Mr. Kannan

INDEX

Financial Arrangement

Terms & Conditions of the offer

DEFINITIONS

(Rs. in lacs)

Current Liabilities and Provisions

Total

(Rs. in lacs)

Current Liabilities and Provisions

Designation

Sr. no

Name

No. of Shares

Sr. no

Name

No. of Shares

Sr. no

Name

No. of Shares

Total

Date

Realisable Book Value/ Net Asset Value

Audited Figures

Particulars

Fair Value in terms of Supreme Court’s Decision

Parameter

12. DOCUMENTS FOR INSPECTION