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EXERCISE 1

Requisition List
Sr. No. Information Requested Remarks

Corporate

1. The minutes of the board meeting dated

________provide a reference of a loan facility
from ______________for INR
________________. Please provide us with a
copy of the same.

2. The minutes of the board meeting of the

Company dated _____________have a
reference of an agreement capturing the terms
and conditions of borrowing
from_________________. Please provide us a
copy of the corresponding document capturing
the terms and conditions.

3. The notes to the accounts attached to the

balance sheet of the Company dated
_____________mentions that the Company
has entered into a tripartite agreement
pursuant to which it has availed a loan of INR
___________with a consortium of banks.
Please provide us with a copy of this tripartite
agreement.

Please provide copies of all statutory registers

maintained by the Company and filings made
by the Company under the Companies Act,
1956 or the Companies Act, 2013 (as may be
applicable), including but not limited to:

(i) Register of charges;

(ii) Register of members;
(iii) Register of transfer of shares;
(iv) Register of debenture holders;
(v) Register of shares bought back under
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Section 68 of the Companies Act, 2013;

(vi) Foreign register of members;
(vii) Registers of particulars of contracts with
“interested” directors as under Section
189 of the Companies Act, 2013;
(viii) Register of directors, managing director,
manager and secretary under Section
170 of the Companies Act, 2013;
(ix) Register of directors’ shareholdings;
(x) Register of investments or loans made,
guarantee given or security provided
under Section 186 of the Companies
Act, 2013;
Copies of directors’ declaration under Section
164 (2) of the Companies Act, 2013.
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EXERCISE 2

REPORT OF
LEGAL DUE DILIGENCE
ON
Electrosteel Castings Limited (“ECL”)

INTRODUCTION
This due diligence report summarizes the results and key findings of the legal due
diligence review conducted by [xyz associates] (“ XYZ”) in respect of the business
and operations of the machinery, equipment, tooling and molding divisions of
Electrosteel Castings Limited (“ECL”) and such business,. The Report is
addressed to and is solely for the use and benefit of Srikalahasthi Pipes Limited
(SPL) (formerly, Lanco Industries Limited) in connection with the proposed
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transaction involving the Sale Business (the “Proposed Transaction”) between

Srikalahasthi Pipes Limited (SPL), or one or more of its subsidiaries/affiliates and
[Electrosteel Castings Limited]. We understand that, pursuant to the Proposed
Transaction, certain definitive agreements will be negotiated, executed and
delivered by and among Electrosteel Castings Limited and Srikalahasthi Pipes
Limited , which are referred to herein as the “Transaction Documents”. This
Report is based on the documents made available by the Company, including, but
not limited to::

(i) Electrosteel Castings Limited (“ECL”)’s Memorandum of Association,

dated as of 21-10-2022 (the “MoA”);

(ii) Electrosteel Castings Limited (“ECL”) Articles of Association, dated as

of 10-5-2019 (“AoA”
(iii) Electrosteel Castings Limited (“ECL”)’s certificate of incorporation,
dated as of 21-3-2015; (iv) Electrosteel Castings Limited (“ECL”) filings
with the Registrar of Companies, Delhi (“RoC”)
(iv) Corporate documents of Electrosteel Castings Limited (“ECL”) made
available during the course of our legal due diligence, details of which is set
out in Schedule-I (Index of Data Room Documents); and (vi) various
responses and explanations provided by [XYZ Associates, legal counsel to
the Company. In preparing this Report, our focus was limited to legal
matters relating to:: (i) Corporate documentations and filings.

CORPORATE INFORMATION
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Organization of the Company Electrosteel Castings Limited (“ECL”) was

incorporated as a private limited company L273100R1955PLC000310 in
Rathod Colony, Rajgangpur, Sundergarh, Odisha 770 017
with its corporate name as –. The Company falls under the jurisdiction of
RoC, and its registered office is at Maheshwari Datamatics Pvt Ltd
Registered Office: 23 R. N. Mukherjee Road, 5th Floor, Kolkata 700 001.

1.2. Equity Capitalization: Equity shares: The authorized share capital of

Electrosteel Castings Limited (“ECL”) Rs. 10 INR /-

Articles of Association of the Company

The AoA of the Company contain standard clauses and the regulations and
Table A of Schedule I of the Companies Act applies to Electrosteel
Castings Limited, unless otherwise expressly incorporated in the AoA.

COMMENTS: The AOA has been drafted under the provisions of the
Companies Act, 1956, and has not been amended as per the Companies Act,
2013.

RECOMMENDATION: The AOA should be redrafted according to the

companies Act, 2013 and must follow all the the amendments and all
thechanges should be supervised by the ROCs before further transaction of
this amalgamation.

Creditor’s right to appoint director to the board of directors of Electrosteel

Castings Limited: A financial corporation or institution or bank or person
that has advanced money to Electrosteel Castings Limited and if such
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amount remains outstanding, may appoint any person(s) to the board of

directors Electrosteel Castings Limited

Notice for general meeting: An annual general meeting and all other general
meetings have been convened at Seven (7) days’ notice, provided that with
the consent of all the members of the Company, in writing, a meeting may
be convened by shorter notice.

Proceedings and voting at general meetings: Quorum for a general meeting

shall be Two (2) members present in person. The chairman of the board of
directors will also preside as the chairman of the general meeting of the
shareholders. Any business other than that upon which a poll has been
demanded, may be proceeded with, pending a poll. In the event equal votes
are cast, the chairman shall have a casting vote.

COMMENTS: in the findings the numbering of AGM, EGM And review

meeting are not numbered accordingly and there various discrepancy in the
sequences which is not according to companies Act, 2013.

RECOMMENDATION: The numbering of all the AGM, EGM and review

meeting should be done accordingly of the regulations of the companies act
and further reviewing meeting should be numbered sequentially.

According to section 17 .1.2 A distinct Minutes Book shall be maintained

for Meetings of the Members of the company, creditors and others as may
be required under the Act. A distinct Minutes Book should be maintained
for each type of Meeting namely:- (i) General Meetings of the Members; (ii)
Meetings of the Creditors; (iii) Meetings of the Debenture Holders; and (iv)
Meetings of class of Members. Resolutions passed by postal ballot shall be
recorded in the Minutes book of General Meetings.
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17.1.4 The pages of the Minutes Books shall be consecutively numbered.

This shall be followed irrespective of a break in the Book arising out of
periodical binding in case the Minutes are maintained in physical form. This
shall be equally applicable for maintenance of Minutes Book in electronic
form with Timestamp

COMMENTS: The minutes of board meetings held during the review

period are not consecutively numbered.and The date of signing of minutes
of meetings is not mentioned on the last page of the minutes of any of the
board meetings.

RECOMMENDATION: Maintenance of Minutes in loose-leaf form is not

specifically provided under the Act. However, MCA has issued
clarifications supporting the contention that Minutes kept in a loose-leaf
form can be said to be in accordance with the provisions of the Act. If
Minutes are maintained in loose-leaf form, these should be bound in one or
more than one book, coinciding with the calendar year or financial year.
This would facilitate proper Maintenance and preservation of Minutes

Directors: The number of directors shall not be less than Two and not more
than Twelve (12). The first directors of Electrosteel Castings Limited:

The qualification of every director is his or her holding and continuing to

hold one share in the capital of the Company. In addition, the directors are
not liable to retire from office by rotation. - Proceedings and voting at the
board meetings: Quorum necessary for transaction of the business of the
board of directors shall be Two (2) directors or one third of the total number
of directors, whichever is higher. A meeting of the directors is competent to
exercise all or any of the authorities, powers and discretions by law or under
the AoA and the regulations for the time being vested or exercisable by the
directors in general. All resolutions must be passed by way of a majority. In
the event equal votes are cast, the chairman shall have a casting vote.
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COMMENTS: The register of directors maintained by the Company is not

updated i.e. the particulars of other directorships held by the directors have
not been specified in the register.

RECOMMENDATION: The key information of all the independent and

non-independent directors’ information should be given according to the
compliance of Company law, 2013 and should be duly signed by the ROC.

Directors Report is one of the most important ways to communicate

between the board and the members. It helps in explaining the overall
financial performance, its operation and scope of activities. Every company
is required to prepare a board’s report based on financials statement of the
company disclosing contents as prescribed under the act every financial
year. Section 134 of companies act, 2013 requires all the companies to
attach its Board’s report along with the financial statements which shall be
laid before the Annual General Meeting (AGM) of the company.

COMMENTS: a. The Board has not made disclosures regarding certain

activities carried out by the Company in its report. The Board’s report for
the previous three financial years had been signedby only one director.

RECOMMENDATION: e board’s report shall be addressed to the members

of company and the matters to be included in a Board’s Report are:

The financial highlights including profit, tax, dividend paid etc.

The web address where the annual return in MGT-9 if it’s placed or it shall
be attached along with board’s report
State of Affairs of company which includes key business development, any
diversification, modernization, acquisition, and merger happened etc.
Amount transferred to reserves, if any Dividend if any is declared. If the
board doesn’t declare the dividend, mention the reason of future business
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plans and expansions. Subsidiary, Associate and Joint Venture companies

and the percentage of holding.

The Board’s report shall be signed by the Chairperson of the company if

authorized by the Board. In case he is not authorized the report shall be
signed by at least 2 directors out of which one shall be a Managing Director.

Debentures of the company: we have found out there is not enough

information given about the debenture holders of the company in the
financial statements.

According to Companies act, Debenture Trustees have a fiduciary

responsibility towards the debenture holders and in order to protect the
interest of such debenture holders, the Debenture Trustees should be made
aware about the developments in the company, by serving to them the
Notice of the General Meeting, Notice of postal ballot and their
accompanying documents.

Comments: The Company does not maintain the Register of debenture

holders.

Recommendation: 2. SEBI Circular No. SEBI/ HO/ MIRSD/ CRADT/

CIR/ P/ 2020/218 dated November 03, 2020, has prescribed the manner in
which debenture trustees shall carry out due diligence for creation of
security at the time of issuance of debt securities and as required under
Regulation 15(1)(s) & 15(1)(t) of DT Regulations, debenture trustee(s) shall
carry out due diligence on continuous basis.
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Section 184. Disclosure of interest by director :director shall at the first

meeting of the Board in which he participates as a director and thereafter at
the first meeting of the Board in every financial year or whenever there is
any change in the disclosures already made, then at the first Board meeting
held after such change, disclose his concern or interest in any company or
companies or bodies corporate , firms, or other association of individuals
which shall include the shareholding, in such manner as may be prescribed.

COMMENTS: We have not been provided with form MBP-1 for each of
the directors of the company.

RECOMMENDATION: director of a company who is in any way, whether

directly or indirectly, concerned or interested in a contract or arrangement
or proposed contract or arrangement entered into or to be entered into—

(a) with a body corporate in which such director or such director in

association with any other director, holds more than two per cent.
shareholding of that body corporate, or is a promoter , manager, Chief
Executive Officer of that body corporate; or

(b) with a firm or other entity in which, such director is a partner, owner or
member.

Rule 9.—(1) Every director shall disclose his concern or interest in any
company or companies or bodies corporate (including shareholding
interest), firms or other association of individuals, by giving a notice in
writing in Form MBP 1.
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Corporate Non-Compliance The Company has not been compliant with

certain provisions of the Companies Act, of 2013. And it can be a possible
compliance issue which can affect this amalgamation.

COMMENTS: A company which has been incorporated in India must ensure

compliance with the Companies Act,2013.

RECOMMENDATION: must go through The Companies Act, 2013 which

regulates appointment, qualification, remuneration, and retirement of directors of
the Company and aspects such as how to conduct Board Meetings and
Shareholders Meetings. The preparation and presentation of annual accounts and
the regular maintenance of books of accounts.

XYZ Associates Note: Failure to maintain a proper minute book attracts

certain penalties under the Companies Act, however, given the nature of the
Proposed Transaction, any fines will only be levied at the corporate level
and does not pose any legal risk for Srikalahasthi Pipes Limited (SPL)