EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2)
OF THE COMPANIES ACT, 1956
 
ITEM NOS. 5 & 6
 
In the Annual General Meeting of the Company held on 29th June, 2006 the Shareholders had authorized the Board of Directors of the Company under section 293(1)(d) of the Companies Act, 1956, to borrow from time to time up to a limit of Rs 2,000 Crores (Rupees two thousand crores only).

The Company, for the purpose of development of its activities and expansions in hand, needs to increase its borrowing powers further by Rs.1,000 Crores (Rupees one thousand crores only) to Rs. 3,000 Crores (Rupees three thousand crores only). Accordingly, it has proposed to increase the said limit.

Since, the borrowings would exceed the paid up Share Capital and Free Reserves (excluding the temporary loans obtained from the Company's bankers and financial institutions etc. in the ordinary course of business) therefore, the resolution no. 6 is being proposed in accordance with the provisions of Section 293(1)(d) of the Act, for approval of the Shareholders.

The resolution number 5 is intended to obtain the consent of the Shareholders under section 293(1)(a) of the Act to mortgage, hypothecate, lease or create any charge on the present and / or future properties / assets of the Company for securing the loans taken or to be taken by the Company from the banks and / or financial institutions etc. up to a limit of Rs 3,000/- Crores (Rupees three thousand crores only).

In view of the above, your Directors recommend the approval of both the aforesaid resolutions.

None of the Directors is in any way concerned or interested in the proposed resolutions.

ITEM NO. 7

The period for payment of the Commission to the Directors as per previous resolution of the shareholders expired on 31.03.2005 and a further approval was taken for payment of commission to the Directors at the rate of 1% of the net profits of the Company to be divided amongst them equally but not exceeding Rs 15 lacs (Rupees fifteen lacs) in every financial year for five years with effect from 1. 4. 2005.

Now the Board felt that the maximum limit of Rs.15 lacs per year, as approved earlier by the shareholders, be increased to Rs. 25 lacs with effect from 01. 04. 2007 subject to the decision of the board from time to time about the quantum. Accordingly, it is recommending for approval of the payment of the enhanced commission to the Directors for the remaining period of 3 years of the five years (i. e. with effect from 1. 4. 2007) approved in the meeting of Shareholders held on 30.6.2005

The Board of Directors recommends the passing of the resolution mentioned under item no. 7 of the Special business as 'Special Resolution'.

All the Directors, except Shri S. K. Parik, are interested in the aforesaid resolution being recipients of the commission.

-	By Order of the Board
Registered Office: 9/1, R. N. Mukherjee Road, Kolkata-700 001 Dated, the 3rd day of May, 2008	S. K. PARIK Director & Secretary