Mysore Cements at its board meeting held on July 18, 2006, has approved the issue of up to 6.65 crore equity shares of Rs 10 each to Cementrum I.B.V. ("Cementrum") a company incorporated under the laws of Netherlands, which is a wholly owned subsidiary of HeidelbergCement AG, Germany at a price of Rs 54 per share (including a premium of Rs 44 per share) on a preferential basis subject to the shareholder and other relevant approvals.

The board has also given consent to enter into a share subscription and share purchase agreement and shareholders agreement (a draft of which was placed before the Board and initialed by the chairman for the purpose of identification) with Cementrum and the existing promoters of the company in terms of which:

Cementrum shall subscribe to 6.65 crore equity shares of Rs 10 each at a price of Rs 54 per share (including a premium of Rs 44 per share) on a preferential basis subject to the shareholder and other relevant approvals, and Cementrum shall purchase from existing promoters 1,34,00,000 equity shares of the company of the face value of Rs 10 each, out of their holdings at a price of Rs 58 per share (plus non-compete fees equivalent to Rs 14.50 per share).

The issue of upto 12,74,944 equity shares at par to IFCI Ltd in part conversion of their dues and increase in authorised share capital from Rs 150 crore to Rs 215 crore subject to the shareholders and other relevant approvals including under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

The board has convened an extraordinary general meeting on August 16, 2006 to consider all relevant matters.