MEMORANDUM OF UNDERSTANDING REGARDING SUSPENSION OF COLLECTION OF TAXES DURING MUTUAL AGREEMENT PROCEDURE

Having regard to the hardship faced by the taxpayers during the pendency of a mutual agreement procedure, the Competent Authorities of  Denmark and India under the Convention between the Kingdom of Denmark and the Republic of India for the avoidance of double taxation and the prevention of fiscal evasion with respect to Taxes on Income and on capital (the "Convention") have determined and agreed that efficient processing of Mutual Agreement Procedure ("MAP") cases will be facilitated by suspending collection of any amounts of tax, including also any related interest or penalties, for any taxable years which are the subject of MAP proceedings.

WHEREAS:

(A) The Competent Authorities have arranged and desired to agree that with regard to amounts of taxes covered under Article 2 of the Convention and potentially payable to the government of Denmark, the Central Customs and Tax Administration, Ministry of Taxation, will suspend collection until putting into effect a mutually agreed disposition of the MAP proceedings concerning the amounts in question;

and

(B) The Competent Authorities have arranged and desired to agree that with regard to amounts of taxes covered under Article 2 of the Convention and potentially payable to the government of India, the Assessing Officer will suspend collection until putting into effect a mutually agreed disposition of the MAP proceedings concerning the amounts in question.

NOW THEREFORE, in consideration of the premises, covenants and conditions herein contained and in implementing this arrangement:

IT IS HEREBY AGREED between the Competent Authorities as follows:

(1) The tax authorities of India and Denmark shall retain the right to demand security in appropriate cases, as deemed fit and necessary to avoid prejudicing the interests of their respective governments.

(2) In India, as security, a taxpayer shall provide an irrevocable Bank Guarantee issued by any scheduled bank, or by an Indian branch of a foreign bank approved by the Reserve Bank of India to carry out banking business in India, as per annexure 'A' to this Memorandum.

(3) In Denmark, as security, a taxpayer shall, upon demand, provide either an irrevocable Bank Guarantee issued by a bank that is authorized by the Danish Financial Supervisory Authority, or by a Danish branch of a foreign bank, as per annexure 'B' to this Memorandum, as well as bonds listed on the Copenhagen Stock Exchange, cash payment, or any other form of security deemed adequate by the Danish tax authorities.

(4) The amount, if any, for which security is demanded under paragraph (2) or (3) above, as the case may be, shall not exceed the amount of additional tax proposed or demanded by the tax authority requiring the security (aggregated for all the period(s) pending before the Competent Authorities), as adjusted by the Assessing Officer in accordance with domestic laws, and subject to further adjustment for interest on these amounts calculated at the statutory rate on non-payments.

(5) Collection of any interest or penalty levied from the concerned taxpayer, in relation to amounts suspended from collection under this Memorandum of Understanding, shall also be suspended.

(6) The amounts of tax(es) identified under Recitals (A) and (B) above, shall include but are not limited to:

(i) Tax demands that have arisen as a result of tax audit or appeal proceedings pending at the time of this Memorandum of Understanding.

(ii) Tax demands, as a result of a tax assessment or re-assessment proceeding, or a tax appeal, or on a review by a Commissioner of Income Tax of an assessment (or re-assessment) proceeding on the grounds that it is prejudicial to the interests of the revenue that could arise subsequent to this Memorandum of Understanding.

(iii) Withholding tax on income or other similar advance taxes that are the subject of MAP proceedings for prior, current or future taxable years.

(7) The Competent Authorities shall endeavour to either resolve or close the case within a period of two years from the date on which one Competent Authority notifies the other that the application from the Taxpayer(s) for assistance under the MAP has been received.

(8) Any draw-down upon a Bank Guarantee referred to in paragraph (2) or (3) above will be authorised only after notice by one Competent Authority to the other at the conclusion of the Mutual Agreement Procedure.

(9) In the event of a lapse of security under paragraph (2) or (3), the taxpayer shall be permitted to substitute another form of security under such paragraph, provided such substitution takes effect not less than 30 days prior to the lapse of the prior security. Such substitution will relieve the bank which provided the first Bank Guarantee from its obligations to the concerned Government of India or Denmark under that first security.

(10) The terms of this Memorandum may be reviewed by the Competent Authorities at anytime in the future upon the request of either party.

In witness whereof the undersigned, duly authorised thereto have signed this Memorandum of Understanding.

Done in duplicate in Copenhagen this 19th of November 2007, in the English language.