alok industries limited · sebi registration no: inm000003531 axis capital limited1, 1st floor,...
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ALOK INDUSTRIES LIMITED
Our Company was incorporated by way of a certificate of incorporation dated March 12, 1986 as „Alok Textile Private Limited‟, a private limited company under the
provisions of the Companies Act, 1956, as amended. Subsequently, by way of a fresh certificate of incorporation dated November 17, 1992, the name of our Company was
changed to „Alok Textiles Industries Private Limited‟. Our Company was thereafter, by way of a certificate of incorporation dated February 11, 1993, converted into a public limited company. Consequently, by way of a fresh certificate of incorporation dated November 8, 2000, our Company‟s name was changed to „Alok Industries Limited‟.
Registered Office: 17/5/1 and 521/1, Village Rakholi / Saily, Silvassa – 396 230, Union Territory of Dadra & Nagar Haveli, India
Corporate Office: Peninsula Towers, “A” Wing, Peninsula Corporate Park, G. K. Marg, Lower Parel, Mumbai – 400 013, Maharashtra, India Tel: +91 22 2499 6200 / 6500; Fax: +91 22 2493 6078 | Contact Person: Compliance Officer, Mr. K. H. Gopal, (Executive Director & Company Secretary)
E-mail: [email protected] Website: www.alokind.com
PROMOTERS OF OUR COMPANY
MR. ASHOK JIWRAJKA, MR. DILIP JIWRAJKA, AND MR. SURENDRA JIWRAJKA
FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF ALOK INDUSTRIES LIMITED
(“COMPANY” OR “ISSUER”) ONLY
ISSUE OF 55,08,46,238 EQUITY SHARES WITH A FACE VALUE OF `10 EACH (“EQUITY SHARES”) FOR CASH AT PAR PER EQUITY SHARE FOR
AN AGGREGATE AMOUNT OF ` 550.85 CRORE ON A RIGHTS BASIS TO THE ELIGIBLE EQUITY SHAREHOLDERS OF THE COMPANY IN THE
RATIO OF 2 EQUITY SHARE(S) FOR EVERY 3 FULLY PAID-UP EQUITY SHARE(S) HELD BY THE ELIGIBLE EQUITY SHAREHOLDERS ON THE
RECORD DATE, THAT IS ON FEBRUARY 19, 2013 (“ISSUE”). THE ISSUE PRICE IS ONE (1) TIME THE FACE VALUE OF THE EQUITY SHARES.
FOR FURTHER DETAILS, PLEASE REFER TO “TERMS OF THE ISSUE” ON PAGE 73.
GENERAL RISKS
Investments in equity and equity related securities involve a degree of risk and Investors should not invest any funds in the Issue unless they can afford to take the risk of
losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in the Issue. For taking an investment decision, Investors must rely on their own examination of the Company and the Issue including the risks involved. The securities being offered in the Issue have not been recommended or
approved by the Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this Letter of Offer. Investors are advised to refer
to the section “Risk Factors” on page xvi before making an investment in this Issue.
THE COMPANY‟S ABSOLUTE RESPONSIBILITY
The Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard to the Issuer and the
Issue, which is material in the context of the Issue, that the information contained in this Letter of Offer is true and correct in all material aspects and is not misleading in any
material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect.
LISTING
The existing Equity Shares are listed on the BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”). We have received “in-principle”
approvals from BSE and NSE for listing the Equity Shares to be allotted in the Issue vide their letters dated November 2, 2012 and October 23, 2012, respectively. For
the purposes of the Issue, the Designated Stock Exchange is BSE.
LEAD MANAGERS TO THE ISSUE REGISTRAR TO THE ISSUE
SBI Capital Markets Limited
202, Maker Tower E,
Cuffe Parade,
Mumbai – 400 005 Maharashtra, India
Tel: +91 22 2217 8300
Fax: +91 22 2218 8332 Email: [email protected]
Investor Grievance E-mail.:
[email protected] Website: www.sbicaps.com
Contact Person: Ms. Shikha Agarwal
SEBI Registration No: INM000003531
Axis Capital Limited1, 1st floor, Axis House,
C-2 Wadia International Centre,
P.B. Marg, Worli, Mumbai- 400025
Maharashtra, India
Tel: +91 22 4325 3101 Fax: +91 22 4325 3000
Email: [email protected]
Investor Grievance E-mail.: [email protected]
Website: www.axiscapital.co.in
Contact Person: Ms. Dipali Dalal SEBI Registration No: INM000012029
Centbank Financial Services Limited 15-16 Bajaj Bhavan,
1st Floor, Opp. Inox Multiplex,
Nariman Point, Mumbai - 400021
Maharashtra, India
Tel: +91 22 2202 2788/5018 Fax: + 91 22 2202 5043
Email: [email protected]
Investor Grievance E-mail: [email protected]
Website: www.cfsl.in
Contact Person: Mr. Rakesh K. Singh SEBI Registration No: INM000011781
Link Intime India
Private Limited
C-13, Pannalal Silk Mills Compound,
LBS Marg, Bhandup West,
Mumbai – 400 078,
Maharashtra, India Tel: +91 22 2596 7878
Fax: +91 22 2596 0329
E-mail: [email protected] Investor Grievance E-mail:
Website: www.linkintime.co.in Contact Person: Mr. Pravin Kasare
SEBI Registration No:
INR000004058
LEAD MANAGERS TO THE ISSUE
Emkay Global Financial Services
Limited
The Ruby, 7th Floor,
Senapati Bapat Marg,
Dadar (West), Mumbai – 400 028, Maharashtra, India
Tel: +91 22 66121212
Fax: +91 22 66121299 Email:[email protected]
Investor Grievance E-mail:
[email protected] Website: www.emkayglobal.com
Contact Person: Mr. Rajesh Ranjan
SEBI Registration No: INM000011229
Fortune Financial Services (India) Limited
K.K. Chambers, 2nd Floor, Sir. P. T. Marg, Fort,
Mumbai – 400 001
Maharashtra, India Tel: +91 22 2207 7931
Fax: +91 22 2207 2948
Email: [email protected] Investor Grievance Email:
Website: www.fortune.co.in Contact Person: Mr. Abhishek Kumar Sureka
SEBI Registration No.: INM000000529
IDBI Capital Market Services
Limited
3rd Floor, Mafatlal Centre,
Nariman Point, Mumbai – 400 021
Maharashtra, India Tel: +91 22 4322 1212
Fax: +91 22 2285 0785
E-mail: [email protected] Investor Grievance Email:
Website:www.idbicapital.com Contact Person: Mr. Swapnil Thakur
SEBI Registration No.: INM000010866
ISSUE PROGRAMME
ISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT APPLICATION FORMS ISSUE CLOSES ON
March 30, 2013 (Saturday) April 20, 2013, (Saturday) April 27, 2013 (Saturday)
1 The merchant banking business of Enam Securities Private Limited has vested with Axis Capital Limited which has been given SEBI registration under the SEBI (Merchant
Bankers) Regulations, 1992, as amended in lieu of earlier registration.
Letter of Offer
March 20, 2013
For our Eligible Equity Shareholders only
March 20, 2013
For our Eligible Equity Shareholders only
TABLE OF CONTENTS
SECTION I – GENERAL ..................................................................................................................................... I
DEFINITIONS AND ABBREVIATIONS .............................................................................................................. I
NOTICE TO OVERSEAS SHAREHOLDERS .................................................................................................... IX
CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA
AND CURRENCY OF PRESENTATION .......................................................................................................... XII
FORWARD LOOKING STATEMENTS ........................................................................................................... XIV
SECTION II - RISK FACTORS ...................................................................................................................... XVI
SECTION III – INTRODUCTION ..................................................................................................................... 1
SUMMARY OF THE ISSUE ................................................................................................................................. 1
SUMMARY FINANCIAL INFORMATION ......................................................................................................... 2
GENERAL INFORMATION ............................................................................................................................... 13
CAPITAL STRUCTURE ..................................................................................................................................... 19
OBJECTS OF THE ISSUE ................................................................................................................................... 27
SECTION IV - STATEMENT OF TAX BENEFITS ....................................................................................... 34
SECTION V - OUR MANAGEMENT ................................................................................................................. 35
SECTION VI – FINANCIAL INFORMATION .............................................................................................. 45
STOCK MARKET DATA FOR EQUITY SHARES ....................................................................................... 46
MATERIAL DEVELOPMENTS ...................................................................................................................... 49
ACCOUNTING RATIOS AND CAPITALISATION STATEMENT ................................................................. 55
SECTION VII – LEGAL AND OTHER INFORMATION ............................................................................. 57
OUTSTANDING LITIGATIONS ........................................................................................................................ 57
GOVERNMENT APPROVALS .......................................................................................................................... 58
OTHER REGULATORY AND STATUTORY DISCLOSURES ........................................................................ 61
SECTION VIII – OFFERING INFORMATION ............................................................................................. 73
TERMS OF THE ISSUE....................................................................................................................................... 73
SECTION IX – STATUTORY AND OTHER INFORMATION .................................................................. 110
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ............................................................ 110
DECLARATION ................................................................................................................................................ 113
i
SECTION I – GENERAL
DEFINITIONS AND ABBREVIATIONS
In this Letter of Offer, unless the context otherwise requires, the terms defined and abbreviations expanded below
shall have the same meaning as stated in this section. References to statutes, rules, regulations, guidelines and
policies will be deemed to include all amendments and modifications notified thereto.
Further, unless otherwise indicated or the context otherwise requires, all references to “Alok Industries Limited”
or to the “Company” is to Alok Industries Limited, references to “we”, “us” or “our” is to Alok Industries
Limited and its Subsidiaries and Joint Ventures, on a consolidated basis, and references to “you” are to the
prospective investors in the Equity Shares.
Conventional and General Terms/ Abbreviations
Term Description
AGM Annual General Meeting
Air Act Air (Prevention and Control of Pollution) Act, 1981, as amended
AS Accounting Standards issued by the Institute of Chartered Accountants of India
AIFs Alternative investment funds as defined in and registered with SEBI under the SEBI
(Alternative Investments Funds) Regulations, 2012
BSE BSE Limited
CARE Credit Analysis & Research Limited
CDSL Central Depository Services (India) Limited
Companies Act Companies Act, 1956, as amended
Depositories Act Depositories Act, 1996, as amended
Depository A depository registered with SEBI under Depositories Act
Depository Participant/ DP A depository participant as defined under the Depositories Act
DIN Director Identification Number
DP ID Depository Participant Identity
EBITDA Earnings before Interest, Tax, Depreciation and Amortisation
EGM Extra-Ordinary General Meeting
EPS Earnings per Share
FDI Foreign Direct Investment
FEMA Foreign Exchange Management Act, 1999, as amended, including the
regulations framed thereunder
FII Foreign Institutional Investor as defined under the Securities and Exchange
Board of India (Foreign Institutional Investors) Regulations, 1995, as amended,
registered with SEBI under applicable laws in India
Financial Year/ Fiscal/ FY Period of 12 months ended on March 31 of that particular year
ii
Term Description
FVCIs Foreign Venture Capital Investors as defined under the SEBI (Foreign Venture
Capital Investors) Regulations, 2000, as amended, registered with SEBI under
applicable laws in India
GAAP Generally Accepted Accounting Principles
GoI Government of India
HUF Hindu Undivided Family
ICAI Institute of Chartered Accountants of India
Indian Boiler Act Indian Boiler Act, 1923, as amended
ISIN International Securities Identification Number allotted by the depository.
Insider Trading Regulations Securities and Exchange Board of India (Prohibition of Insider Trading
Regulations), 1992
IT Act Income Tax Act, 1961, as amended
Indian GAAP Generally accepted accounting principles followed in India
LIC Life Insurance Corporation of India
MICR Magnetic Ink Character Recognition
Mutual Fund A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations,
1996, as amended
NECS National Electronic Clearing Services
NEFT National Electronic Funds Transfer
NR Non-Resident
NRI Non-Resident Indian
NRE Account Non-Resident External Account
NRO Account Non-Resident Ordinary Account
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
OCBs Overseas Corporate Body(ies)
PAN Permanent Account Number under the IT Act
PAC Persons Acting in Concert
PBT Profit Before Tax
RBI Reserve Bank of India
Registrar of Companies/
RoC
Registrar of Companies, Gujarat at Ahmedabad
Regulation S Regulation S under the Securities Act
Rupees/ INR/ `/ Rs. Indian Rupees
RTGS Real Time Gross Settlement
iii
Term Description
SCRA Securities Contracts (Regulation) Act, 1956, as amended
SEBI Securities and Exchange Board of India
SEBI ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009, as amended
Securities Act U.S. Securities Act of 1933, as amended
Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011
Trademark Act Trade Marks Act, 1999, as amended
US/ USA/ United States United States of America
VCFs Venture capital funds as defined under the SEBI (Venture Capital Funds)
Regulations, 1996, as amended, registered with SEBI under applicable laws in
India
Water Act Water (Prevention and Control of Pollution) Act, 1974, as amended
Issue Related Terms
Term Description
Abridged Letter of Offer
or ALoF
The abridged letter of offer to be sent to the Eligible Equity Shareholders with
respect to the Issue
Allotment Unless the context otherwise requires, the allotment of Equity Shares pursuant to
the Issue
Allottees Persons to whom our Equity Shares will be issued pursuant to the Issue
Application Supported by
Blocked Amount/ ASBA
The application (whether physical or electronic) used by an ASBA Investor to
make an application authorizing the SCSB to block the amount payable on
application in the ASBA Account
ASBA Account Account maintained with an SCSB and specified in the CAF or plain paper
application, as the case may be, for blocking the amount mentioned in the CAF, or
the plain paper application, as the case may be
ASBA Investor Eligible Equity Shareholders proposing to subscribe to the Issue through ASBA
process and (i) who are holding our Equity Shares in dematerialized form as on the
Record Date and have applied for their Rights Entitlements and/ or additional
Equity Shares in dematerialized form; (ii) who have not renounced their Rights
Entitlements in full or in part; (iii) who are not Renouncees; and (iv) who are
applying through blocking of funds in a bank account maintained with SCSBs. It is
clarified that QIBs and Non-Institutional Investors are mandatorily required to
make use of ASBA. Furthermore, Eligible Equity Shareholders not being
individuals or HUFs are mandatorily required to make use of ASBA, even if the
application amount does not exceed ` 2,00,000
Axis Capital Axis Capital Limited
Centbank Centbank Financial Services Limited
Composite Application
Form/ CAF
The form used by an Investor to make an application for the Allotment of Equity
Shares in the Issue
iv
Term Description
Consolidated Certificate The single certificate issued by the Company to each Allotee to whom Equity
Shares are allotted in physical form pursuant to the Issue
Controlling Branches of
the SCSBs
Such branches of the SCSBs which coordinate with the Lead Managers, the
Registrar to the Issue and the Stock Exchanges, a list of which is available on
http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries
Designated Branches Such branches of the SCSBs which shall collect application forms used by ASBA
Investors and a list of which is available on
http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries
Draft Letter of Offer The draft letter of offer dated September 26, 2012, filed with SEBI for its
observations, which does not contain complete particulars of the Issue
Eligible Equity
Shareholders
Equity Shareholders of the Company as on the Record Date, i.e., February 19,
2013
Emkay Emkay Global Financial Services Limited
Equity Shares / Shares Fully paid up equity shares of our Company having a face value of `10 each
Equity Shareholders Holders of Equity Shares of our Company
Fortune Financial Fortune Financial Services (India) Limited
IDBICAPS IDBI Capital Market Services Limited
Investor(s) Eligible Equity Shareholders and Renouncees applying in this Issue.
Issue/ Rights Issue Issue of 55,08,46,238 Equity Shares with a face value of `10 each for cash at par
per Equity Share for an amount aggregating ` 550.85 crore on a rights basis to the
Eligible Equity Shareholders in the ratio of 2 Equity Shares for every 3 Equity
Shares held by them on the Record Date (i.e. February 19, 2013)
Issue Closing Date April 27, 2013 (Saturday)
Issue Opening Date March 30, 2013 (Saturday)
Issue Price ` 10 per Equity Share as determined by our Board in consultation with the Lead
Managers
Gross Proceeds The proceeds of the Issue that are available to our Company
Issue Size The issue of 55,08,46,238 Equity Shares aggregating to ` 550.85 crore
Lead Managers SBI Capital Markets Limited, Axis Capital Limited, Centbank Financial Services
Limited, Emkay Global Financial Services Limited, Fortune Financial Services
(India) Limited and IDBI Capital Market Services Limited
Letter of Offer/ LoF This Letter of Offer dated March 20, 2013 to be filed with the Stock Exchanges
after incorporating the observations received from SEBI on the Draft Letter of
Offer
Listing Agreement The listing agreements entered into between us and each of the Stock Exchanges
Monitoring Agency Axis Bank Limited
Net Proceeds The Gross Proceeds less the Issue related expenses. For further details, please refer
to “Objects of the Issue” on page 27
Non - Institutional Non - institutional investor(s) as defined under Regulation 2(1)(w) of the SEBI
v
Term Description
Investor(s) ICDR Regulations
Qualified Foreign
Investors / QFIs
Non-resident investors, other than SEBI registered FIIs or sub-accounts or SEBI
registered FVCIs, who meet „know your client‟ requirements prescribed by SEBI
and are resident in a country which is (i) a member of Financial Action Task Force
or a member of a group which is a member of Financial Action Task Force; and
(ii) a signatory to the International Organisation of Securities Commission‟s
Multilateral Memorandum of Understanding or a signatory of a bilateral
memorandum of understanding with SEBI. Provided that such non-resident
investor shall not be resident in a country which is listed in the public statements
issued by Financial Action Task Force from time to time on: (i) jurisdictions
having a strategic anti-money laundering/combating the financing of terrorism
deficiencies to which counter measures apply; and (ii) jurisdictions that have not
made sufficient progress in addressing the deficiencies or have not committed to
an action plan developed with the Financial Action Task Force to address the
deficiencies.
QIBs / Qualified
Institutional Buyers Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI
ICDR Regulations
Record Date February 19, 2013
Registrar to the Issue/
Registrar and Transfer
Agent/ RTA
Link Intime India Private Limited
Renouncee(s) Any person(s) who has/ have acquired Rights Entitlements from the Eligible
Equity Shareholders
Retail Individual
Investor(s)
Retail individual investor as defined under Regulation 2(1)(ze) of the SEBI ICDR
Regulations
Rights Entitlement The number of Equity Shares that an Eligible Equity Shareholder is entitled to, that
is determined as a proportion to the number of Equity Shares held by such Eligible
Equity Shareholder on the Record Date, i.e., 2 Equity Shares for 3 Equity Shares
held on February 19, 2013
SAF(s) Split application form(s)
SBICAP SBI Capital Markets Limited
SCSB(s) Self Certified Syndicate Bank(s), registered with SEBI, which acts as a banker to
the Issue and which offers the facility of ASBA. A list of all SCSBs is available at
http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries.
Share Certificate The certificate in respect of the Equity Shares allotted to a folio
Stock Exchange(s) BSE and NSE, where our Equity Shares are presently listed
Company Related Terms
Term Description
AOA / Articles/ Articles
of Association
Articles of Association of our Company
vi
Term Description
Alok/ Company/ Issuer
Except as stated otherwise, refers to Alok Industries Limited, a company
incorporated under the Act having its Registered Office at 17/5/1 and 521/1,
Village Rakholi / Saily, Silvassa – 396 230, Union Territory of Dadra & Nagar
Haveli, India
Alok ESOS 2010 Alok Industries Limited Employees Stock Option Scheme 2010, as amended
Associates Associates as per AS 23 namely Next Creations Holdings LLC, Ashford Infotech
Private Limited and Alspun Infrastructure Limited
Audit Committee
The audit committee of our Board constituted pursuant to Section 292A of the
Companies Act and Clause 49 of the Listing Agreement comprising Mr. Ashok
Rajani, Mr. Kandarp Modi, Mr. Dilip Jiwrajka and Mr. M. V. Muthu
Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants, the statutory auditors of our
Company
Board/ Board of Directors The Board of Directors of our Company, unless specified otherwise
Committee of Directors
The committee of Directors of our Board constituted in relation to this Issue and
comprising Mr. Dilip Jiwrajka, Mr. Surendra Jiwrajka, Mr. Kandarp Modi, Mr.
Ashok Rajani and Mr. M. V. Muthu
Continuous
Polymerisation Plant
17/5/1 and 521/1 Rakholi/Saily, Silvassa, Union Territory of Dadra and Nagar
Haveli
Corporate Office Peninsula Towers, “A” Wing, Peninsula Corporate Park, G. K. Marg, Lower Parel,
Mumbai – 400 013, Maharashtra, India
Director(s) Director(s) on the Board of our Company, unless specified otherwise
Garment Units
374/2/2 Saily, Silvassa, Union Territory of Dadra and Nagar Haveli;
17/5/1 Rakholi, Silvassa, Union Territory of Dadra and Nagar Haveli;
273/1/1 Hingraj Industrial Estate, Atiawad, Daman Union Territory; and
50/P2, 52/P1 Morai, Taluka Pardi District Valsad, Gujarat.
Hemming Unit 103/2 Rakholi, Silvassa, Union Territory of Dadra and Nagar Haveli
Joint Ventures Joint ventures as per AS 27 namely Aurangabad Textiles & Apparel Parks Limited
and New City of Bombay Manufacturing Mills Limited
KMP Key Managerial Personnel
Knitting Unit 412 (15) Saily, Silvassa, Union Territory of Dadra and Nagar Haveli
Made-ups Units 374/2/2 Saily, Silvassa, Union Territory of Dadra and Nagar Haveli; and
149/150 Morai, Taluka Pardi District Valsad, Gujarat
MOA/ Memorandum /
Memorandum of
Association
Memorandum of Association of our Company
Packing Unit 87/1/1 and 96/1 Village Falandi, Silvassa, Union Territory of Dadra and Nagar
Haveli
POY/Texturising Unit 17/5/1 and 521/1 Rakholi/Saily, Silvassa, Union Territory of Dadra and Nagar
Haveli
vii
Term Description
Processing Units
C-16/2 Village Pawane, TTC Industrial Estate MIDC, Navi Mumbai District
Thane;
261/268, Village Balitha, Taluka Pardi, District Valsad, Gujarat; and
254, Village Balitha, Taluka Pardi, District Valsad, Gujarat
Promoters Promoters of our Company, namely, Mr. Ashok Jiwrajka; Mr. Dilip Jiwrajka; and
Mr. Surendra Jiwrajka
Promoter Group
Promoter group shall mean the persons and entities forming part of our promoter
group in accordance with the SEBI ICDR Regulations and such persons and
entities disclosed as promoter group in filings made by the Company with the
Stock Exchanges pursuant to Clause 35 of the Listing Agreement
Registered Office 17/5/1 and 521/1, Village Rakholi / Saily, Silvassa - 396230, Union Territory of
Dadra and Nagar Haveli, India
Share Transfer and
Investors‟ Grievance
Committee
The share transfer and investors‟ grievance committee of our Board constituted
pursuant to Clause 49 of the Listing Agreement comprising Mr. Ashok Rajani, Mr.
Dilip Jiwrajka, Mr. Surendra Jiwrajka and Mr. Ashok Jiwrajka
Spinning Unit 412 (15) Saily, Silvassa, Union Territory of Dadra and Nagar Haveli
Subsidiaries
The subsidiaries of our Company as of this Letter of Offer, namely, our direct
Subsidiaries, i.e. (1) Alok Apparels Private Limited; (2) Alok H & A Limited; (3)
Alok Infrastructure Limited; (4) Alok International Inc. (5) Alok Land Holdings
Private Limited; (6) Alok Retail (India) Limited; (7) Alok International (Middle
East) FZE; and (8) Alok Singapore Pte. Ltd. and our step-down Subsidiaries, i.e.
(1) Alok European Retail s.r.o.; (2) Alok Realtors Private Limited; (3) Kesham
Developers and Infotech Private Limited (under liquidation); (4) Mileta a.s.; (5)
Springdale Information and Technologies Private Limited (under liquidation); (6)
Alok Industries International Ltd.; (7) Grabal Alok International Limited; and (8)
Grabal Alok (UK) Limited
Terry Towel Unit 263/P1/P1 and 251/2/P1 Village Balitha, Taluka Pardi, District Valsad, Gujarat
Weaving Units
Babla Compound Kalyan Road, District Bhiwandi, Thane;
17/5/1 and 521/1 Rakholi/Saily, Silvassa, Union Territory of Dadra and Nagar
Haveli; and
209/1 and 209/4 Silvassa, Village Dadra, Union Territory of Dadra and Nagar
Haveli
We / Us / Our Alok Industries Limited, unless specified otherwise
Technical/ Industry Related Terms
Term Description
POY Partially Oriented Yarn
PTA Purified Terephthalic Acid
MEG Mono Ethylene Glycol
FDY Fully Drawn Yarn
DTY Drawn Texturising Yarn
viii
Term Description
MPLS-VPN Multiprotocol Label Switching to create Virtual Private Networks
NCD Non Convertible Debentures
SAP Systems Applications and Products
EPCG Export Promotion Capital Goods Scheme
RM Raw Material
WIP Work in Progress
FG Finished Goods
TUFs Technology Upgradation Fund Scheme
MT Metric Tonnes
The words and expressions used but not defined herein shall have the same meaning as is assigned to such terms
under the SEBI ICDR Regulations, the Companies Act, the SCRA, the Depositories Act and the rules and
regulations made thereunder.
ix
NOTICE TO OVERSEAS SHAREHOLDERS
The distribution of the Draft Letter of Offer, Letter of Offer, Abridged Letter of Offer and the Issue of Equity
Shares on a rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements
prevailing in those jurisdictions. Persons into whose possession the Draft Letter of Offer, Letter of Offer,
Abridged Letter of Offer or CAF may come are required to inform themselves about and observe such
restrictions. We are making this Issue of Equity Shares on a rights basis to the Eligible Equity Shareholders and
will dispatch the Letter of Offer/ Abridged Letter of Offer and CAFs to such shareholders who have a registered
address in India or who have provided an Indian address.
No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for
that purpose, except that the Draft Letter of Offer has been filed with SEBI for observations. Accordingly, the
rights or Equity Shares may not be offered or sold, directly or indirectly, and this Letter of Offer/ Abridged
Letter of Offer may not be distributed in any jurisdiction, except in accordance with legal requirements
applicable in such jurisdiction. Receipt of this Letter of Offer/ Abridged Letter of Offer will not constitute an
offer in those jurisdictions in which it would be illegal to make such an offer and, under those circumstances,
this Letter of Offer/ Abridged Letter of Offer must be treated as sent for information only and should not be
copied or redistributed. Accordingly, persons receiving a copy of this Letter of Offer/ Abridged Letter of Offer
should not, in connection with the issue of the rights or Equity Shares, distribute or send the same in or into the
United States or any other jurisdiction where to do so would or might contravene local securities laws or
regulations. If this Letter of Offer/ Abridged Letter of Offer is received by any person in any such territory, or
by their agent or nominee, they must not seek to subscribe to the rights or Equity Shares referred to in this Letter
of Offer/ Abridged Letter of Offer.
Neither the delivery of this Letter of Offer/ Abridged Letter of Offer nor any sale hereunder, shall under any
circumstances create any implication that there has been no change in our affairs from the date hereof or that the
information contained herein is correct as at any time subsequent to this date.
European Economic Area Restrictions
In relation to each member state of the European Economic Area which has implemented the Prospectus
Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus
Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”), no offer may be
made to the public of any rights or Equity Shares which are the subject of the offering contemplated by this
Letter of Offer in that Relevant Member State except that, with effect from and including the Relevant
Implementation Date, an offer to the public of such rights or Equity Shares may be made in that Relevant
Member State:
(i) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised
or regulated, whose corporate purpose is solely to invest in securities;
(ii) to any legal entity which has two or more of (1) an average of at least 250 employees during the last Fiscal;
(2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000,
as shown in its last annual or consolidated accounts;
(iii) to fewer than 100 natural or legal persons (other than qualified investors as defined in Article 2(1)(e) of the
Prospectus Directive) subject to obtaining the prior consent of the underwriters for any such offer; or
(iv) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such
offer of rights or Equity Shares shall require us or the Lead Managers to publish a prospectus pursuant to
Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus
Directive.
x
For the purposes of this section, the expression an “offer to the public” in relation to any ordinary shares in any
Relevant Member State means the communication in any form and by any means of sufficient information on
the terms of the offer and any ordinary shares to be offered so as to enable an investor to decide to purchase any
ordinary shares, as the same may be varied in that Relevant Member State by any measure implementing the
Prospectus Directive in that Relevant Member State and the expression “Prospectus Directive” means Directive
2003/71/EC and includes any relevant implementing measure in each Relevant Member State.
Each purchaser of the rights or Equity Shares described in this Letter of Offer located within a Relevant
Member State will be deemed to have represented, acknowledged and agreed that it is a “qualified investor”
within the meaning of Article 2(1) (e) of the Prospectus Directive.
In the case of any rights or Equity Shares in this Issue being offered to a financial intermediary as that term is
used in Article 3(2) of the Prospectus Directive, the Lead Managers will use their reasonable endeavours, by the
inclusion of appropriate language in this Letter of Offer, to procure that such financial intermediary will be
deemed to have represented, acknowledged and agreed that the rights or Equity Shares acquired by it in the
Issue have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view
to their offer or resale to, persons in circumstances which may give rise to an offer of any Equity Shares in this
Issue to the public other than their offer or resale in a Relevant Member State to qualified investors as so defined
who are not financial intermediaries or in circumstances in which the prior consent of the Lead Managers has
been obtained to each such proposed offer or resale.
This European Economic Area selling restriction is in addition to any other selling restriction set out below.
United Kingdom
The Lead Managers:
a. have not offered or sold, and prior to the expiry of a period of six months from the issue date of
any rights or Equity Shares, will not offer or sell any securities of the Company to persons in the
United Kingdom except to “qualified investors” as defined in section 86(7) of the Financial
Services and Markets Act, 2000 (“FSMA”) or otherwise in circumstances which have not resulted in
an offer to the public in the United Kingdom;
b. have complied and will comply with an applicable provisions of FSMA with respect to anything
done by it in relation to the rights or Equity Shares in, from or otherwise involving the United
Kingdom; and
c. in the United Kingdom, will only communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning of section 21 of the FSMA)
to persons that are qualified investors within the meaning of Article 2(J)(e) of the Prospectus Directive
who (i) have professional experience in matters relating to investments falling within Article 19(5) of
the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the
“Order”); and/or (ii) are high net worth entities falling within Article 49(2)(a) to (d) of the Order; and
(iii) other persons to whom it may otherwise lawfully be communicated (all such persons together
being referred to as “relevant persons”). This Letter of Offer and its contents are confidential and
should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to
any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant
person should not act or rely on this document or any of its contents.
NO OFFER IN THE UNITED STATES
The Rights Entitlement and Equity Shares have not been and will not be registered under the U.S. Securities Act
of 1933, as amended (“Securities Act”), or any U.S. state securities laws and may not be offered, sold, resold or
xi
otherwise transferred within the United States of America or the territories or possessions thereof (the “United
States” or “U.S.”), or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the
Securities Act (“Regulation S”)), except in a transaction exempt from the registration requirements of the
Securities Act. The offering to which this Letter of Offer relates is not, and under no circumstances is to be
construed as, an offering of any Equity Shares or rights for sale in the United States or as a solicitation therein
of an offer to buy any of the said Equity Shares or Rights Entitlement. Accordingly, this Letter of Offer or the
Abridged Letter of Offer and the CAF should not be forwarded to or transmitted in or into the United States at
any time.
Neither we nor any person acting on behalf of us will accept subscriptions or renunciation from any person, or
the agent of any person, who appears to be, or who we or any person acting on behalf of us has reason to believe
is, either a “U.S. Person” (as defined in Regulation S) or otherwise in the United States when the buy order is
made. Envelopes containing a CAF should not be postmarked in the United States or otherwise dispatched from
the United States or any other jurisdiction where it would be illegal to make an offer, and all persons subscribing
for the Equity Shares in this Issue and wishing to hold such Equity Shares in registered form must provide an
address for registration of the Equity Shares in India. We are making the Issue on a rights basis to Eligible
Equity Shareholders and the Letter of Offer and CAF will be dispatched only to Eligible Equity Shareholders
who have an Indian address. Any person who acquires rights and the Equity Shares offered in this Issue will be
deemed to have declared, represented, warranted and agreed, (i) that it is not and that at the time of subscribing
for such Equity Shares or the Rights Entitlements, it will not be, in the United States when the buy order is
made, (ii) it is not a “U.S. Person” (as defined in Regulation S) and does not have a registered address (and is
not otherwise located) in the United States, and (iii) it is authorised to acquire the rights and the Rights Issue
Equity Shares in compliance with all applicable laws and regulations.
We reserve the right to treat any CAF as invalid which: (i) does not include the certification set out in the CAF
to the effect that the subscriber is not a “U.S. Person” (as defined in Regulation S) and does not have a
registered address (and is not otherwise located) in the United States and is authorized to acquire the Equity
Shares or Rights Entitlement in compliance with all applicable laws and regulations; (ii) appears to us or our
agents to have been executed in or dispatched from the United States; (iii) appears to us or our agents to have
been executed by a “U.S. Person” (as defined in Regulation S); (iv) where a registered Indian address is not
provided; or (v) where we believe that CAF is incomplete or acceptance of such CAF may infringe applicable
legal or regulatory requirements; and we shall not be bound to allot or issue any Equity Shares or Rights
Entitlement in respect of any such CAF.
xii
CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND
CURRENCY OF PRESENTATION
Certain Conventions
References in this Letter of Offer to “India” are to the Republic of India and the “Government” or the “Central
Government” is to the Government of India. All references to the “US”, or the “U.S.A.” or the “United States”
are to the United States of America and all references to “UK” or the “U.K.” are to the United Kingdom.
Financial Data
Unless stated otherwise, financial data in this Letter of Offer with respect to our Company is derived from our
audited consolidated financial statements. Our Fiscal Year commences on April 1 for a year and ends on March
31 of the next year. In this Letter of Offer, the standalone and consolidated audited financial statements for
Fiscal 2012 and the standalone and consolidated limited review financial statements for the half year ended
September 30, 2012 have been included. For details of such financial statements, please refer to “Financial
Information” on page 45.
We have included the limited review results for the nine-month and quarter ending December 31, 2012, as
disclosed to the Stock Exchanges. We have also included our working results, on a standalone basis, for the ten
month period from April 1, 2012 till January 31, 2013. For further details, please refer to “Material
Developments” on page 49.
We prepare our financial statements in accordance with the Indian GAAP, which differ in certain respects from
generally accepted accounting principles in other countries. Indian GAAP differs in certain significant respects
from IFRS. We publish our financial statements in Indian Rupees. Any reliance by persons not familiar with
Indian accounting practices on the financial disclosures presented in this Letter of Offer should accordingly be
limited. We have not attempted to explain those differences or quantify their impact on the financial data
included herein, and we urge you to consult your own advisors regarding such differences and their impact on
our financial data.
In this Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are
due to rounding off, and unless otherwise specified, all financial numbers in parenthesis represent negative
figures. Numerical values have been rounded off to two decimal places.
Industry and Market Data
Unless stated otherwise, market, industry and demographic data used in this Letter of Offer has been obtained
from market research, publicly available information, industry publications and government sources. Industry
publications generally state that the information that they contain has been obtained from sources believed to be
reliable but that the accuracy and completeness of that information is not guaranteed. Similarly, internal surveys,
industry forecasts and market research, while believed to be reliable, have not been independently verified and
neither we nor the Lead Managers makes any representation as to the accuracy of that information. Accordingly,
Investors should not place undue reliance on this information.
Currency and Units of Presentation
All references in this Letter of Offer to “Rupees”, “`”, “Indian Rupees” and “INR” are to Indian Rupees, the
official currency of India. All references to “U.S. $”, “U.S. Dollar”, “USD” or “$” are to United States Dollars,
the official currency of the United States of America.
Exchange Rates
xiii
Fluctuations in the exchange rate between the Rupee and the U.S. Dollar will affect the U.S. Dollar equivalent
of the Rupee price of the Equity Shares on the Stock Exchanges. These fluctuations will also affect the
conversion into U.S. Dollars of any cash dividends paid in Rupees on the Equity Shares.
The following table sets forth, for the periods indicated, information with respect to the exchange rate between
the Rupee and the U.S. Dollar (in Rupees per U.S. Dollar) based on the reference rates released by the RBI. No
representation is made that the Rupee amounts actually represent such amounts in U.S. Dollars or could have
been or could be converted into U.S. Dollars at the rates indicated, at any other rates or at all.
Year ended March 31 Period End
(in `)
Average*
(in `)
High*
(in `)
Low*
(in `)
2010 45.14 47.42 50.53 44.94
2011 44.65 45.27 45.95 44.65
2012 51.15 47.94 54.23 43.94
Month ended Period End
(in `)
Average*
(in `)
High*
(in `)
Low*
(in `)
September 2012 52.69 54.60 55.97 52.69
October 2012 54.11 53.02 54.16 51.61
November 2012 54.52 54.77 55.70 53.66
December 2012 54.77 54.64 55.08 54.20
January 2013 53.28 54.31 55.32 53.28
February 2013 53.77 53.77 54.48 52.97
Source: RBI website at www.rbi.org.in
*Note: High, low and average are based on the RBI reference rate
RBI reference rates as of February 28, 2013 - 1 USD = ` 53.77
xiv
FORWARD LOOKING STATEMENTS
Certain statements in this Letter of Offer are not historical facts but are “forward-looking” in nature. Forward
looking statements appear throughout this Letter of Offer, including, without limitation, under the chapters
“Risk Factors”. Forward-looking statements include statements concerning our plans, objectives, goals,
strategies, future events, future revenues or financial performance, capital expenditures, financing needs, plans
or intentions relating to acquisitions, our competitive strengths and weaknesses, our business strategy and the
trends we anticipate in the industry and the political and legal environment, and geographical locations, in which
we operate, and other information that is not historical information.
Words such as “aims”, “anticipate”, “believe”, “could”, “continue”, “estimate”, “expect”, “future”, “goal”,
“intend”, “is likely to”, “may”, “plan”, “predict”, “project”, “seek”, “should”, “targets”, “would” and similar
expressions, or variations of such expressions, are intended to identify forward-looking statements but are not
the exclusive means of identifying such statements.
By their nature, forward-looking statements involve inherent risks and uncertainties, both general and specific,
and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be
achieved.
These risks, uncertainties and other factors include, among other things, those listed under “Risk Factors” on
page xvi of this Letter of Offer, as well as those included elsewhere in this Letter of Offer. Prospective investors
should be aware that a number of important factors could cause actual results to differ materially from the plans,
objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors
include, but are not limited, to:
Our indebtedness and the conditions and restrictions imposed by our financing and other agreements;
Any failure or disruption of our information technology systems;
Delivery of adequate and uninterrupted supply of electrical power and water at a reasonable cost;
Fluctuations in the prices of our raw materials including raw cotton, PTA and MEG;
Our ability to retain our customers and our ability to sell our products at competitive prices;
Increase in our Company‟s working capital cycle;
General economic and business conditions in the markets in which we operate and in the local, regional and
national economies;
Increasing competition in or other factors affecting the industry segments in which our Company operates;
Changes in laws and regulations relating to the industries in which we operate;
Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch
and implement various projects and business plans;
Our ability to meet our capital expenditure requirements and/or increase in capital expenditure;
Fluctuations in operating costs and impact on the financial results;
Our ability to attract and retain qualified personnel;
Changes in technology in future;
xv
Changes in political and social conditions in India or in countries that we may enter, the monetary policies
of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or
other rates or prices;
Variations in exchange rates;
The performance of the financial markets in India and globally; and
Any adverse outcome in the legal proceedings in which we are involved.
For a further discussion of factors that could cause our actual results to differ, please refer to “Risk Factors” on
page xvi. By their nature, certain market risk disclosures are only estimates and could be materially different
from what actually occurs in the future. As a result, actual future gains or losses could materially differ from
those that have been estimated. Neither we nor the Lead Managers make any representation, warranty or
prediction that the results anticipated by such forward-looking statements will be achieved, and such forward-
looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the
most likely or standard scenario. Neither we nor the Lead Managers nor any of their respective affiliates or
advisors have any obligation to update or otherwise revise any statements reflecting circumstances arising after
the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come
to fruition. In accordance with SEBI/ Stock Exchanges requirements, we and the Lead Managers will ensure that
the Eligible Equity Shareholders are informed of material developments until the time of the grant of listing and
trading permissions by the Stock Exchanges.
xvi
SECTION II - RISK FACTORS
An investment in equity and equity related securities involves a high degree of risk and Investors should not
invest any funds in this Issue unless they can afford to take the risk of losing all or a part of their investment.
You should carefully consider all of the information in this Letter of Offer, including the risks and uncertainties
described below, before making an investment in our Equity Shares. In making an investment decision,
prospective Investors must rely on their own examination of us and terms of the Issue, including the merits and
risk involved. If any of the following risks actually occur, our business, financial condition, results of operations
and prospects could suffer, the trading price of our Equity Shares could decline and you may lose all or part of
your investment. The risk and uncertainties described below are not the only risks that we currently face.
Additional risk and uncertainties not presently known to us or that we currently believe to be immaterial may
also have an adverse effect on results of operations and financial condition, which could result in a decline in
the value of the Equity Shares. You should also pay particular attention to the fact that we are governed in India
by a legal and regulatory environment which in some material respects may be different from that which
prevails in other countries.
This Letter of Offer also contains forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking statements as a result of certain
factors, including the considerations described below and elsewhere in this Letter of Offer. The financial and
other implications of material impact of risks concerned, wherever quantifiable, have been disclosed in the risk
factors mentioned below. However there are a few risk factors where the impact is not quantifiable and hence
the same has not been disclosed in such risk factors.
Prospective Investors should carefully consider the following risk factors as well as other information included
in this Letter of Offer prior to making any decision as to whether or not to invest in our Equity Shares. The risks
described below and any additional risks and uncertainties not presently known to us or that currently are
deemed immaterial could adversely affect our business, financial condition, liquidity or results of operations. As
a result, the trading price of our Equity Shares could decline and Investors may lose part or all of their
investment. Additional risks and uncertainties, including those that we are not aware of or deem immaterial,
may also result in decreased revenues, increased expenses or other events that could result in a decline in the
value of the Equity Shares.
In this section, unless the context otherwise requires, a reference to the “Company” is to Alok Industries
Limited, and a reference to “we”, “us” or “our” refers to Alok Industries Limited and its Subsidiaries and Joint
Ventures on a consolidated basis. Unless otherwise stated, the financial information of our Company used in
this section is derived from our consolidated financial statements prepared under Indian GAAP. Financial
information provided herein as at and for the period up to March 31, 2012 on standalone and consolidated
basis has been derived from audited numbers, however for the period beyond that and as at September 30, 2012
on standalone and consolidated basis have been subject to limited review.
Internal Risks
1. Our substantial indebtedness of ` 16,427.24 crore and the conditions and restrictions imposed by our
financing and other agreements could adversely affect our ability to conduct our business and
operations.
As of September 30, 2012, we had a total outstanding debt of ` 13,824.34 crore, on a standalone basis
(including long term debt aggregating to ` 6,907.67 crore) and approximately ` 16,427.24 crore, on a
consolidated basis, (including long term debt aggregating to ` 8,296.85 crore). Our Company‟s total debt
to equity ratio and long term debt to equity ratio, on a consolidated basis, as on September 30, 2012, was
5.32 and 2.69, respectively. Our Company‟s total debt to equity ratio and long term debt to equity ratio, on
a standalone basis, as on September 30, 2012, was 3.46 and 1.73, respectively. Our net debt outstanding
xvii
was ` 13,455.73 crore and our net debt (excluding cash and bank balances) to equity (equity includes share
capital and all reserves) ratio was 3.37, on a standalone basis. Further, our net debt outstanding was `
16,004.17 crore and our net debt (excluding cash and bank balances) to equity (equity includes share capital
and all reserves) ratio was 5.18, on a consolidated basis. The majority of our indebtedness is secured against
our immovable and movable assets, and also by way of guarantees issued by our Promoters. In particular, as
of September 30, 2012, our total debt outstanding is ` 13,824.34 crore, which includes our borrowing under
TUFs aggregating to ` 2,580.03 crore, and our short-term borrowing (including amounts due within the
year) are ` 6,916.67 crore on a standalone basis. Further, as of September 30, 2012, our total debt
outstanding is ` 16,427.24 crore, which includes our borrowing under TUFs aggregating to ` 2,599.42
crore, and our short-term borrowing (including amounts due within the year) are ` 8,130.39 crore on a
consolidated basis. For further details on our indebtedness, please refer to “Financial Information” on page
45 of this Letter of Offer.
In addition, we may incur substantial additional indebtedness in the future. The high level of our
indebtedness could have several important consequences, including but not limited to the following:
a substantial portion of our cash flows will be used towards repayment of our existing debt, which will
reduce the availability of cash flows to fund working capital, capital expenditures, particularly for our
ongoing expansion projects, acquisitions and other general corporate requirements;
our ability to obtain additional financing in the future or renegotiate or refinance our existing
indebtedness on terms favorable to us may be limited;
fluctuations in market interest rates will affect the cost of our borrowings, as all our indebtedness is
subject to floating rates of interest;
we may be restricted from making dividend payments to our shareholders under certain circumstances;
we may have difficulty in satisfying repayments and other restrictive covenants under our existing
financing arrangements. Specifically, we may require, and may be unable to obtain, lender consents to
incur additional debt, issue equity, change our capital and/or management structure, increase or modify
our capital expenditure plans, undertake any expansion, provide additional guarantees, merge with or
acquire other companies, or distribute dividends under certain circumstances, whether or not there is
any failure by us to comply with the other terms of such agreements. Our inability to comply with these
requirements could result in an event of default, consequent cross defaults, acceleration of our
repayment obligations and enforcement of related security interests over our assets or penalties.
If the obligations under any of our financing documents are accelerated, we may have to dedicate a
substantial portion of our cash flow from operations to make payments under the financing documents,
thereby reducing the availability of our cash flow to meet working capital requirements and use for other
general corporate purposes. Further, this may also result in a decline in the trading price of the Equity
Shares and you may lose all or part of your investment. As of March 8, 2013, 99.15% of our Promoters and
Promoter Group holding in our Company i.e. 33.17% of the total paid-up equity share capital of our
Company has been pledged in favour of various lenders. If these lenders enforce their respective pledges,
the shareholding of our Promoters and Promoter Group in our Company may further reduce. For further
details, please refer to risk factor no. 2, “99.15% of our Promoters and Promoter Group shareholding in our
Company is pledged in favour of various banks, NBFCs and financial institutions. The invocation of such
pledges may result in a decrease of our Promoters’ stake in, or a change in control of our Company.” on
page xviii of this Letter of Offer.
In addition, we also intend to deleverage our balance sheet by exiting from our real estate business to
reduce our existing debt obligations. However, our inability to exit the real estate business at the time or in
the manner we expect could adversely affect our operations and profitability. Furthermore, we may also be
xviii
unable to recover our investments and costs incurred, which may have a material adverse impact on our
capital availability for our future capital expenditure requirements. For further details, please refer to risk
factor no. 5 “Our inability to exit the real estate business in the time or in the manner we expect could
adversely affect our operations and profitability” on page xix of this Letter of Offer.
2. 99.15% of our Promoters and Promoter Group shareholding in our Company is pledged in favour of
various banks, NBFCs and financial institutions. The invocation of such pledges may result in a
decrease of our Promoters‟ stake in, or a change in control of our Company.
As of March 8, 2013, 99.15% of our Promoters and Promoter Group holding in our Company i.e. 33.17% of
the total paid-up equity share capital of our Company has been pledged in favour of various lenders.
Further, as per the financing documentation executed between our Promoters and Promoter Group with
such banks, NBFCs and institutions, these entities have the right to obtain a pledge on further Equity Shares
in the case of certain events, including, amongst other things, if the value of the pledged Equity Shares is
insufficient. In the event of an event of default under any of the relevant financing documentation entered
into by our Promoters and Promoter Group with such banks, NBFCs and institutions, these banks, NBFCs
and financial institutions may invoke their respective pledges on these Equity Shares, which may result in a
decrease of our Promoters‟ stake in, or a change in control of our Company. The invocation of any of these
pledges shall result in a decrease in the stake of our Promoters and Promoter Group. Furthermore, the
perception of the invocation of such pledges could adversely affect the trading price of our Equity Shares.
For further details in relation to our Promoters and Promoter Group shareholding, please refer to “Capital
Structure” on page 19 of this Letter of Offer.
3. Information relating to the installed capacities of our manufacturing facilities included in this Letter of
Offer is based on various assumptions and actual production at our manufacturing facilities may vary
from such estimated installed capacity information.
The information relating to the installed capacities of our manufacturing facilities included in this Letter of
Offer is based on various assumptions and estimates which are based on proposed operations, assumptions
relating to availability and quality of raw materials and assumptions relating to potential plant utilization
levels and potential operational efficiencies. These estimates in relation to the production capacities are only
to the extent of production capable from the installed machinery, which presumes optimal utilisation of such
machinery which is also captured in detail in the section titled “Objects of the Issue” on page 27 of this
Letter of Offer. Capacity additions to our manufacturing facilities have been made on an incremental basis,
including through expansion of our facilities as well as de-bottlenecking exercises and improving material
handling and other operational efficiencies in the manufacturing process. Actual production levels and
utilization rates may differ significantly from these installed capacities of our facilities, and this is
particularly true for the expanded facilities that are currently under trial production. Undue reliance should
therefore not be placed on the installed capacity information for our existing plants included in this Letter of
Offer.
4. We have not commissioned an independent appraisal for the use of the proceeds of this Issue.
Furthermore, while we have appointed a monitoring agency to monitor the use of the proceeds of this
Issue, we have not entered into any definitive agreements to use the proceeds of this Issue.
We intend to use the proceeds of this Issue for meeting the incremental working capital requirements of our
Company and towards general corporate purposes. We have not entered into any definitive agreements to
use the proceeds of this Issue and the requirement of funds for meeting the objects of this Issue have not
been appraised by any bank or financial institution, and are based on our management‟s internal estimates.
Furthermore, we have not identified the general corporate purposes for which we intend to utilise a portion
of the proceeds of the Issue. For further details, please refer to “Objects of the Issue” on page 27 of this
Letter of Offer.
xix
5. Our inability to exit the real estate business in the time or in the manner we expect could adversely affect
our operations and profitability.
Our real estate business is carried on through our Subsidiaries, Alok Infrastructure Limited (through its
step-down Subsidiaries and Associates) and Alok Land Holdings Private Limited, and entails investment in
real estate for onward sale. Such properties are held for sale and are not utilized for carrying out our
operations. The details of investment in the real estate business by our Subsidiaries and Associates as on
September 30, 2012 are set out below:
Sr. No. Subsidiaries / Associates Real Estate Projects
Investment
Amount
(` in crore)
1. Kesham Developers & Infotech Private Limited Ashford Centre 121.06
2. Springdale Information and Technologies Private Limited
3. Alok Realtors Private Limited Peninsula Business Park 1,574.07
4. Alok Infrastructure Limited Ashford Palazzo 55.50
5. Ashford Infotech Private Limited Ashford Royale 67.99
6. Alok Land Holdings Private Limited Lotus Corporate Park 24.91
7. Alspun Infrastructure Limited Land at Vapi 16.34
8. Alok Infrastructure Limited Land at Silvassa* 63.12
Total 1,922.98
* The land at Silvassa was initially intended to be utilised for the operations of Alok Infrastructure Limited and was classified as a fixed asset. However, this land at Silvassa has subsequently been considered for onward sale.
For the period ended September 30, 2012, the contribution of the real estate business to the total income of
our Company was nil on a standalone basis and ` 0.16 crore, on a consolidated basis. The extent of total
leverage, i.e. total outstanding debt in the real estate business, as on September 30, 2012, was nil and `
840.11 crore respectively, on a standalone basis, and consolidated basis.
We intend to deleverage our balance sheet by exiting from the real estate business to reduce our existing
debt obligations. However, any inability to exit the real estate business at the time or in the manner we
expect could adversely affect our operations and profitability.
6. We rely on our IT systems for our business functions, production planning and scheduling. Any failure
or disruption of our information technology systems could adversely impact our business and operations.
We rely on our IT systems to provide us with connectivity across our business functions and manufacturing
facilities through our software, hardware and network systems. Seamless connectivity across our plants,
storage locations and offices is critical to ensure accessibility of SAP across all our locations. In this regard,
our entire database in relation to planning, production and sales is stored at our Silvassa, Vapi, Bhiwandi
and Navi Mumbai units. Any failure or disruption in connectivity can impact real time / online transactions
related to planning, production, sales, etc. While all our locations are facilitated with MPLS-VPN
connections from multiple service providers, events such as natural disasters, net hacking or key hardware
failures could adversely impact our business and disrupt our operations.
xx
7. Our business is dependent on the delivery of adequate and uninterrupted supply of electrical power and
water at a reasonable cost. Failure on account of unavailability of electrical power and water may
restrict us in utilising our full capacity and, hence, may impact our business and results of operation.
Furthermore, we face certain risks with regard to the operation of our captive power plants. The
outbreak of any fire and occurrence of any accidents or damages at the power plants may have an impact
our business and results of operations.
Adequate and cost effective supply of electrical power is critical to our operations, which entails significant
consumption of electrical power. Currently, we have power plants at Vapi and Silvassa supplying to our
manufacturing facilities at Silvassa and Vapi, which provides us with part of our energy requirements for
our manufacturing facilities and also serves as our back-up electricity supply. Furthermore, we also source a
certain portion of our power requirements from the relevant State Electricity Board. Operation of these
power plants entails certain risks associated with typical power plant operation, including, but not limited
to, industrial accidents such as explosions or fire damage. The occurrence of any industrial accidents could
damage the power plant and interrupt our power supply for our manufacturing operations, which could
adversely affect our business and results of operations.
There can be no assurance that electricity supplied by our existing and proposed captive power plants and
third party sources will be sufficient to meet our requirements or that we will be able to procure adequate
and interrupted power supply in the future at a reasonable cost. Further, if the per unit cost of electricity is
increased by the state electricity boards, our power costs will increase and it may not be possible to pass on
any increase in our power costs to our customers, which may adversely affect our profit margins.
We are also dependent on the availability of water from the States of Gujarat and Maharashtra for use in our
manufacturing facilities. Lack of sufficient water resources or an increase in the cost of such water used in
manufacturing facilities could adversely affect our business, financial condition and results of operation.
8. We do not usually enter long-term contracts for the supply of our raw materials and obtain nearly all of
our raw materials on a spot delivery basis. Any fluctuations in the prices of our raw materials including
raw cotton, PTA and MEG, will materially and adversely affect our business, results of operations and
financial condition.
Our textile manufacturing business and operations are significantly dependent on the timely availability and
price of raw materials used in our production process. The primary raw material for our textile operations is
cotton. Being an agricultural commodity, there can be fluctuations in price of cotton due to certain factors,
including the changing weather conditions. Further, pricing of cotton is significantly affected by
government policies and regulations. Governmental policies affecting the agricultural industry (such as
taxes, tariffs, duties, subsidies, import and export restrictions on agricultural commodities and commodity
products) can influence industry profitability, the planting of certain crops versus other uses of agricultural
resources, the location and size of crop production, whether unprocessed or processed commodity products
are traded and the volume and types of imports and exports. Currently, we obtain nearly all of our cotton
requirements in the spot markets, known as “mandis” located primarily in the States of Gujarat,
Maharashtra and Andhra Pradesh, and from certain cotton ginning units and stockists, such as the Cotton
Corporation of India Limited. Apart from cotton obtained from India, we also import cotton from varying
locations based on specific customer requirements. Further, for our polyester yarn operations, PTA and
MEG are the major raw materials that are required in manufacturing POY and polyester yarn, which are
also procured on spot basis. PTA and MEG are procured domestically as well as imported from the Middle
East and Korea. Being petrochemical products, prices of PTA and MEG are linked to naptha prices and
ethylene prices, respectively, and fluctuate in line with fluctuations in the crude oil prices. In the half year
ended September 2012, our Company‟s key raw materials such as raw cotton, PTA and MEG constituted
approximately 56.96% of our total raw material costs.
We generally do not enter into long-term contracts with fixed prices for the supply of such raw materials.
xxi
While we have not experienced any significant disruptions to our operations due to the shortage in the
supply of raw materials, deterioration in quality due to natural causes or other factors, the absence of an
assured supply of raw materials or protection against an increase in the price of the raw materials may
adversely affect our business and results of operations. Any increase in the prices of our raw materials may
have an adverse effect on our business, financial condition and results of operations, particularly if we are
unable to proportionately increase the sale price of our products and pass the increased cost on to our
customers. For instance, even though the prices of our yarn rise due to an increase in cotton prices we
cannot increase the prices of our fabrics in the same manner or if there is a decrease in fabric prices between
the time that we purchase raw materials and the time that our products are sold, then our margins for our
fabric business will be reduced.
9. Lack of long term firm supply contracts with our customers may adversely affect our business and results
of operations. If our customers do not continue to purchase products from us, or if we are unable to sell
our products at competitive prices, our business and results of operations may be adversely affected.
We generally do not enter into long-term supply contracts with our customers. While we believe this is
beneficial to our business, on one hand, as we retain the ability to take advantage of fluctuating demand and
price our products, on the other hand, this also leads to volatility in our revenues. In addition, while certain
of our customers make regular purchases from us, there can be no assurance that they will continue to do so
in the future. If our customers do not continue to purchase products from us, or if we are unable to sell our
products at competitive prices, our business, financial condition and results of operations may be adversely
affected.
10. Our business is dependent on our manufacturing facilities, which is mostly concentrated at two
locations. The loss of or shutdown of operations at any of our manufacturing facilities may have a
material adverse effect on our business, financial condition and results of operations.
As of the date of this Letter of Offer, our manufacturing units in India include units located in Silvassa
(Union Territory of Dadra & Nagar Haveli), Vapi, Valsad (Gujarat), Bhiwandi (Maharashtra), Daman and
Navi Mumbai (Maharashtra). In addition, we have a weaving and administration facility at Horice and a
processing facility at Cerny Dul in the Czech Republic. These units are equipped with modern technology.
We also intend to further expand the capacities of our spinning, knitting and polyester manufacturing units
in Silvassa by Fiscal 2013. Our manufacturing facilities at Silvassa and Vapi are integral to our
manufacturing process and comprise facilities for spinning, weaving, knitting, made-ups, garments,
polyester capacities, hemming, embroidery, terry towels and processing. Our business is therefore
significantly dependent on our units at Silvassa and Vapi and, therefore, the general economic condition
and activity in Silvassa and Vapi, and the local government policies and applicable laws relating to the
manufacturing, spinning and weaving of textiles and fabrics. Further, the concentration of our operations in
these regions increases our exposure to risks which may arise on account of natural calamities or other
adverse developments related to competition, as well as economic, demographic and other changes in these
areas, which may adversely affect our business prospects, financial conditions and results of operations.
Our manufacturing facilities are subject to operating risks, such as the breakdown or failure of equipment,
inadequate performance leading to unexpectedly low levels of output or efficiency, obsolete technology and
machinery, industrial accidents and the need to comply with the directives of relevant government
authorities. Our results of operations are therefore dependent on the successful operation of our
manufacturing facilities.
There is no assurance that those of our manufacturing facilities unaffected by an interruption will have the
capacity to increase their output to manufacture products which compensate for the affected manufacturing
facilities, to the extent that all outstanding orders will be filled in a timely manner. In the event of prolonged
interruptions in the operations of our manufacturing facilities, we may have to purchase supplies and
products from third parties in order to meet our production requirements and client order bookings, which
xxii
could affect our profitability and also result in loss of customers. Although we take precautions to minimize
the risk of any significant operational issues at our facilities, our business, financial condition and results of
operations may be adversely affected on the occurrence of any of the factors mentioned above.
11. We rely significantly on exports of our products to the United States and Europe, collectively being 14.85%
as a percentage of our Company‟s total sales on a standalone basis for the half year ended September
2012 and any adverse change in the demand in these countries will have a negative impact on our
business.
We rely significantly on the export of our products such as home textiles to the United States and Europe.
The total export sales to the United States and Europe were 14.85%, 18.08% and 19.19% as a percentage of
our Company‟s total sales on a standalone basis for the half year ended September 2012, Fiscal 2012 and
Fiscal 2011 respectively. Accordingly, we are particularly prone to any fluctuations in the demand of textile
products manufactured by us in the United States and Europe. The textiles market in the United States and
Europe may be affected by a number of factors outside our control, including local and economic
conditions, changes in demand and supply for products we develop, or comparable to those that we develop,
and changes in government regulations. Any adverse change in the demand for our products in these
countries may have a negative impact on our business, financial condition and results of operations.
12. The business of our Company is working capital intensive. Any increase in our Company‟s working
capital cycle could result in insufficient cash flows, thereby affecting our ability to meet required
payments on our debt and capital requirements, as a result of which, there may be an adverse effect on
our results of operations and future expansion prospects.
Our Company is vertically integrated both in its cotton and polyester business, as a result, we require
substantial amounts of working capital for our business operations vis-à-vis a non-integrated player. Also,
given the nature of our business, our Company supplies products to a majority of its customers within
defined credit periods, which could in turn affect our working capital requirements. We require significant
capital to expand, maintain and operate our manufacturing facilities. Our net working capital, on a
standalone basis, was ` 6,844.61 crore as on September 30, 2012, ` 6,036.96 crore as on March 31, 2012
and ` 3,565.35 crore as on March 31, 2011.
Please find below the details on the net working capital:
Particulars
Half year ended
September 2012 Fiscal 2012 Fiscal 2011
Holding
level (in
days of
sales)
Amount (` in
crore)
Holding
level (in
days of
sales)
Amount (` in
crore)
Holding
level (in
days of
sales)
Amount (` in
crore)
Historical1 Limited
Review Historical1 Audited Historical
1 Audited
CURRENT ASSETS
Inventory 108 3,448.47 139 3,379.91 114 2,002.62 which includes
- Raw Material 14 442.01 18 435.09 34 587.63 - Stock In Progress
(including stock in trade) 77 2,452.97
91 2,223.49 50 882.36
- Finished Goods 15 486.05 26 641.86 27 466.33 - Store Consumable (Spares
and Packaging material) 2 67.44
3 79.47 4 66.30
Sundry Debtors 85 2,718.92 88 2,152.15 99 1,740.19
Other Current Assets
(incl. Advances) 2,617.26
1,512.38 586.20
xxiii
Total Current Assets (A) 8,784.66 7,044.44 4,329.01
CURRENT LIABILITIES
Trade Payables 40 1,278.45 21 506.42 32 562.92 Provisions 126.29 75.60 71.87 Other current liabilities 535.31 425.46 128.87 Total Current Liabilities (B) 1,940.05 1,007.48 763.66
NET WORKING CAPITAL
(A-B)
6,844.61 6,036.96 3,565.35
¹ Arrived at on an actual on net sales basis
We require substantial amounts of working capital for our business operations and the failure to obtain the
required working capital on attractive terms, or at all, may materially and adversely affect our operations.
Our ability to obtain additional financing on favourable commercial terms will depend on a number of
factors, including our future financial condition, results of operations and cash flows, general market
conditions for financing activities by textile manufacturers and economic, political and other conditions in
the markets where we operate.
Our cost of borrowing will also be affected by the credit ratings issued to our debt instruments. Based on
our financial performance in Fiscal 2012, CARE has assigned and maintained “CARE A” rating for our
long term non-convertible debentures and “CARE A1” rating for our short term commercial papers and
short term instruments. Any downgrade in the credit rating of our debt instruments could negatively affect
our ability to borrow at reasonable terms, or at all. Additional borrowings could include terms that restrict
our financial and operational flexibility, including the debt we may incur in the future, or may restrict our
ability to manage our business as we had intended. Therefore, our inability to raise funds to meet our future
capital requirements may adversely affect our growth and operations.
13. Most of our Subsidiaries have incurred losses in the recent past, if such losses continue our consolidated
results of operations and financial condition will be adversely affected.
Most of our Subsidiaries have incurred losses in the recent past. The details of losses incurred by our
Subsidiaries are set out below for the periods specified below:
(` in crore)
Subsidiaries For the half year ended
September 2012
For the year ended March 31
2012 2011
Alok Industries International Limited (32.15) (44.34) 70.34
Alok Infrastructure Limited (1.61) (15.00) 2.01
Alok HB Properties Private Limited@
-###
(0.04) (0.00)^^
Alok HB Hotels Private Limited@
-###
(0.04) (0.00) ^^
Alok Realtors Private Limited (0.25) (0.06) (0.00) ^^
Springdale Information & Technologies
Private Limited
0.14 (0.17) (0.04)
Alok Land Holdings Private Limited 0.00 (0.11) (0.00) ^^
Alok New City Infratex Private Limited@ -###
(0.04) 0.00^^
Alok Aurangabad Infratex Private Limited@ -###
(0.04) (0.00) ^^
xxiv
Subsidiaries For the half year ended
September 2012
For the year ended March 31
2012 2011
Mileta, a.s. (2.70) (8.77) * 4.55
Alok European Retail, s.r.o. -*###
–* (0.07)
Alok Retail (India) Limited (5.09) (10.92) (13.32)
Alok Apparels Private Limited (1.54) (4.36) (5.25)
Alok International Inc. 8.23 (0.29) (0.85)
Alok Inc. -##
–##
(0.00) ^^
Alok Singapore Pte. Ltd. 3.56 (2.54)* –
#
Alok International (Middle East) FZE 0.52 (0.38)* –
^
Grabal Alok (UK) Limited** (100.09) (151.76)* –
Grabal Alok International Limited**
(8.74) (13.78) –
Alok H&A Limited (18.44) (26.37)* (1.49)
*
# Incorporated on December 28, 2011 ^ Incorporated on August 1, 2011 * Unaudited figures ** Subsidiaries of our Company with effect from April 1, 2011, pursuant to the merger with Grabal Alok Impex Limited @ Subsidiaries struck off in terms of the Companies Act and therefore stand dissolved post March 31, 2012
## Wound up in FY 2012
### Wound up in the half year ended September 2012
^^ Indicates negligible loss / negligible profit
In the event that our Subsidiaries incur losses or continue to incur losses, our consolidated results of
operations and financial condition will continue to be adversely affected.
14. We compete with other low cost producing countries to sell our products in highly competitive markets
and have limited ability to influence prices in these markets for our products.
We export our products to highly competitive markets, particularly in the United States and Europe. As a
result, to remain competitive, we must continuously strive to reduce our costs of production, transportation
and distribution and improve our operating efficiencies. If we fail to do so, other producers in low cost
manufacturing countries may be able to sell their products at lower prices, which would have an adverse
effect on our market share and results of operations.
We face competition from leading textile manufacturers in India and internationally. In particular, we also
face increasing competition from manufacturers from low cost manufacturing countries such as China,
Pakistan, Indonesia and Bangladesh. Some of our competitors may have a lower cost of production and
therefore, their products may be more price competitive both in international and domestic markets. Certain
competitors may be larger than us, may have significantly greater financial resources, may benefit from
greater economies of scale and operating efficiencies, may benefit from government subsidies, and/or may
also have a broader product range less affected by cyclical downturns. There can be no assurance that we
can continue to effectively compete with such producers in the future, and failure to compete effectively
may have an adverse effect on our business, financial condition and results of operations. Our inability to
attract new customers could have a material adverse effect on our results of operations. In the event that we
are unable to manage our costs efficiently or reduce our operating expenses, our profit margin and results of
operations may be adversely affected.
15. We have experienced negative operating cash flows for half year ended September 2012 and Fiscal 2012
and negative investing cash flows for half year ended September 2012, Fiscal 2012, 2011 and 2010, on a
xxv
standalone basis. Such negative cash flows as well as any negative cash flow that may arise in the future
would adversely affect our results of operations and financial condition.
We have, in the last few years, significantly increased our apparel fabrics and polyester business. Our most
significant capacity expansion plans were completed in the last few years and our current expansion plans
are primarily focused on expanding capacities for operations in our cotton yarn division and some
expansion in the knitting operations and polyester business, which we expect will get commissioned by
Fiscal 2013. Furthermore, we supply our products to a majority of our customers within defined credit
periods. As a result, we have to maintain significant inventory levels for a period of at least three to four
months to ensure continuous manufacturing operations. Our inventory holding days have increased from
114 days in Fiscal Year 2011 to 139 days in Fiscal 2012. This increase in Fiscal 2012, primarily, has
resulted in negative operating cash flows for the Fiscal 2012. The increase in receivables/ advances has
resulted in negative operating cash flows for the half year ended September 2012.
Being an integrated textile player, we require significant capital to expand, maintain and operate our
manufacturing facilities and deploy a substantial portion of our accruals towards such working capital. A
substantial portion of our cash flows has been utilised towards such working capital and capital
expenditures, particularly for our expansion projects. As a result, there has been no free investing cash flow
generation over the last three Fiscal Years and half year ended September 2012.
The table below sets forth our cash flows on a consolidated basis for the periods indicated:
Particulars
For the half year
ended September
30, 2012
(` in crore)
For the year ended March 31,
2012
(` in crore)
2011
(` in crore)
2010
(` in crore)
Net cash (used) in / generated from
operating activities
721.87 (450.46) 896.34 326.72
Net cash (used) in / generated from
investing activities
(711.48) (1,439.16) (2,672.87) (2865.02)
Net cash (used) in / generated from
financing activities
(390.88) 2160.47 1248.73 2,906.13
The table below sets forth our cash flows on a standalone basis for the periods indicated:
Particulars
For the half year
ended September
30, 2012
(` in crore)
For the year ended March 31,
2012
(` in crore)
2011
(` in crore)
2010
(` in crore)
Net cash (used) in / generated from
operating activities
(873.13) (115.39) 1126.08 184.56
Net cash (used) in / generated from
investing activities
130.90 (1113.05) (2045.15) (1906.48)
Net cash generated from financing
activities
398.85 1515.91 353.96 2117.75
If we continue to experience such negative cash flows, our results of operations and financial condition may
be adversely affected.
16. Our Company has entered into, and expects to continue to enter into, related party transactions relating
to operating transactions viz sales, purchases, expenses, income, dividend relating to financial
transactions viz, loans and advances, non- current investments, guarantee aggregating as per the nature
of transaction (as per the below summary table*). There can be no assurance that we could not have
achieved more favorable terms had such transactions been entered into with un-related parties.
xxvi
*Summary table relating to aggregate amount pertaining to significant related party transactions on a
standalone basis: (` in crore)
Nature of Transaction September 30,
2012
March 31, 2012 March 31, 2011
Unsecured Short Term Borrowing
accepted during the year
- 11.75 -
Long Term Loans And Advances
Loans Given during the period/year 2,248.82 - -
Repaid during the period/year 789.78 - -
Short Term Loans and Advances
Given during the period/year 357.88 4,008.19 1,735.08
Repaid/Adjusted during the period/year 237.20 3,957.33 1,698.06
Non-Current Investments
Invested during the year - 27.54 1.75
Redeemed/Transferred /Provided during
the period/ year
0.04 22.82 79.15
Sale of Goods (including job work
charges)
311.94 243.66 139.35
Expenditure / Purchase of Fixed Assets 217.05 308.58 364.08
Dividend Paid 1.88 1.54 1.54
Income
Dividend 1.93 2.00 2.21
Rent 0.28 0.75 0.71
Guarantee Given 1,002.30 763.19 235.13
The details of significant related part transactions include sales of its products through its international
subsidiaries viz. Alok International Inc. and Alok Singapore Pte Limited amounting to. ` 296.24 Crore for
the half year ended September 30, 2012, guarantees given amounting to ` 987.91 Crore as of September 30,
2012 for loans taken by its subsidiaries viz. Alok Infrastructure Limited, Grabal Alok (U.K) Limited and
Alok Industries International Limited and advance extended to its subsidiary, Alok Infrastructure Limited
for which the outstanding balance as of September 30, 2012 is ` 1,459.04 crore.
While we believe that all such transactions have been conducted on an arm‟s length basis, there can be no
assurance that we could not have achieved more favourable terms had such transactions been entered into
with un-related parties. Furthermore, it is likely that we may enter into related party transactions in the
future. There can be no assurance that such transactions, individually or in the aggregate, will not have an
adverse effect on our financial condition and results of operations.
Our Company has, on a standalone basis, entered into the following transactions as at and for the half year
ended September 30, 2012, with related parties that include our Promoters and Promoter Group and entities
affiliated with our Promoters and Promoter Group:
(` in crore)
Transaction Associ
ate
Comp
anies
Entities
under
common
control
Subsidi
aries
Joint
Venture
Compa
nies
KMP Relatives
of KMP Firms in
which
Relatives of
KMP are
interested
Total
a) Unsecured Short Term
Borrowing
Balance as at 1 April - - - 11.75 - - - 11.75
xxvii
Transaction Associ
ate
Comp
anies
Entities
under
common
control
Subsidi
aries
Joint
Venture
Compa
nies
KMP Relatives
of KMP Firms in
which
Relatives of
KMP are
interested
Total
Balance as at 30 Sept - - - 11.75 - - - 11.75
b) Long Term Loans and
Advances
Balance as at 1 April - - - - - - - -
Given during the period/
year
- - 2,248.82 - - - - 2,248.82
Repaid during the
period /year
- - 789.78 - - - - 789.78
Balance as at 30 Sept - - 1,459.04 - - - - 1,459.04
c) Short Term Loans and
Advances
Balance as at 1 April - 0.01 120.49 - - - - 120.50
Given during the period/
year
- - 357.88 - - - - 357.88
Repaid/Adjusted during
the period/year
- - 237.20 - - - - 237.20
Provision made during
the period/year
- - 54.59 - - - - 54.59
Balance as at 30 Sept - 0.01 186.58 - - - - 186.59
d) Non-Current
Investments
Balance as at 1 April - - 39.00 92.38 - - - 131.38
Invested during the
period/ year
- - - - - - - -
Redeemed /
Transferred/Provided
during the period/year
- - 0.04 - - - - 0.04
Provided during the
period/year
- - 37.10 - - - - 37.10
Balance as at 30 Sept - - 1.86 92.38 - - - 94.24
e) Trade Receivables
Balance as at 30 Sept - - 151.50 0.09 - - - 151.59
f) Trade payables
Balance as at 30 Sept - - 2.99 20.11 - - 0.07 23.17
g) Other Current
Liabilities
Balance as at 30 Sept - - 310.40 - - - - 310.40
h) Sale of product
Sales of Goods
(Including job work
- - 311.64 0.30 - - - 311.94
xxviii
Transaction Associ
ate
Comp
anies
Entities
under
common
control
Subsidi
aries
Joint
Venture
Compa
nies
KMP Relatives
of KMP Firms in
which
Relatives of
KMP are
interested
Total
charges)
i) Expenditure
Purchase of goods / Job
Charges
- - 1.88 24.08 - - - 25.96
Purchase of Fixed
Assets
- - 146.82 - - - - 146.82
Rent - - 1.74 - - - 1.74
Repairs & Maintenance - - 0.55 - - - - 0.55
Consultancy Charges - - - - - - 1.03 1.03
Marketing Service
Charges
- - 34.75 - - - - 34.75
Remuneration - - - - 6.10 0.10 - 6.20
j) Dividend Paid - - - - 1.88 - - 1.88
k) Income
Dividend - - - 1.93 - - - 1.93
Rent - 0.11 0.17 - - - - 0.28
l) Guarantee given - - 1,002.30 - - - - 1,002.30
Our Company has, on a consolidated basis, entered into the following transactions as at and for the half year
ended September 30, 2012, with related parties that include our Promoters and Promoter Group and entities
affiliated with our Promoters and Promoter Group:
(` in crore)
Transaction
Associates Entities
under
common
control
Joint
Venture
Compani
es
KMP Relat
ives
of
KMP
Firms in
which
relatives of
KMP are
interested
Total
a) Advance Share Application Money
Balance as at 1st April - 350.00 - - - - 350.00
Balance as at 30th September - 350.00 - - - - 350.00
(b) Long term borrowings
Balance as at 1st April - 613.88 - - - - 613.88
Reclassified to short term borrowings - 358.10 - - - - 358.10
Translation difference during the period - 7.71 - - - - 7.71
Balance as at 30th September - 263.49 - - - - 263.49
(c) Short term borrowings
Balance as at 1st April - 196.95 5.99 - - - 202.94
xxix
Received during the period/ reclassified
from long term borrowings
- 358.10 - - - - 358.10
Translation difference during the period - 16.71 - - - - 16.71
Balance as at 30th September - 571.76 5.99 - - - 577.75
(d) Short term loans and Advances
Balance as at 1st April 0.63 8.59 - - - - 9.22
Granted during period - 7.99 - - - - 7.99
Converted / Repaid during the period 0.41 7.67 - - - - 8.08
Translation difference during the period - 0.27 - - - - 0.27
Balance as at 30th September 0.22 9.18 - - - - 9.40
(e) Investments
Balance as at 1st April 88.78 3.84 - - - - 92.62
Translation difference during the period - 0.10 - - - - 0.10
Balance as at 30th September 88.78 3.94 - - - - 92.72
(f) Long Term Loans & Advances
Balance as at 1st April - - - - - - -
Given/ (Received) during the period
(net)
0.02 0.02 0.04
Balance as at 30th September 0.02 - - - - 0.02 0.04
(g) Trade Receivables
Balance as at 30th September 21.47 - 0.04 - - - 21.51
(h) Trade Payables
Balance as at 30th September 1.31 - 10.26 - - 0.07 11.64
(i) Other current liabilities
Balance as at 30th September - 90.71 - - - - 90.71
(j) Turnover
Sale of goods (including job work
charges)
39.26 0.15 - - - 39.41
(k) Expenditure
Purchase of goods / Job charges 0.11 - 12.28 - - - 12.39
Rent - - - - 0.10 - 0.10
Consultancy Charges - - - - - 1.03 1.03
Remuneration - - - 6.10 0.13 - 6.23
Upfront Fees - 2.48 - - - - 2.48
Dividend Paid - - - 1.88 - - 1.88
Interest Paid 7.99 - - - - - 7.99
xxx
(l) Income
Rent - 0.12 - - - - 0.12
For more details relating to related party transactions, please refer to section titled “Risk Factors – Prominent
Notes” and “Financial Information” on pages xlviii and 45, respectively.
17. We have certain contingent liabilities which, if materialises, may adversely affect our financial condition.
As of September 30, 2012, we had certain contingent liabilities that were not provided for. In the event that
we are unable to meet these contingent liabilities, when and if they materialise, our business and financial
condition may be adversely affected. The following table sets forth certain information relating to our
contingent liabilities, on a consolidated basis, as of September 30, 2012:
Sr.
No. Particulars
September 30, 2012 (` in crore)
A Customs duty on shortfall in export obligation in accordance with
EXIM Policy Amount unascertained
B Pending Litigation 0.05
C Guarantees given by banks on behalf of the Company 56.20
D Bills discounted 268.24
E Taxation Matters:
a) Demand on account of alleged short deduction of taxes. The
Company has filed appeal with higher authorities and is hopeful
of favorable order.
0.23
b) Demands of Works Contract Tax contested not acknowledged as
debts as the Company is hopeful of favourable decision. 0.59
F Disputed various matters relating to NTC / ATM Amount unascertained
Total 325.31*
* To the extent ascertainable
The following table sets forth certain information relating to our contingent liabilities, on a standalone basis, as
of September 30, 2012:
Sr. No. Particulars September 30, 2012 (` in crore)
A Customs duty on shortfall in export obligation in accordance
with EXIM Policy Amount unascertained
B Pending Litigation 0.05
C Guarantees given by banks on behalf of the Company 55.97
D Corporate Guarantees given to bank for loans taken by
Subsidiary Companies 1,002.30
E Bills discounted 268.24
F Taxation Matters:
a) Demand on account of alleged short deduction of taxes. The
Company has filed appeal with higher authorities and is
hopeful of favorable order.
0.23
xxxi
Sr. No. Particulars September 30, 2012 (` in crore)
Demands of Works Contract Tax contested not acknowledged
as debts as the Company is hopeful of favourable decision. 0.59
Total 1,327.38*
* To the extent ascertainable
While we believe that all such transactions have been conducted on an arm‟s length basis, there can be no
assurance that we could not have achieved more favourable terms had such transactions been entered into
with un-related parties. Furthermore, it is likely that we may enter into related party transactions in the
future. There can be no assurance that such transactions, individually or in the aggregate, will not have an
adverse effect on our financial condition and results of operations. For further details please see “Financial
Information” on page 45.
18. Since we have an integrated textile and apparels manufacturing business, the impact of production
slowdowns in a particular product may adversely affect our operations and profitability in connection
with the other products higher in the order of our textile manufacturing value chain. Further, increased
costs in any business verticals lower in the value chain may affect profitability of the business verticals
higher in the order.
We have an integrated textile and apparels manufacturing business and manufacture products across the
entire textile value chain. Accordingly, any slowdown in production or sales of a single product may
adversely affect the production and the results of our operations from other products which are higher in the
order in our manufacturing value chain. For instance, because most of our products are used in a
manufacturing chain in which raw cotton, through a series of intermediate processes, results in finished
fabric, adverse effects on any link in the chain can have indirect effects on all of our other production
processes. Similarly, if the production of yarn is affected due to any reason such as machinery breakdown,
the production of fabric will be similarly affected. Moreover, increased costs in any one business vertical of
our business may affect the profitably of the subsequent vertical in the value chain. For instance, an
increase in the price of yarn would typically benefit the results of our operations in connection with
manufacture of yarn, but our profitability in connection with fabric could be adversely affected, if we are
unable to pass on increased costs in our manufactured fabrics.
19. If the GoI does not extend and/or renew the Technology Upgradation Fund Scheme, our growth could
be adversely affected.
We benefit from government-sponsored incentives that are available to us as a textile company, primarily
the TUFs. TUFs was introduced in April 1999 to catalyse investments in all the sub-sectors of textiles and
jute industry and currently provides for a reimbursement of 5% on the interest charged by the lending
agency for financing of a project covered by this scheme. The scheme also provides a 10.0% capital subsidy
for specified processing machinery and equipment. As of September 30, 2012, our Company‟s borrowing
under TUFs is ` 2,580.03 crore, which amounts to 18.66 % of our Company‟s total indebtedness on a
standalone basis and our Company‟s borrowing under TUFs is ` 2,599.42 crore which amounts to 15.82 %
of our Company‟s total indebtedness on a consolidated basis. Any adverse change in TUFs or
discontinuation or non-renewal of the same could adversely affect our expansion plans.
20. Fluctuations in the value of the Rupee against other foreign currencies may have a material adverse
effect on our financial condition and results of operations.
Changes in currency exchange rates influence our results of operations. For the half year ended September
2012, approximately 29.05% of our Company‟s revenues on a standalone basis, particularly relating to our
export sales, and approximately 14.93% of our cash expenses on a standalone basis, including cost of raw
materials, are denominated in currencies other than Indian Rupees, most significantly the U.S. dollar.
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Although our widespread operations and diverse markets provide a natural hedge to our foreign currency
exposure, significant fluctuations in currency exchange rates between the Indian rupee and the foreign
currencies, particularly the U.S. dollar, may adversely affect our results of operations.
In addition, as of September 30, 2012, approximately 14.77% of our Company‟s total indebtedness on a
standalone basis and 23.02% of our Company‟s total indebtedness on a consolidated basis was in foreign
currency. Depreciation of the Indian rupee against the U.S. dollar and other foreign currencies may
adversely affect our results of operations by increasing the cost of financing any debt denominated in
foreign currency or any proposed capital expenditure in foreign currencies. Appreciation of the Indian
rupee, on the other hand, may cause our export products to be less competitive by raising our prices in
terms of such other currencies, or alternatively require us to reduce the Indian rupee price we charge for
export sales, either of which effects could adversely affect our profitability, as approximately 33.90% of our
revenue is derived from our exports.
Changes in interest rates could also significantly affect our financial condition and results of operations. As
of the date of this Letter of Offer, most of our borrowings are at floating rates of interest. If the interest rates
for our existing or future borrowings increase significantly, our cost of funds will increase thereby affecting
our planned capital expenditures, cash flows and result of operations. Although we enter into hedging
transactions to minimize our currency exchange and interest rate risks, there can be no assurance that such
measures will enable us to avoid the effect of any adverse fluctuations in the value of the Indian rupee
against the U.S. dollar or other relevant foreign currencies or protect us from losses due to the fluctuations
in interest rates.
21. The seasonal nature of our sales and business cause our results to fluctuate, and prior performance in
certain quarters of a fiscal year may not necessarily be indicative of our future results.
Our sales and operating revenues tend to be typically higher in the third and fourth quarters of a fiscal year,
i.e. September to December and January to March, primarily due to festive purchases, thereby scaling up
our revenues and growth in these periods. Consequently, lower than expected net sales during the first and
second quarters of the fiscal year or more pronounced seasonal variations in sales in the future could have a
disproportionate impact on our operating results for the fiscal year, or could strain our resources and impair
our cash flows. Any slowdown in demand for any of our products during such periods or failure by us to
accurately anticipate and prepare for such fluctuations in demand and sales could have a material adverse
effect on our business, financial condition and results of operations.
22. Our insurance coverage may not adequately protect us against certain operating hazards and product
liability claims and this may have a material adverse effect on our business.
Our insurance policies consist of a comprehensive coverage for risks relating to our operations. While
we believe the amount of our insurance coverage is adequate, there can be no assurance that any claim
under the insurance policies maintained by us will be honoured fully, in part, or on time.
Our insurance coverage as on December 31, 2012 is ` 29,607.05 crore. Our insurance may not be adequate
to fully cover the potential hazards described above or we may not be able to renew our insurance on
commercially reasonable terms, or at all. For example, we are not insured against environmental pollution
resulting from environmental accidents that occur on a sudden and accidental basis, some of which may
result in toxic tort claims. Therefore, any losses or damages could have a material adverse effect on our
business and cash flows.
We may also face the risk of incurring additional costs for any damage where our insurance coverage is
ultimately inadequate to cover such damages. In addition, any inability of our insurers to meet their
commitments in a timely manner and the effect of significant claims or litigation against insurance
companies may subject us to additional risks.
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Further, our insurance coverage may be inadequate to cover all potential product liability claims. Also,
insurance coverage may not be available in the future on acceptable terms. If we experience a large insured
loss, it might exceed our coverage limits, or our insurance carrier may decline to further cover us or may
raise our insurance rates to unacceptable levels, any of which could have a material adverse effect on our
financial condition and results of operations.
Notwithstanding the insurance coverage that we carry, we may not be fully insured against some business
risks. There are many events that could significantly impact our operations, or expose us to third party
liabilities, for which we may not be adequately insured. There can be no assurance that any claim under the
insurance policies maintained by us will be honoured fully, in part, or on time. To the extent that we suffer
any loss or damage that is not covered by insurance or exceeds our insurance coverage, our business,
financial condition and results of operations could be adversely affected
23. There are potential conflicts of interest with and within our Promoter Group entities, as a result of which
new business opportunities in the textile sector may be directed to these entities instead of our Company.
Our Promoters and our Promoter Group have equity interests or investments in certain entities that may or
are offering services that are related to our business.
There may be conflicts of interest in addressing business opportunities and strategies where these entities
are also involved. In addition, new business opportunities may be directed to these entities instead of our
Company. Our Company may also be prevented from entering into certain businesses which relate to our
business and which may be important for our future growth, as our Promoters or members of our Promoter
Group may already have interests in such businesses. There can be no assurance that these or other conflicts
of interest will be resolved in an impartial manner.
24. Our on-going as well as proposed capacity expansion plans relating to our production facilities are
subject to the risk of unanticipated delays. Our business and future results of operations may be
adversely affected if we are unable to successfully implement and execute our capacity expansion plans.
We have in the last few years significantly increased our apparel fabrics and polyester business, most of
which have come into operation during Fiscal 2012. Our most significant capacity expansion plans,
particularly across the apparel fabrics and home textile products divisions, were completed in the last few
years. Our current expansion plans are primarily focused on expanding capacities for operations in our
cotton yarn division and some expansion in the knitting operations and polyester business, which we expect
will get commissioned by Fiscal 2013.
Although we have successfully implemented capacity addition plans in the past, our expansion plans remain
subject to a variety of risks and potential problems including labour and material shortages, increased costs
of equipment or manpower, delays in completion, non-availability of adequate funds, and the possibility of
unanticipated future regulatory restrictions. The information relating to the capacities of our manufacturing
facilities is based on various assumptions and estimates which are based on proposed operations,
assumptions relating to availability and quality of raw materials and assumptions relating to potential plant
utilization levels and potential operational efficiencies. We cannot be sure that the proposed capacity
additions and process improvements will be completed as planned or on schedule or that the expected
benefits of our capacity expansion plans will be fully realized. We intend to meet our proposed capital
expenditures through various financing activities, primarily through borrowings, as well as internal cash
accruals. Certain of our existing financing agreements require us to obtain consents for such additional
borrowing, and there is no assurance that we will be successful in obtaining such consents. Further, there
can be no assurance that we will obtain financing for such proposed expansion plans on terms satisfactory
to us or at all. Our business and future results of operations may be adversely affected if we are unable to
successfully implement and execute our capacity expansion plans.
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25. Our failure to accurately manage our inventory levels could result in an unexpected shortfall and/or
surplus of products, which could have a material adverse impact on our manufacturing operations,
profitability and cash flows.
We monitor our inventory levels based on the annual forecast received from most of our customers and to a
certain extent on our projections of future demand. We typically maintain our inventory levels for a period
of approximately three to four months for our products/raw materials. Due to the time necessary to
manufacture the required commercial quantities of our products, we typically procure the annual forecasts
in advance from most of our customers prior to commencing production and sales for most of our products.
We cannot guarantee that our customers will submit orders which correlate to their forecasts. A shortfall in
the off-take of the manufactured products by the customers based on their forecasts can result in surplus of
products, which may increase finished inventory holding costs, negatively impact cash flow, result in
inventory reduction at discounted prices leading to margin erosions, create write-offs of inventory, affect
customer relationships and lead to capacity under-utilization. In addition, as we manufacture our products
based on the receipt of orders from our customers, our inability to maintain sufficient orders during a
particular period may lead to under-utilization of capacity of our manufacturing units and have an adverse
impact on our sales and revenues. Further, an inaccurate forecast of demand for any product can also result
in the unavailability and surplus of products. Any of the aforesaid circumstances could have a material
adverse effect on our business, results of operations and financial condition.
26. Loss of key personnel, including key management personnel and key technical personnel, or failure to
attract and retain additional personnel, could adversely affect our business and results of operations.
Our business requires a management team and employee workforce that is knowledgeable in the
technological and commercial areas in which we operate. Our success is also substantially dependent on the
expertise and services of our senior management. Our ability to meet future business challenges depends on
our ability to attract and recruit talented and skilled personnel. The loss of any key technical and operational
employees, or the failure to attract, train or retain such employees could prevent us from developing our
products, diversifying our product portfolio and executing our business strategy.
We may be unable to attract or retain qualified employees in the future due to the intense competition for
qualified personnel among the similar businesses, or due to the unavailability of personnel with the
qualifications or experience necessary for our business. Our future performance will depend upon the
continued services of these personnel. The loss of any of the members of our senior management, our full
time directors or other key personnel or an inability to manage the attrition levels in different employee
categories may materially and adversely impact our business and results of operations.
27. Any inability on our part to comply with prescribed specifications and standards of quality in connection
with our products and/or manufacturing facilities could adversely impact our operations and
profitability. Moreover, our inability to renew or maintain our statutory and regulatory permits and
approvals required to operate our business would adversely affect our operations and profitability.
Our business requires obtaining and maintaining quality certifications, accreditations, statutory and
regulatory permits and approvals from certain independent certification entities to operate our business and
manufacturing facilities, certain of which may have expired and have been applied for and certain of which
are due to expire in the near future. In the future, we will be required to renew such permits and approvals
and obtain new permits and approvals for any proposed operations. While we believe that we will be able to
renew or obtain such permits and approvals as and when required, there can be no assurance that the
relevant authorities will issue or re-issue any such permits or approvals in the timeframe anticipated by us,
or at all. Further, government approvals, licenses, clearances and consents are often also subject to
numerous conditions, some of which are onerous and may require significant expenditure.
xxxv
Failure by us to obtain, renew or maintain the required permits or approvals may result in the interruption of
our manufacturing operations or delay or prevent our expansion plans and may have a material adverse
effect on our business, financial condition and results of operations.
Further, we are required to adhere to stringent regulatory/statutory/contractual specifications and standards,
and our customers often require our manufacturing facilities and products to be pre-approved and/or
accredited by various agencies before placing orders for our products. If we fail to adhere to the aforesaid
requirements or changes thereto in a timely manner, or at all, our cash flows, operations and/or profitability
could be adversely affected. Our business and results of operations will be adversely affected if we are
unable to develop and maintain a continuing relationship or pre-qualified status with certain of our key
customers. For further details please refer to “Government Approvals” on page 58 of this Letter of Offer.
28. Our H&A stores, based on franchise models, are typically owned or rented by independent individuals or
entities, and we may not be able to retain control of most of the operational factors on a daily basis.
We have established cash-and-carry wholesale operations under the H&A brand in India. All our H&A
stores are operated through franchise arrangements with third parties. As of August 31, 2012, our Company
had 108 of our H&A stores and as of March 8, 2013, the same was reduced to 73. We typically do not incur
any capital or rental costs for our H&A stores. In these stores, we majorly stock products of our in-house
brand, and some products of two external brands. The agreement for stocking product of one of the external
brand, being Savile Row has been terminated with effect from February 17, 2013 and we are not stocking
products of this brand anymore.
Franchisees are independent business operators and, although we have control of the operations under the
terms of our franchise agreements, we do not exercise absolute control over their day-to-day operations. We
provide training and support to franchisees and set and monitor operational standards, but there can be no
assurance that our training and standards will be effective, and the quality of the service and operations may
be diminished by various factors beyond our control. The failure of franchisees to maintain our standards
could adversely affect our reputation, our brands and our business, financial condition, results of operations
and prospects. Franchisees, may from time to time disagree with our business strategies or our
interpretation of rights and obligations under their franchise agreement. This may lead to disputes with our
franchisees, which could have a material adverse effect on our business, financial condition, results of
operations and prospects.
29. We are subject to risks relating to product liability claims which could generate adverse publicity or
adversely affect our business, results of operations or financial condition.
The design, development, production and sale of our products involves an inherent risk of product liability
claims and associated adverse publicity. For instance, we have strategically focused on developing technical
textiles used in industrial and high-technology industries, including for research, armed forces, aviation,
industrial, fire departments, healthcare, construction, oil refineries, mining, infrastructure and hospitality.
Sometimes these products may contain quality issues or undetected errors or defects resulting from the
design or manufacturing process. Such quality issues can expose us to product liability or recall claims in
the event that our products fail to meet the required quality standards and customer specifications and
requirements.
Further, such defects in our products could lead to the rejection of supplied products and consequential
financial claims and/or could require us to undertake service actions. These actions could require us to
expend considerable resources in rectifying and/or addressing these problems, to absorb costs incurred by
our customers in addressing such problems, and could adversely affect demand for our products.
We may be named in product liability suits. Any such suits, even if unsuccessful, could be costly and
disrupt the attention of our management and damage our negotiations with other potential customers.
xxxvi
Although, we have not experienced any major product liability claims, there can be no assurance that our
customers, users of their products or unrelated third parties will not make claims against us in the future.
30. Our failure to successfully manage our international operations could adversely affect our business and
results of operations.
Our international operations, which include apparel fabrics and garments manufactured in the Czech
Republic and retail operations under the Store Twenty One brand in the United Kingdom are subject to risks
that could adversely affect our business and results of operations, including risks associated with uncertain
political and economic environments, government instability and legal systems, laws and regulations that
differ from the legal systems, laws and regulations that we are familiar with in India, and which may be less
established or predictable than those in more developed countries. Further, our international retail business
and operations may not be able to achieve the desired profits, or at all, and also result in diverting our
management's attention and resources, thereby having an adverse impact on our business, strategies,
financial condition and results of operations. In addition, we could be subject to expropriation or
deprivation of assets or contract rights, foreign currency restrictions, exchange rate fluctuations and
unanticipated taxes or we could encounter potential incompatibility with foreign joint venture partners, and
non-availability of suitable personnel.
Our failure to successfully manage our operations could impair our ability to react quickly to changing
business and market conditions and comply with industry standards and procedures. Our ability to operate
and compete may be adversely affected by governmental regulations in the countries in which we export. In
particular, price controls, taxes and other laws relating to the textile manufacturing industry and the
environment and changes in laws and regulations relating to such matters may affect our operations. In
addition, we may become involved in proceedings with regulatory authorities that may require us to pay
fines, comply with more rigorous standards or other requirements or incur capital and operating expenses
for compliance with such laws and regulations.
31. We depend on certain key customers, and our business and financial conditions may be adversely
affected if we are unable to retain these customers.
Our business is dependent on developing and maintaining a continuing relationship with our key customers
in targeted sectors. For half year ended September 2012, our key customers (in terms of net sales on a
standalone basis) constituted 14.01 % of our Company‟s net sales and these customers contributed 12.60%
and 15.85% of our Company‟s net sales for FY 2011 and FY 2012, respectively. In India we supply apparel
fabrics and home textile products to certain key distributors, renowned retailers, power loom weavers and
garment and home textile manufacturers as well as certain large export houses. In our international markets,
we believe that we are nominated or preferred vendors for certain large branded retailers and fashion
houses.
There can be no assurance that we will be able to maintain the historic levels of business from these
customers or that we will be able to replace these customers in case we lose any of them. Any loss of
significant customers or deterioration in our relationship with any of them would have a significant adverse
impact on our business, financial condition and results of operations. Further, some of our products are in
the nature of commodity products facing highly competitive conditions and are extremely price sensitive.
Any major fluctuations in prices of our products can adversely affect our competitiveness and could lead to
a loss of our customers to our competitors.
32. Our business and results of operations could be adversely affected by strikes, work stoppages or
increased wage demands by our employees and/or contract labourers.
Our garments and home textile businesses are more labour intensive due to the requirement of stitching
operations. These businesses contributed 1.31% and 13.23%, respectively, of our Company‟s revenue in the
xxxvii
half year ended September 2012 and 2.44% and 14.05% respectively for the Fiscal 2012 on a standalone
basis. Further, these businesses contributed 1.22% and 12.29%, respectively, of our Company‟s revenue in
the half year ended September 2012 on a consolidated basis. In order to retain flexibility and keep our fixed
overhead to the minimum, in line with industry practice, we typically appoint contractors who in turn
engage on-site contract labourers for performance of our low skill operations. Apart from our Company‟s
employees at our Navi Mumbai units none of the employees in our Indian operations are represented by any
labour unions.
While we believe that we maintain good relationships with our employees in India, internationally and our
contract labourers, there can be no assurance that there will not be any employee grievance-related strikes,
agitations or work stoppages in the future. Any such strikes, agitations or work stoppages could adversely
affect our financial condition and results of operations. Further in the textile retail industry, the level and
quality of sales personnel and customer service are key competitive factors for successfully operating our
retail operations and any inability to recruit, train and retain suitably qualified and skilled sales personnel
could adversely impact our reputation, business prospects and results of operations.
33. We are dependent on third party transportation providers for the supply of raw materials and delivery of
our finished products. A failure to maintain a continuous supply of raw materials or to deliver our
products to our customers in an efficient and reliable manner could have a material and adverse effect
on our business, financial condition and results of operations.
As a manufacturing business, our success depends on the smooth supply and transportation of the various
raw materials required for our manufacturing facilities and of our products from our facilities to our
customers or intermediate delivery points such as ports and railway stations, both of which are subject to
various uncertainties and risks. We are also dependent on such third party freight and transportation
providers for the delivery of our products to customers and suppliers within and outside India. In the past,
transportation strikes have had an adverse effect on supplies and deliveries to and from our customers and
suppliers, and they could again have in the future. In addition, raw materials and products may be lost or
damaged in transit for various reasons including occurrence of accidents or natural disasters. There may
also be a delay in delivery of raw materials and products which may also affect our business and results of
operation negatively. A failure to maintain a continuous supply of raw materials or to deliver our products
to our customers in an efficient and reliable manner could have a material and adverse effect on our
business, financial condition and results of operations. Any recompense received from insurers or third
party transportation providers may be insufficient to cover the cost of any delays and will not repair damage
to our relationships with our affected customers.
34. We are dependent on external contractors who in turn employ daily wage labourers for handling,
loading and unloading of materials at our manufacturing facilities. Any disruption in such activities due
to non-availability of such labourers at reasonable costs could adversely affect our manufacturing
operations, production and delivery schedules.
We use external contractors who in turn employ daily wage labourers for the handling, loading and
unloading of materials in our manufacturing facilities. Any disruption in such activities due to non-
availability of such labourers at reasonable costs could adversely affect our manufacturing operations,
production and delivery schedules. In addition, costs associated with such activities have been steadily
increasing and are expected to increase significantly in the future as a result of our expanded production
capacity and increased operations. Continuing increases in such costs or non-availability of such services
may have an adverse effect on our business and results of operations. Further, if the performance of these
contractors is inadequate to our requirements, this could also result in incremental costs and time overruns
which in turn could adversely affect our operations.
35. Export destination countries may impose varying duties on yarn, thread or fabrics. Any increase in such
duties or the entry into free trade agreements with countries other than India may materially adversely
xxxviii
affect our business, financial condition and results of operations. Our revenues are subject to different
tax regimes and changes in the applicable legislation and rules could negatively and adversely affect our
results of operations.
Our manufacturing facilities are located in India and the Czech Republic. We make significant export sales
to the United States, Asia, South America and Europe and have established large marketing and distribution
offices in Europe and the United States. In the half year ended September 2012, export sales from India
contributed 29.05%, of our total sales in these periods. In Fiscals 2011 and 2012, export sales from India
contributed 34.71% and 34.04%, respectively, of our total sales in these periods.
Our tax liabilities and tax regimes involve the assessment of transfer pricing arrangements among the
Company and our Subsidiaries in different tax jurisdictions, and although we enter into arm's length
transactions with respect to the supply of products among the Company and our Subsidiaries, there can be
no assurance that regulatory and tax authorities in the various jurisdictions that we operate in will not
disagree with our assessment of such transactions. Changes in the operating environment, including
changes in tax law and currency/repatriation controls, including on a retroactive basis, could impact the
determination of our tax liabilities for any given tax year. Income tax returns of our foreign subsidiaries,
unconsolidated affiliates and related entities are routinely examined by foreign tax authorities. These tax
examinations may result in assessments of additional taxes or penalties or both. There can be no assurance
that the duties imposed by such destination countries will not increase. Any change or increase in such
duties may adversely affect our business, financial condition and results of operations.
Export destination countries may also enter into free trade agreements or regional trade agreements with
countries other than India. Such agreements may place us at a competitive disadvantage compared to
manufacturers in other countries and may adversely affect our business, financial condition and results of
operations. Further, adverse changes in trade policies in countries to which we export our products may
have a particularly significant adverse impact on our business, financial condition and results of operations.
36. We have certain outstanding export obligations under export promotion schemes of the Government of
India. In the event that we fail to meet such export obligations, the import duty applicable on such
equipment imports would become applicable retroactively and we may be required to pay additional
penalties and/or interest for any such default by the relevant authorities.
We have imported various equipment at concessional rates of duty under the EPCG scheme of the GoI, and
have consequently assumed certain export obligations that we are required to meet by Fiscal 2021. As of
December 31, 2012, we had outstanding export obligations pursuant to the EPCG scheme of ` 2,117.73
crore. In the event that we fail to meet such export obligations, the import duty applicable on such
equipment imports would become applicable retroactively and we may be required to pay additional
penalties and/or interest for any such default by the relevant authorities.
37. We are involved in various legal and other proceedings that if determined against us could have a
material adverse effect on our financial condition and results of operations.
We are currently involved in a number of legal proceedings arising in the ordinary course of our business.
These proceedings are pending at different levels of adjudication before various courts and tribunals,
primarily relating to civil suits and tax disputes. For further information, please refer to “Outstanding
Litigations” on page 57.
An adverse decision in these proceedings could materially and adversely affect our business, financial
condition and results of operations. If any new developments arise, for instance, a change in Indian law or
rulings against us by appellate courts or tribunals, we may face losses and may have to make provisions in
our financial statements, which could increase our expenses and our liabilities.
xxxix
38. Our inability to identify, understand or cater to evolving industry trends, changing customer tastes and
preferences may adversely affect our business
The fashion-oriented nature of the textile industry subjects us to certain risks and uncertainties associated
with the industry. Our ability to anticipate changes in technology and to develop and introduce new and
enhanced products successfully on a timely basis will be a significant factor in our ability to grow and to
remain competitive in the domestic and international markets. In the export market, the demand for our
products is based on the prevailing trends in the United States, Europe, South Asia and South America, the
key export regions for our Company. Our manufacturing facilities need to be flexible to deliver quick
changeovers and handle a variety of fabrics to meet with such trends. We cannot assure you that we will be
able to achieve the technological advances that may be necessary for us to remain competitive or that
certain of our products will not become obsolete. We are also subject to the risks generally associated with
new product introductions and applications, including the lack of market acceptance and delays in product
development.
Further, any substantial change in the spending habits of the consumers who are end users of our products
will affect our customers‟ businesses and, in turn, will affect the demand for our products. With respect to
our garment business, the demands of our customers change frequently and there is no guarantee that we
will be able to forecast these demands as well as we have in the past. Any failure on our part to forecast
and/or meet the changing demands of our customers will have an adverse effect on our business,
profitability and growth prospects.
39. We may be unable to adequately protect our intellectual property since certain of our trademarks, logos
and other intellectual property are currently not registered and therefore do not enjoy any statutory
protection. Furthermore, we may be subject to claims alleging breach of third party intellectual property
rights.
Our Company currently has 43 trademarks registered and 29 trademark applications pending under the
provisions of the Trademarks Act. We cannot assure you that we will be able to register these trademarks or
that third parties will not infringe our intellectual property, causing damage to our business prospects,
reputation and goodwill. Our efforts to protect our intellectual property may not be adequate and any third
party claim on any of our unprotected brands may lead to erosion of our business value and our operations
could be adversely affected. We may need to litigate in order to determine the validity of such claims and
the scope of the proprietary rights of others. Any such litigation could be time consuming and costly and a
favourable outcome cannot be guaranteed. We may not be able to detect any unauthorized use or take
appropriate and timely steps to enforce or protect our intellectual property. We also can provide no
assurance that the unauthorized use by any third parties of these trademarks will not damage our business
prospects, reputation and goodwill.
40. An inability to manage our growth and operations could disrupt our business and reduce our
profitability.
We have experienced significant growth in recent years and expect our business to grow significantly as a
result of the expansion of our manufacturing facilities. Our Company‟s sales have grown from ` 3,835.89
crore in the half year ended September 2011 to ` 5,747.52 crore in the half year ended September 2012 on a
standalone basis. Similarly, our Company‟s exports have grown from ` 1,395.28 crore in the half year
ended September 2011 to ` 1,669.61 crore in the half year ended September 2012 on a standalone basis.
We expect this growth in our operations and expansion into diverse sales channels to place significant
demands on us and require us to continuously evolve and improve our operational, financial and internal
controls across the organization. In particular, continued expansion increases the challenges involved in:
maintaining high levels of customer satisfaction;
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recruiting, training and retaining sufficient skilled management, technical and marketing personnel;
adhering to health, safety and environment and quality and process execution standards that meet
customer expectations; and
developing and improving our internal administrative infrastructure, particularly our financial,
operational, communications and other internal systems.
Any inability to manage our growth and operations may have an adverse effect on our business and results
of operations.
41. Stringent environmental, health and safety laws and regulations or stringent enforcement of
environmental, health and safety laws and regulations may result in increased liabilities and capital
expenditures and adversely affect our business, prospects, financial condition and results of operations.
Our operations are subject to environmental, health and safety and other regulatory and/or statutory
requirements in the countries in which we operate. Our operations may generate certain amounts of
pollutants and waste, some of which may be hazardous in nature. The discharge, storage and disposal of
such hazardous substances are subject to environmental regulations. The scope and extent of new
environmental regulations, including their effect on our operations, cannot be predicted. The costs and
management time required to comply with these requirements could be significant. The measures we
implement in order to comply with these new laws and regulations may not be deemed sufficient by
governmental authorities and our compliance costs may significantly exceed our estimates. In addition, due
to the possibility of unanticipated regulatory or other developments, the amount of future environmental
expenditures may vary widely from those currently anticipated. Further, any environment related
investments/expenditure may reduce funds available for other investments.
There can be no assurance that we will not become involved in future litigation or other proceedings or be
held responsible in any such future litigation or proceedings relating to safety, health and environmental
matters in the future, the costs of which could be material. Clean-up, remediation costs, as well as damages,
temporary shutdown of operations and other liabilities and related litigation, may adversely affect our
business, prospects, financial condition and results of operations.
42. Our business and operations depend on our reputation and the value of our brand. Any impairment of
our reputation or erosion of our brand or failure to optimize our brand in the marketing of our products
could have a material adverse effect on our capacity to retain our current customers and attract new
customers and therefore on our sales and profitability.
We have been present in the textile manufacturing industry for over 25 years, which has helped us in
understanding the changing needs and demands of the textile industry and our customers. We operate in a
competitive environment, and we believe that our brand recognition provides significant competitive
advantage to us. Our brand name, trademarks and logos and our reputation are sales and distribution tools,
and we devote significant resources to promoting and protecting them. We also believe our future success
will partially be influenced by further development of our brand and our ability to communicate effectively
about our diverse products to various target customers in India and internationally. Any adverse publicity,
whether or not justified, relating to activities of our operations, products, employees or agents could tarnish
our reputation and reduce the value of our brand. Damage to our reputation and loss of brand equity could
reduce demand for our services. Any impairment of our reputation or erosion of our brand or failure to
optimize our brand in the marketing of our products could have a material adverse effect on our capacity to
retain our current customers and attract new customers and therefore on our sales and profitability, as well
as require additional resources to rebuild our reputation and restore the value of our brand.
xli
43. We could be adversely affected if we fail to keep pace with technical and technological developments in
our businesses.
We believe our future success will depend in part on our ability to respond to technological advances in the
industry in which we operate, on a cost-effective and timely basis. The development and implementation of
such technology entails significant technical and business risks. To meet our customers‟ requirements, we
must continuously update our existing technology, and develop new technology for our various products.
Our strong product knowledge and designing capabilities, including our ability to create samples and
develop new targeted product offerings in response to or in anticipation of changes in market and fashion
trends, are integral to our success in developing and maintaining customer relationships. We have
established design studios across all our facilities that are staffed by qualified designers from reputed
fashion and design institutions in India. Some of our sophisticated knitting and weaving equipment is linked
directly to machines that enable computer-generated designs in the knit or weave. These design studios
develop new designs for our design library for apparel fabrics, home textile products and garments. We
have recently made substantial capital expenditure increasing our production capacity.
In addition, our product development and merchandising initiatives are based on a comprehensive
understanding of the industries in which our customers operate and the underlying design and technology
trends deployed in such industries. These initiatives ensure that our operations move up the value chain
resulting in better margins and improved realization. Any rapid and frequent technology and market
demand changes can often render existing technologies, equipment and processes obsolete, requiring
substantial new capital expenditures and/or write downs of assets. We cannot assure you that we will
successfully implement new technologies effectively. Any failure to anticipate or to respond adequately to
changing technical developments, market demands and/or customer requirements could adversely affect our
business, financial condition and results of operations.
44. If more stringent labour laws or other industry standards in India become applicable to us, our business,
results of operations, financial condition and cash flows may be adversely affected.
We are subject to a number of stringent labour laws. India has stringent labour legislation that protects the
interests of workers, including legislation that sets forth detailed procedures for dispute resolution and
employee removal and legislation that imposes financial obligations on employers upon retrenchment. If
this policy is adopted, our ability to hire employees of our choice may be affected due to restrictions on our
pool of potential employees. From a regulatory perspective, we also face the risk that on an application
made by the contract labourers, the appropriate court or tribunal may direct that the contract labourers are
required to be regularized or absorbed, and/or that we pay certain contributions in this regard that can
adversely impact our financial performance.
In the event the labour laws become more stringent or are more strictly enforced or if our employees
unionize, it may become difficult for us to maintain flexible human resource policies, discharge employees
or downsize, any of which could have an adverse effect on our business, results of operations, financial
condition and cash flows.
45. We may undertake strategic acquisitions or investments, which may prove to be difficult to integrate and
manage or may not be successful.
In the future, we may consider making strategic acquisitions of other textile manufacturing companies or
other companies whose resources, capabilities and strategies are complementary to and are likely to
increase our product portfolio, expand our distribution network and/or develop new customers. We may
also enter into strategic alliances or joint ventures to explore such opportunities or make significant
investments in entities that we do not control to capitalize on such business opportunities, and there can be
no assurance that such strategic alliances, joint ventures or investments will be successful.
xlii
It is also possible that we may not be able to identify suitable acquisition or investment candidates, or that if
we do identify suitable candidates, we may not complete those transactions on terms commercially
beneficial to us, or at all. The inability to identify suitable acquisition targets or investments or the inability
to complete such transactions may adversely affect our competitiveness or our growth prospects. If we
acquire another company we could face difficulty in integrating the acquired operations. In addition, the
key personnel of the acquired company may decide not to work for us. These difficulties could disrupt our
on-going business, distract our management and employees and increase our expenses. There can be no
assurance that we will be able to achieve the strategic purpose of such acquisition or operational integration
or our targeted return on investment.
46. Our operations are subject to various business and operational risks and our future results of operations
are difficult to predict.
Our operations are subject to various risks and hazards associated with the manufacturing of textile
products and associated processes, which may adversely affect our profitability, including natural
calamities, breakdown of operations, loss or shutting down of our manufacturing facilities, failure or
substandard performance of equipment, third party liability claims, litigation filed by unsatisfied customers
for non-receipt of committed supplies, labour disturbances or strikes due to wage demands, employee
frauds and infrastructure failures. Despite compliance with requisite safety requirements and standards, our
operations are subject to certain hazards, including explosions, fires, mechanical failures, operational
problems, transportation interruptions, discharges or releases of hazardous substances and chemicals and
other environmental risks. These hazards can cause personal injury and loss of life, damage to or
destruction of property and equipment as well as environmental damage, which could result in a suspension
of operations and the imposition of civil or criminal liabilities.
In addition, our results of operations may fluctuate in the future due to a number of factors, many of which
are beyond our control. Our results of operations during any fiscal year and from period to period are
difficult to predict. Our business, financial condition and results of operations may be adversely affected by,
among other factors, the following:
timing and integration of acquired businesses, if any;
the cyclical nature of the textile industry;
economic downturn or stagnant economies in India and global markets;
any adverse change in international and domestic prices for our raw materials such as cotton;
adverse changes in purchasing practices of our customers;
the ability to raise the finance required for investments and/or an increase in interest rates at which we
can raise finance;
adverse fluctuations in the exchange rate of the rupee versus major international currencies, including
the U.S. dollar;
statutory and/or regulatory requirements pertaining to the textile industry; and
competition from global and Indian textile manufacturing companies, including new entrants in the
market.
Any liability incurred as a result of the above-mentioned events has the potential to materially impact our
business, financial condition and results of operations. Such events may also adversely affect public
xliii
perception about our business and the perception of our suppliers, customers and employees, leading to an
adverse effect on our business. Although we maintain general insurance against such liabilities, insurance
proceeds may not be adequate to completely cover the substantial liabilities, lost revenues or increased
expenses that we may incur.
47. We will be required to prepare our financial statements in accordance with IFRS effective from April 1,
2014. There can be no assurance that our adoption of „Indian Accounting Standards converged with
IFRS‟ (“IND-AS”) will not adversely affect our reported results of operations or financial condition and
any failure to successfully adopt IND-AS from April 1, 2014 could have an adverse effect on the price of
the Equity Shares.
Based on the current timeline announced for the convergence of „Indian Accounting Standards‟ with IFRS
for Indian companies, we estimate that the earliest that our Company would need to prepare annual and
interim financial statements under IND-AS would be the financial period commencing from April 1, 2014.
There is currently a significant lack of clarity on the adoption of, and convergence to IND-AS and we
currently do not have a set of established practices on which to draw on in forming judgments regarding its
implementation and application, and we have not determined with any degree of certainty the impact that
such adoption will have on our financial reporting. There can be no assurance that our financial condition,
results of operations, cash flows or changes in shareholders‟ equity will not appear materially worse under
IND-AS than under Indian GAAP. As we transition to IND-AS reporting, we may encounter difficulties in
the ongoing process of implementing and enhancing our management information systems. Moreover, there
is increasing competition for the small number of IFRS-experienced accounting personnel as more Indian
companies begin to prepare IND-AS financial statements. There can be no assurance that our adoption of
IND-AS will not adversely affect our reported results of operations or financial condition and any failure to
successfully adopt IND-AS from April 1, 2014 could have an adverse effect on the price of the Equity
Shares.
48. We are subject to regulatory and legal risk which may adversely affect our business.
Our operations are subject to regulations framed by various regulatory authorities in India and other
jurisdictions, including regulations relating to foreign investment in India, investments by our Company
overseas as well as issuances of guarantees. Compliance with many of the regulations applicable to us
across jurisdictions including any restrictions on investments and other activities currently being carried out
by our Company involve a number of risks, particularly in areas where applicable regulations may be
subject to varying interpretations. If the interpretation of the regulators and authorities varies from our
interpretation, we may be subject to penalties and our business could be adversely affected.
We are also subject to changes in Indian laws, regulations and accounting principles. There can be no
assurance that these laws will not change in the future or that such changes or the interpretation or
enforcement of existing and future laws and rules by governmental and regulatory authorities will not affect
our business and future financial performance.
External Risks
49. Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could
adversely affect the financial markets and could have a material adverse effect on our business, financial
condition and results of operations and the price of our Equity Shares.
Terrorist attacks and other acts of violence or war may negatively affect the Indian markets in which our
Equity Shares trade and also adversely affect the worldwide financial markets. These acts may also result in
a loss of business confidence, make travel and other services more difficult and ultimately adversely affect
our business. India has experienced communal disturbances, terrorist attacks and riots during recent years.
If such events recur, our business may be adversely affected. The Asian region has from time to time
xliv
experienced instances of civil unrest and hostilities. Hostilities and tensions may occur in the future and on
a wider scale. Military activity or terrorist attacks in India, such as the attacks in Mumbai in November
2008, as well as other acts of violence or war could influence the Indian economy by creating a greater
perception that investments in India involve higher degrees of risk. Events of this nature in the future, as
well as social and civil unrest within other countries in Asia, could influence the Indian economy and could
have a material adverse effect on the market for securities of Indian companies, including our Equity
Shares.
50. A slowdown in economic growth in India could cause our Company‟s business to suffer.
Our performance and growth are dependent on the performance of the Indian economy. The economy could
be adversely affected by various factors such as political or regulatory action, including adverse changes in
liberalization policies, social disturbances, terrorist attacks and other acts of violence or war, natural
calamities, interest rates, and various other factors. Any slowdown in the Indian economy may adversely
impact our business and financial performance and the price of the Equity Shares. The Indian securities
markets are smaller than securities markets in more developed economies. Indian stock exchanges have in
the past experienced substantial fluctuations in the prices of listed securities. These exchanges have also
experienced problems that have affected the market price and liquidity of the securities of Indian
companies, such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers.
In addition, the governing bodies of the Indian stock exchanges have from time to time restricted securities
from trading, limited price movements and restricted margin requirements. Further, disputes have occurred
on occasion between listed companies and the Indian stock exchanges and other regulatory bodies that, in
some cases, have had a negative effect on market sentiment. If similar problems occur in the future, the
market price and liquidity of the Shares could be adversely affected.
51. Political instability or changes in the GoI could delay the liberalization of the Indian economy and
adversely affect economic conditions in India generally and our business in particular.
A significant portion of our revenue is generated from the sale of products in India. Our business, and the
market price and liquidity of the Equity Shares, are therefore directly affected by the Indian economy,
which in turn may be affected by foreign exchange rates and controls, interest rates, changes in government
policy, taxation, social and civil unrest and other political, economic or other developments in or affecting
India.
Since 1991, successive Indian Governments have pursued policies of economic liberalization, including
significantly relaxing restrictions on the private sector. Nevertheless, the role of the Indian central and state
governments in the Indian economy as producers, consumers and regulators has remained significant. Since
1996, the GoI has changed several times. The present GoI, formed in May 2009, has announced policies
and taken initiatives that support the continued economic liberalization policies that have been pursued by
previous governments. We cannot assure you that these liberalization policies will continue in future. The
rate of economic liberalization could change, and specific laws and policies affecting the textile
manufacturing companies, foreign investment, currency exchange and other matters affecting investment in
our securities could change as well. Any change in India‟s economic liberalization and deregulation policies
could adversely affect business and economic conditions in India generally and our business in particular.
52. Any down-grading of India‟s debt rating by an international rating agency could have a negative impact
on our business and the price of the Equity Shares.
Any adverse revisions to India‟s credit ratings for domestic and international debt by international rating
agencies may adversely impact our ability to raise additional financing, and the interest rates and other
commercial terms at which such additional financing may be available. This could have an adverse effect
on our business and future financial performance, our ability to obtain financing for capital expenditures
and the price of the Equity Shares.
xlv
53. Natural calamities could have a negative impact on the Indian economy and cause our Company‟s
business to suffer.
India has experienced natural calamities such as earthquakes, tsunamis, floods and droughts in the past few
years. The impact on the Indian economy of these natural disasters is determined by their extent and
severity. The erratic progress of the monsoon in 2004 affected sowing operations for certain crops. In
addition, prolonged spells of below normal rainfall or other natural calamities could have a negative impact
on the Indian economy, adversely affecting our Company‟s business, raising our raw material costs and the
price of the Shares. Pandemic disease, caused by a virus such as H5N1 (the „avian flu‟ virus), or H1N1 (the
„swine flu‟ virus), could have a severe adverse effect on our Company‟s business. The potential impact of
such a pandemic on our Company‟s results of operations and financial position is highly speculative, and
would depend on numerous factors, including:
the rate of contagion if and when that occurs;
the regions of the world most affected;
the effectiveness of treatment of the infected population;
our Company‟s insurance coverage and related exclusions;
the possible macroeconomic effects of a pandemic on our business; and
the effect of lapses and surrenders of existing policies, as well as sales of new policies.
54. Trade deficits could have a negative effect on our business and the trading price of the Equity Shares.
India‟s trade relationships with other countries can influence Indian economic conditions. If India's trade
deficits increase or become unmanageable, the Indian economy, and consequently our business, future
financial performance and the trading price of the Equity Shares could be adversely affected.
55. An outbreak of an infectious disease or any other serious public health concerns in Asia or elsewhere
could have a material adverse effect on our business and results of operations.
The outbreak of an infectious disease in Asia or elsewhere or any other serious public health concern such
as swine influenza around the world could have a negative impact on economies, financial markets and
business activities worldwide, which could have a material adverse effect on our business. Although we
have not been adversely affected by such outbreaks, there can be no assurance that a future outbreak of an
infectious disease or any other serious public health concern will not have a material adverse effect on our
business.
56. If inflation were to rise in India, price of our raw materials could increase thereby adversely affecting
our results of operations.
India has experienced high inflation rates in recent years. The rate of inflation might rise in the future and
the prices of raw materials may increase thereby adversely affecting our results of operations.
Risks Relating to Investment in our Equity Shares
57. Foreign investors are subject to foreign investment restrictions under Indian law that limits our ability to
attract foreign investors, which may adversely impact the market price of the Equity Shares.
Under the foreign exchange regulations currently in force in India, transfers of shares between non-residents
and residents are freely permitted (subject to certain exceptions) if they comply with the pricing guidelines
xlvi
and reporting requirements specified by the RBI. If the transfer of shares, which are sought to be transferred,
is not in compliance with such pricing guidelines or reporting requirements or fall under any of the
exceptions referred to above, then the prior approval of the RBI will be required. Additionally, shareholders
who seek to convert the rupee proceeds from a sale of shares in India into foreign currency and repatriate
that foreign currency from India will require a no objection/ tax clearance certificate from the income tax
authority. There can be no assurance that any approval required from the RBI or any other government
agency can be obtained on any particular terms or at all.
58. An active market for our Equity Shares may not be sustained, which may cause the price of our Equity
Shares to fall.
While our Equity Shares have been traded on the BSE since 1993 and the NSE since 1995, and are
currently frequently traded in terms of the Takeover Regulations, there can be no assurance regarding the
continuity of the existing active or liquid market for our Equity Shares, the ability of Investors to sell their
Equity Shares or the prices at which Investors may be able to sell their Equity Shares. In addition, the
market for debt and equity securities in emerging markets has been subject to disruptions that have caused
volatility in the prices of securities similar to our Equity Shares. There can be no assurance that the market
for the Equity Shares offered hereunder will not be subject to similar disruption. Any disruption in these
markets may have an adverse effect on the market price of our Equity Shares.
59. The price of the Equity Shares has historically fluctuated and may continue to fluctuate, which may
make future prices of the Equity Shares difficult to predict.
The price of the Equity Shares, like that of other textile manufacturing companies, can be volatile. Some of
the factors that could affect our share price are:
speculation in the press or investment community about, or actual changes in, our business, strategic
position, market share, organizational structure, operations, financial condition, financial reporting and
results, value or liquidity of our investments, exposure to market volatility, prospects, business
combination or investment transactions, or executive team;
the announcement of new products, innovations or acquisitions by us or our competitors;
quarterly increases or decreases in revenue, gross margin, earnings or cash flow from operations,
changes in estimates by the investment community or guidance provided by us, and variations between
actual and estimated financial results; and
announcements of actual and anticipated financial results by our competitors and other companies in
the textile manufacturing industry.
General or industry-specific market conditions or stock market performance or domestic or international
macroeconomic and geopolitical factors unrelated to our performance also may affect the price of our
Equity Shares. In particular, the stock market as a whole recently has experienced extreme price and
volume fluctuations that have affected the market price of many textile manufacturing companies in ways
that may have been unrelated to those companies' operating performance. For these reasons, Investors
should not rely on recent trends to predict future share prices, financial condition, results of operations or
cash flows.
60. A third party could be prevented from acquiring control of our Company because of anti-takeover
provisions under Indian law.
There are provisions in Indian law that may delay, deter or prevent a future takeover or change in control of
our Company, even if a change in control would result in the purchase of your Equity Shares at a premium
xlvii
to the market price or would otherwise be beneficial to you. Such provisions may discourage or prevent
certain types of transactions involving actual or threatened change in control of us. Under the Takeover
Regulations in India, an acquirer has been defined as any person who, directly or indirectly, acquires or
agrees to acquire shares or voting rights or control over a company, whether individually or acting in
concert with others. Although these provisions have been formulated to ensure that interests of
investors/shareholders are protected, these provisions may also discourage a third party from attempting to
take control of our Company. Consequently, even if a potential takeover of our Company would result in
the purchase of the Equity Shares at a premium to their market price or would otherwise be beneficial to its
stakeholders, it is possible that such a takeover would not be attempted or consummated because of the
Indian takeover regulations.
61. Financial instability in other countries, particularly emerging market countries, could disrupt our
business and affect the price of our Equity Shares.
Although economic conditions are different in each country, investors‟ reactions to developments in one
country may have an adverse effect on the securities of companies in other countries, including India. A
loss of investor confidence in the financial systems of other emerging markets may cause increased
volatility in Indian financial markets and the Indian economy in general. Any worldwide financial
instability could also have a negative impact on the Indian economy, including the movement of exchange
rates and interest rates in India. Any financial disruption could have an adverse effect on our business,
future financial performance, shareholders‟ equity and the price of our Equity Shares.
62. Because our Equity Shares are quoted in Indian Rupees in India, Investors may be subject to potential
losses arising out of exchange rate risk on the Indian rupee and risks associated with the conversion of
Indian rupee proceeds into foreign currency.
Non resident investors are subject to currency fluctuation risk and convertibility risk since the Equity
Shares are quoted in Indian Rupees on the Indian stock exchanges on which they are listed. Dividends on
the Equity Shares will also be paid in Indian Rupees. The volatility of the Indian Rupee against the U.S.
dollar and other currencies subjects investors who convert funds into Indian Rupees to purchase our Equity
Shares to currency fluctuation risks.
63. There is no guarantee that the Equity Shares will be listed on the BSE and the NSE in a timely manner
or at all, and any trading closures at the BSE and the NSE may adversely affect the trading price of our
Equity Shares.
In accordance with Indian law and practice, permission for listing of the Equity Shares will not be granted
until after the Equity Shares offered in the Issue have been issued and allotted. Approval will require all
other relevant documents authorizing the issuing of Equity Shares to be submitted. There could be a failure
or delay in listing the Equity Shares on the BSE and the NSE. Any failure or delay in obtaining the approval
would restrict your ability to dispose of your Equity Shares.
The regulation and monitoring of Indian securities markets and the activities of investors, brokers and other
participants differ, in some cases significantly, from those in Europe and the United States The BSE and the
NSE have in the past experienced problems, including temporary exchange closures, broker defaults,
settlements delays and strikes by brokerage firm employees, which, if continuing or recurring, could affect
the market price and liquidity of the securities of Indian companies, including the Equity Shares, in both
domestic and international markets. A closure of, or trading stoppage on, either of the BSE and the NSE
could adversely affect the trading price of the Equity Shares. Historical trading prices, therefore, may not be
indicative of the prices at which the Equity Shares will trade in the future.
xlviii
64. Any further issue of Equity Shares by our Company may lead to a dilution of Investor shareholding in
our Company. Furthermore, significant sales of Equity Shares by our major shareholders may affect the
trading price of the Equity Shares.
Any future equity offerings by our Company may lead to a dilution of Investor shareholding in our
Company or affect the market price of the Equity Shares. Additionally, sales of a large number of the
Equity Shares by the Company's principal shareholders could adversely affect the market price of the
Equity Shares. In addition, any perception by Investors that such issuances might occur could also affect the
market price of the Equity Shares. There can be no assurance that the Company will not issue further Equity
Shares or that the shareholders will not dispose of, pledge or otherwise encumber their Equity Shares. In
addition, any perception by Investors that such issuances or sales might occur could also affect the trading
price of our Equity Shares.
65. Delay in resolution of outstanding investor complaints in a timely manner may affect our reputation.
As on March 18, 2013, there were three outstanding investor complaints including one of which are on
SCORES, all of which were in relation to non-receipt of dividend. The aggregate amount involved is `
2,645. We have sent a request to the bank for preparing demand drafts of the dividend amounts, which we
will send to the three complainants on receipt. In case we are not able to resolve these complaints in a
timely manner, may affect our reputation.
Prominent Notes:
The net worth (net worth means share capital and all reserves) of our Company, on a standalone basis, is `
3,994.21 crore and ` 3,655.50 crore as at September 30, 2012 and Fiscal 2012 respectively. The net worth
(net worth means share capital and all reserves) of our Company on a consolidated basis, is ` 3,088.10 crore
and ` 2,860.37 crore respectively, as per the financial statements of our Company prepared in accordance
with the Indian GAAP in “ Financial Information” beginning on page 45;
This is a rights issue of 55,08,46,238 Equity Shares of ` 10 each for cash at par per Equity Share, for an
aggregate amount not exceeding ` 550.85 crore to the Eligible Equity Shareholders of our Company in the
ratio of 2 Equity Shares for every 3 Equity Shares held as on the Record Date i.e. February 19, 2013;
Our Company has, on a standalone basis, entered into the following transactions as at and for the half year
ended September 30, 2012, with related parties that include our Promoters and Promoter Group and entities
affiliated with our Promoters and Promoter Group:
(` in crore)
Transaction Associate
Compani
es
Entities
under
common
control
Subsidiar
ies
Joint
Venture
Compani
es
KMP Relatives
of KMP
Firms in
which
Relatives
of KMP
are
interested
Total
a) Unsecured Short Term
Borrowing
Balance as at 1 April - - - 11.75 - - - 11.75
Balance as at 30 Sept - - - 11.75 - - - 11.75
b) Long Term Loans and
Advances
Balance as at 1 April - - - - - - - -
Given during the - - 2,248.82 - - - - 2,248.82
xlix
Transaction Associate
Compani
es
Entities
under
common
control
Subsidiar
ies
Joint
Venture
Compani
es
KMP Relatives
of KMP
Firms in
which
Relatives
of KMP
are
interested
Total
period/ year
Repaid during the
period /year - - 789.78 - - - - 789.78
Balance as at 30 Sept - - 1,459.04 - - - - 1,459.04
c) Short Term Loans and
Advances
Balance as at 1 April - 0.01 120.49 - - - - 120.50
Given during the
period/ year - - 357.88 - - - - 357.88
Repaid/Adjusted
during the period/year - - 237.20 - - - - 237.20
Provision made during
the period/year - - 54.59 - - - - 54.59
Balance as at 30 Sept - 0.01 186.58 - - - - 186.59
d) Non-Current
Investments
Balance as at 1 April - - 39.00 92.38 - - - 131.38
Invested during the
period/ year - - - - - - - -
Redeemed /
Transferred/Provided
during the period/year
- - 0.04 - - - - 0.04
Provided during the
period/year - - 37.10 - - - - 37.10
Balance as at 30 Sept - - 1.86 92.38 - - - 94.24
e) Trade Receivables
Balance as at 30 Sept - - 151.50 0.09 - - - 151.59
f) Trade payables
Balance as at 30 Sept - - 2.99 20.11 - - 0.07 23.17
g) Other Current
Liabilities
Balance as at 30 Sept - - 310.40 - - - - 310.40
h)
Advance to Vendor -
Short term Loans and
Advances
- - - - - - - -
Balance as at 30 Sept - - - - - - - -
i) Sale of product
Sales of Goods
(Including job work
- - 311.64 0.30 - - - 311.94
l
Transaction Associate
Compani
es
Entities
under
common
control
Subsidiar
ies
Joint
Venture
Compani
es
KMP Relatives
of KMP
Firms in
which
Relatives
of KMP
are
interested
Total
charges)
j) Expenditure
Purchase of goods /
Job Charges - - 1.88 24.08 - - - 25.96
Purchase of Fixed
Assets - - 146.82 - - - - 146.82
Rent - - 1.74 - - - 1.74
Repairs &
Maintenance - - 0.55 - - - - 0.55
Consultancy Charges - - - - - - 1.03 1.03
Marketing Service
Charges - - 34.75 - - - - 34.75
Remuneration - - - - 6.10 0.10 - 6.20
k) Dividend Paid - - - - 1.88 - - 1.88
l) Income
Dividend - - - 1.93 - - - 1.93
Rent - 0.11 0.17 - - - - 0.28
m) Guarantee given - - 1,002.30 - - - - 1,002.30
Our Company has, on a consolidated basis, entered into the following transactions as at and for the half year
ended September 30, 2012, with related parties that include our Promoters and Promoter Group and entities
affiliated with our Promoters and Promoter Group:
(` in crore)
Transaction
Associates Entities
under
common
control
Joint
Venture
Compan
y
KMP Relat
ives
of
KMP
Firms in
which
relatives of
KMP are
interested
Total
a) Advance Share Application Money
Balance as at 1st April - 350.00 - - - - 350.00
Balance as at 30th September - 350.00 - - - - 350.00
(b) Long term borrowings
Balance as at 1st April - 613.88 - - - - 613.88
Reclassified to short term borrowings - 358.10 - - - - 358.10
Translation difference during the period - 7.71 - - - - 7.71
Balance as at 30th September - 263.49 - - - - 263.49
(c) Short term borrowings
li
Balance as at 1st April - 196.95 5.99 - - - 202.94
Received during the period/ reclassified
from long term borrowings
- 358.10 - - - - 358.10
Translation difference during the period - 16.71 - - - - 16.71
Balance as at 30th September - 571.76 5.99 - - - 577.75
(d) Short term loans and Advances
Balance as at 1st April 0.63 8.59 - - - - 9.22
Granted during period - 7.99 - - - - 7.99
Converted / Repaid during the period 0.41 7.67 - - - - 8.08
Translation difference during the period - 0.27 - - - - 0.27
Balance as at 30th September 0.22 9.18 - - - - 9.40
(e) Investments
Balance as at 1st April 88.78 3.84 - - - - 92.62
Translation difference during the period - 0.10 - - - - 0.10
Balance as at 30th September 88.78 3.94 - - - - 92.72
(f) Long Term Loans & Advances
Balance as at 1st April - - - - - - -
Given/ (Received) during the period
(net)
0.02
Balance as at 30th September 0.02 - - - - 0.02 0.04
(g) Trade Receivables
Balance as at 30th September 21.47 - 0.04 - - - 21.51
(h) Trade Payables
Balance as at 30th September 1.31 - 10.26 - - 0.07 11.64
(i) Other current liabilities
Balance as at 30th September - 90.71 - - - - 90.71
(j) Turnover
Sale of goods (including job work
charges)
39.26 0.15 - - - 39.41
(k) Expenditure
Purchase of goods / Job charges 0.11 - 12.28 - - - 12.39
Rent - - - - 0.10 - 0.10
Consultancy Charges - - - - - 1.03 1.03
Remuneration - - - 6.10 0.13 - 6.23
Upfront Fees - 2.48 - - - - 2.48
Dividend Paid - - - 1.88 - - 1.88
Interest Paid 7.99 - - - - - 7.99
(l) Income
Rent - 0.12 - - - - 0.12
lii
There has been no financing arrangement whereby the Promoters and Promoter Group, the Directors or
their relatives have financed the purchase by any other person of our securities other than in the normal
course of business of the financing activity during the period of six months immediately preceding the date
of filing of this Letter of Offer with SEBI.
1
SECTION III – INTRODUCTION
SUMMARY OF THE ISSUE
The following is a summary of the Issue. This summary should be read in conjunction with, and is qualified in its entirety
by, more detailed information in the chapter “Terms of the Issue” on page 73.
Equity Shares offered in this Issue 55,08,46,238 Equity Shares
Rights Entitlement 2 Equity Shares for every 3 fully paid-up Equity Shares held
on the Record Date.
Record Date February 19, 2013
Face Value per Equity Share `10
Issue Price per Equity Share `10
Equity Shares outstanding prior to the Issue 82,62,69,357 Equity Shares
Equity Shares outstanding after the Issue (assuming
full subscription and Allotment of the Rights
Entitlement)
1,37,71,15,595 Equity Shares
Terms of the Issue For further information, please refer to “Terms of the Issue” on
page 73.
Use of Gross Proceeds For further information, please refer to “Objects of the Issue”
on page 27.
Terms of Payment
Due Date Amount
On the Issue application (i.e. along with the CAF) ` 10, which constitutes 100% of the Issue Price
Note on Outstanding Instruments
Employee Stock Options
Of the options granted under ALOK ESOS 2010, 102,88,900 options remain outstanding as on December 31, 2012, all of
which have been vested but not yet exercised.
2
SUMMARY FINANCIAL INFORMATION
The following tables set forth the summary financial information derived from our audited standalone and audited
consolidated financial statements as at and for Fiscal 2012 prepared in accordance with Indian GAAP and the Companies
Act and the limited reviewed financial statements as at and for the half year ended September 30, 2012 on a standalone
basis, prepared in accordance with Indian GAAP.
Our summary financial information presented below, is in Rupees/ Rupees Crore and should be read in conjunction with
the financial statements and the notes (including the significant accounting principles) thereto included in “Financial
Information” on page 45.
Balance Sheet as at September 30, 2012
Particulars Standalone Consolidated As at September 30,
2012
As at September 30,
2012 (` in crore) (` in crore)
I EQUITIES AND LIABILITIES
(1) Shareholders' Funds
Share Capital 826.28 826.28
Reserves and Surplus 3,167.93 2,261.82
(2) Non-current Liabilities
Long-term Borrowings 6,907.67 8,296.85
Deferred Tax liabilities (net) 592.16 592.65
Long-term provisions 205.29 205.66
(3) Current Liabilities
Short-term Borrowings 4,855.13 5,441.15
Trade payables 1,278.45 1,481.88
Other current liabilities 2,596.85 3,550.42
Short-term provisions 126.29 146.80
TOTAL 20,556.05 22,803.51
II ASSETS
(1) Non-current Assets
Fixed assets
Tangible assets 8,870.09 9,152.99
Intangible assets 34.42 38.53
Capital work-in-progress 773.45 778.47
Goodwill in consolidation - 606.27
Non-current Investments 129.66 1,706.92
Deferred Tax Asset (net) - 9.24
Long-term Loans & Advances 1,595.16 1,007.04
(2) Current Assets
Current Investments 2.65 4.26
Inventories 3,448.47 3,763.85
Trade receivables 2,718.92 2,802.04
Cash & Bank Balance 368.61 423.07
Short-term Loans & Advances 2,547.18 2,441.19
Other current assets 67.44 69.64
TOTAL 20,556.05 22,803.51
3
Statement of Profit and Loss for the half year ended September 30, 2012
Particulars Standalone Consolidated
For the half year
ended
September 30,
2012
For the half year ended
September 30, 2012
(` in crore) (` in crore)
I REVENUE
Revenue from Operations (gross) 5,909.57 6,351.68
Less : Excise Duty 162.05 162.06
Revenue from Operations (net) 5,747.52 6,189.62
II Other Income 14.47 17.55
III Total Revenue 5,761.99 6,207.17
IV EXPENSES
Cost of Materials consumed 2,977.37 2,987.91
Purchase of Traded Goods 40.79 274.57
Changes in inventories of finished goods,
work-in-progress and stock-in-trade (73.67) (69.64)
Employee benefits expense 146.05 253.82
Finance costs 651.36 726.15
Depreciation and amortisation expense 431.69 450.58
Other expenses 1,023.40 1,181.33
Total Expenses 5,196.99 5,804.72
V Profit before exceptional items and tax 565.00 402.45
VI Exceptional Items (73.05) 18.64
VII Profit before tax (V-VI) 491.95 421.09
VIII Tax expenses
– Current tax (193.40) (198.54)
Short Provision for Income Tax in respect of earlier years
Include MAT adjustment of Rs. 66.27 crore (13.47) (13.47)
– Deferred tax 34.61 34.80
Total Tax expenses (172.26) (177.21)
Profit for the year before share of profit from associates - 243.88
Share of loss from associates - (0.12)
IX Net Profit for the period 319.69 243.76
X EARNINGS PER SHARE (in `)
Basic 3.87* 2.95*
Diluted 3.87* 2.95* *Not annualized
4
Condensed Cash Flow Statement for the half year ended September 30, 2012
Particulars
Standalone Consolidated
For the half year
ended September 30,
2012
For the half year
ended September 30,
2012
(` in crore) (` in crore)
A. Net cash (used) in /generated from operating activities (873.13) 721.87
B. Net cash generated from /(used) in Investing Activities 130.90 (711.48)
C. Net cash generated from /(used) in Financing Activities 398.95 (390.88)
Net Decrease in Cash and Cash equivalents (A+B+C) (343.38) (380.49)
Cash and Cash equivalents at the beginning of the
year 542.76 595.45
Cash and Cash equivalents at the end of the half year 199.38 214.96
Cash and Cash equivalents include:
Particulars
Standalone Consolidated
As at September 30,
2012 As at September 30,
2012
(` in crore) (` in crore)
Cash and Bank Balances 368.61 423.07
Less : Earmarked Balances/Deposit with banks * 145.66 145.83
Less : Deposit with maturity period of more than 3 months ** 23.57 58.07
Less: Unrealized Foreign Exchange variations on cash & Cash
Equivalents
- 4.21
Total Cash and Cash equivalents 199.38 214.96
* Earmarked balances/deposits with bank includes balances / deposits held as margin money or security against
borrowings, guarantees and other commitments, which being, restricted for its use, have been excluded from cash and
cash equivalent and grouped under the investment activity.
** Fixed Deposits with maturity period of more than three months have been excluded from cash and cash equivalent and
grouped under the investment activity.
5
Standalone Balance Sheet
Particulars As at March 31, 2012 As at March 31, 2011
(` in crore) (` in crore)
I EQUITIES AND LIABILITIES
(1) Shareholders' Funds
Share Capital 826.28 787.79
Reserves and Surplus 2,829.22 2,309.80
(2) Non-current Liabilities
Long-term Borrowings 7,013.06 6,051.40
Deferred Tax liabilities (net) 626.77 507.66
Long-term provisions 176.39 79.35
(3) Current Liabilities
Short-term Borrowings 4,126.42 2,846.19
Trade payables 506.42 562.92
Other current liabilities 2,058.20 1,050.49
Short-term provisions 75.60 71.87
TOTAL 18,238.36 14,267.47
II ASSETS
(1) Non-current Assets
Fixed assets
Tangible assets 8,514.54 7,384.29
Intangible assets 37.55 42.92
Capital work-in-progress 914.16 906.55
Non-current Investments 175.79 139.93
Long-term Loans & Advances 257.04 324.92
(2) Current Assets
Current Investments 3.94 27.25
Inventories 3,379.91 2,002.62
Trade receivables 2,152.15 1,740.19
Cash & Bank Balance 1,294.84 1,139.85
Short-term Loans & Advances 1,395.04 425.03
Other current assets 113.40 133.92
TOTAL 18,238.36 14,267.47
6
Statement of Standalone Profit and Loss
Particulars
For the year ended March
31, 2012
For the year ended March
31, 2011
(` in crore) (` in crore)
I. REVENUE
Revenue from Operations (gross) 9,134.81 6,500.91
Less : Excise Duty 233.95 112.48
Revenue from Operations (net) 8,900.86 6,388.43
II. Other Income 65.60 41.09
III. Total Revenue 8,966.46 6,429.52
IV EXPENSES
Cost of Materials consumed 5,748.34 3,224.04
Purchase of Traded Goods 161.45 342.62
Changes in inventories of finished goods, work
in progress and stock in- trade (1,516.66) (222.55)
Employee benefits expense 267.28 199.76
Finance costs 1,149.55 736.27
Depreciation and amortisation expense 713.43 518.79
Other expenses 1,681.30 1,005.95
Total Expenses 8,204.69 5,804.88
V Profit before exceptional items and tax 761.77 624.64
VI Exceptional Items (121.27) (41.45)
VII Profit before tax (V-VI) 640.50 583.19
VIII Tax expenses
– Current tax (157.64) (78.15)
– Deferred tax (102.33) (100.68)
Total Tax expenses (259.97) (178.83)
IX Net profit for the year 380.53 404.36
X EARNINGS PER SHARE (in `)
Basic 4.69 5.13
Diluted 4.69 5.13
7
Standalone Cash Flow Statement
Particulars
For the year ended March
31, 2012
For the year ended
March 31, 2011
(` in crore) (` in crore)
A] Cash Flow from Operating Activities
Net Profit Before Tax 640.5 583.19
Adjustments for:
Depreciation / Amortisation 713.43 518.79
Exchange rate difference 124.47 41.45
Dividend Income (2.57) -2.37
Employee Stock option outstanding 2.27 –
Interest Paid (net) 1,032.10 651.3
(Profit) / Loss on sale of fixed assets (net) (9.65) 1.74
Profit on sale of Current Investments (net) (0.12) (1.16)
Operating Profit before working capital changes 2,500.43 1,792.94
Adjustments for
(Increase) in Inventories (1,331.29) (528.21)
(Increase) in Trade Receivable (356.12) (637.81)
(Increase)/Decrease in Loans & Advances (932.09) 148.61
Increase in Current Liabilities and Provisions 136.14 468.38
Cash generated from operations 17.07 1,243.91
Income taxes paid (132.46) (117.83)
Net cash (used)/generated from operating activities (115.39) 1,126.08
B] Cash flow from Investing Activities
Purchase of fixed assets (1,499.37) (1,835.36)
Sale of fixed assets 17.86 1.74
Purchase of Investments (116.74) (131.15)
Sale of Investments 162.48 194.82
Fixed Deposits & earmarked balances matured/(placed) 285.66 (314.67)
Dividends received 2.57 2.37
Interest received 33.23 34.65
Inter Corporate deposits refunded (Net) 1.26 2.45
Net cash (used) in Investing Activities (1,113.05) (2,045.15)
C] Cash flow from Financing Activities
Proceeds from issue of Equity Share Capital (including
premium) (Net) 61.2 –
Proceeds from Term borrowings 2,353.70 3,119.39
Repayment of Term Borrowings (926.47) (2,047.10)
8
Proceeds from Short Term Borrowings (Net) 1,123.94 53.49
Dividend Paid (Including Tax thereon) (22.89) (22.96)
Interest Paid (Net) (1,073.57) (748.86)
Net cash generated from Financing Activities 1,515.91 353.96
Net Increase/(Decrease) in Cash and Cash
equivalents (A+B+C) 287.47 (565.11)
Cash and Cash equivalents at the beginning of the
year 108.29 673.40
Cash and Cash equivalents pursuant to amalgamation 147.00 –
Cash and Cash equivalents at the end of the year 542.76 108.29
Cash and Cash equivalents include:
March 31, 2012
(` in crore)
March 31, 2011
(` in crore)
Cash and Bank Balances 1,294.84 1,139.85
Less : Earmarked Balances/Deposit with banks * 715.12 978.32
Less : Deposit with maturity period of more than 3 months ** 36.96 53.24
Total Cash and Cash equivalents 542.76 108.29
* Earmarked balances/deposits with bank includes balances / deposits held as margin money or security against
borrowings, guarantees and other commitments, which being, restricted for its use, have been excluded from cash and
cash equivalent and grouped under the investment activity.
** Fixed Deposits with maturity period of more than three months have been excluded from cash and cash equivalent and
grouped under the investment activity.
9
Consolidated Balance Sheet
Particulars As at March 31, 2012 As at March 31, 2011
(` in crore) (` in crore)
I EQUITY AND LIABILITIES
Shareholders' Funds
Share Capital 826.28 787.79
Reserves and Surplus 2,034.09 2,004.27
Minority Interest – 4.62
Non-current Liabilities
Long-term Borrowings 8,516.96 7,164.48
Deferred Tax Liabilities (net) 627.07 507.84
Long-term provisions 176.71 79.64
Current Liabilities
Short-term Borrowings 5,340.01 3,695.97
Trade payables 605.23 594.93
Other current liabilities 2,908.52 1,563.20
Short-term provisions 119.47 72.93
TOTAL 21,154.34 16,475.67
II ASSETS
Non-current Assets
Fixed assets
Tangible assets 8,811.20 7,470.27
Intangible assets 41.00 43.58
Capital work-in-progress 924.38 899.98
Goodwill on Consolidation 606.27 156.42
Non-current Investments 1,589.42 1,689.98
Deferred tax assets (net) 9.02 7.54
Long-term Loans & Advances 390.32 440.11
Current Assets
Current Investments 3.94 27.41
Inventories 3,697.12 2,149.88
Trade receivables 2,204.00 1,814.20
Cash & Bank Balances 1,397.80 1,200.91
Short-term Loans & Advances 1,364.06 439.01
Other current assets 115.81 136.38
TOTAL 21,154.34 16,475.67
10
Statement of Consolidated Profit and Loss
Particulars
For the year ended
March 31, 2012
For the year ended
March 31, 2011
(` in crore) (` in crore)
REVENUE
Revenue from Operations (gross) 10,018.67 6,727.38
Less : Excise Duty 233.95 112.48
Revenue from Operations (net) 9,784.72 6,614.90
Other Income 95.51 67.07
Total Revenue 9,880.23 6,681.97
EXPENSES
Cost of Materials consumed 5,793.09 3,261.84
Purchase of Traded Goods 1,117.20 468.99
Changes in inventories of finished goods, work-in-progress and stock-
in-trade (1,692.18) (267.67)
Employee benefits expense 312.84 244.22
Finance costs 1,234.70 782.15
Depreciation and amortisation expense 749.14 530.97
Other expenses 1,877.36 1,120.36
Total Expenses 9,392.15 6,140.86
Profit before exceptional items and tax 488.08 541.11
Exceptional items 121.27 39.87
Profit before tax 366.81 501.24
Tax Expenses
– Current tax (172.93) (81.16)
Includes MAT adjustment ` 44.12 crore (` 26.53 crore pertaining to the
previous year (previous year ` 42.42 crore))
– Deferred tax (100.97) (97.34)
Total Tax expenses (273.90) (178.50)
Profit for the year before minority interest and share of profit
/(loss) from associates 92.91 322.74
Share of profit/(loss) from Associates 0.08 (10.89)
Minority Interest – (0.31)
Net Profit for the year 92.99 311.54
EARNINGS PER SHARE (in `)
Basic 1.15 3.95
Diluted 1.15 3.95
11
Consolidated Cash Flow Statement
Particulars
For the year ended
March 31, 2012
For the year ended
March 31, 2011
(` in crore) (` in crore)
A] Cash Flow from Operating Activities
Net Profit Before Tax 366.81 501.24
Adjustments for:
Depreciation / Amortisation 749.14 530.97
Diminution in the value of investment 8.88 16.88
Employee Stock Option outstanding 2.27 –
Exchange rate difference 8.99 (6.34)
Dividend Income (0.60) (0.36)
Interest Expense (net) 1,108.77 668.26
(Profit)/Loss on sale of fixed assets (net) (34.88) 0.03
Loss/(Profit) on sale of current investments (net) 0.12 (1.16)
Operating Profit before working capital changes 2,209.50 1,709.52
Adjustments for
(Increase) in Inventories (1,381.63) (599.29)
(Increase) in Trade Receivables (283.39) (687.74)
(Increase)/Decrease in Loans and Advances (958.63) 123.87
(Decrease)/Increase in Current Liabilities 93.09 478.43
Cash (used) in/generated from operations (321.06) 1,024.79
Income Taxes Paid (129.40) (128.45)
Net cash (used) in/generated from Operating Activities (450.46) 896.34
B] Cash flow from Investing Activities
Purchase of Fixed Assets (1,551.10) (2,340.79)
Proceeds from sale of fixed assets 49.40 14.05
Purchase of Investments (341.57) (214.13)
Proceeds from sale of Investments 135.57 127.24
Fixed Deposits and earmarked balances matured/(placed) 236.57 (318.04)
Dividends Received 0.60 0.36
Interest Received 35.86 62.04
Share Application money paid – (0.16)
Inter Corporate Deposits granted (4.49) (3.44)
Net cash (used) in Investing Activities (1,439.16) (2,672.87)
C] Cash flow from Financing Activities
Proceeds from issue of Equity Share Capital (including
premium) (Net) 61.19 –
12
Particulars
For the year ended
March 31, 2012
For the year ended
March 31, 2011
(` in crore) (` in crore)
Share Application money received/(repaid) (Net) 350.00 (227.57)
Proceeds from Term borrowings 2,430.53 4,144.40
Repayment of Term Borrowings (954.59) (2,751.40)
Proceeds from short term borrowings (Net) 1,428.24 898.48
Dividend Paid (Including Tax thereon) (24.52) (23.33)
Interest Paid (1,130.38) (791.85)
Net cash Generated from Financing Activities 2,160.47 1,248.73
Net Increase/(decrease) in Cash and Cash equivalents (A+B+C) 270.85 (527.80)
Cash and Cash equivalents at the beginning of the Year 165.98 693.78
Cash and Cash equivalents pursuant to amalgamation 158.62 –
Cash and Cash equivalents at the end of the Year 595.45 165.98
Cash and Cash equivalents include:
Particulars March 31, 2012
(` in crore)
March 31, 2011
(` in crore)
Cash and Bank Balances 1,397.80 1,200.91
Less : Earmarked balances/deposits with bank* 715.19 981.69
Less : Deposit with maturity period of more than 3 months ** 87.16 53.24
Total Cash and Cash equivalents 595.45 165.98
* Earmarked balances/deposits with bank includes balances/deposits held as margin money or security against
borrowings, guarantees and other commitments, which being restricted for its use, have been excluded from cash and cash
equivalent and grouped under the investing activity.
** Fixed Deposits with maturity period of more than three months have been excluded from cash and cash equivalent and
grouped under the investing activity.
13
GENERAL INFORMATION
Registered Office
17/5/1 and 521/1,
Village Rakholi / Saily, Silvassa - 396230,
Union Territory of Dadra & Nagar Haveli,
India.
E-mail: [email protected]
Website: www.alokind.com
Corporate Office
Peninsula Towers, “A” Wing,
Peninsula Corporate Park,
G. K. Marg, Lower Parel,
Mumbai – 400 013,
Maharashtra
India
Tel: +91 22 2499 6200 / 6500
Fax: +91 22 2493 6078
Corporate Identity Number: L17110DN1986PLC000334
Address of the Registrar of Companies
Registrar of Companies, Gujarat at Ahmedabad
ROC Bhavan,
Opposite: Rupal Park Society, Naranpura,
Ahmedabad -380 013
Gujarat, India
Tel: +91 079-27438531
Fax: +91 079-27438531
Compliance Officer
Mr. K.H. Gopal
Executive Director and Company Secretary
Peninsula Towers, “A” Wing,
Peninsula Corporate Park,
G. K. Marg, Lower Parel,
Mumbai – 400 013,
Maharashtra
India
Tel: +91 22 2499 6341
Fax: +91 22 2493 6078
E-mail: [email protected]
Investors may contact the Registrar to the Issue or the Company Secretary and Compliance Officer for any pre-Issue/ post-
Issue related matter. All grievances relating to the ASBA process may be addressed to the Registrar to the Issue, with a
copy to the SCSB, giving full details such as name, address of the applicant, number of Equity Shares applied for, Amount
blocked, ASBA Account number and the Designated Branch of the SCSB where the CAF was submitted by the ASBA
Investors.
14
Lead Managers to the Issue
SBI Capital Markets Limited
202, Maker Tower E, Cuffe Parade,
Mumbai – 400 005 Maharashtra, India
Tel: +91 22 2217 8300
Fax: +91 22 2217 8332
Email: [email protected]
Investor Grievance E-mail.:
Website: www.sbicaps.com
Contact Person: Ms. Shikha Agarwal
SEBI Registration No:
INM000003531
Axis Capital Limited2,
1st floor, Axis House,
C-2 Wadia International Centre,
P.B. Marg, Worli,
Mumbai- 400025
Maharashtra, India
Tel: +91 22 4325 3101
Fax: +91 22 4325 3000
Email: [email protected]
Investor Grievance E-mail.:
Website: www.axiscapital.co.in
Contact Person: Ms. Dipali Dalal
SEBI Registration No: INM000012029
Centbank Financial Services
Limited
15-16 Bajaj Bhavan,
1st Floor, Opp. Inox Multiplex,
Nariman Point,
Mumbai - 400021
Maharashtra, India
Tel: +91 22 2202 2788/5018
Fax: + 91 22 2202 5043
Email: [email protected]
Investor Grievance E-mail:
Website: www.cfsl.in
Contact Person: Mr. Rakesh Kumar
Singh
SEBI Registration No:
INM000011781
Emkay Global Financial Services
Limited The Ruby, 7th Floor, Senapati Bapat Marg, Dadar (West), Mumbai – 400 028 Maharashtra, India Tel: +91 22 66121212 Fax: +91 22 66121299 Email:[email protected] Investor Grievance E-mail:
Website: www.emkayglobal.com
Contact Person: Mr. Rajesh Ranjan
SEBI Registration. No: INM000011229
Fortune Financial Services (India)
Limited
K.K. Chambers, 2nd Floor,
Sir. P. T. Marg, Fort, Mumbai – 400 001.
Maharashtra, India
Tel: +91 22 2207 7931 Fax: +91 22 2207
2948
Email: [email protected]
Investor Grievance Email:
Website: www.fortune.co.in
Contact Person: Mr. Abhishek Kumar
Sureka
SEBI Registration No. INM000000529
IDBI Capital Market Services
Limited
3rd
Floor, Mafatlal Centre,
Nariman Point,
Mumbai – 400 021 Maharashtra,
India
Tel: +91 22 4322 1212
Fax: +91 22 2285 0785
E-mail:
Investor Grievance Email:
Website:www.idbicapital.com
Contact Person: Mr. Swapnil
Thakur
SEBI Registration No.
INM000010866
Legal Advisors to the Issue
AZB & Partners
23rd
Floor, Express Towers
Nariman Point, Mumbai 400 021
Maharashtra, India
Tel: +91 22 66396880
Fax: +91 22 66396888
Email: [email protected]
2 The merchant banking business of Enam Securities Private Limited has vested with Axis Capital Limited which has been given SEBI registration under
the SEBI (Merchant Bankers) Regulations, 1992, as amended in lieu of earlier registration.
15
Auditors
M/s Deloitte Haskins & Sells
Chartered Accountants
27th
- 32nd
Floor, Tower 3,
Indiabulls Finance Centre,
Senapati Bapat Marg, Elphinstone (W),
Mumbai 400013,
Maharashtra, India
Tel: +91 22 6185 4000
Fax: +91 22 6185 4601
Firm Registration No.: 117366W
Registrar to the Issue
Link Intime India Private Limited
C-13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai – 400 078
Maharashtra, India
Tel: +91 22 2596 7878
Fax: +91 22 2596 0329
Investor Greivance E-mail: [email protected]
E-mail: [email protected]
Website: www.linkintime.co.in
Contact Person: Mr. Pravin Kasare
SEBI Registration No.: INR000004058
Bankers to the Issue
Axis Bank Limited
209, Ground Floor,
Atlanta Building,
Nariman Point,
Mumbai – 400 021
Telephone: +91 22 2287 5200
Facsimile: +91 22 6639 0935
Email: [email protected]
Website: www.axisbank.com
Contact person: Mr. Pradeep Kumar/
Mr. K. Venkatesh
SEBI registration no.: INBI00000017
State Bank of India*
Capital Market Branch
Videocon Heritage (Killick House)
Ground Floor, Charanjit Rai Marg,
Fort, Mumbai 400 001
Telephone: +91 22 2209 4932
Facsimile: +91 22 2209 4921
Email: [email protected]
Website: www.statebankofindia.com
Contact person: Mr. Anil Sawant
SEBI registration no.: INBI00000038
IDBI Bank Limited
Unit No. 2, Corporate Park,
Near Swastika Chambers,
Sion Trombay Road,
Chembur,
Mumbai – 400 071
Telephone: +91 22 6690 8402
Facsimile: +91 22 6690 8424
Email: [email protected]
Website: www.idbinabank.com
Contact person: Mr. V. Jayananthan
Yes Bank Limited
Indiabulls Finance Centre
Tower 2, 8th
Floor,
Senapati Bapat Marg,
Elphinstone (W),
Mumbai - 400 013
Telephone: +91 22 3347 7251
Facsimile: +91 22 2497 4875
Email: [email protected]
Website: www.yesbank.in
Contact person: Mr. Shankar Vichare / Mr. Avinash
16
*The SEBI registration of State Bank of India as a Banker to the Issue expired on November 30, 2012. State Bank of India has applied
for renewal of its registration certificate on October 13, 2012 prior to the expiry of its registration. The approval of SEBI in this regard
is awaited.
**The SEBI registration of DBS Bank Limited as a Banker to the Issue will expire on April 4, 2013. DBS Bank Limited has applied for
renewal of its registration certificate on January 4, 2013. The approval of SEBI in this regard is awaited.
Self Certified Syndicate Banks
The list of banks that have been notified by SEBI to act as SCSB for the ASBA process is provided on SEBI website at
http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries.
Credit rating
As the Issue is a rights issue of Equity Shares, no credit rating is required.
Experts to our Company for the Issue
M/s. Deloitte Haskins & Sells, Chartered Accountants, and M/s. Gandhi & Parekh, Chartered Accountants, have provided
their written consents for the inclusion of the reports on the standalone and consolidated financial statements in the form
and context in which the reports will appear in this Letter of Offer, and to be named as experts in relation thereto, and such
consent has not been and will not be withdrawn up to the time of delivery of this Letter of Offer to SEBI. Pursuant to the
AGM held on August 14, 2012, M/s. Deloitte Haskins & Sells, Chartered Accountants are the sole Statutory Auditors of
the Company and the standalone and consolidated Limited Review Statements for the half year ended September 30, 2012
and standalone limited review report for December 31, 2012, have been signed by them.
M/s. Narendra Poddar & Co., Chartered Accountants, have provided their written consent for the inclusion of the statement
of special tax benefits in the form and context in which it appears in this Letter of Offer, and to be named as an expert in
relation thereto, and such consent has not been and will not be withdrawn up to the time of delivery of this Letter of Offer
to SEBI.
SEBI registration no.: INBI00000076 Pawar
SEBI registration no.: INBI00000935
DBS Bank Limited**
First Floor, Fort House, 221 D.N. Road, Fort, Mumbai - 400 001
Telephone: +91 22 6617 8973
Facsimile: +91 22 6752 8470
Email: [email protected]/ [email protected];
Website: www.yesbank.in
Contact person: Mr. Amol Natekar/ Mr. Mustafa Sanchawalla/
Mr. Saurav Goswamy
SEBI registration no.: INBI00000992
ING Vysya Bank Limited
CMS Hub, No 20, Eden Park,
Vithal Mallaya Road,
Bangalore – 560 000
Telephone: +91 80 2253 2110/ 2253 2113
Facsimile: +91 80 2253 2111
Email: [email protected]
Website: www.ingvysyabank.com
Contact person: Mr. Akshay Hegde
SEBI registration no.: INBI00000022
Standard Chartered Bank
Cresenzo, C 38/39 G
Block Bandra Kurla Complex,
Bandra East, Mumbai - 400 051
Telephone: +91 22 2675 7234
Facsimile: +91 22 2675 7358
Email: [email protected], [email protected]
Website: www.standardcharteredbank.com
Contact person: Mr. Rohan Ganpule / Mr. Aniruddha Verma
SEBI registration no.: INBI0000085
17
Statement of responsibility of the Lead Managers
The inter-se allocation of responsibilities of Lead Managers is as follows:
S. No. Activity Responsibility Coordinator
1 Capital structuring with the relative components and formalities such as
composition of debt and equity, type of instruments of the Issue in
conformity with the ICDR Regulations, undertaking liaison with SEBI and
the Stock Exchanges (including obtaining in-principle listing approval), as
may be required under the prevailing framework of regulations/ rules/
guidelines issued by the SEBI and the Stock Exchanges.
All Lead
Managers
SBICAP
2 Assisting the Company and its legal advisors in drafting this Letter of Offer;
conduct due diligence as may be required on the Company and assist in
compliance with regulatory requirements of the SEBI and the Stock
Exchanges. The Lead Managers shall ensure compliance with the ICDR
Regulations, other stipulated requirements, completion of prescribed
formalities with the Stock Exchanges and the SEBI and securing all
necessary regulatory approvals for the issue.
All Lead
Managers
SBICAP
3 Drafting and Design of Abridged Letter of Offer Document and CAF. All Lead
Managers
IDBICAPS
4 Drafting and Design of statutory and non-statutory advertisement /publicity
material including newspaper advertisements and brochure
All Lead
Managers
IDBICAPS
5 Selection of agencies connected with the issue – finalizing printers,
advertisement agency, and monitoring agency.
All Lead
Managers
Fortune
Financial
6 Selection of agencies connected with the issue – finalizing banker to the
issue (selecting collection centers) and Registrar.
All Lead
Managers
Emkay
7 Institutional marketing strategy which will cover, inter alia:
· Finalizing the list and division of investors for one to one meetings; and
· Finalizing road show schedule and investor meeting schedules.
· Preparation of Investor Presentation and FAQ‟s.
All Lead
Managers
SBICAP
8 Retail/Non-Institutional marketing strategy which will cover inter-alia,
preparation of publicity budget, arrangement for selection of (i) ad-media,
(ii) centres of holding conferences of brokers, investors etc.,
(iii) distribution of publicity and Issue materials including application form
and Letter of Offer.
All Lead
Managers
Emkay
9 Follow-up with the Bankers to the Issue to get quick estimates of collection
and advising such Banks about closure of the Issue, based on the correct
figures.
All Lead
Managers
Axis Capital
10 The post-Issue activities will involve essential follow-up steps, which
include finalization of basis of allotment or weeding out of multiple
applications, listing of instruments and dispatch of certificates or de-mat
credit and refunds, with the various agencies connected with the work such
as the Registrar to the Issue, the Bankers to the Issue and SCSBs to get
quick estimates of collection and advising the Issuer about the closure of the
Issue and the bank handling refund business. Whilst, many of the post issue
activities will be handled by other intermediaries, the designated Lead
Manager shall be responsible for ensuring that these agencies fulfill their
functions and enable them to discharge this responsibility through suitable
agreements with the Company.
All Lead
Managers
Axis Capital
18
Debenture trustee
This being an issue of equity shares, a debenture trustee is not required.
Issue Schedule
Issue Opening Date: March 30, 2013 (Saturday)
Last date for receiving requests for SAFs: April 20, 2013 (Saturday)
Issue Closing Date: April 27, 2013 (Saturday)
Monitoring Agency
The Company has appointed Axis Bank Limited as the monitoring agency, to monitor the utilization of the Net Proceeds in
terms of Regulation 16 of the SEBI ICDR Regulations.
Axis Bank Limited
2nd
Floor, Axis House,
Bombay Dyeing Mills Compound,
Pandurang Budhkar Marg,
Worli, Mumbai – 400 025
Tel: 022 2425 5223
Fax: 022 2425 4200
Contact Person: Kanhu Harichandan, Deputy Vice President
E-mail: [email protected]
Website: www.axisbank.com
Appraisal Reports
None of the purposes for which the Net Proceeds are proposed to be utilised have been financially appraised by any bank
or financial institution.
Principal Terms of Loans and Assets charged as security
For details of the principal terms of loans and assets charged as security, please refer to “Financial Information” on page
45.
Underwriting
This Issue is not underwritten and our Company has not entered into any underwriting arrangements.
Compliance with Listing Agreement, Takeover Regulations and Insider Trading Regulations
Our Company has complied with the provisions of the Listing Agreement, specifically Clauses 35, 40A, 41 and 49, and the
provisions of the Takeover Regulations and the Insider Trading Regulations, during the financial year immediately
preceding the date of this Letter of Offer.
19
CAPITAL STRUCTURE
Our capital structure and related information as on date of this Letter of Offer is set forth below.
Particulars Aggregate
Nominal Value
(in `)
Aggregate
Value at Issue
Price
(in `)
A. Authorised share capital
1,50,00,00,000 equity shares of ` 10 each 15,00,00,00,000
B. Issued Capital
82,62,69,357 equity shares of ` 10 each 8,26,26,93,570
C. Paid-up and subscribed capital
82,62,69,357 equity shares of ` 10 each 8,26,26,93,570
D. Shares Forfeiture account
13,921 shares of ` 10 each with ` 5 paid up 69,605
E. Present Issue in terms of this Letter of Offer*
55,08,46,238 Equity Shares at an Issue Price of ` 10 per Equity Share 5,50,84,62,380 5,50,84,62,380
F. Issued Subscribed and Paid-up capital after the Issue (assuming full
subscription for and allotment of the Rights Entitlement)
1,37,71,15,595 Equity Shares of ` 10 each fully paid-up 13,77,11,55,950 13,77,11,55,950
*The Issue has been authorized by the Board of Directors under section 81(1) and other applicable provisions of the Companies Act
pursuant to a resolution dated September 25, 2012.
Of the options granted under ALOK ESOS 2010, 102,88,900 options remain outstanding as on December 31, 2012, all of
which have been vested but not yet exercised.
Notes to the Capital Structure
1. Subscription to the Issue by the Promoters and Promoters Group
Our Promoters and Promoter Group have confirmed, by their respective letters dated September 26, 2012, that they
intend to subscribe to the full extent of their respective Rights Entitlement in the Issue, either by themselves or
through any of the Promoters / members of the Promoter Group, in compliance with the Takeover Regulations. In this
regard, the Promoters and members of the Promoter Group may bring in an amount upto their full portion of Rights
Entitlement in the Issue prior to the Issue Opening Date. In case the Issue fails or is withdrawn for any reason, such
Application Money if so received from the Promoters and members of the Promoter Group shall be treated as
unsecured loans repayable on demand at terms to be decided thereon.
Our Promoters and Promoter Group have further reserved their respective rights to acquire beyond their entitlement,
and may subscribe to, and / or make arrangements for the subscription of Equity Shares if any, which remain
unsubscribed, as well as by subscribing to renunciation(s). Such subscription to additional Equity Shares and the
unsubscribed portion, if any, shall be in accordance with and subject to the provisions of the Takeover Regulations.
Further, such subscription shall not result in a breach of the minimum public shareholding requirement stipulated in
the Listing Agreements.
20
2. Our shareholding pattern as per clause 35 of the Listing Agreement on March 08, 2013 is as follows:
Categ
ory
Code
Category of
Shareholder
Number
of
Sharehol
ders
Total
number of
shares
Number of
shares held
in
demateriali
zed form
Total shareholding
as a percentage of
total number of
shares
Shares Pledged or
otherwise encumbered
As a
percen
tage of
(A+B)
As a
percentag
e of
(A+B+C)
Number of
shares
As a
percenta
ge
(I) (II) (III) (IV) (V) (VI) (VII) (VIII)
(IX)=
(VIII)/(IV
)*100
(A)
Shareholding of
Promoter and
Promoter
Group
1 Indian
(a)
Individuals/
Hindu Undivided
Family
11 65,786,696 65,786,696 7.96 7.96 64,236,143 97.64
(b)
Central
Government/
State
Government(s)
- - - - - - -
(c) Bodies
Corporate 7 197,010,440 197,010,440 23.84 23.84 196,165,148 99.57
(d)
Financial
Institutions/
Banks
- - - - - -
(e) Trusts 2 19,459,382 19,459,382 2.36 2.36 19,459,382 100.00
Sub Total(A)(1) 20 282,256,518 282,256,518 34.16 34.16 27,986,0673 99.15
2 Foreign
A
Individuals
(Non-Residents
Individuals/
Foreign
Individuals)
- - - - - -
B Bodies
Corporate - - - - - -
C Institutions - - - - - -
D Any
Others(Specify) - - - - - -
Sub Total(A) (2) - - - - - - -
Total
Shareholding of
Promoter and
Promoter
Group (A)=
(A)(1)+(A)(2)
20 282,256,518 282,256,518 34.16 34.16 27,98,60,673 99.15
(B) Public
shareholding
1 Institutions
(a) Mutual Funds/
UTI 2 13,218 13,018 0.00 0.00
- -
(b) Financial
Institutions / 16 100,232,680 100,232,580 12.13 12.13
- -
21
Categ
ory
Code
Category of
Shareholder
Number
of
Sharehol
ders
Total
number of
shares
Number of
shares held
in
demateriali
zed form
Total shareholding
as a percentage of
total number of
shares
Shares Pledged or
otherwise encumbered
As a
percen
tage of
(A+B)
As a
percentag
e of
(A+B+C)
Number of
shares
As a
percenta
ge
(I) (II) (III) (IV) (V) (VI) (VII) (VIII)
(IX)=
(VIII)/(IV
)*100
Banks
(c)
Central
Government/
State
Government(s)
- - - - -
- -
(d) Venture Capital
Funds - - - - -
- -
(e) Insurance
Companies - - - - -
- -
(f)
Foreign
Institutional
Investors
53 35,795,511 35,795,511 4.33 4.33
- -
(g) Foreign Venture
Capital Investors - -
- - -
- -
(h) Any Other
(specify) - -
- - -
- -
Sub-Total
(B)(1) 71 136,041,409 136,041,109 16.46 16.46
- -
B 2 Non-institutions - -
(a) Bodies
Corporate 2033 122,817,999 120,798,599 14.86 14.86
- -
(b) Individuals - -
I
i. Individual
shareholders
holding nominal
share capital up
to Rs 1 lakh
215410 122,859,247 122,462,517 14.87 14.87
- -
II
ii. Individual
shareholders
holding nominal
share capital in
excess of Rs. 1
lakh.
3239 145,439,225 145,393,225 17.60 17.60
- -
(c) Any Other - - - - -
Clearing
Member 409 4,838,165 4,838,165 0.59 0.59
- -
Market Member 69 1,374,653 1,374,653 0.17 0.17 - -
Non Resident
Indians (Repat) 1411 8,479,314 8,456,114 1.03 1.03
- -
Non Resident
Indians (Non
Repat)
314 2,135,577 2,135,577 0.26 0.26
- -
Overseas Bodies
Corporates 2 4,800 4,800 - -
- -
Trusts 7 22,450 22,450 - - - -
Sub-Total
(B)(2) 222894 407,971,430 405,486,100 49.38 49.38
- -
22
Categ
ory
Code
Category of
Shareholder
Number
of
Sharehol
ders
Total
number of
shares
Number of
shares held
in
demateriali
zed form
Total shareholding
as a percentage of
total number of
shares
Shares Pledged or
otherwise encumbered
As a
percen
tage of
(A+B)
As a
percentag
e of
(A+B+C)
Number of
shares
As a
percenta
ge
(I) (II) (III) (IV) (V) (VI) (VII) (VIII)
(IX)=
(VIII)/(IV
)*100
(B)
Total Public
Shareholding
(B)=
(B)(1)+(B)(2)
222965 544,012,839 541,527,209 65.84 65.84
- -
TOTAL
(A)+(B) 222985 826,269,357 823,783,727 100.00 100.00
- -
(C)
Shares held by
Custodians and
against which
Depository
Receipts have
been issued
1 Promoter and
Promoter
Group
- - - - -
- -
2 Public - - - - - - -
GRAND
TOTAL
(A)+(B)+ ( C)
222985 826,269,357 823,783,727 100.00 100.00 279,860,673 99.15
The list of Equity Shareholders belonging to the category “Promoter and Promoter Group” as on March 8, 2013 is detailed
in the table below:
S.
No
Name of the
shareholder
Details of Shares
held Encumbered shares (*)
Details of
warrants
Details of
convertible
securities
Total shares
(including
full
conversion
of warrants
and
convertible
securities) as
a % of
diluted share
capital
No. of
shares
held
% of
grand
total
(A) + (B)
+ ( C )
No. %
% of
grand
total
(A) +
(B) +
(C) of
sub-
clause
(I)(a )
No.
of
warr
ants
held
%
total
number
of
warrant
of the
same
class
No. of
converti
ble
securitie
s
held
As a %
total
no. of
converti
ble
securities
of the
same
class
(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX) (X) (XI) (XII)
1 Ashok B.
Jiwrajka 20,270,684 2.45 20,270,684 100.00 2.45 - - - - 2.45
2 Dilip B.
Jiwrajka 20,507,053 2.48 20,505,823 99.99 2.48 - - - - 2.48
3 Surendra B.
Jiwrajka 21,294,951 2.58 21,294,372 100.00 2.58 - - - - 2.58
23
S.
No
Name of the
shareholder
Details of Shares
held Encumbered shares (*)
Details of
warrants
Details of
convertible
securities
Total shares
(including
full
conversion
of warrants
and
convertible
securities) as
a % of
diluted share
capital
No. of
shares
held
% of
grand
total
(A) + (B)
+ ( C )
No. %
% of
grand
total
(A) +
(B) +
(C) of
sub-
clause
(I)(a )
No.
of
warr
ants
held
%
total
number
of
warrant
of the
same
class
No. of
converti
ble
securitie
s
held
As a %
total
no. of
converti
ble
securities
of the
same
class
4 Chandrakum
ar Bubna 432,755 0.05 - - - - - - - 0.05
5 Chandrakala
A. Jiwrajka 515,543 0.06 514,006 99.70 0.06 - - - - 0.06
6 Pramila D.
Jiwrajka 1,236,963 0.15 1,202,193 97.19 0.15 - - - - 0.15
7 Geeta S.
Jiwrajka 449,065 0.05 449,065 100.00 0.05 - - - - 0.05
8 Narbada B.
Jiwrajka^ 373,972 0.05 - - - - - - - 0.05
9 Vinod
Jivrajka 678,180 0.08 - - - - - - - 0.08
10 Manju
Bubna 25,030 0.00 - - - - - - - 0.00
11 Alok A.
Jiwrajka 2,500 0.00 - - - - - - - 0.00
12
Dilip B.
Jiwrajka, J1.
Sunil O
Khandelwal*
1,900,000 0.23 1,900,000 100.00 0.23 - - - - 0.23
13
Surendra B.
Jiwrajka, J1.
K H Gopal*
17,559,382 2.13 17,559,382 100.00 2.13 - - - - 2.13
14
Nirvan
Holdings
Private
Limited
(NHPL)**
15,515,501 1.88 15,458,501 99.63 1.87 - - - - 1.88
15
Niraj
Realtors &
Shares
Private
Limited
(NRSPL)
86,137,204 10.42 86,137,204 100.00 10.42 - - - - 10.42
16
Jiwrajka
Investment
Private
Limited
24,274,091 2.94 24,274,091 100.00 2.94 - - - - 2.94
17
Ashok
Realtors
Private
Limited
957,792 0.12 957,000 99.92 0.12 - - - - 0.12
18
Alok Knit
Exports
Limited
9,854,768 1.19 9,854,768 100.00 1.19 - - - - 1.19
19 Jiwrajka 37,056,067 4.48 36,268,567 97.87 4.39 - - - - 4.48
24
S.
No
Name of the
shareholder
Details of Shares
held Encumbered shares (*)
Details of
warrants
Details of
convertible
securities
Total shares
(including
full
conversion
of warrants
and
convertible
securities) as
a % of
diluted share
capital
No. of
shares
held
% of
grand
total
(A) + (B)
+ ( C )
No. %
% of
grand
total
(A) +
(B) +
(C) of
sub-
clause
(I)(a )
No.
of
warr
ants
held
%
total
number
of
warrant
of the
same
class
No. of
converti
ble
securitie
s
held
As a %
total
no. of
converti
ble
securities
of the
same
class
Associates
Private
Limited
(JAPL)***
20
Alok
Finance
Private
Limited
23,215,017 2.81 23,215,017 100.00 2.81 - - - - 2.81
TOTAL 282,256,518 34.16 279,860,673 99.15 33.87 - - - - 34.16
*Trustee on behalf of Alok Benefit Trust
**Out of 1,55,15,501 shares held by NHPL, the beneficial owners of 57,000 shares are Mr. Santosh Jiwrajka (28,500) and
Mrs. Kiran Jiwrajka (28,500 shares)
***Out of 37,05,6067 shares held by JAPL, the beneficial owners of 7,87,500 shares are M/s. Belisev Fashion
Establishment.
^These shares are held by Mr. Surendra Jiwrajka as second holder. Post the demise of Ms. Narbada B. Jiwrajka on
January 1, 2013, the shares shall stand in the name of Mr. Surendra Jiwrajka.
The list of Equity Shareholders, other than the Equity Shareholders belonging to the category “Promoters and Promoter
Group”, holding more than 1% of our paid-up capital as on March 8, 2013 is detailed in the table below:
Sr.
No.
Name of the
shareholder
Number of
shares held
% of total
no. of shares
{i.e., Grand
Total
(A)+(B) +(C)
indicated in
Statement at
para (I)(a)
above}
Details of
warrants
Details of
convertible
securities
Total shares (
warrants and
convertible
securities)
as a % of
diluted share
capital
No. of
warra
nts
held
%
total
no. of
warrants
of
the same
class
No. of
convertib
le
securities
held
% w.r.t total
no. of
convertible
securities of
the same
class
1 Life Insurance
Corporation of India 35,164,136 4.26 - - - - 4.26
2 IFCI Limited 21,440,823 2.59 - - - - 2.59
3 Axis Bank Limited 17,535,002 2.12 - - - - 2.12
4 IDBI Bank Limited 10,788,161 1.31 - - - - 1.31
5
IL&FS Trust
Company Limited
A/c IL&FS Private
Equity Trust -
Leverage India Fund
9,955,642 1.20 - - - - 1.20
TOTAL 94,883,764 11.48 - - - - 11.48
Shareholding of securities (including shares, warrants, convertible securities) of persons (together with PAC) belonging to
the category “Public” and holding more than 5% of the total number of shares of the company: NIL
25
Statement showing details of locked-in shares
Sr. No. Name of the shareholder Number of
locked-in shares Locked-in shares as a percentage of
total number of shares {i.e., Grand
Total (A)+(B)+(C) indicated in
Statement at para (I)(a) above}
1 Jiwrajka Investment Private Limited 16,000,000 1.94 TOTAL 16,000,000 1.94
Statement showing details of Depository Receipts: NIL
Statement Showing holding of depository Receipts (DRs), where underlying shares held by Promoter /Promoter Group are
in excess of 1% of the total number of shares: NIL
Shareholding of securities (including shares, warrants, convertible securities) of persons (together with PAC) belonging to
the category “Public” and holding more than 5% of the total number of shares of the Company: NIL
Merger of the Promoter Group and group entities into Alok Knit Exports Limited, a Promoter Group Company
Pursuant to the scheme of arrangement filed with the High Court of Bombay dated December 12, 2012 admitted on
January 18, 2013, it is proposed to amalgamate 8 (eight) entities, including Promoter Group and group entities, into Alok
Knit Exports Limited, a Promoter Group company. The company scheme petition was filed on January 21, 2013 inter alia
for combining all Promoter holdings in a single entity to avoid duplication of efforts, costs and resources, thereby
strengthening the Company‟s financial position and providing it flexibility to compete effectively. The petition was heard
on February 8, 2013. In the said hearing, the High Court of Bombay has granted a date of March 15, 2013 for sanctioning
of the scheme. Pending official liquidator‟s report, no order was passed at the hearing scheduled on March 15, 2013 and
another date shall be notified for hearing, once the official liquidator‟s report is received. Once the scheme is sanctioned
and all the requisite approvals and consents are obtained, 8 (eight) Promoter Group and group entities will amalgamate into
Alok Knit Exports Limited. All the rights and obligations of the amalgamated entities will vest into one entity, including
the obligation of the relevant entities for the commitment towards the rights entitlement under this Issue.
3. Except as disclosed below, there have been no acquisition of Equity Shares by the Promoters and the members
of the Promoter Group within the last one year preceding the date of this Letter of Offer:
Name of the Promoter
and Promoter Group
Date of
transaction
Type of transaction Purchase
price per
share (in `)
Number of Equity
Shares
Niraj Realtors and
Shares Private Limited
10-Apr-12 Market Purchase 20.33 18,50,000 12-Apr-12 Market Purchase 20.24 15,50,000
13-Apr-12 Market Purchase 20.45 6,50,000
16-Apr-12 Market Purchase 19.73 10,50,000
17-Apr-12 Market Purchase 19.76 6,00,000
18-Apr-12 Market Purchase 19.96 2,00,000
26-Apr-12 Market Purchase 19.46 5,00,000
04-May-12 Market Purchase 19.66 8,00,000
08-May-12 Market Purchase 19.44 2,00,000
18-Jun-12 Market Purchase 18.21 21,00,000
28-Aug-12 Market Purchase 12.93 50,00,000
1,45,00,000
Nirvan Holdings
Private Limited
30-Apr-12 Off Market Purchase 30.00 30,00,000 30,00,000
Jiwrajka Associates
Private Limited
17-Apr-12 Market Purchase 19.91 3,50,000
18-Apr-12 Market Purchase 19.85 3,00,000
19-Apr-12 Market Purchase 20.44 6,50,000
20-Apr-12 Market Purchase 19.51 8,00,000
2,100,000
26
Name of the Promoter
and Promoter Group
Date of
transaction
Type of transaction Purchase
price per
share (in `)
Number of Equity
Shares
Vinod Jivrajka
16-Jan-13 Off Market Purchase* 11.65 3,19,090
17-Jan-13 Off Market Purchase 11.50 20,000
24-Jan-13 Off Market Purchase 10.85 20,000
3,59,090
Jayshree Jivrajka 16-Jan-13 Off Market Sale** 11.65 3,19,090
3,19,090
* from Jayshree Jivrajka
** to Vinod Jivrajka
4. The details pertaining to the earlier rights issue undertaken pursuant to the letter of offer dated March 19, 2009, are as
below:
Sr. no. Particulars Details
1. Issue Price ` 11 per equity share
2. No. of Shares 40,87,23,061 Equity Shares of ` 10 each
3. Rights Entitlement 83 rights equity shares for every 40 equity shares held on the record date.
4. Record Date March 25, 2009
5. Subscription Details 1.18 times
6. Shareholding Particulars Pre-rights issue Post-rights issue
Promoters 35.57% 35.65%
Other Shareholders 64.43% 64.35%
Total 100% 100%
7. Issue Period March 31, 2009 to April 22, 2009
8. Date of Allotment May 5, 2009
5. As on the date of this Letter of Offer, there are no outstanding convertibles into Equity Shares other than the options
granted under Alok ESOS 2010.
6. Of the options granted under ALOK ESOS 2010, 102,88,900 options remain outstanding as on December 31, 2012, all
of which have been vested but not yet exercised.
7. The present Issue being a rights issue, as per Regulation 34(c) of the SEBI ICDR Regulations, the requirements of
promoters‟ contribution and lock-in are not applicable.
8. If our Company does not receive minimum subscription of 90% of the Issue, or the subscription level falls below 90%,
after the Issue Closing Date on account of cheques being returned unpaid or withdrawal of applications, our Company
shall refund the entire subscription amount received within 15 days from the Issue Closing Date. If there is a delay in
the refund of subscription by more than eight days after our Company becomes liable to pay the subscription amount
i.e. 15 days after the Issue Closing Date, our Company and every Director of our Company who is an officer in default
will be liable to pay interest for the delayed period, as per the rates prescribed under Section 73 of the Companies Act.
9. Except for the allotments to be made under Alok ESOS 2010, mentioned above, there will be no further issue of
capital whether by way of issue of bonus shares, preferential allotment, rights issue or in any other manner during the
period commencing from submission of this Letter of Offer with the Stock Exchanges/SEBI until the Equity Shares to
be issued pursuant to the Issue have been listed.
10. The ex-rights price of the Equity Shares as per Regulation 10(4) (b) of the Takeover Regulations is ` 10.83 per Equity
Share.
27
OBJECTS OF THE ISSUE
Our Company intends to utilise the proceeds from the Issue, after deduction of the Issue expenses (hereinafter referred to
as the “Net Proceeds”), towards funding the following objects:
1. To meet the incremental working capital requirements of our Company; and
2. General corporate purposes.
Our Company is involved in the textiles business. The main objects of our Memorandum of Association and the objects
incidental or ancillary to the main objects enable our Company to undertake its existing activities. The purpose for which
the funds are being raised through the Issue fall within the main objects of our Memorandum of Association.
The fund requirements and deployment described herein are based on internal management estimates and have not been
appraised by any bank, financial institution or any other external agency. These are based on current circumstances of our
business.
We may have to revise our fund requirements and deployment as a result of changes in commercial and other external
factors, which may not be within the control of our management. This may entail rescheduling, revising or cancelling the
fund requirements and increasing or decreasing the fund requirements for a particular purpose from its fund requirements
mentioned below, at the discretion of our management. Accordingly, the Net Proceeds would be used to meet all or any of
the uses of the funds described herein.
In case of variations in the actual utilization of funds earmarked for the purposes set forth below, increased fund
requirements for a particular purpose may be financed by surplus funds, if any, available in respect of the other purposes
for which funds are being raised in this Issue. If surplus funds are unavailable, the required financing will be met through
our internal accruals, additional equity and/or debt arrangements. In the event that estimated utilization out of the Net
Proceeds in a Financial Year is not completely met, the same shall be utilized in the next Financial Year.
Our management, in accordance with the competitive and dynamic nature of our business, the textile industry and the
policies of the Board, will have the flexibility to revise its business plan from time to time and in utilizing the sum
earmarked for general corporate purposes and any surplus amounts from the Net Proceeds.
Proceeds of the Issue
The details of the proceeds of the Issue (“Gross Proceeds”) are summarized in the following table:
Particulars Amount
(` in crore)
Gross Proceeds 550.85
Less: Issue related expenses 6 .79
Net Proceeds 544.06
The stated objects of the Issue are proposed to be financed entirely out of the Net Proceeds. Accordingly, we confirm that
there is no requirement for us to make firm arrangements of finance through verifiable means towards 75% of the stated
means of finance, excluding the amount to be raised through the Issue. The Net Proceeds, after deduction of all Issue
expenses, are estimated to be approximately ` 544.06 crores. The details in relation to the objects of the Issue are set forth
herein below. In case of a shortfall in the Net Proceeds, we may explore a range of options including utilizing our internal
accruals, and / or seeking long term funding sources.
Requirement of Funds
The details of the utilization of Net Proceeds will be as per the table set forth below:
28
Particulars
Amount estimated to be utilized through the
Net Proceeds
(` in crore)
Incremental working capital requirement to be funded from Net Proceeds 432.18
General corporate purposes 111.88
Total 544.06
Appraisal
Our Company has not got its proposed requirement of funds as detailed in this section appraised by any bank or financial
institution or any independent agency.
Capacity Expansion
The following table sets forth certain information relating to the aggregate production capacities and capacity utilisation
over the last two and half years (FY11, FY12 and half year ended Sept 30, 2012) our Company‟s facilities in India on a
standalone basis:
Division/ Segment Units
FY2011
Installed
Capacity
Effective
Capacity
Production Capacity
Utilisation (%)
Cotton Yarn MT 69,040 69,040 54,391.44 78.78
Ring Frame Ring Spindles 3,43,840 N.A. N.A. N.A.
Open End Rotors 3,792 N.A. N.A. N.A.
Polyester Yarn
Continuous Polymerization MT 3,00,000 3,00,000 201,432.13 80.57
which includes
(a) Drawn Texturized Yarn MT 1,14,000 1,14,000 1,22,171.96 107.17
(b) POY/Dyed Yarn/ Chips MT 1,20,300 1,20,300 39,086.83 37.87
(c) Fully Drawn Yarn MT 65,700 65,700 15,484.72 47.21
Apparel Fabric
Processing Woven Million Meters 105.00 105.00 90.00 73.85
Weaving Million Meters 93.00 93.00 77.54 96.77
Knitting MT 18,200 18,200 8,801.38 58.68
Home Textiles
Processing Million Meters 82.50 82.50 52.80 64.00
Weaving Million Meters 68.00 68.00 54.00 79.41
Terry Towels MT 6,700 6,700 4,467.92 66.69
Garments Million Pieces 22 22 15.05 68.41
Note:
Effective capacity denotes the average capacity available during the year after accounting for capacities added during the
year and the number of days of such availability during the financial year.
Production denotes the actual production during the financial year in the respective capacities.
Capacity Utilisation = Production / Effective Capacity * 100
Installed capacities of the manufacturing facilities are based on various assumptions and estimates.
Division/ Segment Units
FY2012
Installed
Capacity
Effective
Capacity
Production Capacity
Utilisation
(%)
Cotton Yarn MT 80,000 75,000 55,950.82 74.6
Ring Frame Ring Spindles 4,11,840 N.A. N.A. N.A.
29
Division/ Segment Units
FY2012
Installed
Capacity
Effective
Capacity
Production Capacity
Utilisation
(%)
Open End Rotors 5,680 N.A. N.A. N.A.
Polyester Yarn
Continuous Polymerization MT 5,00,000 4,00,000 3,25,358.03 81.34
which includes
(a) Drawn Texturized Yarn MT 1,30,000 1,25,000 1,21,495.14 97.2
(b) POY/Dyed Yarn/ Chips MT 3,00,000 2,05,000 74,921.45 36.55
(c) Fully Drawn Yarn MT 70,000 70,000 42,646 60.92
Apparel Fabric
Processing Woven Million Meters 130.00 117.50 150.00 72.97
Weaving Million Meters 186.00 165.00 85.74 90.91
Knitting MT 18,200 18,200 8,159.15 44.83
Home Textiles
Processing Million Meters 105.00 95.00 60.40 63.58
Weaving Million Meters 92.00 82.00 65.00 79.27
Terry Towels MT 13,400 10,050 5,392.68 53.66
Garments Million Pieces 22 22 13.22 60.07
Note:
Effective capacity denotes the average capacity available during the year after accounting for capacities added during the
year and the number of days of such availability during the financial year.
Production denotes the actual production during the financial year in the respective capacities.
Capacity Utilisation = Production / Effective Capacity * 100
Installed capacities of the manufacturing facilities are based on various assumptions and estimates.
Division/ Segment Units
Half year ended September 30, 2012
Installed
Capacity
Effective
Capacity
Production Capacity
Utilisation
(%)
Cotton Yarn MT 80,000 40,000 38,407.41 96.02%
Ring Frame Ring Spindles 4,11,840 N.A. N.A. N.A.
Open End Rotors 5,680 N.A. N.A. N.A.
Polyester Yarn
Continuous
Polymerization
MT 5,00,000 250,000 181,098.96 72.44%
which includes
(a) Drawn Texturized Yarn MT 1,30,000 65,000 70,656.77 108.70%
(b) POY/Dyed Yarn/ Chips MT 3,00,000 1,50,000 86,398.08 57.60%
(c) Fully Drawn Yarn MT 70,000 35,000 24,044.11 68.70%
Apparel Fabric
Processing Woven Million Meters 130.00 65 82.30 126.62%
Weaving Million Meters 186.00 93 101.95 109.62%
Knitting MT 18,200 9,100 4,353.86 47.84%
Home Textiles
Processing Million Meters 105.00 52.5 34.18 65.10%
Weaving Million Meters 96.00 48.00 34.35 71.56%
Terry Towels MT 13,400 6,700 3,840.78 57.33%
Garments Million Pieces 22 11 5.57 50.64%
30
Note:
Effective capacity denotes the average capacity available during the year after accounting for capacities added during the
year and the number of days of such availability during the financial year.
Production denotes the actual production during the financial year in the respective capacities.
Capacity Utilisation = Production / Effective Capacity * 100
Installed capacities of the manufacturing facilities are based on various assumptions and estimates.
The benefits of the expansions carried out by our Company have started accruing in the current financial year. This is
substantiated by the increase in net sales by our Company by 49.84 % from ` 3,835.89 crore for the half year ended
September 30, 2011 to ` 5,747.52 crore for the half year ended September 30, 2012 on a standalone basis.
The expansions carried out by our Company are set out below:
Expansion in the polyester business: The expansion in the polyester business has helped our Company to widen its
markets. Our Company has increased its capacity of continuous polymerisation from 3,00,000 MT to 5,00,000 MT in
the Fiscal Year 2012. The full benefit of this expansion would accrue to our Company from Fiscal 2013 onwards.
Expansion in the cotton business: Our Company has expanded its capacities across the value chain from spinning
(by way of an increase of 68,000 spindles) to weaving and processing (by way of an increase of 47.50 million metres)
in the apparel fabric and home textile business.
Increase in sales would also result in higher working capital requirements as the textile industry is a working capital
intensive industry.
Details of the Objects of the Issue
The detail of the requirement of funds is as provided below:
A. Incremental Working Capital Requirement
Our Company is vertically integrated both in its cotton and polyester business, as a result, we require substantial amounts
of working capital for our business operations vis-à-vis a non-integrated player. The nature of our business requires our
Company to supply products to a majority of its customers within defined credit periods, which could in turn affect our
working capital requirements.
We require significant capital to expand, maintain and operate our manufacturing facilities. Our working capital deployed
was ` 6,036.96 crore as on March 31, 2012, on a standalone basis. We avail a major portion of working capital in the
ordinary course of our business from our internal accruals and from banks and financial institutions by way of fund and
non-fund based working capital limits, and short term and long term loans.
Our Company‟s working capital requirements have been calculated on the basis of the incremental working capital
required over the next fiscal year, namely Fiscal 2014, based on the various expansion activities carried on by our
Company as set out in “Capacity Expansion” above. The entire Net Issue Proceeds will be utilised towards meeting the
incremental working capital and general corporate purposes.
The working capital requirements set forth below are our estimates based on past experience and in line with our
expanding operations. Our Company‟s existing and estimated working capital requirement, on a standalone basis, is as
follows:
Particulars
Fiscal 2012 As on September 30,
2012 Fiscal 2013 Fiscal 2014
Holding
level (in
days of
Amount
(` in
crore)
Holding
level (in
days of
Amount
(` in crore)
Holding
level (in
days of
Amount
(` in crore)
Holding
level (in
days of
Amount
(` in crore)
31
sales) sales) sales) sales)
Historical¹ Audited Historical¹ Limited
Review Estimates Estimates* Estimates Estimates*
CURRENT ASSETS
Inventory 139 3,379.91 108 3,448.47 116 3,694.20 112 3,840.38
which includes
- Raw Material 18 435.09 14 442.01 16 501.63 16 542.12
- Stock In Progress
(including stock in trade)
91 2,223.49 77 2,452.97
73 2,318.78 69 2,358.05
- Finished Goods 26 641.86 15 486.05 24 758.54 24 813.27
-Store Consumable (Spares
and Packaging material)
3 79.47 2 67.44
3 115.25 4 126.94
Sundry Debtors 88 2,152.15 85 2,718.92 110** 3,505.50 111** 3,833.00
Other Current Assets
(incl. Advances)
1,512.38
2,617.27
1,410.00 1,510.00
Total Current Assets (A) 7,044.44 8,784.66 8,609.70 9,183.38
CURRENT LIABILITIES
Trade Payables 21 506.42 40 1,278.45 32 1,026.36 32 1,107.86
Provisions 75.60 126.29 111.28 165.5
Other current liabilities 425.46 535.31 88.25 94.04
Total Current Liabilities
(B)
1,007.48 1,940.05 1,225.90 1,367.40
NET WORKING
CAPITAL (A-B)
6,036.96 6,844.61 7,383.80 7,815.98
Incremental Working
Capital Requirement
1,346.84 432.18
Incremental Bank Finance /
Internal Accruals
1,346.84 Nil
Incremental Working
Capital Requirement to be
funded from Net Proceeds
Nil 432.18
*Based on management estimates;
** The Company permits a credit period of 100-120 days to all its customers. While the realisation of debtors was timely for
the Fiscal Year ended March 31, 2012, the Company generally assumes a higher holding period in line with its prevalent credit
period policy. As a result, for the Fiscal Year ended March 31, 2013 and March 31, 2014, the Company has assumed a holding
period of 110 days and 111 days respectively in relation to its debtors.
¹ Arrived at on an actual on net sales basis
Note: The holding period days have been calculated as on a date and the average period may differ.
B. General Corporate Purposes
We also intend to utilise a portion of the Net Proceeds for general corporate purposes in the nature of investment in
technology upgradation, meeting exigencies, normal capital expenditure and expansion of our operations domestically, and
/ or internationally, through the organic / inorganic route, as available, and other strategic initiatives. Our Board of
Directors will review various requirements from time to time and determine the quantum of utilization of funds towards the
above purposes, and, in response to the competitive and dynamic nature of the industry, our management will have the
discretion to revise our Company‟s business plan from time to time.
32
C. Issue Related Expenses
The expenses of this Issue include, among others, lead management fees, printing and distribution expenses, legal fees,
advertisement cost, registrar fees, depository charges and listing fees. The total Issue expenses are estimated to be
approximately ` 6.79 crore as per the following break-up:
Activity Amount
(` in crore)
As a % of total
expenses
As a % of Issue
Size
Fees payable to intermediaries including Lead Managers
and Registrar to the Issue 3.89 57.29% 0.71%
Advertising, Printing and stationery (including courier and
distribution charges) 2.01 29.61% 0.36%
Others (legal fees, listing charges, depositories‟ fees,
auditor fees, out of pocket reimbursements, monitoring
agency fees, etc.)
0.89 13.10% 0.16%
Total 6.79 100.00% 1.23%
Interim Use of Net Proceeds
Pending utilization of the funds, the management of our Company, in accordance with policies established by our Board
from time to time, will have flexibility in deploying the Net Proceeds. Pending utilisation for the purposes described above,
our Company intends to temporarily invest the funds in high quality interest / dividend bearing liquid instruments
including money market mutual funds, deposits with banks for the necessary duration and other investment grade interest
bearing securities, as may be approved by the Board of Directors or a committee thereof. Such transactions would be at the
prevailing commercial rates at the time of investment. Our Company confirms that pending utilization of the Net Proceeds,
it shall not use the funds for any investments in the equity markets.
Monitoring of the Utilisation of Funds
Our Company has appointed Axis Bank Limited as the Monitoring Agency in relation to the Issue. The Board and the
Committee of Directors will monitor the utilisation of the Net Proceeds. Our Company will disclose the utilisation of the
Net Proceeds under a separate head in our balance sheet along with details, for all such amounts that have not been utilised.
Our Company will indicate investments, if any, of unutilised Net Proceeds in the balance sheet of our Company for the
relevant Financial Years subsequent to the listing.
Pursuant to Clause 49 of the Listing Agreement, our Company shall, on a quarterly basis, disclose to the Audit Committee
the uses and applications of the Net Proceeds. The report submitted by the Monitoring Agency will be placed before the
Audit Committee of our Company, so as to enable the Audit Committee to make appropriate recommendations to the
Board of Directors of our Company.
In accordance with Clause 43A of the Listing Agreement, our Company shall furnish to the Stock Exchanges, on a
quarterly basis, a statement including material deviations, if any, in the utilisation of the proceeds of the Issue from the
objects of the Issue as stated above. This information will also be published in newspapers simultaneously with the interim
or annual financial results after placing the same before the Audit Committee. In the event that the Monitoring Agency
points out any deviation in the use of Net Proceeds from the objects of the Issue as stated above, or has given any other
reservations about the end use of funds, our Company shall intimate the same to the Stock Exchanges without delay.
Bridge Financing
Our Company has not availed any bridge loans from any bank/financial institutions as on the date of this Letter of Offer,
which are proposed to be repaid form the Net Proceeds.
33
Other confirmations
No part of the proceeds of this Issue will be paid by us as consideration to our Promoters, Promoter Group our Directors or
key managerial employees, except in the normal course of our business.
34
SECTION IV - STATEMENT OF TAX BENEFITS
To,
The Board of Directors,
Alok Industries Limited,
Peninsula Corporate Park,
Lower Parel, Mumbai – 400 013
Subject – Special tax benefits under Income Tax Act, 1961 & Wealth Tax Act, 1957
Dear Sirs,
We hereby report that there are no special tax benefits available to Alok Industries Limited („the Company‟) and its
shareholders under the Income Tax Act, 1961 as amended and Wealth Tax Act, 1957 as amended.
This is based on the information, explanations and representations obtained from the Company and on the basis of our
understanding of the business activities and operations of the Company and interpretations of the current relevant laws.
For Narendra Poddar & Co.
Chartered Accountants
Firm Registration No.106915W
Narendra Poddar
Proprietor
Membership No. 41256
Place: Mumbai
Date: February 7, 2013
35
SECTION V - OUR MANAGEMENT
As per our Articles of Association, we are required to have a maximum of 12 directors on our Board of Directors. We have
been permitted by the Central Government vide its letter no. 4/4/06-CL. VII dated March 16, 2007 to increase the total
number of directors from 12 to 15 and we currently have 13 directors on our Board.
The following table sets forth certain details regarding the Board of Directors as on the date of this Letter of Offer.
Particulars Age
(years)
Other directorships
Mr. Ashok Jiwrajka
(s/o. Mr. Bhagirathmal Jiwrajka)
401/402, Raheja Legend Plot no.254 A,
Dr. Annie Besant Road, Worli,
Mumbai - 400 018,
Maharashtra, India
Designation: Executive Chairman
DIN 00168350
Occupation: Businessman
Term: 5 years with effect from March 10, 2013
Nationality: Indian
62
Indian Companies
1. Alok Knit Exports Limited;
2. Alspun Infrastructure Limited;
3. Alok Infrastructure Limited;
4. Alok Apparels Private Limited;
5. Alok Realtors Private Limited;
6. Alok Retail (India) Limited;
7. Alok Land Holdings Private Limited;
8. Alok H &A Limited;
9. Kesham Developers & Infotech Private Limited;
10. Springdale Information and Technologies Private Limited;
11. Alok Denims (India) Limited;
12. Alok Finance Private Limited;
13. Jiwrajka Associates Private Limited;
14. Jiwrajka Investment Private Limited;
15. Niraj Realtors & Shares Private Limited;
16. Nirvan Holdings Private Limited;
17. Ashford Infotech Private Limited;
18. Gogri Properties Private Limited; and
19. Ashok Realtors Private Limited.
Foreign Companies
20. Alok Industries International Ltd;
21. Grabal Alok International Limited;
22. Grabal Alok (UK) Limited;
23. Alok Singapore Pte Ltd;
24. Alok International (Middle East) FZE;
25. Alok International Inc.
Mr. Dilip Jiwrajka
(s/o Mr. Bhagirathmal Jiwrajka)
6, Villa Orb,
15th Floor,
Opposite Manzoni Showroom,
Darabshaw Lane,
Off. Nepeansea Road,
Mumbai – 400 006,
Maharashtra, India
Designation: Managing Director
DIN: 00173476
Occupation: Businessman
Term: 5 years with effect from March 10, 2013
Nationality: Indian
56
Indian Companies
1. Alok Knit Exports Limited;
2. Aurangabad Textiles & Apparel Parks Limited;
3. Alspun Infrastructure Limited;
4. Alok Infrastructure Limited;
5. Alok Apparels Private Limited;
6. Alok Realtors Private Limited;
7. Alok Retail (India) Limited ;
8. Alok Land Holdings Private Limited;
9. Alok H &A Limited;
10. Kesham Developers & Infotech Private Limited;
11. Springdale Information and Technologies Private
Limited;
12. Alok Denims (India) Limited;
13. Alok Finance Private Limited;
14. Jiwrajka Associates Private Limited;
15. Jiwrajka Investment Private Limited;
16. Niraj Realtors & Shares Private Limited;
17. Nirvan Holdings Private Limited;
36
Particulars Age
(years)
Other directorships
18. Ashford Infotech Private Limited; and
19. Gogri Properties Private Limited.
Foreign Companies
20. Alok Industries International Ltd;
21. Grabal Alok International Limited;
22. Grabal Alok (UK) Limited;
23. Triumphant Victory Holdings Limited;
24. Alok Singapore Pte Ltd;
25. Alok International (Middle East) FZE; and
26. Alok International Inc.
Mr. Surendra Jiwrajka
(s/o Mr. Bhagirathmal Jiwrajka)
901, Palm Beach,
Pochkhanwala Road, Worli,
Mumbai - 400 018,
Maharashtra, India
Designation: Joint Managing Director
DIN: 00173525
Occupation: Businessman
Term: 5 years with effect from March 10, 2013
Nationality: Indian
54 Indian Companies
1. Alok Knit Exports Limited
2. Aurangabad Textiles & Apparel Parks Limited
3. Alspun Infrastructure Limited
4. Alok Infrastructure Limited
5. Alok Apparels Private Limited
6. Alok Realtors Private Limited
7. Alok Retail (India) Limited
8. Alok Land Holdings Private Limited
9. Alok H &A Limited
10. Kesham Developers & Infotech Private Limited
11. Springdale Information and Technologies Private
Limited
12. Alok Denims (India) Limited;
13. Alok Finance Private Limited;
14. Jiwrajka Associates Private Limited;
15. Jiwrajka Investment Private Limited;
16. Niraj Realtors & Shares Private Limited;
17. Nirvan Holdings Private Limited;
18. Ashford Infotech Private Limited; and
19. Gogri Properties Private Limited
Foreign Companies
20. Alok Industries International Ltd.;
21. Grabal Alok International Limited;
22. Grabal Alok (UK) Limited;
23. Triumphant Victory Holdings Limited;
24. Alok Singapore Pte Ltd.;
25. Alok International (Middle East) FZE;
26. Alok International Inc.;
Mr. Chandrakumar Bubna
(S/ o Mr. Govindram Bubna)
124/5, Krishna Kunj,
Sainik Farm, Central Avenue,
New Delhi – 100 062
India
Designation: Executive Director
DIN: 00611031
60 Indian Companies
1. Jiwrajka Associates Private Limited
37
Particulars Age
(years)
Other directorships
Occupation: Businessman
Term: 5 years with effect from May 1, 2009
Nationality: Indian
Mr. Sunil O. Khandelwal
(s/o Mr. Omprakash Khandelwal)
13/13, Anamika Apartments,
10, Gulmohar Cross Road,
JVPD Scheme,
Mumbai – 400 049,
Maharashtra, India
Designation: Executive Director* & Chief Financial
Officer
DIN: 06430362
Occupation: Service
Term: 5 years with effect from November 10, 2012
Nationality: Indian
48 Nil
Mr. K. H. Gopal
(S/o Mr. K. S. Hariharan)
8 A&B, 8th Floor, ,
Sapphire, Plot No. 230,
10th Road, Sandu Garden, Chembur,
Mumbai – 400 071,
Maharashtra, India
Designation: Executive Director* & Secretary
DIN: 06430369
Occupation: Service
Term: 5 years with effect from November 10, 2012
Nationality: Indian
47 Nil
Mr. Ashok Rajani
(S/o Mr. Giridardas Rajani)
101/102, Red Rose Apartments,
Pochkhanwala Road,
Mumbai - 400 018,
Maharashtra, India
Designation: Independent Director
DIN: 00267748
Occupation: Businessman
Term: Liable to retire by rotation.
63
Indian Companies
1. Midas Touch Apparel Private Limited;
2. Flair Apparel Industries Private Limited; and
3. Vision Apparel Private Limited
38
Particulars Age
(years)
Other directorships
Nationality: Indian
Mr. Kandarp Modi
(S/o Mr. Ratanchand Modi),
901, Pushpanjali Apartments,
Old Prabhadevi Road,
Mumbai – 400 025,
Maharashtra, India
Designation: Independent Director
DIN: 00261506
Occupation: Advocate and Solicitor
Term: Liable to retire by rotation.
Nationality: Indian
70 Indian Companies
1. Rolta India Limited
Mr. Timothy Ingram
(s/o Mr. Stanley Charles Ingram)
6, Ranelagh Avenue,
London, SW63PJ,
United Kingdom.
Designation: Independent Director
DIN: 01430613
Occupation: Chief Executive of Collins Stewart
Hawkpoint Plc
Term: Liable to retire by rotation.
Nationality: British
65 Foreign Companies
1. RSM Tenon plc
Mr. Samuel Joseph Jebaraj
(s/o Mr. S. G. S. Jebaraj)
1504, Wallace Apartments 1,
Noshir Harucha Marg (Slater Road),
Grant Road (West),
Mumbai – 400 007,
Maharashtra, India
Designation: Independent Director (Nominee
Director of EXIM Bank)
DIN: 02262530
Occupation: Chief General Manager of EXIM Bank
Term: As decided by EXIM Bank
Nationality: Indian
44 Indian Companies
1. Himatsingka Seide Limited;
2. Alucast Auto Parts Limited;
Mrs. Thankom Mathew 59 Nil
39
Particulars Age
(years)
Other directorships
(W/o Mr. Thomas Mathew)
A-1, 1st
Floor, Jeevan Jyot,
Setalwad Road Lane,
Napean Sea Road,
Mumbai - 400 036,
Maharashtra, India
Designation: Independent Director (Nominee
Director of Life Insurance Corporation of India)
DIN: 00025326
Occupation: Executive Director (New Projects /
CPIO)
Term: As decided by Life Insurance Corporation of
India
Nationality: Indian
Mr. M. V. Muthu
(s/o Late Mr. Vekantavarada Iyengar Narasimha
Iyengar Mudambai)
Flat No.123, Vrindavan Garden,
Anjanappa Layout,
Hebbal, Kempapura,
Bangalore – 560024,
Karnataka, India
Designation: Independent Director (Nominee
Director of IFCI Limited)
DIN: 00019683
Occupation: Retired – currently on Expert Panel of
the Technical Development Board of Government of
India as Finance Expert.
Term: As decided by IFCI Limited
Nationality: Indian
66 Indian Companies
1. IFCI Financial Services Limited
2. Parijatha Business Solution Private Limited
Ms. Maya Chakravorty
(D/o Mr. Nripendra Kumar Chakravorty)
A/32, Twin Towers,
V.S. Marg, Prabhadevi,
Mumbai – 400 025,
Maharashtra, India
Designation: Independent Director (Nominee
Director of IDBI Bank Limited)
DIN: 03577159
Occupation: General Manager (Retail Banking –
Front Office) of IDBI Bank Limited
47 Nil
40
Particulars Age
(years)
Other directorships
Term: As decided by IDBI Bank Limited
Nationality: Indian
*Appointed as additional director till ratification at the next AGM.
Further, none of our Directors were directors on the board of listed companies that have been delisted from the Stock
Exchanges.
None of our Directors hold any current and past directorship(s) during the preceeding five years in listed companies whose
shares have been or were suspended from being traded on BSE or NSE.
Relationship between Directors
None of the Directors are related to each other, except Mr. Ashok Jiwrajka, Mr. Dilip Jiwrajka and Mr. Surendra Jiwrajka,
who are brothers.
Profile of Directors
Mr. Ashok Jiwrajka is the Executive Chairman of the Company. He completed his schooling and college from Mumbai.
Immediately after his graduation, in commerce from Mumbai University, he joined the family partnership firm and
subsequently incorporated our Company in 1986. Mr. Jiwrajka has been a Director on the Board of our Company since its
incorporation and has over three decades of experience in the textiles industry. His functions as the Executive Chairman
include envisioning our Company's strategic initiatives and overseeing the home textiles business.
Mr. Dilip Jiwrajka is the Managing Director of our Company. He completed his schooling and college from Mumbai.
Subsequently, he completed his post-graduation in Business Entrepreneurship and Management. He began his career as a
management trainee and thereafter he started the business of trading in textiles as sole selling agent for Bombay Dyeing for
the Readymade Garment Sector. Starting with a partnership firm, he incorporated our Company in 1986 and has been a
Director on the Board of our Company since its incorporation. His functions as the Managing Director include envisioning
our Company's growth strategy, responsibility for the apparel fabric and garment divisions and overseeing the finance,
administration and overall working of our Company and its group companies.
Mr. Surendra Jiwrajka is the Joint Managing Director of our Company. He completed his schooling and college from
Mumbai. Immediately after his graduation, he joined the family partnership firm and subsequently incorporated Alok
Industries Limited in 1986. Mr. Jiwrajka has been a Director on the Board of our Company since its incorporation and has
over two decades of experience in the Textile Industry. His functions as the joint managing director include envisioning
our Company‟s growth strategy, overseeing the manufacturing, marketing functions of the polyester and spinning
businesses and project implementation of our Company.
Mr. Chandrakumar Bubna is the Executive Director of our Company. He is a commerce graduate and has been
associated with the textile industry in the field of marketing for more than two decades. He has been a Director on the
Board of our Company since 1993 and manages our Company‟s marketing operations for the northern region and is also
actively involved in planning and executing our Company's marketing strategies.
Mr. Sunil O. Khandelwal has been appointed as an Additional Director designated as the Executive Director and Chief
Financial Officer of our Company. He is a qualified a bachelor of commerce in 1984 from the University of Bombay and is
also a qualified Chartered Accountant. He has been associated with the Company from 23 years and is currently also
working as the Chief Finance Officer. He is responsible for overall Corporate Finance, Operations, Accounts &Tax,
Internal Controls, Investments, Risk Management and Strategic Planning. He has wide experience in raising funds for
41
project financing, working capital, acquisition funding from international and national lenders, equity raising in domestic
and international markets, private equity, financial planning and budgeting, treasury, corporate accounts and taxation.
Mr. K. H. Gopal has been appointed as an Additional Director designated as an Executive Director. He has obtained his
associate membership with the Institute of Company Secretaries of India in the year 1994 and has passed Second LL.B.
Examination from the Mumbai University in the year 1994. He also holds a Diploma in Music (Percussion) from the Fine
Arts Society, Chembur, Mumbai. He is also currently the Secretary of the Company. He started his career with Rohit Pulp
& Paper Mills Limited in 1987. Thereafter, he moved on to the Hinditron Group in 1992 before joining the Company in
mid-1994. His responsibilities at Alok include overseeing the legal & secretarial, forex management, information
technology, human resource and administration functions. He is a part of the core management team for envisioning the
Group‟s strategy and growth plans. His forte is a strong legal background with a penchant for human resource
management.
Mr. Ashok Rajani is a B.Com Graduate. He is the Founder Chairman of the M/s Midas Touch Group and Midas Touch
Apparel Private Limited, an Indian garment exporting company. He is experienced in the field of garment manufacturing
and exports and is associated with various garment and textile organizations. He was the Chairman of the Export
Promotion Committee of the Apparel Export Promotion Council and is a member on its executive committee. He was the
President of The Clothing Manufacturers Association of India and has also been on the Board of Governors of the National
Institute of Fashion Technology.
Mr. Kandarp Modi is an Advocate and Solicitor by profession with over 40 years experience. His academic qualifications
include a Bachelor Degree in Arts and Law from Mumbai University. He was enrolled as a attorney with the High Court of
Bombay and was a Senior Partner with M/s. Kanga & Company, a firm of Advocates & Solicitors in Mumbai and is an
independent director on our Board.
Mr. Timothy Ingram is the Chief Executive of Collins Stewart Hawkpoint Plc. He completed his Masters in Arts in
Economics from Cambridge University, an MBA from INSEAD Business School and is a Fellow of the Chartered Institute
of Bankers. He was appointed as Chief Executive of Caledonia Investments plc in June 2002. Caledonia Investments is a
FTSE-250 investment company taking large stakes in other businesses, both in the UK and internationally. He began his
career in banking with Grindlays Bank (now part of ANZ Bank and Standard Chartered Bank subsequently) in 1969 and
had his first CEO experience running a bank in the Congo (then called Zaire) in the mid 1970s. He was then put in charge
of a number of banks in various parts of the world and in 1989 took charge of ANZ‟s corporate bank in Australia. He
returned to the UK in 1991 to run First National Finance Corporation which was taken over by Abbey National in 1995. He
joined the Abbey National Board in 1996 and left Abbey National in 2002, and become the CEO of Caledonia Investments
and retired in 2010.
Mr. Samuel Joseph Jebaraj has been nominated as an Independent Director by Export- Import Bank of India. He has
completed his BE (Hons) and MBA. He has about 20 years of experience in Project and Trade Finance. He is a regular
speaker on Banking, Trade Finance, Project Finance, SME Banking etc. He is also a member of FICCI‟s sectoral
committees on Pharmaceuticals and Defence as well as of Task Force on “Financial solutions for R&D in pharmaceutical
sector” set up by the Ministry of Commerce and Industry, Government of India. He is presently Chief General Manager
and in charge of Corporate Banking including SME and Agri Financing in head office at Mumbai.
Mrs. Thankom Mathew has been nominated as an Independent Director by Life Insurance Corporation of India. She has
completed her M.SC. She is working in LIC as an Executive Director (New Projects) / CPIO.
Mr. M. V. Muthu has been nominated as an Independent Director by IFCI Limited. He has completed his BSc, ANSI –
Sugar Technology, Programme in Investment Appraisal and Management from Harvard. He joined IFCI Limited as
Assistant Technical Officer and served in various capacities. He retired as CEO from IFCI Limited. He was Chairman of
IFCI Venture Capital. He has also served on boards of ITC Limited and Andhra Pradesh Paper Mills Limited. He is also on
the Expert Panel of the Technical Development Board of the Government of India as a Finance Expert.
42
Ms. Maya Chakravorty has been nominated as an Independent Director by IDBI Bank Limited. She has completed her
B.E. (Chemical), MBA and CFA. She joined SAIL as a Management Trainee and worked with ONGC as Assistant
Executive Engineer (Production) for 3 years. She joined IDBI Bank Limited as Manager and is presently the General
Manager (Retail Banking), where she is in charge of liquidity/fund management, resource mobilisation, statutory
compliances like CRR / SLR, and PD operation.
Borrowing Powers of our Board of Directors
Pursuant to a resolution dated September 29, 2011, passed by the shareholders of our Company the Annual General
Meeting of the Company our Board has been authorised to borrow sums of money for and on behalf of our Company,
provided that the money so borrowed (apart from temporary loans obtained from time to time by our Company in the
ordinary course of business) shall not exceed `150,000,000,000.
Pursuant to various financing arrangements entered into by our Company, the following persons have been
nominated as directors on our Board:
Sr. No. Name of Director Nominating Entity
1. Mrs. Thankom Mathew Life Insurance Corporation of India
2. Mr. M. V. Muthu IFCI Limited
3. Ms. Maya Chakravorty IDBI Bank Limited
4. Mr. Samuel Joseph Jebaraj EXIM Bank
Executive Chairman
The significant terms of Mr. Ashok Jiwrajka‟s employment as the Executive Chairman, as per the agreement with our
Company dated March 10, 2013, are as follows:
Tenure of
Appointment
5 years with effect from March 10, 2013
Annual
Remuneration:
` 1,80,00,000
Perquisites Would include:
i) accommodation or house rent allowance in lieu thereof; house maintenance allowance together with
reimbursement of expenses/or allowances for utilization of gas, electricity, water, furnishing and
repair, medical reimbursement; leave travel concession for self and his family including dependents;
ii) club fees, credit card payment, Life Insurance Premium, medical insurance and such other
perquisites and/ or
iii) other allowances, subject to overall ceiling of remuneration stipulated in Section 198 and 309 of
the Companies Act.
The said perquisites and allowances shall be evaluated, wherever applicable, as per the Income Tax
Act or any rules thereunder (including any statutory modification(s) or re-enactment thereof, for the
time being in force).
Commission Not more than 1% of the net profit, subject to the provisions of relevant sections of the Companies
Act.
Managing Director
The significant terms of Mr. Dilip Jiwrajka‟s employment as the Managing Director, as per the agreement with our
Company dated March 10, 2013, are as follows:
43
Tenure of
Appointment
5 years with effect from March 10, 2013
Annual
Remuneration:
` 1,80,00,000/-
Perquisites Would include:
i) accommodation (furnished or otherwise) or house rent allowance in lieu thereof; house maintenance
allowance together with reimbursement of expenses/or allowances for utilization of gas, electricity,
water, furnishing and repair, medical reimbursement; leave travel concession for self and his family
including dependents;
ii) club fees, credit card payment, Life Insurance Premium, medical insurance and such other
perquisites and/ or
iii) other allowances, subject to overall ceiling of remuneration stipulated in Section 198 and 309 of
the Companies Act.
The said perquisites and allowances shall be evaluated, wherever applicable, as per the Income Tax
Act, 1961 or any rules thereunder (including any statutory modification(s) or re-enactment thereof, for
the time being in force).
Commission Not more than 1% of the net profit, subject to the provisions of relevant sections of the Companies
Act.
Joint Managing Director
The significant terms of Mr. Surendra Jiwrajka‟s employment as the Joint Managing Director, as per the agreement with
our Company dated March 10, 2013, are as follows:
Tenure of
Appointment
5 years with effect from March 10, 2013
Annual
Remuneration:
` 1,80,00,000/-
Perquisites Would include:
i) accommodation (furnished or otherwise) or house rent allowance in lieu thereof; house maintenance
allowance together with reimbursement of expenses/or allowances for utilization of gas, electricity,
water, furnishing and repair, medical reimbursement; leave travel concession for self and his family
including dependents;
ii) club fees, credit card payment, Life Insurance Premium, medical insurance and such other
perquisites and/ or
iii) other allowances, subject to overall ceiling of remuneration stipulated in Section 198 and 309 of
the Companies Act.
The said perquisites and allowances shall be evaluated, wherever applicable, as per the Income Tax
Act, 1961 or any rules thereunder (including any statutory modification(s) or re-enactment thereof, for
the time being in force).
Commission Not more than 1% of the net profit, subject to the provisions of relevant sections of the Companies
Act.
Executive Director
The significant terms of Mr. Chandrakumar Bubna‟s employment as an Executive Director, as per the agreement with our
Company dated May 1, 2009, are as follows:
44
Tenure of
Appointment
5 years with effect from May 1, 2009
Annual
Remuneration:
` 1,80,00,000/-
Perquisites Would include:
i) accommodation (furnished or otherwise) or house rent allowance in lieu thereof; house maintenance
allowance together with reimbursement of expenses/or allowances for utilization of gas, electricity,
water, furnishing and repair, medical reimbursement; leave travel concession for self and his family
including dependents;
ii) club fees, credit card payment, Life Insurance Premium, medical insurance and such other perquisites
and/ or
iii) other allowances, subject to overall ceiling of remuneration stipulated in Sections 198 and 309 of the
Companies Act.
The said perquisites and allowances shall be evaluated, wherever applicable, as per the Income Tax Act,
1961 or any rules thereunder (including any statutory modification(s) or re-enactment thereof, for the
time being in force).
Commission Not more than 1% of the Net Profit, subject to the provisions of relevant sections of the Companies Act.
Executive Director
The significant terms of Mr. Sunil O. Khandelwal‟s employment as an Executive Director, as per the agreement with our
Company dated November 10, 2012, are as follows:
Tenure of
Appointment
5 years with effect from November 10, 2012
Annual
Remuneration:
Upto ` 92,10,384/- inclusive of all allowances with annual increments as may be decided by the Board
Perquisites Benefits and perquisites as may be determined/decided by the Board from time to time and as per the
policy of the Company from time to time.
Commission N.A
Executive Director
The significant terms of Mr. K.H.Gopal‟s employment as an Executive Director, as per the agreement with our Company
dated November 10, 2012, are as follows:
Tenure of
Appointment
5 years with effect from November 10, 2012
Annual
Remuneration:
Upto ` 89,07,384/- inclusive of all allowances with annual increments as may be decided by the Board
Perquisites Benefits and perquisites as may be determined/decided by the Board from time to time and as per the
policy of the Company from time to time.
Commission N.A
Compensation to Independent Directors
All the Independent Directors of our Company are paid sitting fees as per resolution dated July 31, 2007, to the extent of `
20,000 for every Board meeting attended by them. There are no sitting fees paid for attending any of the committee
meetings.
45
SECTION VI – FINANCIAL INFORMATION
Sr. No. Particulars Page Nos.
1 Limited Review Statements on standalone basis for the half year ended
September 30, 2012
F – 1
2 Limited Review Statements on consolidated basis for the half year ended
September 30, 2012
F – 22
3 Standalone audited financial statements as at and for the year ended FY 2012 F – 40
4 Consolidated audited financial statements as at and for the year ended FY 2012 F – 84
F - 1
Report on Review of Interim Financial Statements
To the Board of Directors of Alok Industries Limited
Introduction
We have reviewed the accompanying condensed interim balance sheet of Alok Industries Limited (“the Company”), as of September 30, 2012, the related statement of profit and loss and cash flow statement for the six months period then ended and explanatory notes (“Interim financial statements”). Management is responsible for the preparation and presentation of these interim financial statements in accordance with Accounting Standard 25 (Interim Financial Reporting), as notified by the Companies (Accounting Standards) Rules, 2006 (“AS 25”) and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on these interim financial statements based on our review.
Scope of Review
We conducted our review in accordance with Standard on Review Engagements (SRE) 2410, “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Institute of Chartered Accountants of India (ICAI). This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the interim financial statements are free of material misstatements. A review is limited primarily to inquiries of Company personnel and analytical procedures applied to financial data and thus provide less assurance than an audit. We have not performed an audit and, accordingly, we do not express an opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial statements are not prepared, in all material respects, in accordance with Accounting Standard 25 (Interim Financial Reporting), as notified by the Companies (Accounting Standards) Rules, 2006 (“AS 25”) and other accounting principles generally accepted in India.
Other Matter
We draw attention to note no 1 to the interim financial statements regarding non-presentation of comparative figures / information in respect of the comparable previous periods, as required in terms of AS 25 “Interim Financial reporting” for the reasons stated in the said note. Our conclusion is not qualified in respect of this matter.
For Deloitte Haskins & SellsChartered Accountants
(Firm Registration No. 117366W)
R. D. KamatPartner
MUMBAI, December 31, 2012 (Membership No. 36822)
F - 2
(Rs. Crore)AS AT
PARTICULARS NOTES 30-Sep-12
I EQUITY AND LIABILITIES
(1) Shareholders' FundsShare Capital 2 826.28 Reserves and Surplus 3 3,167.93
(2) Non-current LiabilitiesLong-term Borrowings 4 6,907.67 Deferred Tax Liabilities (net) 5 592.16 Long-term provisions 6 205.29
(3) Current LiabilitiesShort-term Borrowings 7 4,855.13 Trade payables 8 1,278.45 Other current liabilities 9 2,596.85 Short-term provisions 10 126.29
TOTAL 20,556.05
II ASSETS
(1) Non-current AssetsFixed assets Tangible assets 11 8,870.09 Intangible assets 11 34.42 Capital work-in-progress 11 773.45 Non-current Investments 12 129.66 Long-term Loans & Advances 13 1,595.16
(2) Current AssetsCurrent Investments 14 2.65 Inventories 15 3,448.47 Trade receivables 16 2,718.92 Cash & Bank Balances 17 368.61 Short-term Loans & Advances 18 2,547.18 Other current assets 19 67.44
TOTAL 20,556.05
III Significant notes forming part of the condensed financial statements 1 to 32
In terms of our report attached. For and on behalf of the Board
For Deloitte Haskins & Sells Ashok B. JiwrajkaChartered Accountants (Executive Chairman)
Dilip B. Jiwrajka(Managing Director)Surendra B. Jiwrajka
R. D. Kamat (Joint Managing Director)Partner Sunil O. Khandelwal
(Executive Director & Chief Financial Officer)K. H. Gopal(Executive Director & Secretary)
Place: Mumbai Place: MumbaiDate: 31.12.2012 Date: 31.12.2012
ALOK INDUSTRIES LIMITED
CONDENSED BALANCE SHEET AS AT 30 SEPTEMBER 2012
F - 3
(Rs. Crore)1-Apr-12 to
PARTICULARS NOTES 30-Sep-12-
I. REVENUERevenue from Operations (gross) 20 5,909.56 Less : Excise Duty 162.05
Revenue from Operations (net) 5,747.51
II. Other Income 21 14.47
III. Total Revenue 5,761.99
IV EXPENSESCost of Materials consumed 2,977.37 Purchase of Traded Goods 40.79
22 (73.67)
Employee benefits expense 23 146.05 Finance costs 24 651.36 Depreciation and amortisation expense 11 431.69 Other expenses 25 1,023.40
Total 5,196.99
V 565.00
VI Exceptional Items (Refer note no 32) (73.05)
VII Profit before tax (V-VI) 491.95
VIII Tax expenses- Current tax (193.40)
(13.47) - Deferred tax 34.61
Total Tax expenses (172.26)
IX Net profit for the period 319.69
X EARNINGS PER SHARE (in Rs.) 28Basic 3.87*Diluted 3.87*
* Not AnnualisedXI Significant notes forming part of the condensed financial statements 1 to 32
In terms of our report attached. For and on behalf of the Board
For Deloitte Haskins & Sells Ashok B. JiwrajkaChartered Accountants (Executive Chairman)
Dilip B. Jiwrajka(Managing Director)
R. D. Kamat Surendra B. JiwrajkaPartner (Joint Managing Director)
Sunil O. Khandelwal(Executive Director & Chief Financial Officer)K. H. Gopal(Executive Director & Secretary)
Place: Mumbai Place: MumbaiDate: 31.12.2012 Date: 31.12.2012
ALOK INDUSTRIES LIMITED
CONDENSED STATEMENT OF PROFIT AND LOSS FOR THE SIX MONTHS ENEDED 30 SEPTEMBER 2012
Changes in inventories of finished goods, work-in-progress and stock-in-trade
Profit before exceptional items and tax
(Includes MAT adjustment Rs. 66.27 crore)- Short provision for income tax in respect of earlier years
F - 4
(Rs. Crore) 1-Apr-12 to
PARTICULARS 30-Sep-12
A. Net cash used in operating activities (873.13)
B. Net cash generated from Investing Activities 130.90
C. Net cash generated from Financing Activities 398.85
Net Decrease in Cash and Cash equivalents (A+B+C) (343.38)
Cash and Cash equivalents at the beginning of the period 542.76
Cash and Cash equivalents at the end of the period 199.38
Net Increase in Cash and Cash equivalents (343.39)
NOTES TO CASH FLOW STATEMENT
1 Cash and Cash equivalents includes : 30-Sep-12(Rs. Crore)
Cash and Bank Balances 368.61 Less : Earmarked balances / deposits with bank* 145.66 Less : Deposit with maturity period of more than 3 months ** 23.57
Total Cash and Cash equivalents 199.38
In terms of our report attached For and on behalf of the Board
For Deloitte Haskins & Sells Ashok B. JiwrajkaChartered Accountants (Executive Chairman)
Dilip B. Jiwrajka(Managing Director)
R. D. Kamat Surendra B. JiwrajkaPartner (Joint Managing Director)
Sunil O. Khandelwal(Executive Director & Chief Financial Officer)K. H. Gopal(Executive Director & Secretary)
Place: Mumbai Place: MumbaiDate: 31.12.2012 Date: 31.12.2012
ALOK INDUSTRIES LIMITED
CONDENSED CASH FLOW STATEMENT FOR SIX MONTHS ENDED 30 SEPTEMBER 2012
* Earmarked balances / deposits with bank includes balances / deposits held as margin money orsecurity against borrowings, guarantees and other commitments, which being, restricted for its use,have been excluded from cash and cash equivalent and grouped under the investing activity.
** Fixed Deposits with maturity period of more than three months have been excluded from cashand cash equivalent and grouped under the investing activity.
F - 5
1. Background
(Rs. Crore)PARTICULARS AS AT
30-Sep-12-
2. SHARE CAPITAL
(a) Authorised Shares1,000,000,000 Equity shares of Rs.10/- each 1,000.00
1,000.00
(b) Issued and Subscribed and fully paid-up shares
826,269,357 Equity shares of Rs.10/- each fully paid up 826.27
(c) Forfeited Shares (Amount originally paid-up)0.01
TOTAL 826.28
PARTICULARS AS AT30-Sep-12
-
3. RESERVES AND SURPLUS
Capital ReserveBalance as per last Balance Sheet 11.72
Capital Redemption ReserveBalance as per last Balance Sheet 9.10
Securities Premium AccountBalance as per last Balance Sheet 993.65
Debenture Redemption ReserveBalance as per last Balance Sheet 168.48 Less: Transferred to Statement of Profit and Loss (102.47) 66.01
General ReserveBalance as per last Balance Sheet 280.62
Employee Stock Options OutstandingOptions granted 4.67 Less : Deferred Employee Compensation expenses (1.29)
3.38
Cash Flow Hedging ReserveBalance as per last Balance Sheet (16.78) Add : created during the period 17.86
1.08
Surplus in the Statement of Profit and LossBalance brought forward from previous year 1,380.16 Profit for the period 319.69 Less : Appropriations
Transferred from Debenture Redemption Reserve 102.47 Excess provision of dividend and tax thereon 0.05
1,802.37
TOTAL 3,167.93
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
These condensed interim financial statements are prepared for the use by the Board of Directors solely in connection with theproposed Rights issue of the Company and have been prepared using the same basis / accounting policies as those used for theaudited financial statements for the year ended 31 March 2012. The Management has prepared these financial statements inaccordance with the recognition and measurement principles as laid down in AS 25 on "Interim Financial reporting". Comparativefigures / information for the previous comparable periods i.e. period 1 April 2011 to 30 September 2011 in respect of statement ofProfit & Loss and Cash flow statement and as at 31 March 2012 in respect of Balance sheet, have not been presented as in theopinion of the Board of Directors, the same is not required for the purpose of the proposed rights issue.
F - 6
(Rs. Crore)PARTICULARS AS AT
30-Sep-12-
Current Non Current4. LONG-TERM BORROWINGS
a) Debentures (Secured) - 800.00
b) Term Loans- Secured
From banks -Rupee Loans 1,406.13 5,489.46 -Foreign currency loans 605.08 339.79
2,011.21 5,829.25 From Financial Institutions
-Rupee Loans 13.13 52.02 -Foreign currency loans 17.15 145.13
30.28 197.15 2,041.49 6,026.40
- UnsecuredFrom banks
-Foreign currency loans 17.28 77.73
c) Other loans & advances- Secured
Vehicle loan from Banks 2.77 3.54
TOTAL 2,061.54 6,907.67
5. Deferred Tax Liabilities (Net)
Deferred Tax Liability (DTL)Depreciation 729.39
729.39Deferred Tax Asset (DTA)
Mark to Market loss on Derivative Contract 66.29Share issue expenses 2.80Employee benefit provision 7.77Provision for doubtful debts, advances and investment 60.37
137.23Deferred Tax Liability (Net) TOTAL 592.16
6. LONG-TERM PROVISIONS
Provision for employee benefits 16.70 Mark to Market provision on derivative instruments 188.59
TOTAL 205.29
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
ALOK INDUSTRIES LIMITED
F - 7
(Rs. Crore)PARTICULARS AS AT
30-Sep-12-
7. SHORT-TERM BORROWINGS
Working capital loans :Cash Credit accounts, working capital demand loan etc. (Secured)
3,964.63 144.75
Cash Credit accounts, working capital demand loan etc. (Unsecured)From Banks 100.00
Commercial Paper (Unsecured)From Banks 153.00 From Financial Institutions 225.00
378.00
Inter Corporate Deposit (Unsecured) 11.75
Deposits (Unsecured)Deposit from Public 1.35
Short term loan Secured
Rupee LoansFrom Banks 169.65 From Financial Institutions 85.00
254.65
TOTAL 4,855.13
8. TRADE PAYABLE
Total outstanding due to :- Micro, Small and Medium Enterprises* - - Others 1,278.45
1,278.45
TOTAL 1,278.45 * As per information available with the company
9. OTHER CURRENT LIABILITIES
Current maturities of long-term debt 2,061.54 Interest accrued but not due on borrowings 9.94 Unclaimed dividends 17.44 Other payables
Advance from customers 67.35 Creditors for Capital Goods 120.17 Towards statutory liabilities 8.16 Advance from Related parties (Refer note no 27) 310.40 Temporary overdrawn bank balance (see note below) 1.85
TOTAL 2,596.85
NOTE(i)
10. SHORT-TERM PROVISIONS
Provision for employee benefits 7.24 Mark to Market provision on derivative instruments 15.71 Provision for taxation (Net of Advance Tax) 103.34
TOTAL 126.29
From Financial Institutions (Includes Rs. 45.96 crore loan in foreign currency)
Temporary overdrawn bank balances are as per books consequent to issue of cheques at the period end, though the banks have positive balances as on that date.
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
From Banks (Includes Rs. 783.84 crore loan in foreign currency)
F - 8
11
.FIX
ED
AS
SETS
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tration.
F - 9
(Rs. Crore)PARTICULARS AS AT
30-Sep-12-
12. NON CURRENT INVESTMENTS (Trade)
In Subsidiary Companies - UnquotedAlok International Inc. (Rs. 43,225/-) 0.00 [1,000 Equity Shares of USD 1/- each]Alok Apparel Private Limited 1.00 [10,00,000 Equity Shares of Rs.10/- each]Less : Provision for diminution in value of investment (Refer note no 33) (1.00) -
Alok Retail (India) Limited 0.05 [50,000 Equity Shares of Rs.10/- each]Less : Provision for diminution in value of investment (Refer note no 33) (0.05) -
Alok Land Holdings Private Limited 0.50 [5,00,000 Equity Shares of Rs.10/- each](1,50,000 shares pledged against finance availed by Alok Infrastructure Limited)Alok Infrastructure Limited 0.05 [50,000 Equity Shares of Rs.10/- each](Pledged against finance availed by Alok Realtors Private Limited)Alok H & A Limited 36.05 [3,60,50,000 Equity Shares of Rs.10/- each]Less : Provision for diminution in value of investment (Refer note no 33) (36.05) -
Alok Singapore Pte. Ltd. (Rs. 49/-) 0.00 [1 Equity share of USD 1 each](Pledged against finance availed by Alok Singapore Pte. Ltd.)Alok International (Middle East) FZE 1.31 (1 Equity share of UAE Dirhams One Million)
1.86 In Joint Venture - Unquoted
Aurangabad Textiles & Apparel Parks Limited 17.25 [10,19,200 Equity Shares of Rs.10/- each]New City Of Bombay Mfg. Mills Limited 75.13 [44,93,300 Equity Shares of Rs.10/- each]
92.38
Others - UnquotedTriumphant Victory Holdings Limited (Rs. 90.14/-) 0.00 [2 Equity share of USD 1 each]Dombivali Nagri Sahakari Bank Limited 0.05 [10,000 Equity Shares of Rs. 50/- each]Kalyan Janata Sahakari Bank Limited 0.03 [10,000 Equity Shares of Rs. 25/- each]Saraswat Bank Limited (Rs. 25,000/-) 0.00 [2,500 Equity Shares of Rs. 10/- each](Pledged against finance availed by company)Interest in Alok Benefit Trust 35.33 [1,94,59,382 Equity Shares of Rs.10/- each ]Wel-Treat Environ Management Organisation (Rs. 36,500/-) 0.01 [3,650 Equity Shares of 10 each]
35.42
TOTAL 129.66
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
F - 10
(Rs. Crore)PARTICULARS AS AT
30-Sep-12-
13. LONG TERM LOANS & ADVANCES (Unsecured)
Considered goodCapital advances 85.59 Lease & Security deposits 9.10 Loan to Alok Infrastructure Limited, a subsidiary company 1,459.04 Foreign Currency Monetary Item Translation Difference Account 1.26 Other Loans & advances
Prepaid Expenses 38.16 Advance Tax (Net of provision for tax) 2.01
1,595.16
Considered DoubtfulCapital advances 11.46 Less : Provision 11.46
-
TOTAL 1,595.16
14. CURRENT INVESTMENTS (at cost)
Investments in debentures or bondsBonds
Laxmi Vilas Bank Tier II Bonds 2.00 [20 Bonds of Rs. 10,00,000 each]
2.00 Investments in Mutual funds - Unquoted
Axis Infrastructure Fund 1 0.65 [6,464 units of Rs. 1000/- each]
0.65
TOTAL 2.65
15. INVENTORIES
Raw Materials 442.01 (includes material in transit Rs. 28.29 crore)Work-in-progress 2,452.97 Finished Goods 486.05
3,381.03
Stores & Spares 54.99 Packing Material 12.45
TOTAL 3,448.47
16. TRADE RECEIVABLES (Unsecured)
Debts Outstanding for a period exceeding six months from due date 11.30 Less : Provision 6.54
4.76
Other Debts 2,764.51 Less : Provision 50.35
2,714.16
TOTAL 2,718.92
UnsecuredConsidered Good 2,718.92 Considered Doubtful 56.89
TOTAL 2,775.81
NOTE :(i)(ii) Refer note no 27 for related party balances.
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
Sundry Debtors includes Rs. 60.11 crore towards contractual obligations on account of Export Incentives Receivables.
F - 11
(Rs. Crore)PARTICULARS AS AT
30-Sep-12-
17. CASH AND BANK BALANCES
Cash on hand 0.45
Balance with BankIn current accounts 186.03 In deposit accounts 36.47 In earmarked accounts
- Unclaimed dividend accounts 17.45 - Balances / Deposits held as margin money or security against borrowings, guarantees and other commitments
128.21
TOTAL 368.61
18. SHORT-TERM LOANS AND ADVANCES (Unsecured)
Considered GoodLoans & advances to related parties (Refer note no 27) 186.58 Others
Loans to vendors 1,919.33 Advance to Vendors 110.85 Advance to Staff 7.55 Balance with Central Excise, Customs and Sales Tax authorities 280.08 Prepaid Expenses 39.45 Inter Corporate Deposits 3.34
2,547.18
Considered DoubtfulLoans & advances to subsidiary companies 54.59 Less : Provision (Refer note no 33) 54.59
-
TOTAL 2,547.18
19. OTHER CURRENT ASSETS (Unsecured)
Considered GoodInterest Subsidy Receivable 64.26 Unutilised DEPB Licence 1.16 Insurance Claim Receivable 1.11 Balance with Central Excise Authorities 0.05 Foreign Currency Monetary Item Translation Difference Account 0.86
67.44
Considered DoubtfulInterest Subsidy Receivable 26.06 Less : Provision 26.06
-
TOTAL 67.44
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
F - 12
(Rs. Crore)PARTICULARS 1-Apr-12 to
30-Sep-12-
20. REVENUE FROM OPERATIONS
a) Sale of productSales - Local 4,223.66 Sales - Export 1,669.61
5,893.27 b) Sale of services
Job work charges collected 12.08
c) Sale of Scrap 4.22
TOTAL 5,909.56
21. OTHER INCOME
Interest IncomeOn Current Investments 11.26
11.26 Dividend Income :
On Non Current Investments 1.94 1.94
Gain from sale of fixed Assets (Net) 0.84 Rent Received 0.38Other non operating income 0.05
TOTAL 14.47
22. CHANGE IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE
CLOSING STOCK AS ON 30 SEPTEMBER 2012
Finished Goods 486.05 Work-in-progress 2,452.97
2,939.02 LESS : OPENING STOCK AS ON 1 APRIL 2012
Finished Goods 641.86 Stock in Trade (Traded Goods) 2.72 Work-in-progress 2,220.77
2,865.35
TOTAL 73.67
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
F - 13
(Rs. Crore)PARTICULARS 1-Apr-12 to
30-Sep-12-
23. EMPLOYEE BENEFIT EXPENSES
Salaries, Wages and Bonus 135.27 Contribution to Provident Fund and Other Funds 6.40 Employee Stock Option Compensation Expenses 1.11 Employees Welfare Expenses 3.27
146.05
24. FINANCE COSTS
Interest expense 591.31 (Net of interest subsidy Rs. 64.60 crore and recovery of Rs. 134.75 crore)Interest on late payment of taxes 0.53 Other borrowing costs 59.52
TOTAL 651.36
25. OTHER EXPENSES
Stores and Spares Consumed 41.39 Packing Materials Consumed 75.33 Power and Fuel 375.64 Processing Charges 35.94 Labour Charges 35.56 Excise Duty 6.38 Donation 0.91 Marketing Service Charges 34.75 Freight, Coolie and Cartage 69.06 Legal and Professional Fees 16.49 Rent 7.00 Rates and Taxes 3.68 Repairs and Maintenance 11.50 Commission on Sales 21.15 Loss on exchange rate difference / derivative (net) 150.01 Provision for Doubtful Debts 35.75 Provision for Doubtful Advances 24.45 Directors Remuneration 3.42 Directors Fees and Commission 2.52 Auditors Remuneration 0.65 Insurance 8.96 Miscellaneous Expenses 62.86 (Miscellaneous Expenses includes Bank Charges, Agency and clearing charges, security expenses etc.)
TOTAL 1,023.40
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
ALOK INDUSTRIES LIMITED
F - 14
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
26 Contingent Liabilities in respect of :
(Rs. Crore) Sr. No. Particulars Current Period
A Customs duty on shortfall in export obligation in accordance with EXIM Policy (The company is hopeful of meeting the export obligation within the stipulated period)
Amount Unascertained
B Pending Litigation 0.05 C Guarantees given by banks on behalf of the Company 55.97 D Corporate Guarantees given to bank for loans taken by
Subsidiary Companies 1002.30
E Bills discounted 268.24 F Taxation Matters : a) Demand on account of alleged short deduction of taxes. The
Company has filed appeal with higher authorities and is hopeful of favourable order.
0.23
b) Demands of Works Contract Tax contested not acknowledged as debts as the company is hopeful of favourable decision.
0.59
c) Income tax amounting to Rs 11.29 crore, mainly on account of disallowance of interest and expenditure incurred towards exempt income.
-
27 Related Party Disclosure
A)
Name and Transaction / balances with related parties
I. Name of related parties and nature of relationship
As per Accounting Standard 18 (AS-18) “Related Party Disclosures”, Company's related parties disclosed as below:
(i) Associate companies Alspun Infrastructure Limited Next Creation Holdings LLC Ashford Infotech Private Limited Nirvan Builders Private Limited* (ii) Entities under common control Alok Denims (India) Private Limited Green Park Enterprises Alok Finance Private Limited Jiwrajka Associates Private Limited Alok Knit Exports Limited Jiwrajka Investment Private Limited Alok Textile Traders Niraj Realtors & Shares Private Limited Ashok Realtors Private Limited Nirvan Exports Buds Clothing Co. Nirvan Holdings Private Limited D. Surendra& Co. Pramatex Enterprises Gogri Properties Private Limited Pramita Creation Private Limited GrabalAlokImpex Limited Triumphant Victory Holdings Limited. (iii) Subsidiaries Alok Inc. # Alok Apparels Private Limited Alok Industries International Ltd. Alok New City Infratex Private Limited* Alok Infrastructure Limited Alok Realtors Private Limited Alok Retail (India) Limited Alok HB Hotels Private Limited* Alok Land Holdings Private Limited Alok HB Properties Private Limited* Alok Aurangabad Infratex Private Limited* Springdale Information and Technologies Private Limited Alok H&A Limited Kesham Developers &Infotech Private Limited Alok International, Inc. Alok Singapore Pte Ltd. Alok European Retail, s.r.o.# (Incorporated on 28 December 2011) Alok International (Middle East) FZE GrabalAlok (UK) Limited (incorporated on 01 August 2011) GrabalAlok International Limited Mileta, a.s.
* All these are liquidated during FY 2011-12 # liquidated during the current period
F - 15
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(iv) Joint Venture Aurangabad Textiles & Apparel Parks Limited New City Of Bombay Mfg. Mills Limited (v) Key Management Personnel Ashok B. Jiwrajka Chandrakumar Bubna Directors Dilip B. Jiwrajka Surendra B. Jiwrajka
(vi) Relatives of Key Management Alok A. Jiwrajka Personnel Suryaprakash Bubna (vii) Firms in which relatives of Key
Management Personnel are interested AVAN Packaging and Boards
II. Transactions with related parties. (Rs. Crore)
Transaction Associate Companies
Entities under
common control
Subsidiaries Joint Venture
Companies
Key Management
Personnel
Relatives of Key
Management Personnel
Firms in which
Relatives of Key
Management Personnel
are interested
Total
a) Unsecured Short Term Borrowing
Balance as at 1 April - - - 11.75 - - - 11.75
Balance as at 30 Sept - - - 11.75 - - - 11.75
b) Long Term Loans and
Advances
Balance as at 1 April - - - - - - - -
Given during the period/ year
- - 2,248.82 - - - - 2,248.82
Repaid during the period / year
- - 789.78 - - - - 789.78
Balance as at 30 Sept - - 1,459.04 - - - - 1,459.04
c) Short Term Loans and Advances
Balance as at 1 April - 0.01 120.49 - - - - 120.50
Given during the period/ year
- - 357.88 - - - - 357.88
Repaid/Adjusted during the period/year
- - 237.20 - - - - 237.20
Provision made during the period/year
- - 54.59 - - - - 54.59
Balance as at 30 Sept - 0.01 186.58 - - - - 186.59
d) Non Current Investments Balance as at 1 April - - 39.00 92.38 - - - 131.38
F - 16
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
Transaction Associate
Companies Entities under
common control
Subsidiaries Joint Venture
Companies
Key Management
Personnel
Relatives of Key
Management Personnel
Firms in which
Relatives of Key
Management Personnel
are interested
Total
Invested during the period/ year
- - - - - - - -
Redeemed / Transferred/ Provided during the period/year
- - 0.04 - - - - 0.04
Provided during the period/year
- - 37.10 - - - - 37.10
Balance as at 30 Sept - - 1.86 92.38 - - - 94.24
e) Trade Receivables Balance as at 30 Sept - - 151.50 0.09 - - - 151.59
f) Trade payables Balance as at 30 Sept - - 2.99 20.11 - - 0.07 23.17
g) Other Current Liabilities Balance as at 30 Sept - - 310.40 - - - - 310.40
h) Sale of product Sales of Goods
(Including job work charges)
- - 311.64 0.30 - - - 311.94
i) Expenditure Purchase of goods / Job
Charges - - 1.88 24.08 - - - 25.96
Purchase of Fixed Assets
- - 146.82 - - - - 146.82
Rent - - 1.74 - - - 1.74
Repairs & Maintenance - - 0.55 - - - - 0.55
Consultancy Charges - - - - - - 1.03 1.03 Marketing Service
Charges - - 34.75 - - - - 34.75
Remuneration - - - - 6.10 0.10 - 6.20
j) Dividend Paid - - - - 1.88 - - 1.88
k) Income Dividend - - - 1.93 - - - 1.93 Rent - 0.11 0.17 - - - - 0.28
l) Guarantee given - - 1,002.30 - - - - 1,002.30
III. Out of the above items, transaction in excess of 10% of the total Related Party transactions
are as under:
F - 17
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)
Transaction Current Period a) Long term Loans and advances Granted during the period/year Subsidiary- Alok Infrastructure Limited 2,248.82 2,248.82 Repaid during the period/year Subsidiary- Alok Infrastructure Limited 789.78 789.78 b) Short term Loans and advances Given during the period/year Subsidiary- Alok Infrastructure Limited - Alok H&A Limited 238.23 Alok Apparels Private Limited 35.16 Alok International Inc. 47.78 321.17 Repaid during the period/year Subsidiary- Alok Infrastructure Limited 40.34 Alok Apparels Private Limited 32.95 Alok Retail (India) Limited 25.60 Alok H&A Limited 114.60 213.49 Provision made during the period Subsidiary- Alok Apparels Private Limited 17.00 Alok Retail (India) Limited 21.59 Alok H&A Limited 16.00 54.59 c) Investment Invested during the period/year Subsidiary- GrabalAlok International Limited - Joint Venture- Aurangabad Textiles & Apparel Parks Limited - Redeemed during the period/year Subsidiary- GrabalAlok International Limited - Alok Inc. 0.04 Provision made during the period Subsidiary- AlokH&A Limited 36.05 Alok Retail Iindia) Limited 0.05 Alok Apparels Private Limited 1.00 37.10 d) Turnover (including job work charges)
Subsidiary- Alok International Inc. 92.93 Alok Singapore Pte. Ltd. 203.31 296.24 Joint Venture Company New City of Bombay Mfg. Mills Limited 0.28
F - 18
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
Transaction Current Period
e) Expenditure
Purchase of Goods: Joint Venture Company New City of Bombay Mfg. Mills Limited 24.08 Subsidiary- Alok Retails (India) Limited 1.33 Mileta. A.s. 0.40 Repairs &Maint.-Factory & Building Subsidiary- Alok Infrastructure Limited 0.55
Purchase of Fixed Assets (Under Construction): Subsidiary- Alok Infrastructure Limited 146.62 Rent Subsidiary- Kesham Developers Private Limited 1.61
Consultancy Charges Firms in which relatives of Key Management Personnel are
interested-
AVAN Packaging. 1.03
Marketing Service Charges Subsidiary - Alok International Inc. 11.63 Alok Singapore Limited 21.99
33.62 Remuneration: Key Management Personnel- Ashok B. Jiwrajka 1.53 Surendra B. Jiwrajka 1.53 Dilip B. Jiwrajka 1.53 ChandrakumarBubna 1.53 6.12 f) Dividend Paid
Key Management Personnel- Ashok B. Jiwrajka 0.61 Dilip B. Jiwrajka 0.62 Surendra B. Jiwrajka 0.64 1.87
g) Income Dividend: Joint Venture Company New City of Bombay Mfg. Mills Limited 1.57 Aurangabad Textiles & Apparel Parks Limited 0.36 1.93 Rent received: Entities under common control- Alok Denim (India) Limited 0.09 Alok Knit Export Limited 0.02 Subsidiary- Alok Retail (India) Limited 0.11 Alok H&A Limited 0.05 0.27
F - 19
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
Transaction Current Period
h) Guarantee Given Subsidiary- Alok Industries International Limited 685.06 AlokInfrastructure Limited 200.00 GrabalAlok (UK) Limited 102.85
28 Earnings per share (EPS)
(Rs. Crore) Current Period a. Nominal value of equity shares per share ( In Rupees) 10
b. Basic and Diluted EPS Net Profit available for equity shareholders 319.69 Weighted average number of equity shares - Basic 826,269,357 Basic EPS 3.87 Add: Effect of dilutive stock options (Nos.) - Weighted average number of equity shares - Diluted (Nos.) 826,269,357 Diluted EPS 3.87*
* Potential equity shares on account of stock options are ignored in the calculation of the diluted earnings per share since it is antidilutive.
29 Segment Reporting a) Primary Segment: Geographical Segment
The company is in the business of manufacturing of Textile products. Considering its high level of international operations and present internal financial reporting based on geographical location of customer, the company has identified geographical segment as primary segment.
The geographic segment consists of:
a) Domestic (Sales to Customers located in India) b) International (Sales to Customers located outside India)
Revenue directly attributable to segments is reported based on items that are individually identifiable to that segment. The company believes that it is not practical to allocate segment expenses, segment results, assets used, except debtors, in the company’s business or liabilities contracted since the resources / services / assets are used interchangeably within the segments. Accordingly, no disclosure relating to same is made. All fixed assets are located in India.
(Rs. Crore)
Particulars Current Period
Segment Revenue
Operating Revenue – Sales & Job Charges
Domestic [Net of Excise duty of Rs. 162.05crore] 4,077.91
International 1,669.61
Total segment revenue 5,747.52 Segment Assets Sundry Debtors
Domestic 2,478.85 International 240.07
2,718.92
F - 20
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
b) Secondary Segment: Business Segment
The company is operating in a single business segment i.e. Textile and as such all business activities revolve around this segment. Hence, there is no separate secondary segment to be reported considering the requirements of AS 17 on “Segment Reporting”
30 (i) Value of raw materials, stores and spares consumed during the year
(Rs. Crore) Current Period Imported Indigenous
Value % of Total Consumption
Value % of Total Consumption
Raw Materials 603.49 20.27% 2373.88 79.73%
Stores and Spares 26.03 62.88% 15.36 37.12%
Packing Materials 4.58 6.08% 70.75 93.92%
(ii) Expenditure in Foreign Currency
(Rs. Crore)
Nature of Expenses Current Period
Commission on sales 9.42
Interest on Fixed Loan 25.99
Legal and Professional Fees 1.39
Marketing service charges 34.75
Employee Benefit Expenses 0.30
Sales Promotion Expenses 0.76
Claim for damaged goods 1.50
Travelling expenses 0.05
Bank Charges 1.91
Miscellaneous Expenses 1.52
Total 77.59
31 Addition information
(i) Raw Material Consumption for the period in broad heads
(Rs. Crore) Division Current Period
Cotton & Cotton yarn Raw Cotton 388.86 Cotton Yarn 265.88
654.74 Apparel Fabric
Woven Fabric 944.09 Knitted Fabric 6.74
950.83 Polyester Yarn
PTA and MEG 1,307.05 Chips 21.68 POY 3.06 Melt 19.90 1,351.69
Others Packing Material 20.11
Total 2,977.37
F - 21
ALOK INDUSTRIES LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(ii) Purchase of Traded Goods for the period in broad heads (Rs. Crore)
Division Current Period Cotton & Cotton yarn
Raw Cotton 2.95 Cotton Yarn 5.17
8.12 Apparel Fabric
Woven Fabric 30.50 Garment
Accessories 2.16
Total 40.79 32 Exceptional items include :
i) Exchange loss/ gain arising out of a) restatement of foreign currency liabilities/ assets and
b) Mark to market (MTM) losses on foreign exchange derivatives taken by the Company, considering the unusual fluctuation in the Indian Rupee (INR) against US Dollar (USD)
ii) Provision for diminution in the value of investments and impairment of loans to
subsidiaries in the retail business of Rs. 91.69crore for period ended 30 September 2012. Considering the business plan for retail operations, such diminution/impairment is not regarded as temporary.
Signatures to Schedules 1 to 34 In terms of our report attached For and on behalf of the Board For Deloitte Haskins & Sells Ashok B. Jiwrajka Chartered Accountants (Executive Chairman) Dilip B. Jiwrajka (Managing Director) R. D. Kamat Partner Surendra B. Jiwrajka (Joint Managing Director) Sunil O. Khandelwal (Chief Financial Officer)
K. H. Gopal (President (Corporate Affairs) & Company Secretary)
Mumbai: Mumbai:
F - 22
Report on Review of Interim Consolidated Financial StatementsTo the Board of Directors of Alok Industries LimitedIntroduction1. We have reviewed the accompanying condensed consolidated interim balance sheet of Alok Industries
Limited (“the Company”), its subsidiaries and jointly controlled entities (collectively referred to as “the Group”) as of September 30, 2012, the related statement of profit and loss and cash flow statement for the six months period then ended and explanatory notes (“Interim consolidated financial statements”). Management is responsible for the preparation and presentation of these interim consolidated financial statements in accordance with Accounting Standard 25 (Interim Financial Reporting), as notified by the Companies (Accounting Standards) Rules, 2006 (“AS 25”) and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on these interim consolidated financial statements based on our review.
Scope of Review2. We conducted our review in accordance with Standard on Review Engagements (SRE) 2410, “Review
of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by Institute of Chartered Accountants of India (ICAI). This Standard requires that we plan and perform the review to obtain moderate assurance as to whether the interim consolidated financial statements are free of material misstatements. A review is limited primarily to inquiries of Company personnel and analytical procedures applied to financial data and thus provide less assurance than an audit. We have not performed an audit and, accordingly, we do not express an opinion.
3. We did not review the condensed interim financial statements of certain Subsidiaries and Joint venture companies, whose financial statements reflect total assets of Rs. 3,294.24 crores as at September 30, 2012, total revenue of Rs. 445.85 crores and net cash outflows amounting to Rs. 1,638.11 crores for the period ended on that date and condensed interim financial statements of an Associate company in which share of loss of the Group for the half year ended September 30, 2012 is Rs. 0.01 crores, as considered in the interim consolidated financial statements. These financial statements have been reviewed by other auditors whose reports have been furnished to us and our conclusion in so far as it relates to the amounts included in respect of these Subsidiaries, Joint venture companies and an Associate company is based solely on the reports of such other auditors.
Basis for Qualified Conclusion4. The condensed interim financial statements of Associate companies in which the Group’s share of loss
for the half year ended September 30, 2012 is Rs. 0.11 crores, as considered in the interim consolidated financial statements have not been reviewed by their auditors.
Qualified Conclusion5. Based on our review, with the exception of the matter described in the Basis for Qualified Conclusion
paragraph, nothing has come to our attention that causes us to believe that the accompanying interim consolidated financial statements are not prepared, in all material respects, in accordance with Accounting Standard 25 (Interim Financial Reporting), as notified by the Companies (Accounting Standards) Rules, 2006 (“AS 25”) and other accounting principles generally accepted in India.
Emphasis of Matter6. We draw attention to note no. 34 to the interim consolidated financial statements which refers to the
key source of estimation uncertainty as at September 30, 2012 relating to carrying value of goodwill recognised on the consolidation of Grabal Alok (UK) Limited. Our conclusion is not qualified in respect of this matter.
Other Matter7. We draw attention to note no 1 to the interim financial statements regarding non-presentation of
comparative figures / information in respect of the comparable previous periods, as required in terms of AS 25 “Interim Financial reporting” for the reasons stated in the said note. Our conclusion is not qualified in respect of this matter.
For Deloitte Haskins & SellsChartered Accountants
(Firm Registration No. 117366W)R. D. Kamat
PartnerMUMBAI, December 31, 2012 (Membership No. 36822)
F - 23
ALOK INDUSTRIES LIMITED
CONDENSED CONSOLIDATED BALANCE SHEET AS AT 30 SEPTEMBER 2012(Rs. Crore)
PARTICULARS NOTES AS AT30-Sep-12
I EQUITY AND LIABILITIES
Shareholders' FundsShare Capital 2 826.28 Reserves and Surplus 3 2,261.82
Non-current LiabilitiesLong-term Borrowings 4 8,296.85Deferred Tax Liabilities (net) 5 592.65 Long-term provisions 6 205.66
Current LiabilitiesShort-term Borrowings 7 5,441.15Trade payables 8 1,481.88Other current liabilities 9 3,550.42Short-term provisions 10 146.80
TOTAL 22,803.51
II ASSETS
Non-current AssetsFixed assets
Tangible assets 11 9,152.99Intangible assets 11 38.53 Capital work-in-progress 11 778.47
Goodwill on Consolidation 606.27 Non-current Investments 12 1,706.92Deferred tax assets (net) 5 9.24 Long-term Loans & Advances 13 1,007.04
Current AssetsCurrent Investments 14 4.26 Inventories 15 3,763.85Trade receivables 16 2,802.04Cash & Bank Balances 17 423.07 Short-term Loans & Advances 18 2,441.19Other current assets 19 69.64
TOTAL 22,803.51
III Significant notes forming part of the condensed financial statements 1 to 35
In terms of our report attached. For and on behalf of the Board
For Deloitte Haskins & Sells Sunil O. KhandelwalChartered Accountants
R. D. Kamat K. H. GopalPartner (Executive Director & Secretary)
Place: Mumbai Place: MumbaiDate: 31 December 2012 Date: 31 December 2012
(Executive Director & Chief Financial Officer)
F - 24
ALOK INDUSTRIES LIMITED
CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS NOTES 1-Apr-12 to
30-Sep-12
I. REVENUERevenue from Operations (gross) 20 6,351.68Less : Excise Duty 162.06
Revenue from Operations (net) 6,189.62Other Income 21 17.55
Total Revenue 6,207.17
II. EXPENSESCost of Materials consumed 2,987.91Purchase of Traded Goods 274.57
22 (69.64)
Employee benefits expense 23 253.82Finance costs 24 726.15Depreciation and amortisation expense 11 450.58Other expenses 25 1,181.33
Total 5,804.72
III. Profit before exceptional items and tax 402.45IV. Exceptional items (Refer note no.35) 18.64V. Profit before tax 421.09VI. Tax Expenses
- Current tax 198.54
13.47- Deferred tax (34.80)
Total Tax expenses 177.21
VII. Profit for the year before share of profit from associates 243.88Share of profit from Associates (0.12)
VIII. Net Profit for the period 243.76
IX. EARNINGS PER SHARE (in Rs.) 32Basic 2.95*Diluted 2.95** Not annualised
III Significant notes forming part of the condensed financial statements 1 to 35
In terms of our report attached. For and on behalf of the Board
For Deloitte Haskins & Sells Sunil O. KhandelwalChartered Accountants (Executive Director & Chief Financial Officer)
R. D. Kamat K. H. GopalPartner (Executive Director & Secretary)
Place: Mumbai Place: MumbaiDate: 31 December 2012 Date: 31 December 2012
Changes in inventories of finished goods, work-in-progress and stock-in-trade
Includes MAT adjustment Rs. 66.27 crore - Short provision for income tax in respect of earlier years
F - 25
(Rs. Crore) (Rs. Crore) 1-Apr-12 to Year Ended
30-Sep-12 31-Mar-12
A Net cash generated from Operating Activities 721.87 (450.46)
B Net cash used in Investing Activities (711.48) (1,439.16)
C Net cash used in Financing Activities (390.88) 2,160.48
Net decrease in Cash and Cash equivalents (A + B + C) (380.49) 270.86Cash and Cash equivalents at the beginning of the period 595.45 165.98
Cash and Cash equivalents at the end of the period 214.96 595.44
Notes1
2 Cash and Cash equivalents includes : 30-Sep-12 31-Mar-12(Rs. Crore) (Rs. Crore)
Cash and Bank Balances (Refer note no 17) 423.07 1,397.80Less : Earmarked balances/deposits with bank* 145.83 715.19Less : Deposit with maturity period of more than 3 months ** 58.07 87.16Less : Unrealised foreign exchange variations on cash & cash equivalents 4.21 -
Total Cash and Cash equivalents 214.96 595.45
3
In terms of our report attached For and on behalf of the Board
For Deloitte Haskins & Sells Sunil O. KhandelwalChartered Accountants
R. D. Kamat K. H. GopalPartner (Executive Director & Secretary)
Place: Mumbai Place: MumbaiDate: 31 December 2012 Date: 31 December 2012
ALOK INDUSTRIES LIMITED
CONDENSED CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
PARTICULARS
Purchase of fixed assets are stated inclusive of movements of Capital Work in Progress between the commencement and end of the period and is considered as part of investing activity.
(Executive Director & Chief Financial Officer)
* Earmarked balances/deposits with bank includes unpaid dividend accounts and balances/deposits held as marginmoney or security against borrowings, guarantees and other commitments, which being restricted for its use, havebeen excluded from cash and cash equivalent and grouped under the investing activity.
** Fixed Deposits with maturity period of more than three months have been excluded from cash and cashequivalent and grouped under the investing activity.
The Cash Flow Statement has been prepared in accordance with the requirements of Accounting Standard 'AS-3' Cash Flow Statements".
F - 26
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
1 BACKGROUND
(Rs. Crore)PARTICULARS AS AT
30-Sep-122 SHARE CAPITAL
Authorised1,00,00,00,000 Equity shares of Rs. 10/- each 1,000.00
1,000.00 Issued, Subscribed and fully paid-upEquity Share Capital
82,62,69,357 Equity shares of Rs.10/- each fully paid up 826.27
Forfeited Shares (Amount originally paid-up) 0.01
826.28
3 RESERVES AND SURPLUSCapital ReserveBalance as per last Balance Sheet 26.95 Add: Reclassified from securities premium as per contra 1.78
28.73 Revaluation reserveBalance as per last Balance Sheet 3.86
3.86 Capital Redemption ReserveBalance as per last Balance Sheet 9.10
9.10 Securities premium accountBalance as per last Balance Sheet 993.65 Less : Reclassified to capital reserve as per contra (1.78)
991.87 General ReserveBalance as per last Balance Sheet 281.19 Add: Transferred from statement of Profit and Loss 0.27
281.46 Debenture Redemption ReserveBalance as per last Balance Sheet 168.48 Add: Transferred to statement of Profit and Loss (102.47)
66.01 Foreign Currency Translation ReserveBalance as per last Balance Sheet (64.27) Add: Created during the period (34.69)
(98.96) Cash flow hedging ReserveBalance as per last Balance Sheet (16.78) Add: Created during the period 17.86
1.08 Employee Stock Options OutstandingOptions granted during the period 4.67 Less : Deferred Employee Compensation expenses (1.29)
3.38 Surplus in Statement of Profit and Loss Opening balance 629.63 Profit for the period 243.76 Less : Appropriations(i) Transferred to General Reserve (0.27) (ii) Transferred from Debenture Redemption Reserve 102.47 (iii) Short provision of dividend and tax thereon (0.30)
975.29 2,261.82
*Refer note no.37(a)
These condensed consolidated interim financial statements are prepared for the use by the Board of Directors solely in connection with theproposed Rights issue of the Company and have been prepared using the same basis / accounting policies as those used for the auditedfinancial statements for the year ended March 31, 2012. The Management has prepared these financial statements in accordance with therecognition and measurement principles as laid down in AS 25 on "Interim Financial reporting". Comparative figures / information for theprevious comparable periods i.e. period 1 April, 2011 to 30 September 2011 in respect of statement of Profit & Loss and Cash flow statementand as at 31 March 2012 in respect of Balance sheet, have not been presented as in the opinion of the Board of Directors, the same is notrequired for the purpose of the proposed rights issue.
F - 27
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS
Current Non Current4 LONG-TERM BORROWINGS
Debentures/BondsDebentures (Secured) - 800.00 Compulsorily Convertible Debentures (Unsecured) - 632.36 Compulsorily Convertible Bonds (Secured ) 73.34 450.09
Term Loans (Secured)(a) From banks
-Rupee Loans 1,682.99 5,693.66 -Foreign currency loans 605.08 341.20
2,288.07 6,034.86
(b) From Financial Institutions-Rupee Loans 290.56 153.01 -Foreign currency loans 17.15 145.13
307.71 298.14 2,595.78 6,333.00
Term Loans (Unsecured)From Banks and Financial Institutions
-Foreign Currency Loans 17.28 77.73
Other loans & advancesVehicle loan from Banks (Secured) 2.84 3.67
2,689.24 8,296.85
(Rs. Crore)PARTICULARS AS AT
30-Sep-125 DEFERRED TAX LIABILITIES (NET)
I) Deferred Tax Liability (DTL)Depreciation 729.57 Share Issue expenses (2.80) Gratuity and Compensated Absences (66.29) Employee benefit provision (7.45) Provision for doubtful debts, advances and investment (60.38)
592.65
II) Deferred Tax Asset (DTA)Depreciation (2.50) Unabsorbed tax losses 11.74
9.24
6 LONG-TERM PROVISIONS
Provision for employee benefits 17.07 Mark to Market provision on derivative instruments 188.59
205.66
AS AT 30-Sep-12
F - 28
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS AS AT
30-Sep-127 SHORT-TERM BORROWINGS
Cash Credit accounts, working capital demand loan etc. (Secured)From Banks (includes Rs. 866.60 crore loan in foreign currency) 4,047.40 From Others (includes Rs.45.96 crore loan in foreign currency) 144.75
Cash Credit accounts, working capital demand loan etc. (Unsecured)From banks 100.00
Compulsorily Convertible Debentures (Unsecured) 202.88
Commercial Paper (Unsecured)From Banks 153.00 From Financial Institutions 225.00
Short term loanSecured
Rupee LoansFrom Banks 169.64 From Financial Institutions 85.00
UnsecuredForeign currency loans
From Banks 306.15
Deposits (Unsecured)-Deposit from Public 1.34
Inter Corporate Deposit 5.99
5,441.15
8 TRADE PAYABLE
Total outstanding due to :- Micro, Small and Medium Enterprises* - - Others 1,481.88
* As per infromation available with the company 1,481.88
9 OTHER CURRENT LIABILITIES
Current maturities of long-term debt 2,689.24 Interest accrued but not due on borrowings 13.88 Unclaimed dividends 17.44 Share application money received by subsidiary company 350.00 Other payables
Advance from customers 189.68 Creditors for Expenses 47.14 Creditors for Capital Goods 122.99 Creditors for statutory Liabilities 19.27 Advance from Related parties (Refer note no 31) 90.71 Temporary overdrawn bank balance (see note below) 5.31 Advance from Others 4.76
3,550.42
10 SHORT-TERM PROVISIONS
Provision for employee benefits 7.49 Mark to Market provision on derivative instruments 15.71 Provision for taxation (Net of Advance Tax) 115.95 Others 7.65
146.80
NOTE : Temporary overdrawn bank balances are as per books consequent to issue of cheques at the period end, though the banks have positive balances as on that date.
F - 29
ALO
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NS
F - 30
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS AS AT
30-Sep-12
12 NON CURRENT INVESTMENTSInvestment Property :
Property under construction* 1,545.57 Freehold Land 34.18
1,579.75
Investments in Equity Instruments (at cost)In Associate companies - unquoted
Next Creations Holdings LLC, subscription towards 33% membership interest 4.47 Less : share in post acquisition accumulated loss (1.01)
3.46
Alspun Infrastructure Limited 0.10 [25,000 Equity shares of Rs.10 each](Including goodwill on acquisition of stake of associates Rs. 0.04 crore)Less : share in post acquisition accumulated loss (0.08)
0.02
Ashford Infotech Private Limited 2.50 [50,000 Equity Share of Rs.10 each]Less : share in post acquisition accumulated loss 0.12
2.62 Others - Unquoted
Triumphant Victory Holdings Limited 0.00 [2 equity share of USD 1 each Rs. 90.14]Dombivali Nagari Sahakari Bank Limited. 0.05 [10,000 Equity Shares of Rs. 50/- each]Kalyan Janata Sahakari Bank Limited 0.03 [10,000 Equity Shares of Rs. 25/- each]Saraswat Bank Limited (Rs. 25,000/-) 0.00 [2500 Equity Shares of Rs. 10/- each]Wel-Treat Environ Management Organisation (Rs. 36,500/-) 0.00 [3,650 Equity Shares of Rs. 10 each]
6.18
Investment in Preference shares (unquoted)In Associates Company
Ashford Infotech Private Limited 65.49 [5,00,000 Shares Rs. 10 each]Alspun Infrastructure Limited 16.22 [5,00,000 Shares Rs. 10 each]
81.71 Others
Triumphant Victory Holdings Limited 3.94 [7,50,000 Shares USD 1 each]Interest in Alok Benefit Trust 35.33 [1,94,59,382 Equity Shares of Rs.10/- each ]
PowerCorSubscription towards 5% Group B Membership interest 39.02 Less: Provision (39.02)
- Aisle 5 LLC
22 senior units of the equity capital 6.90 Less: Provision (6.90)
-
Other Investment 0.01 39.28
1,706.92 * Interest capitalised Rs. 12.06
F - 31
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS AS AT
30-Sep-1213 LONG TERM LOANS & ADVANCES (Unsecured)
Considered goodCapital advances 927.50 Lease & Security deposits 15.52 Loans & advances to Related parties (Refer note no 31) 0.02 Foreign Currency Monetary Item Translation Difference Account 1.26 Advance Tax (Net of Provision for Tax) 2.01 Advance to Staff 0.05 Prepaid Expenses 60.22 Balance with Central Excise, Customs and Sales Tax Authorities 0.46
1,007.04
Considered doubtfulCapital advances 11.46 Less : Provision 11.46
-
TOTAL 1,007.04
14 CURRENT INVESTMENTS (at cost)
Investments in debentures or bondsLaxmi Vilas Bank Tier II Bonds 2.00 [20 Bonds of Rs. 10,00,000 each]
Investments in Mutual funds - UnquotedAxis Infrastructure Fund 1 0.65 [6,464 units of Rs. 1000/- each]UTI Treasury Advantage Fund 1.61 [32,866.896 units of Rs. 1000/- each]
4.26
15 INVENTORIES
Stock-in-trade :Raw Materials 451.33 Work-in-progress 2,512.70 Finished Goods 512.75 Stock in Trade (Traded Goods) 214.97 Stores & Spares 59.65 Packing Material 12.45
3,763.85
16 TRADE RECEIVABLES (Unsecured)
Debts Outstanding for a period exceeding six months from due date 122.75 Less : Provision 10.78
111.97
Other Debts 2,740.42 Less : Provision 50.35
2,690.07
2,802.04
Considered Good 2,802.04 Considered Doubtful 61.13
2,863.17
NOTE :(i)(ii) Refer note no 31 for related party balances.
17 CASH & BANK BALANCES
Cash on hand 0.84 Balance with Bank
In Current Accounts 204.44 EEFC Accounts ( Rs. 4216) 0.00 In Deposit Accounts [Including interest accrued thereon] 71.96 In earmarked accounts
Unclaimed dividend accounts 17.45 Balances / Deposits held as margin money or security against borrowings, 128.38 guarantees and other commitments
423.07
Sundry Debtors includes Rs. 60.11 crore towards contractual obligations on account of Export Incentives Receivables.
F - 32
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS AS AT
30-Sep-1218 SHORT-TERM LOANS AND ADVANCES (Unsecured)
Considered goodLoans & advances to Related parties (Refer note no 31) 9.40 Advance to Vendors 153.88 Advance to Staff 7.73 Balance with Central Excise, Customs and Sales Tax Authorities 282.26 Prepaid Expenses 54.36 Inter Corporate Deposits 3.34 Loans to Vendors 1,919.33 Advance Tax (Net of provision for tax) 10.33 Deposits others 0.56
2,441.19 Considered doubtful
Advance to others 21.22 Less : Provision 21.22
-
2,441.19
19 OTHER CURRENT ASSETS (Unsecured)
Considered GoodInterest Subsidy Receivable 66.06 Unutilised DEPB Licence 1.26 Interest Receivable 0.30 Insurance Claim Receivable 1.11 Balances with Central Excise Authorities 0.05 Foreign Currency Monetary Item Translation Difference Account 0.86 Rent Receivable (Rs. 33,700) 0.00
69.64 Considered DoubtfulInterest Subsidy Receivable 26.06 Less : Provision 26.06
-
69.64
F - 33
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS 1-Apr-12 to
30-Sep-12
20 REVENUE FROM OPERATIONSSale of product
Sales - Local 4,237.20 Sales - Export 2,097.98
6,335.18 Sale of services
Job work charges collected 12.28
Other operating revenueSale of Scrap 4.22
6,351.68
21 OTHER INCOMEInterest Income
On Long Term Investments (Rs. 3,975) 0.00 On Current Investments 12.91
12.91 Dividend Income :
On Non-Current Investments 0.14
Profit on sale of fixed assets (net) 1.32 Provision for doubtful debts written back 0.67 Rent Received 1.23 Other non operating Income 1.28
17.55
22
CLOSING STOCK AS ON 30 SEPTEMBER 2012
Finished Goods 512.75 Work-in-progress 2,512.70 Stock in Trade (Traded Goods) 214.97
3,240.42 LESS : OPENING STOCK AS ON APRIL 1,2012
Finished Goods 671.11 Work-in-progress 2,278.38 Stock in Trade (Traded Goods) 221.29
3,170.78
(69.64)
CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE
F - 34
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
(Rs. Crore)PARTICULARS 1-Apr-12 to
30-Sep-12
23 EMPLOYEE BENEFIT EXPENSESSalaries, Wages and Bonus 234.90 Contribution to Provident Fund and Other Funds 11.11 Employee Stock Option Compensation Expenses 1.11 Employees Welfare Expenses 6.70
253.82
24 FINANCE COSTSInterest expense (Net of interest subsidy Rs. 64.60 crore and recovery of Rs. 134.75 crore) 639.25 Interest on late payment of taxes 0.78 Other borrowing cost 86.12
726.15
25 OTHER EXPENSES
Stores and Spares Consumed 41.38 Packing Materials Consumed 75.65 Power and Fuel 381.62 Processing Charges 35.94 Labour Charges 37.11 Excise Duty 6.38 Donation 0.91 Freight, Coolie and Cartage 71.53 Legal and Professional Fees 17.33 Rent 115.04 Rates and Taxes 4.09 Repairs and Maintenance 14.11 Commission on Sales 23.97 Loss on exchange rate difference/derivative (Net) 169.99 Provision for Doubtful Debts 35.86 Provision for Doubtful Advances 24.45 Directors Remuneration 3.54 Directors Fees and Commission 2.52 Auditors Remuneration 1.37 Insurance 9.42 Loss on Sale of Investment (net) 0.02 Loss on discarded assets 7.40 Miscellaneous Expenses 101.70
clearing charges, security expenses etc.)
1,181.33
(Miscellaneous Expenses includes Bank Charges, Agency and
F - 35
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
26 The subsidiary companies considered in the consolidated financial statements are:
Name of the subsidiary companies Country of Incorporation Ownership Interest
OwnershipInterest
30-Sep-12 31-Mar-121 Alok Infrastructure Limited India 100% 100%2 Alok Land Holdings Private Limited India 100% 100%3 Alok Realtors Private Limited India 100% 100%4 Alok Retail (India) Limited India 100% 100%5 Alok Apparels Private Limited India 100% 100%6 Alok Industries International Limited British Virgin Island 100% 100%7 Alok International Inc. USA 100% 100%8 Mileta, a. s. Czech Republic 100% 100%9 Alok H&A Limited India 100% 100%
10 Springdale Information and Technologies Private Limited India 100% 100%11 Kesham Developers & Infotech Private Limited India 100% 100%12 Grabal Alok International Limited British Virgin Island 100% 100%13 Grabal Alok (UK) Limited UK 90.43% 90.43%14 Alok Singapore Pte Ltd. (incorporated on 28 December 2011) Singapore 100% 100%15 Alok International (Middle East) FZE (incorporated on 01 August 2011) Dubai 100% 100%
For financial information of subsidiary companies, refer note no 29 below
27 Joint Venture companies considered in the consolidated financial statements are:Name of the associates Country of Incorporation Ownership
InterestOwnership
Interest30-Sep-12 31-Mar-12
1 Aurangabad Textile and Apparel Park Limited India 49.00% 49.00%2 New City of Bombay Mfg. Mills Limited India 49.00% 49.00%
28 The Associate companies considered in the consolidated financial statements are:Name of the associates Country of Incorporation Ownership
InterestOwnership
Interest30-Sep-12 31-Mar-12
1 Ashford Infotech Private Limited India 50.00% 50.00%2 Alspun Infrastructure Limited India 50.00% 50.00%3 Next Creations Holdings LLC * USA 33.00% 33.00%
29 Financial information relating to subsidiary companies for the period ended 30 september 2012
(Rs. Crore)
Sr. No. Name of the subsidiary Profit after tax Current Period
1 Alok Land holdings Private Limited (Rs. 39,298) 0.00 2 Alok H&A Limited (18.44)3 Alok Retail (India) Limited (5.09)4 Alok Apparels Private Limited (1.54)5 Alok International Inc.* 8.23 6 Alok Singapore Pte Ltd.* 3.56 7 Alok International (Middle East) FTZ^ 0.52 8 Alok Infrastructure Limited (1.61)9 Grabal Alok International Limited* (8.74)
10 Grabal Alok (UK) Limited@ (100.09)11 Alok Realtors Private Limited (0.25)12 Kesham Developers & Infotech Pvt. Ltd 1.74 13 Springdale Information & Technology Pvt. Ltd. 0.14 14 Alok Industries International Limited* (32.15)15 Mileta, a.s.# (2.70)
* Translated at average rate of INR 54.7370/USD# Translated at average rate of INR 2.7567/CZK@ Translated at average rate of INR 86.4691/GBP^ Translated at average rate of INR 14.8936/AED
Sr. No.
Sr. No.
Sr. No.
* Not consolidated since no financial statements received from such associate company.The company belives that the impact of such non-consolidation would be immaterial to the financial statements
F - 36
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
30 Contingent Liabilities in respect of:(Rs. Crore) (Rs. Crore)
Sr. No. Particulars Current Period Previous Year
A AmountUnascertained
AmountUnascertained
B Pending Litigation 0.05 0.05C Guarantees given by banks on behalf of the Company 56.20 73.71D Bills discounted 268.24 214.79E Taxation Matters :
a) 0.23 1.92
b) 0.59 0.59
F AmountUnascertained
AmountUnascertained
31 Related Party Disclosure
a. Names of related parties and nature of relationship As per Accounting Standard (AS) 18 “Related Party Disclosures”, Company's related parties disclosed as below:
I Associate companiesAlspun Infrastructure Ltd. Ashford Infotech Private LimitedNext Creations Holdings LLC
II Entities under common controlAlok Denims (India) Limited Jiwrajka Associates Private LimitedAlok Finance Private Limited Jiwrajka Investment Private LimitedAlok Knit Exports Limited Niraj Realtors & Shares Private LimitedAlok Textile Traders Nirvan ExportsAshok Realtors Private Limited Nirvan Holdings Private LimitedBuds Clothing Co. Pramatex EnterprisesD. Surendra & Co. Pramita Creation Private LimitedGogri Properties Private Limited Green Park EnterprisesHoney Comb Knit Fabrics Triumphant Victory Holdings Limited.
III Joint VentureAurangabad Textiles & Apparel Parks Limited New City Of Bombay Mfg. Mills Limited
IV Key Management Personnel (KMP)Ashok B. Jiwrajka Surendra B. JiwrajkaDilip B. Jiwrajka Chandra Kumar Bubna
V Relatives of Key Management PersonnelAlok A. Jiwrajka Vidhi S. JiwrajkaPrita D. Jiwrajka Niraj D. JiwrajkaVarun S. Jiwrajka Suryaprakash Bubna
V Firms in which relatives of Key Management Personnel are interestedAVAN Packaging and Boards
Customs duty on shortfall in export obligation in accordance with EXIM Policy(The company is hopeful of meeting the export obligation within the stipulated period)
Demand on account of alleged short deduction of taxes. The Company has filed appeal with higherauthorities and is hopeful of favourable order. Demands of Works Contract Tax contested not acknowledged as debts as the company is hopeful offavourable decision.
Disputed various matters relating to NTC / ATM
F - 37
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
b. Nature of transactions (Rs. Crore)
Transaction Associates
Entitiesunder
commoncontrol
Joint Venture Company
KMP Relatives of KMP
Firms in which
relatives of KMP are
interested
Total
a) Advance Share Application MoneyBalance as at 1st April - 350.00 - - - - 350.00 Balance as at 30th September - 350.00 - - - - 350.00
(b) Long term borrowingsBalance as at 1st April - 613.88 - - - - 613.88 Reclassified to short term borrowings - 358.10 - - - - 358.10 Translation difference during the period - 7.71 - - - - 7.71Balance as at 30th September - 263.49 - - - - 263.49
(c) Short term borrowingsBalance as at 1st April - 196.95 5.99 - - - 202.94 Received During the period / reclassified - 358.10 - - - - 358.10 from long term borrowingsTranslation difference during the period - 16.71 - - - - 16.71Balance as at 30th September - 571.76 5.99 - - - 577.75
(d) Short term loans and AdvancesBalance as at 1st April 0.63 8.59 - - - - 9.22Granted during period - 7.99 - - - - 7.99Converted / Repaid during the period 0.41 7.67 - - - - 8.08
Translation difference during the period - 0.27 - - - - 0.27
Balance as at 30th September 0.22 9.18 - - - - 9.40
(e) InvestmentsBalance as at 1st April 88.78 3.84 - - - - 92.62 Translation difference during the period - 0.10 - - - - 0.10Balance as at 30th September 88.78 3.94 - - - - 92.72
(f) Long Term Loans & AdvancesBalance as at 1st April - - - - - - - Given/(Received) during the period (Net) 0.02 - - - - 0.02 0.04 Balance as at 30th September 0.02 - - - - 0.02 0.04
(g) Trade ReceivablesBalance as at 30th September 21.47 - 0.04 - - - 21.51
(h) Trade PayablesBalance as at 30th September 1.31 - 10.26 - - 0.07 11.64
(i) Other current liabilitiesBalance as at 30th September - 90.71 - - - - 90.71
(j) TurnoverSales of Goods (Including jobwork charges) 39.26 - 0.15 - - - 39.41
(k) ExpenditurePurchase of goods / Job charges 0.11 - 12.28 - - - 12.39 Rent - - - - 0.10 - 0.10Consultancy Charges - - - - - 1.03 1.03Remuneration - - - 6.10 0.13 - 6.23 Upfront Fees - 2.48 - - - - 2.48 Dividend Paid - - - 1.88 - - 1.88 Interest Paid 7.99 - - - - - 7.99
(l) IncomeRent - 0.12 - - - - 0.12
F - 38
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
c. Out of the above items, transaction in excess of 10% of the total Related Party transactions are as under:
Transactions Current Period Previous YearAmount Amount
(a) Long term borrowingsReclassified to short term borrowingsEntities under common control
Triumphant Victory Holdings Limited 358.10 -
(b) Short term borrowingsReceived During the period / reclassifiedfrom long term borrowingsEntities under common control
Triumphant Victory Holdings Limited 358.10 196.95
(c) Short term loans and AdvancesGranted during periodEntity Under Common Control
Triumphant Victory Holdings Limited 7.99 8.59
Converted / Repaid during the periodAssociates
Next Creation Holdings Limited 0.41 - Entity Under Common Control
Triumphant Victory Holdings Limited 7.67 12.68 8.08 12.68
(d) Long Term Loans & AdvancesGiven/(Received) during the period (Net)Associates
Alspun Infrastructure Limited 0.02 -
(e) TurnoverAssociates
Next Creations Holdings LLC 39.01
(f) ExpenditurePurchase of goods / Job chargesJoint Venture Company
New City of Bombay Mfg. Mills Limited 12.15
RentRelative of Key Management Personnel-
Varun Jiwrajka 0.05 Vidhi Jiwrajka 0.05
0.10 Consultancy ChargesKey management persons interested
Avan packaging 1.03
RemunerationKey Management Personnel
Ashok B. Jiwrajka 1.53 Chandrakumar Bubna 1.53 Dilip B. Jiwrajka 1.53 Surendra B. Jiwrajka 1.53
6.12 Upfront FeesEntities under common control
Triumphant Victory Holdings Limited 2.48
Dividend PaidKey Management Personnel-
Ashok B. Jiwrajka 0.61 Dilip B. Jiwrajka 0.62 Surendra B. Jiwrajka 0.64
1.87
Interest PaidEntities under common control
Triumphant Victory Holdings Limited 7.92
(g) IncomeRentEntity Under Common Control
Alok Denim (India) Limited 0.09 Alok Knit Exports Limited 0.02
0.11
F - 39
ALOK INDUSTRIES LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2012
32 Earnings per share (EPS)(Rs. Crore)
Sr. No. Particulars Current Perioda. Nominal value of equity shares per share ( In Rupees) 10
b. Basic & Diluted EPS Net Profit Available for Equity Shareholders 243.76 Weighted average number of Equity Shares - Basic 826,269,357 Basic EPS 2.95 Add : Effect of dilutive stock options (Nos.) - Weighted average number of Equity Shares - Diluted (Nos.) 826,269,357 Diluted EPS 2.95*
* Potential equity shares on account of stock options are ignored in the calculation of the diluted earnings per share since it is antidilutive.
33 Segment Reporting
a) Primary Segment: Geographical Segment
The geographic segment consists of:a) Domestic (Sales to Customers located in India)b) International (Sales to Customers located outside India)
(Rs. Crore)Particulars Current
Period
Segment RevenueOperating Revenue – Sales & Job Charges
4,091.64 International 2,097.98
Total segment revenue 6,189.62
(Rs. Crore) (Rs. Crore)Particulars Current
PeriodPrevious Year
Segment AssetsSundry Debtors
Domestic 2,535.71 1,535.47 International 266.33 668.53
2,802.04 2,204.00
b) Secondary Segment: Business Segment
34
35a) Restatement of foreign currency liabilities/ assets andb)
Signatures to Notes 1 to 35
In terms our report attached For and on behalf of the Board
For Deloitte Haskins & Sells Sunil O. KhandelwalChartered Accountants (Executive Director & Chief Financial Officer)
R. D. Kamat K. H. Gopal Partner (Executive Director & Secretary)
Place: Mumbai Place: MumbaiDate: 31 December 2012 Date: 31 December 2012
The company is in the business of manufacturing of Textile products. Considering its high level of international operations and present internal financial reportingbased on geographical location of customer, the company has identified geographical segment as primary segment.
Revenue directly attributable to segments is reported based on items that are individually identifiable to that segment. The company believes that it is not practical toallocate segment expenses, segment results, assets used, except debtors, in the company’s business or liabilities contracted since the resources / services / assetsare used interchangeably within the segments. Accordingly, no disclosure relating to same is made.
Domestic [Net of Excise duty of Rs. 162.06 Crore]
The Group is operating in a single business segment i.e. Textile and as such all business activities revolve around this segment. Hence, there is no separatesecondary segment to be reported considering the requirement of AS 17 on “Segment Reporting”
Goodwill includes amount of Rs. 448 crores on consolidation of Grabal Alok Uk Ltd (“Grabal Uk”), its subsidiary. The net-worth of Grabal UK was fully eroded as on March 31,2012 and the Company has incurred significant losses during the period resulting in negative net-worth of Rs. 217 crores. The Management believes that the currentperformance, impacted by difficult economic situation in the UK is not indicative of the long term enterprise value of the investment. On the basis of cash flow projections, whichconsider improved economic situation and enhanced level of operations considered achievable by the management of the Parent company – Alok Industries Ltd, no provisionfor impairment of goodwill is considered necessary at this stage
Exceptional items include Exchange loss/ gain arising out of :
Mark to market (MTM) losses on foreign exchange derivatives taken by the Company, considering the unusual fluctuation in the Indian Rupee (INR) against US Dollar (USD)
F - 40F - 1
TO THE MEMBERS OF
ALOK INDUSTRIESLIMITED
1. We have audited the attached Balance Sheet of ALOK INDUSTRIES LIMITED (“the Company”) as at 31st a ch 1 the Statement of o t and oss and the Cash Flo Statement of the Company fo the yea ended on that date oth anne ed the eto. hese nancial statements a e the esponsi ility of the Company s ana ement. u esponsi ility is to e p ess an opinion on these nancial statements ased on our audit.
. We conducted our audit in accordance ith the auditin standards enerally accepted in ndia. hose Standards re uire that e plan and perform the audit to o tain reasona le assurance a out hether the nancial statements are free of material misstatements. n audit includes e aminin on a test asis
evidence supportin the amounts and the disclosures in the nancial statements. n audit also includes assessin the accountin principles used and the si ni cant estimates made y the ana ement as ell as evaluatin the overall nancial statement presentation. We elieve that our audit provides a reasona le basis for our opinion.
3. s re uired by the Companies ( uditor s eport) rder 3 (C ) issued by the Central overnment in terms of Section ( ) of the Companies ct 1 e enclose in the nne ure a statement on the matters speci ed in para raphs and of the said rder.
. Further to our comments in the nne ure referred to in para raph 3 above e report as follo s
(a) e have obtained all the information and e planations hich to the best of our no led e and belief ere necessary for the purposes of our audit
(b) in our opinion proper boo s of account as re uired by la have been ept by the Company so far as it appears from our e amination of those boo s
(c) the Balance Sheet the Statement of ro t and oss and the Cash Flo Statement dealt ith by this report are in a reement ith the boo s of account
(d) in our opinion the Balance Sheet the Statement of ro t and oss ccount and the Cash Flo Statement dealt ith by this report are in compliance ith the ccountin Standards referred to in Section 11(3C) of the Companies ct 1
(e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information re uired by the Companies ct, 1 in the manner so re uired and give a true and fair vie in conformity ith the accounting principles generally accepted in ndia
(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st arch, 1
(ii) in the case of the Statement of ro t and oss, of the pro t of the Company for the year ended on that date and
(iii) in the case of the Cash Flo Statement, of the cash o s of the Company for the year ended on that date.
. n the basis of the ritten representations received from the irectors as on 31st arch, 1 and ta en on record by the Board of irectors, none of the irectors is dis uali ed as on31stMarch, 2012 from being appointed as a director in terms of Section 2 (1)(g) of the Companies ct, 1 .
For Deloitte Haskins & SellsChartered ccountantsFirm egistration o 11 3 W
R. D. KamatPartnerMembership o 3 22
For Gandhi & ParekhChartered ccountantsFirm egistration o 12031 W
Devang B. ParekhPartnerMembership o 10
Mumbai, May 1 , 2012 Mumbai, May 1 , 2012
AUDITORS’ REPORT
F - 41F - 2
e lo ndustries imited
Referred to in paragraph 3 of our report of even date
(i) n respect of xed assets
(a) he Company has maintained proper records sho ing full particulars, including uantitative details and situation of xed assets.
(b) ccording to the information and explanations given to us, physical veri cation of ma or portion of xed assets as at 31st March, 2012 as conducted by the management during the year, hich is
reasonable having regard to the size of the company and nature of its business and no material discrepancies ere noticed on such veri cation.
(c) he xed assets disposed off during the year, in our opinion, do not constitute a substantial part of the xed assets of the Company.
(ii) n respect of inventories
(a) s explained to us, inventories (except stoc s lying ith third parties and in-transit, con rmation subse uent receipt have been obtained in respect of such inventory) have been physically veri ed during the year by the management at reasonable intervals.
(b) n our opinion and according to the information and explanations given to us, the procedures of physical veri cation of inventories follo ed by the management ere reasonable and ade uate in relation to the size of the Company and the nature of its business.
(c) n our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies ere noticed on physical veri cation.
(iii) n respect of loans, secured or unsecured, granted or ta en by the Company to from companies, rms or other parties covered in the egister under Section 301 of the Companies ct, 1 , according to the information and explanations given to us
uring the year, the Company has granted and ta en loans to from rabal lo mpex td. rabal lo mpex td as amalgamated ith the Company vide scheme of amalgamation sanctioned by the
Bombay High Court on 3rd February, 2012 and effective from 1stMarch, 2012. The appointed date for such amalgamation as 1st pril, 2011 ( efer note no 3 ) and as such,these transactions have not been considered for reporting under this clause.
(iv) n our opinion and according to the information and explanations given to us, there is an ade uate internal control system commensurate ith the size of the company and the nature of its business ith regard to purchases of inventory and xed assets and sale of goods and services. uring the course of our audit,
e have not observed any ma or ea ness in such internal control system.
(v) n respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies ct, 1
(a) To the best of our no ledge and belief and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the register have been so entered.
(b) Where each of such transaction is in excess of ` la hs in respect of any party, the transactions have been made at prices hich are prima facie reasonable having regard to the prevailing mar et prices at the relevant time.
(vi) n our opinion and according to the information and explanations given to us, the Company has complied ith the provisions of Sections and or any other relevant provisions of the Companies ct,
1 and the Companies ( cceptance of eposits) ules, 1 ith regard to the deposits accepted from the public. ccording to the information and explanations given to us, no order has been passed by the Company a Board or the ational Company a Tribunal or the eserve Ban of ndia or any Court or any other Tribunal.
ANNEXURE TO THE AUDITORS’ REPORT
F - 42F - 3
(vii) n our opinion, the internal audit functions carried out during the year by rms of Chartered ccountants appointed by the Management have been commensurate ith the size of the company and the nature of its business.
(viii) We have broadly revie ed the boo s of account maintained by the Company pursuant to the rules made by the Central overnment for the maintenance of cost records under Section 20 (1) (d) of the Companies
ct, 1 in respect of Textile products manufactured by the Company and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have, ho ever, not made a detailed examination of the records ith a vie to determining hether they are accurate or complete. To the best of our no ledge and according to the information and explanations given to us, the Central overnment has not prescribed the maintenance of cost records for any other product of the Company.
(ix) ccording to the information and explanation given to us in respect of statutory dues
(a) The company has generally been regular in depositing undisputed statutory dues, including Provident Fund, nvestor ducation and Protection Fund, mployees State nsurance, ncome-tax, Sales-tax, Wealth Tax, Custom uty, xcise uty, Cess and other material statutory dues ith the appropriate authorities during the year, except for service tax dues aggregating to ` 1.74 crores including interest of ` 0.21 crores, hich have been deposited subse uent to the year end.
(b) There ere no undisputed amounts payable in respect of ncome-tax, Wealth-tax, Customs uty, xcise uty, Sales Tax, Service Tax, Cess and other statutory dues in arrears as at 31stMarch, 2012
for a period of more than six months from the date they became payable.
(c) There are no dues in respect of Sales Tax, ncome Tax, Wealth tax, Customs duty, Service Tax, xcise duty and Cess that have not been deposited as on 31stMarch , 2012 on account of disputes,
except as follo s
Name of the statute
Nature of dues Amount (` in crores)
Period to which the amount relates
Forum where dispute is pending
ncome Tax ct, 1 1
ncome tax demand (T S dues)
1. 2 200 -07 to 2011-12
Commissioner of ncome Tax ( ppeals)
Wor s Contract Tax ct, 1
Wor s Contract Tax
0. F 2004 0 eputy Commissioner of Sales Tax
(x) The company neither has accumulated losses at the end of the year, nor incurred cash losses during the current and immediately preceding nancial year.
(xi) n our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to ban s, nancial institutions and debenture holders.
(xii) ccording to the information and explanations given to us, the company has not granted any loans and advances on the basis of security by ay of pledge of shares, debentures and any other securities.
ccordingly, clause 4 (xii) of the order is not applicable to the company.
(xiii) n our opinion and according to the information and explanations given to us, the company is not a chit fund or a nidhi mutual bene t fund society. ccordingly clause 4 (xiii) of the order is not applicable to the company.
(xiv) n our opinion and according to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures or investments. ccordingly clause 4 (xiv) of the order is not applicable to the Company.
(xv) n our opinion and according to the explanation given to us, the terms and conditions of the guarantees given by the company for loans ta en by subsidiary company from ban s and nancial institutions are not prima facie pre udicial to the interests of the Company.
ANNEXURE TO THE AUDITORS’ REPORT
F - 43F - 4
(xvi) On the basis of records examined by us, and relying on the information compiled by the Company for co-relating the funds raised to the end use of term loans, e have to state that, the company has, prima-facie, applied the term loansfor the purposes for hich they ere obtained, other than amounts temporarily invested pending utilisation of the funds for the intended use.
(xvii) n our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, e report that funds raised on short-term basis have not been used during the year for long term investment.
(xviii) uring the year, the Company has made allotment of 1. crores e uity shares to i ra a nvestment Private imited ( efer note no 2 (a) (i) to the nancial statement), covered in egister maintained under section 301 of the Companies ct, 1 . n our opinion, the price at hich the shares have been issued is not pre udicial to the interest of the Company.
(xix) Security Charges have been created in respect of debentures issued as detailed in note no 4 to the nancial statements.
(xx) The Company has not raised money by public issue during the year.
(xxi) To the best of our no ledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company has been noticed or reported during the year.
For Deloitte Haskins & SellsChartered ccountantsFirm egistration o 1173 W
R. D. KamatPartnerMembership o 3 22
For Gandhi & ParekhChartered ccountantsFirm egistration o 12031 W
Devang B. ParekhPartnerMembership o 10 7
Mumbai, May 1 , 2012 Mumbai, May 1 , 2012
ANNEXURE TO THE AUDITORS’ REPORT
F - 44F -
In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka xecutive ChairmanChartered ccountants Chartered ccountants Dilip B. Jiwrajka Managing irector
Surendra B. Jiwrajka t. Managing irectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate ffairs)
Company SecretaryPlace Mumbai Place Mumbai Place Mumbai
ate 1 May 2012 ate 1 May 2012 ate 1 May 2012
(` Crore)PARTICULARS NOTES AS AT
31-Mar-12 AS AT
31-Mar-11I EQUITIES AND LIABILITIES
(1) Shareholders' Funds Share Capital 2 826.28 7 7.7 eserves and Surplus 3 2,829.22 2,30 . 0
3,655.50 3,0 7.(2) Non-current Liabilities ong-term Borro ings 4 7,013.06 ,0 1.40 eferred Tax liabilities (net) 626.77 07. ong-term provisions 176.39 7 .3(3) Current Liabilities Short-term Borro ings 7 4,126.42 2, 4 .1 Trade payables 506.42 2. 2 Other current liabilities 2,058.20 1,0 0.4 Short-term provisions 10 75.60 71. 7
TOTAL 18,238.36 14,2 7.47
II ASSETS
(1) Non-current Assets Fixed assets
Tangible assets 11 8,514.54 7,3 4.2 ntangible assets 11 37.55 42. 2 Capital or -in-progress 11 914.16 0 . on-current nvestments 12 175.79 13 . 3 ong-term oans dvances 13 257.04 324. 2(2) Current Assets Current nvestments 14 3.94 27.2 nventories 1 3,379.91 2,002. 2 Trade receivables 1 2,152.15 1,740.1 Cash Ban Balance 17 1,294.84 1,13 . Short-term oans dvances 1 1,395.04 42 .03 Other current assets 1 113.40 133. 2
TOTAL 18,238.36 14,267.47III Signi cant accounting policies and
accompanying notes forming part of the nancial statements
1 to 40
BALANCE SHEET AS AT 31 MARCH 2012
F - 45F -
In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka xecutive ChairmanChartered ccountants Chartered ccountants Dilip B. Jiwrajka Managing irector
Surendra B. Jiwrajka t. Managing irectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate ffairs)
Company SecretaryPlace Mumbai Place Mumbai Place Mumbai
ate 1 May 2012 ate 1 May 2012 ate 1 May 2012
(` Crore)PARTICULARS NOTES Year Ended
31-Mar-12 Year Ended
31-Mar-11I. REVENUE
evenue from Operations (gross) 20 9,134.81 , 00. 1
ess xcise uty 233.95 112.4
Revenue from Operations (net) 8,900.86 ,3 .43
II. Other ncome 21 65.60 41.0
III. Total Revenue 8,966.46 ,42 . 2
IV EXPENSESCost of Materials consumed 5,748.34 3,224.04
Purchase of Traded oods 161.45 342. 2
Changes in inventories of nished goods,or -in-progress and stoc -in-trade
22 (1,516.66) (222. )
mployee bene ts expense 23 267.28 1 .7
Finance costs 24 1,149.55 73 .27
epreciation and amortisation expense 713.43 1 .7
Other expenses 2 1,681.30 1,00 .
Total Expenses 8,204.69 , 04.
V 761.77 24. 4
VI Exceptional Items (refer note no. 33 (i)) 121.27 41.4
VII 640.50 3.1
VIII Tax expenses Current tax (157.64) (7 .1 )
nclude M T ad ustment of ` 44.12 Crore (` 2 . 3 Crore pertaining to the previous year (preavious year ` 42.42 crores))
eferred tax (102.33) (100. )
Total Tax expenses (259.97) (17 . 3)
IX 380.53 404.3
X EARNINGS PER SHARE (in `) 30
Basic 4.69 .13
iluted 4.69 .13
Signi cant accounting policies and accompanying 1 to 40
notes forming part of the nancial statements
STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2012
F - 46F - 7
(` Crore) PARTICULARS Year Ended
31-Mar-12 Year Ended
31-Mar-11A] Cash Flow from Operating Activities
et Pro t Before Tax 640.50 3.1Adjustments for:
epreciation mortisation 713.43 1 .7xchange rate difference 124.47 41.4ividend ncome (2.57) (2.37)mployee Stoc option outstanding 2.27
nterest Paid (net) 1,032.10 1.30(Pro t) oss on sale of xed assets (net) (9.65) 1.74Pro t on sale of Current nvestments (net) (0.12) (1.1 )Operating Pro t before or ing capital changes 2,500.43 1,7 2. 4Adjustments for( ncrease) in nventories (1,331.29) ( 2 .21)( ncrease) in Trade eceivable (356.12) ( 37. 1)( ncrease) ecrease in oans dvances (932.09) 14 . 1ncrease in Current iabiltites and Provisions 136.14 4 .3
Cash generated from operations 17.07 1,243. 1ncome taxes paid (132.46) (117. 3)et cash (used) generated from operating activities (115.39) 1,12 .0
B]Purchase of xed assets (1,499.37) (1, 3 .3 )Sale of xed assets 17.86 1.74Purchase of nvestments (116.74) (131.1 )Sale of nvestments 162.48 1 4. 2Fixed eposits earmar ed balances matured (placed) (refer note 2 belo ) 285.66 (314. 7)
ividends received 2.57 2.37nterest received 33.23 34.nter Corporate deposits refunded ( et) 1.26 2.4et cash (used) in nvesting ctivities (1,113.05) (2,04 .1 )
C]Proceeds from issue of uity Share Capital (including premium) ( et) 61.20 Proceeds from Term borro ings 2,353.70 3,11 .3
epayment of Term Borro ings (926.47) (2,047.10)Proceeds from Short Term Borro ings ( et) 1,123.94 3.4
ividend Paid ( ncluding Tax thereon) (22.89) (22. )nterest Paid ( et) (1,073.57) (74 . )et cash generated from Financing ctivities 1,515.91 3 3.
Net Increase/(Decrease) in Cash and Cash equivalents (A+B+C) 287.47 ( .11) 108.29 73.40
Cash and Cash equivalents persuant to amalgmation (refer note no. 36) 147.00 –542.76 10 .2
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
F - 47F -
NOTES TO CASH FLOW STATEMENT
1 Purchase of xed assets are stated inclusive of movements of Capital Wor in Progress bet een the commencement and end of the year and is considered as part of investing activity.
2 Cash and Cash e uivalents includes (` Crore)
March 31, 2012 March 31, 2011Cash and Ban Balances 1,294.84 1,13 .
ess armar ed Balalces eposit ith ban s 715.12 7 .32ess eposit ith maturity period of more than 3 months 36.96 3.24
Total Cash and Cash equivalents 542.76 108.29
armar ed balances deposits ith ban includes balances deposits held as margin money or security against borro ings, guarantees and other commitments, hich being, restricted for its use, have been excluded from cash and cash equivalent and grouped under the investment activity.
Fixed eposits ith maturity period of more than three months have been excluded from cash and cash equivalent and grouped under the investment activity.
3 The Cash Flo Statement has been prepared in accordance ith the requirements of ccounting Standard S-3 Cash Flo Statements .
4 Pursuant to scheme of amalgamation bet een lo ndustries td and rabal lo mpex td ith appointed date of 1 pril 2011, the assets and liabilities of rabal lo mpex imited ere ta en over as per the Pooling of nterest method as on 1 pril 2011.
This arrangement of amalgamation is a non-cash transaction and considered as such, in the above cash o statement. ( efer note no 3 of nancial statement)
Previous year s gures have been regrouped restated herever necessary.
In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka xecutive ChairmanChartered ccountants Chartered ccountants Dilip B. Jiwrajka Managing irector
Surendra B. Jiwrajka t. Managing irectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate ffairs)
Company SecretaryPlace Mumbai Place Mumbai Place Mumbai
ate 1 May, 2012 ate 1 May, 2012 ate 1 May, 2012
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
F - 48F -
NOTE 1 : SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Preparation of Financial Statements
These nancial statements have been prepared under the historical cost convention in accordance ith generally accepted accounting principles in ndia, the applicable ccounting Standards and the provisions of the Companies ct, 1 .
b) Use of Estimates
The preparation of nancial statements in conformity ith the generally accepted accounting principles require estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the nancial statements and the reported amounts of revenues and expenses during the reporting period. ifferences bet een, the actual results and estimates are recognised in the period in
hich the results are no n materialise.
c) Revenue Recognition
i) evenue on sale of products is recognised hen the products are dispatched to customers, all signi cant contractual obligations have been satis ed and the collection of the resulting receivable is reasonably expected. Sales are stated net of trade discount, returns and sales tax collected.
ii) evenue in respect of insurance other claims, interest etc. is recognised only hen it is reasonably certain that the ultimate collection ill be made.
d) Fixed Assets
i) Own Assets:
Fixed ssets are stated at cost of acquisition or construction including directly attributable cost. They are stated at historical cost less accumulated depreciation and impairment loss, if any.
ii) Assets taken on lease:
Operating Lease:
ssets ta en on lease under hich, all the ris and re ards of o nership are effectively retained by the lessor are classi ed as operating lease. ease payments under operating leases are recognised as expenses on accrual basis in accordance ith the respective lease agreements.
iii) Assets given on lease
ease rental are recognised as income over the lease term.
e) Investments
nvestments classi ed as ong Term nvestments are stated at cost. Provision is made to recognise a decline, other than temporary, in the value of investments. Current investments are carried at cost or fair value hichever is lo er.
f) Depreciation / Amortisation
i) epreciation on Fixed ssets is provided on Straight ine Method at the rates and in the manner speci ed in Schedule to the Companies ct, 1 . Continuous process plant is classi ed based on technical assessment and depreciation is provided accordingly epreciation on additions to assets or on sale disposal of assets is calculated from the beginning of the month of such addition or up to the month of such sale scrapped, as the case may be. ssets costing less than ` ,000 are fully depreciated in the year of purchase.
ii) Cost of leasehold land is amortised over the period of lease.
iii) Trademar s Brands are amortised over a period of ten years from the date of capitalization
iv) Computer soft are is amortised for a period of ve years from the date of capitalization.
i) Foreign currency transactions are recorded at the exchange rates prevailing on the date of the
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 49F - 10
transaction. xchange differences arising on settlement of foreign currency transactions are recognised in the pro t and loss account
ii) Monetary items denominated in foreign currency are restated using the exchange rate prevailing at the balance sheet date and the resultant exchange differences are recognized in the pro t and loss account. on-monetary items denominated in foreign currency are carried at historical cost.
Ho ever, pursuant to the amended ccounting Standard 11 on The ffects of Changes in Foreign xchange ates, exchange differences arising on restatement of long term monetary items are dealt ith
in the follo ing manner
xchange differences relating to long-term monetary items, arising during the year, in so far as those relate to the acquisition of a depreciable capital asset are added to deducted from the cost of the asset and depreciated over the balance life of the asset.
n other cases such differences are accumulated in a “Foreign Currency Monetary tem Translation ifference ccount” and amortized to the pro t and loss account over the balance life of the long-term
monetary item, ho ever that the period of amortization does not extend beyond 31 March, 2020.
h) Inventories
tems of nventories are valued on the basis given belo
i) a Materials, Pac ing Materials, Stores and Spares and Trading goods at cost determined on First n First Out (F FO) basis or net realisable value, hichever is lo er.
ii) Process stoc and Finished oods t cost or net realisable values hichever is lo er. Cost comprises of cost of purchase (as above), cost of conversion (absorption cost) and other costs incurred in bringing the inventory to their present location and condition.
i)
Company s contribution paid payable for the year to de ned contribution retirement bene t scheme is charged to Pro t and oss account.
ii)
Company s liabilities to ards de ned bene t scheme and other long term bene t plans are determined using the pro ected unit credit method. ctuarial valuation under pro ected unit credit method are carried out at Balance Sheet date, ctuarial gains losses are recognised in Pro t and oss ccount in the period of occurrence of such gains and losses. Past service cost is recognised immediately to the extent bene ts are vested other ise it is amortized on straight line basis over running average periods until the bene ts become vested. The retirement bene t obligation recognised in Balance Sheet represents present value of the de ned bene t obligations as ad usted for unrecognised past service cost and as reduced by fair value of scheme assets. ny asset resulting from this calculation is limited to past service cost the present value is available refunds and reduction in future contribution to the scheme.
iii)
Short term employee bene ts are recognised as an expense at undiscounted amount in pro t loss account of the year in hich the related service is rendered. These bene ts include incentive, bonus.
j) Accounting of CENVAT credit
Cenvat credit available is accounted by recording material purchases net of excise duty. Cenvat credit availed is accounted on ad ustment against excise duty payable on dispatch of nished goods.
k) Government Grants
rants, in the nature of interest subsidy under the Technology pgradation Fund Scheme (T FS), are accounted for hen it is reasonably certain that ultimate collection ill be made. overnment grants not speci cally related to xed assets are recognised in the Pro t and oss ccount in the year of accrual receipt.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 50F - 11
l) Borrowing Costs
Borro ing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. qualifying asset is one that necessarily ta es a substantial period of time to get ready for its intended use or sale. ll other borro ing costs are charged to revenue.
m) Income taxes
Tax expense comprises of current tax and deferred tax. Current tax and deferred tax are accounted for in accordance ith ccounting Standard 22 ( S-22) on “ ccounting for taxes on ncome”. Current tax is measured at the amount expected to be paid recovered from the tax authority using the applicable tax rates. eferred tax liabilities are recognised for future tax consequence attributable to timing difference bet een taxable income and accounting income that are capable of reversing in one or more subsequent periods and are measured at relevant enacted substantively enacted tax rates and in the case of deferred tax asset on consideration of prudence, are recognised and carried for ard to the extent of reasonable virtual certainty as case may be. t each balance sheet date, the Company reassesses unrealised deferred tax assets to the extent they become reasonably certain or virtually certain of realisation, as the case may be. Minimum lternate Tax (M T) credit entitlement is recognised in accordance ith the uidance ote on “ ccounting for credit available in respect of Minimum lternate Tax under the ncome-tax ct, 1 1” issued by C
n) Intangible Assets
ntangible assets are recognised only if it is probable that the future economic bene ts that are attributable to the assets ill o to the enterprise and the cost of the assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated amortisation and accumulated impairment losses, if any.
o) Impairment of Fixed Assets
t the end of each year, the company determines hether a provision should be made for impairment loss on xed assets by considering the indications that an impairment loss may have occurred in accordance
ith ccounting Standard 2 ( S-2 ) mpairment of ssets . n impairment loss is charged to the Pro t and oss ccount in the year in hich, an asset is identi ed as impaired, hen the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.
p) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised hen there is a present obligation as a result of past events and it is probable that there ill be an out o of resources. Contingent liabilities are not recognised but are disclosed in the otes. Contingent ssets are neither recognised nor disclosed in the nancial statements.
q) Accounting for Derivatives
i) The company uses derivative instruments li e foreign currency for ard contracts, foreign currency options and nterest rate s aps to hedge its exposure to movements in foreign exchange rates, interest rates and currency ris s. The ob ective of these derivative instruments is to reduce the ris or cost to the company and is not intended for trading or speculation purposes.
ii) nterest ate S aps, Foreign Currency Options and Currency S aps, entered into by the Company for hedging the ris s of foreign currency exposure (including interest rate ris ) are accounted based on the principles of prudence as enunciated in ccounting Standard 1 ( S-1) “ isclosure of ccounting Policies”. Thus, mar to mar et loses (net) are accounted for by the company, net gains are ignored.
iii) n respect of foreign currency for ard contracts entered into to hedge foreign currency exposure in respect of recognized monetary items, the premium or discount on such contracts is amortized over the life of the contract. The exchange difference measured by the change in exchange rate bet een the inception dates of the contract last reporting date as the case may be and the balance sheet date is recognized in the pro t and loss account. ny gain loss on cancellation of such for ard contracts are recognised as income expense of the period.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 51F - 12
iv) The Company designates foreign currency for ard contracts ta en ith respect to highly probable forecast transactions and rm commitments as hedges and accounts for the same by applying the recognition and measurement principles set out in the ccounting Standard ( S) 30 “Financial nstruments ecognition and Measurement”. ccordingly, the Company records the gain or loss on
effective cash o hedges in the Cash Flo Hedging eserve account until the forecasted transaction materializes. ain or loss on ineffective cash o hedges (if any) is recognized in the pro t and loss account. ( efer ote o. 33(ii)).
2. SHARE CAPITAL
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11(a) Authorised Shares 100,00,00,000 (previous year 0,00,00,000) quity
shares of `10 each 1,000.00 00.00
1,000.00 00.00
2, 2, ,3 7 (previous year 7 ,77, 4,3 7) quity shares of `10 each fully paid up
826.27 7 7.7
dd Forfeited Shares (13, 21 shares of ` 10 each ` paid up)
0.01 0.01
826.28 7 7.7 TOTAL 826.28 7 7.7
NOTES :
a) uring the year 3, 4, ,000 (previous year il) equity shares are issued as under
i 1, 0,00,000 quity shares of `10 each at a permium of ` 41 each alloted on conversion of arrants issued by rabal lo mpex imited, the amalgmating company. Such arrants ere
sold by the original arrant holder to i ara a nvestment Private imited, a promoter group company, hich excercised such arrants.
ii 2,24, ,000 quity shares alloted to the Shareholders of rabal lo mpex imited pursuant to the Scheme of malgamation ( efer ote o 3 ) for consideration other than cash.
b) Of the remaining shares
i 7,4 ,3 equity shares ere allotted as Bonus shares by ay of capitalisation of eneral eserve.
ii 2, 0 equity shares being forfeited shares ere reissued during 2001.
c) Reconciliation of shares outstanding at the begining and end of the reporting period
Particulars AS AT 31-Mar-12
AS AT 31-Mar-11
787,784,357 7 7,7 ,27
llotment of quity shares on conversion of arrants 16,000,000 llotment of quity shares pursuant to the Scheme of malgamation 22,485,000
– (13, 21) 826,269,357 7 7,7 4,3 7
The company has only one class of equity shares having a par value of ` 10 per share. ach holder of equity share is entitled to one vote per share. The company declares and pays dividend in ndian upees. The dividend proposed by the Board of irectors is sub ect to the approval of the sharesholders in the nnual eneral Meeting.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 52F - 13
n the event of liquidation of the company, the holders of equity shares il be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution ill be in proportion to the number of equity shares held by the shareholder.
e) Shares reserved for issue under options (Refer note no 29)
f) rabal lo mpex imited, the amalgamating company, ( efer note no 3 ) had issued and allotted 200 Foreign Currency Convertible Bonds of S 1,00,000 each aggregating to S 20 million outstanding as at the balance sheet date, hich as convertible into shares, at any time on or after 1 pril 2007 and prior to the closure of business on 0 March 2012, unless previously redeemed, converted or purchased and cancelled. Such FCCBs have been redeemed after the balance sheet date, on 0 pril 2012.
g) uring the year ended 31 March 2012, an amount of ` 0.30 per share (previous year ` 0.2 per share) as recognised as proposed dividend to equity share holders.
h) Shareholder holding more than 5 percent of the share capital
Sr.No. Name of the Shareholder AS AT 31-Mar-12
AS AT 31-Mar-11
No of shares Held
% No of shares Held
%
i ira ealtors Shares Private imited 71,637,204.00 8.67 , 42,1 4.00 7. 0
ii Caledonia nvestment P C 36,207,135.00 4.38 47, 2 ,714.00 .07
iii Caledonia nvestment P C (F ) 24,211,903.00 2.93 4 ,1 4,3 4.00 .74
3. RESERVES AND SURPLUS
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Capital ReserveBalance as per last Balance Sheet 10.23 10.23
dd on amalgmation 1.49 11.72 10.23
Capital Redemption ReserveBalance as per last Balance Sheet 2.20 2.20
dd on amalgmation 6.90 9.10 2.20
Securities Premium AccountBalance as per last Balance Sheet 880.39 0.3
dd on amalgmation 60.15 dd eceived during the year ( efer note on arrants in note no 2 above)
65.60
ess Premium on redemption of FCCB (12.49) 993.65 0.3
Debenture Redemption ReserveBalance as per last Balance Sheet 220.38 04.
ess Transferred to Pro t and oss ccount (51.90) (3 4.30) 168.48 220.3
General ReserveBalance as per last Balance Sheet 274.99 24 .
dd on amalgmation 5.63 2 .00 280.62 274.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 53F - 14
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
Options granted during the year 4.67 ess eferred mployee Compensation
expenses (2.40)
2.27 Cash Flow Hedging Reserve ( efer ote o 33(ii))
(16.78)
Balance brought for ard from previous year 921.61 1 0. 1dd on amalgmation 54.85
Pro t for the year 380.53 404.3Less : Appropriations(i) Transfered to eneral eserve – (2 .00)(ii) Transfered from (to) ebenture edemption
eserve 51.90 3 4.30
(iii) Proposed ividend quity Shares (24.79) (1 . )(iv) Corporate ividend Tax thereon (4.02) (3.27)(v) xcess Provision of dividend and tax thereon 0.08
1,380.16 21. 1 TOTAL 2,829.22 2,30 . 0
efer note no 3
4. LONG-TERM BORROWINGS
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11 Current Non
Current Current Non
Currenta) ebentures (Secured) ( efer ote belo ) – 800.00 00.00
b) Term oans
Secured ( efer ote belo )
(1) From ban s
- upee oans 920.71 5,568.45 7.32 4, 2.17
- Foreign currency loans 555.87 350.15 12. 3 71. 2
1,476.58 5,918.60 70.1 ,233.
(2) From Financial nstitutions
- upee oans 13.13 58.59 12.1 71.72
- Foreign currency loans 20.96 145.22 20.33 144.55 34.09 203.81 32. 2 21 .27
1,510.67 6,122.41 02. 7 ,4 0.2
nsecured ( efer ote belo )
(1) From ban s
- Foreign currency loans 119.64 86.62 1 . .34
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 54F - 1
c) Other loans advances ( efer ote belo )
Secured
ehicle loan from Ban s 2.43 4.03 2.07 . 0
TOTAL 1,632.74 7,013.06 21. 2 ,0 1.40
NOTES :
I. a) ebentures outstanding at the year end are redeemable as follo s
Particulars Nos 31-Mar-12 (` Crore)
31-Mar-11 (` Crore)
Date of Redemption
12.00 edeemable on convertible ebentures 37 37. 0 1-Feb-2012.00 edeemable on convertible ebentures 37 37. 0 1- ug-112.00 edeemable on convertible ebentures 37 37. 0 1-Feb-110.7 edeemable on convertible ebentures 334 33.34 33.34 1 -Oct-112.00 edeemable on convertible ebentures 37 37. 0 1- ug-112.00 edeemable on convertible ebentures 37 37. 0 1-Feb-110.7 edeemable on convertible ebentures 333 33.33 33.33 1 -Oct-1712.00 edeemable on convertible ebentures 37 37. 0 1- ug-1712. 0 edeemable on convertible ebentures 300 30.00 30.00 3-Mar-1712. 0 edeemable on convertible ebentures 3 3 . 3 . 2-Mar-1712.00 edeemable on convertible ebentures 37 37. 0 1-Feb-1710.7 edeemable on convertible ebentures 333 33.33 33.33 1 -Oct-112.00 edeemable on convertible ebentures 37 37. 0 1- ug-111. 0 edeemable on convertible ebentures 00 0.00 0.00 2 - un-112. 0 edeemable on convertible ebentures 3 7 3 . 7 3 . 7 2-Mar-112. 0 edeemable on convertible ebentures 300 30.00 30.00 2-Mar-111. 0 edeemable on convertible ebentures 700 70.00 70.00 2 - un-112. 0 edeemable on convertible ebentures 3 7 3 . 7 3 . 7 3-Mar-112. 0 edeemable on convertible ebentures 300 30.00 30.00 3-Mar-111. 0 edeemable on convertible ebentures 700 70.00 70.00 2 - un-14Total 800.00 500.00
b) ll the debentures in a) above are secured by pari passu charge on the immovable property situated at Mou e rana, Talu a adi, istrict Mehsana in the state of u arat. Further, ebentures of ` 300 crore are secured by rst pari passu charge to be created on xed assets of the company and ebentures of ` 00 crore are secured by subservient charge on xed and current assets of the Company (excluding and and Building).
(` Crore)Banks Financial
InstitutionsTOTAL
xclusive charge on Plant Machinery and speci c assets nanced
1,021.42( 40. )
1,021.42( 40. )
Pari Passu rst charge created to be created on the entire xed assets of the company
2,7 3.2(2,4 7. )
4.02(10 . 3)
2, 37.30(2, 4. 2)
Subservient charge on all movable and current assets of the Company @
3, 20.4(2, 7 .4 )
1 3.(141. )
3,774.3(3,117.3 )
Total 7,395.18 237.90 7,633.08 (6,104.14) (248.79) (6,352.93)
ncludes loans agreegating to ` 21 .47 crore (previous year 21 . crore) hich is further secured by personal guarantees of promotor directors group Companies
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 55F - 1
ncludes Ban loans agreegating to ̀ 0.17 crore (previous year . 0 crore) Financial nstitution loans aggreegation to ` 30.47 crore (previous year 3 . crore) hich is further secured by personal guarantees of promotor directors group Companies
@ ncludes Ban s loans agreegating to ` 237.47 crore (previous year 1 . 0 crore) hich is further secured by personal guarantees of promotor directors group Companies
(` Crore)Particulars Rate of Interest* 1-2 Years 2-3 Years 3-4 Years
YearsTotal
upee Term oan From Ban
12 1 .7(10.2 14.2 )
1, 42.7(70 . 2)
1, .0(1,1 . 0)
20.31(1,17 .17)
1, 37.34(1, 0.4 )
, .4(4, 2.17)
Foreign Currency Term oan From Ban s
2. 3 .34(2. 0 .00 )
34.4(47 . 4)
4 . 1(27.3 )
2.7(3 . )
20 .10(2 .33)
3 0.1( 71. 2)
upee Term oan From Financial nstitutions
.00 12. 0( .00 12.00 )
13.74(13.13)
1 . 3(13.7 )
13. 1(1 . 3)
1 .31(2 .21)
.(71.72)
Foreign Currency Term oan From Financial
nstitutions
2.70 .31(3. 2 .00 )
.(1 . 3)
13 .(7. )
(11 .3 )
14 .22(144. )
Total 1,699.60 1,767.05 897.01 1,758.75 6,122.41(1,216.92) (1,245.60) (1,351.72) (1,636.02) (5,450.26)
ate of interest is hitout considering interest subsidy under T F Scheme
(` Crore)Particulars Rate of Interest 1-2 Years 2-3 Years 3-4 Years
YearsTotal
Foreign Currency Term oan From Ban s
2. 3 3.7 17.32 17.32 17.32 34. . 2
(2. 3.00 ) (17.32) (17.32) (17.32) (43.3 ) ( .34)
(` Crore)Banks
ehicle loans are secured by vehicles under hypothecation ith ban s .4 (7. 7)
(` Crore)Particulars Rate of Interest 1-2
Years2-3
Years3-4
Years 4 YearsTotal
ehicle oan . 0 13.00 2.44 1.2 0.33 4.03( . 0 13.00 ) (2.43) (2.44) (0. 3) ( . 0)
Previous year gure are given in brac et.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 56F - 17
5. Deferred Tax Liabilities (Net)(` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
epreciation 702.43 27.77
702.43 27.77
Deferred Tax Asset (DTA)Mar to Mar et loss on erivative Contract 58.26
Share ssue expenses 3.31 7.3
Other disallo ances 14.09 12.7
75.66 20.11
626.77 07.
ncludes Opening eferred tax iability ( et) of rabal lo mpex imited of ` 1 .7 crore on account of amalgmation ( efer note no 3 )
6. LONG-TERM PROVISIONS(` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
Provision for employee bene ts ( efer note o 31) 16.69 17. 2
Mar to Mar et provision on derative instruments ( efer ote o 33(iii)) 159.70 0.04
Others ( efer note o 3 ) – 1.7
TOTAL 176.39 7 .3
7. SHORT-TERM BORROWINGS(` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
ebenture (Secured) ( efer note a belo )
edeemable on convertible ebentures – 2 0.00
Wor ing capital loans
Cash Credit accounts, or ing capital demand loan etc. (Secured) ( efer note b belo )
From Ban s ( ncludes ` 720.1 crores (Previous year `
3 0.34 crores) loan in foreign currency)
2,668.40 7 .
From Financial nstitutions ( ncludes ̀ il ( Previous year ̀ .0 crores)
loan in foreign currency)
130.74 .0
Cash Credit accounts, or ing capital demand loan etc. ( nsecured)
From Ban s 157.53 . 4
From Financial nstitutions –Commercial Paper ( nsecured)
From Ban s 103.00 3 0.00
From Financial nstitutions 335.00 3 0.00
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 57F - 1
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
438.00 720.00
nter Corporate eposit ( nsecured) (refer note no. 2 )
11.75
Short term loan
Secured ( efer note b belo )
- upee oans
From Ban s 635.00 7 .
From Financial nstitutions 85.00 7 .00
720.00 1.
- Foreign currency loans
From Ban s – 44.
– 720.00 44. . 3
nsecured
- upee oans
From Ban s – 144.
– – 144. 144.
TOTAL 4,126.42 2, 4 .1
Note a) ebentures are secured by pari passu charge on the immovable property situated at Mou e rana,
Talu a adi, istrict Mehsana in the state of u arat.
b) isclosure of security
Banks Financial Institutions
TOTAL
Working capital loans :(i) Hypothecation of company's current assets and
mortgage of certain immovable properties belonging to the company uarantor.
(ii) Second charge created to be created on all xed assets (excluding land and building) of the company
2,324.47(44 .14)
40.3(20. )
2,3 4. 2(4 .72)
Subservient charge created to be created on all moveable and current assets of the company.
343. 3(42 .4 )
0.3( . 0)
434.32(4 7. )
TOTAL 2, .40 130.74 2,7 .14 ( 7 . ) ( .0 ) ( 4. 7)
Short Term LoansSubservient charge on all movable and current assets of the Company
37.00 ( 21. 3)
.00 (7 .00)
22.00 ( . 3)
Fixed eposit placed ith the ban . .00 .00
TOTAL 3 .00 .00 720.00 ( 21. 3) (7 .00) ( . 3)
Previous year gures are given in brac ets
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 58F - 1
8. TRADE PAYABLE (` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
Total outstanding due to Micro, Small and Medium nterprises – Others 506.42 2. 2
( ncluding acceptances ` 2.20 crore (previous year ` 0. 4 crrore)
506.42 2. 2 506.42 2. 2
s per information available ith the company
9. OTHER CURRENT LIABILITIES (` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
Current maturities of long-term debt ( efer note 4 for details) 1,632.74 21. 2nterest accrued but not due on borro ings 9.35 17.npaid dividends (see note i ii belo ) 1.05 0. 4
Foreign Currency Monetary tem Translation ifference ccount – 0.22Other payables dvance from customers 46.14 1.32 Creditors for Capital oods 32.79 1 .71 To ards statutory iabilities 6.09 10.0 Premium on redemption of FCCB 43.14
dvance from elated parties ( efer ote o 2 ) 261.73 Temporary overdra n ban balance (see note iii belo ) 14.28 30.13 For ard Contract Payable 10.89 TOTAL 2,058.20 1,0 0.4
NOTES
(i) This gure doesn t include any amount due and outstanding to be credited to the nvestor ducation and Protection Fund.
(ii) uring the year company has transferred ` 0.03 crore (Previous year ` 0.0 crore) to the nvestor ducation and Protection Fund.
(iii) Temporary overdra n ban balances are as per boo s consequent to issue of cheques at the year end, though the ban s have positive balances as on that date.
10. SHORT-TERM PROVISIONS
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Provision for employee bene ts ( efer note o 31) 7.51 3.07Mar to Mar et provision on derivative instruments ( efer ote o 33(iii)) 36.65 12. 2Proposed dividend 24.79 1 .Corporate dividend tax 4.02 3.27Provision for taxation ( et of dvance Tax) 2.63 1 .24Others ( efer note o 3 ) – 13.
TOTAL 75.60 71. 7
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 59F - 20
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 201211
. FIX
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CAPI
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WOR
K-IN
-PRO
GRES
S (n
cludi
ng `
1.
4 cr
ores
on
acco
unt o
f am
alga
mat
ion
(ef
er n
ote
no 3
))
14.1
0
.NO
TES
:1.
Pl
ant
Mac
hine
ry in
clud
es
a
xc
hang
e di
ffere
nce
(net
) of `
7.
0 cr
ore
(pre
viou
s ye
ar g
ain
of `
1.
cro
re) o
n re
stat
emen
t of l
ong
term
bor
roin
gs p
ayab
le in
fore
ign
curre
ncy.
b
nt
eres
t cap
italis
ed `
77.
2 C
rore
(pre
viou
s ye
ar `
3.0
Cro
re)
2.
ntan
gibl
e as
sets
con
sist
s of
Tra
de M
ars
Bra
nds
aggr
egat
ing
to `
.0
4 C
rore
(pr
evio
us y
ear `
.04
cror
e) (
ross
) W
ritte
n do
n va
lue
` 2
.0
cror
e (p
revi
ous
year
` 3
4.41
cro
re),
hi
ch a
re
regi
ster
ed in
the
nam
e of
a s
ubsi
diar
y co
mpa
ny in
trus
t on
beha
lf of
the
com
pany
. The
Com
pany
has
app
lied
for r
egis
terin
g th
ose
Trad
emar
s B
rand
s in
its
nam
e ith
con
cern
ed a
utho
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s an
d is
aai
ting
regi
stra
tion.
3.
Cap
ital
or in
pro
gres
s in
clud
es
a
xc
hang
e di
ffere
nce
(net
) of `
1.
7 cr
ore
(pre
viou
s ye
ar `
7.
2 cr
ore)
on
rest
atem
ent o
f lon
g te
rm b
orro
ings
pay
able
in fo
reig
n cu
rrenc
y.
b
nt
eres
t cap
italis
ed `
2.1
4 C
rore
(Pre
viou
s ye
ar `
0.
73 C
rore
)
c
`
3.3
cro
re (p
revi
ous
year
`
3.
cro
re) o
n ac
coun
t of c
onst
ruct
ion
mat
eria
l and
pla
nt a
nd m
achi
nery
und
er e
rect
ion.
d
Pr
e-op
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ive
expe
nses
agg
rega
ting
to `
4.
0 cr
ore
(pre
viou
s ye
ar `
12.
74 c
rore
)
mou
nt
ritte
n of
f in
resp
ect o
f ea
seho
ld
and
for t
he p
erio
d of
ea
se
hich
has
exp
ired.
F - 60F - 21
12. NON CURRENT INVESTMENTS (Trade)
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11
lo nc. 0.04 0.040 quity Shares of S 200 eachlo ndustries nternational imited (refer note no 3 ) – 0.220,000 quity Shares of S 1 eachlo nternational nc. (` 43,22 -) 0.00 0.00
1,000 quity Shares of S 1 eachlo pparel Private imited 1.00 1.00
10,00,000 quity Shares of `10 eachlo etail ( ndia) imited 0.05 0.00,000 quity Shares of ` 10 eachlo and Holdings Private imited 0.50 0. 0,00,000 quity Shares of ` 10 each
(1, 0,000 shares pledged against nance availed by lo nfrastructure imited)lo nfrastructure imited 0.05 0.00,000 quity Shares of `10 each
(Pledged against nance availed by lo ealtors Private imited)lo H imited 36.05 3 .0
3, 0, 0,000 quity Shares of `10 eachlo Singapore Pte. td. (` 4 -) 0.00
1 (previous year il) quity share of S 1 each(Pledged against nance availed by lo Singapore Pte.
td.)lo nternational (Middle ast) F 1.31
(1 (previous year il) quity share of irhams of One Million)
39.00 37. 1In Joint Venture – Unquoted
urangabad Textiles pparel Par s imited 17.25 17.210,1 ,200 quity Shares of `10 eache City Of Bombay Mfg. Mills imited 75.13 71. 0
44, 3,300 quity Shares of `10 each Stamp duty on lease deed of ` 3. 3 crore paid during the
year as per share subscription agreement
92.38 .7Others – UnquotedTrimphant ictory Holdings imited (` 0.14 (previous year ` 4 .14))
0.00 0.00
2 (previous year 1) quity share of S 1 eachShirt Company ( ndia) imited - 0.20
il (previous year 11,333) quity Shares of `10 eachombivali agri Saha ari Ban imited 0.05 0.0
10,000 quity Shares of ` 0 eachalyan anata Saha ari Ban imited 0.03 0.03
10,000 quity Shares of ` 2 eachSaras at Ban imited (` 2 ,000 -) 0.00 0.002, 00 quity Shares of ` 10 each
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 61F - 22
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
(Pledged against nance availed by company)rabal lo nternational imited (` 1,121.2 -) (refer note
no. 3 ) – 0.00
il quity Shares (previous year 2 ) of S 1 eachnterest in lo Bene t Trust (refer note no 3 ) 35.33 1, 4, ,3 2 (previous year il) quity Shares of `10
each Wel-Treat nviron Management Organisation (` 3 , 00 -) 0.00 0.003, 0 quity Shares of 10 each
35.41 0.2Others – Quoted
rabal lo mpex imited (refer note no. 3 ) – 3.
Other Non-current investmentsShare pplication Money in Subsidiary company
lo pparel Private imited 9.00 .00 9.00 .00
TOTAL 175.79 139.93
1) uoted nvestment ggregate cost carrying value – 3. ggregate mar et value – .02) nquoted nvestment ggregate cost carrying value 166.79 12 . 4
13. LONG TERM LOANS & ADVANCES
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Considered goodCapital advances 121.97 1 4.ease Security deposits 8.89 .3
Foreign Currency Monetary tem Translation ifference ccount
0.95
Other oans advances Prepaid xpenses 41.34 3 .23 dvance Tax ( et of provision for tax) 17.62 1 .2 M T Credit entitlement 66.27 110.3
257.04 324. 2Considered DoubtfulCapital advances 3.76 ess Provision 3.76
TOTAL 257.04 324. 2
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 62F - 23
14. CURRENT INVESTMENTS (at cost) [Others](` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
nvestments in debentures or bonds Bonds axmi ilas Ban Tier Bonds 2.00 2.00 [20 Bonds of ` 10,00,000 each
2.00 2.00nvestments in Mutual funds nquoted
xis nfrastructure Fund 1 1.94 7.20 [1 ,37 (previous year 72,03 ) units of 1000 each SB Magnum nsta Cash Fund – 17.00 [ il (previous year 7 ,0 , 7 .4 ) units of 10 each Peerless iquid Fund collection C – 1.00 [ il (previous year ,3 , 0 .20) units of 10 each FC Money Manager Fund aily ividend – 0.0 [ il (previous year 4 , 2. 3) units of 10 each
1.94 2 .2 TOTAL 3.94 27.2
15. INVENTORIES(` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
a Materials 435.09 7. 3( ncludes material in transit ` 2.0 crore (previous year ` 13 . 2 crore)Wor -in-progress 2,220.77 .77Finished oods 641.86 4 .33Stoc in Trade (Traded oods) 2.72 13.
3,300.44 1, 3 .32Stores Spares 72.45 .40Pac ing Material 7.02 . 0TOTAL 3,379.91 2,002. 2
16. TRADE RECEIVABLES(` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
ebts Outstanding for a period exceeding six months from due date
41.97 2 .7
ess Provision 14.18 27.79 . 1 . 0
Other ebts 2,131.32 1,722. 3ess Provision 6.96 2,124.36 2.44 1,720.3
2,152.15 1,740.1nsecured
Considered ood 2,152.15 1,740.1 Considered oubtful 21.14 .3TOTAL 2,173.29 1,74 .
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 63F - 24
NOTE :
i) Sundry ebtors includes ` 70.72 crore (previous year ` 3 .23 crore) to ards contractual obligations on account of xport ncentives eceivables.
ii) ebtors include dues from parties aggregating to ` 1.22 crore (previous year ` 3.10 crore) in hich a director is a director partner
ii) efer note o. 2 for related party balances
17. CASH AND BANK BALANCES
(` Crore)
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
Cash on hand 0.50 0.70
Balance ith Ban
(i) n current accounts 515.20 27.2
(ii) n FC accounts 0.98 0.41
(iii) n deposit accounts ( efer ote (i) and (ii) belo ) 61.99 132.30
(iv) n earmar ed accounts
npaid dividend accounts 1.05 0. 4
Balances eposits held as margin money or security against borro ings, guarantees and other commitments ( efer ote (i) and (iii) belo )
715.12 7 .32
TOTAL 1,294.84 1,13 .
NOTE :
(i) Balances ith ban s includes deposits amounting to ` 22. 4 crore (previous year ` 3 .22 crore) and margin monies amounting to ` 77. 3 (previous year ` 71.4 crore) hich have an original maturity of more than 12 months.
Balances ith ban s includes deposits amounting to ` 2.1 crore (previous year ` . 2 crore) and margin monies amounting to ` 2. 1 crore (previous year ` 1 .42 crore) hich have a maturity of more than 12 months from the Balance Sheet date
(ii) ncludes ̀ 33.4 crore (previous year il) ept in ban deposits and ̀ . crore (previous year ̀ 41.2 crore) margin money pending utilisation to ards pro ect
(iii) ncludes ` 437. 7 crore (previous year ` 4 .4 crore) pledged ith ban s to ards loan availed by subsidiary company.
18. SHORT-TERM LOANS AND ADVANCES (Unsecured, considered good)
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11oans advances to elated parties ( efer ote o 2 ) 120.50 . 4
Others
dvance to endors 933.22 110.74
dvance to Staff (see note i belo ) 9.13 10. 0
Balance ith Central xcise, Customs and Sales Tax authorities 279.32 201.07
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 64F - 2
PARTICULARS AS AT 31-Mar-12
AS AT 31-Mar-11
Prepaid xpenses 49.18 2 .13
nter Corporate eposits 3.69 4.
TOTAL 1,395.04 42 .03
NOTE :
(i) dvance to staff includes ` 0.1 crore (previous year ` 1.27 crore) due from of cers of the Company [maximum amount outstanding during the year ` 1.27 crore (previous year ` 1.3 crore)
19. OTHER CURRENT ASSETS (Unsecured)
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Considered GoodFor ard Contract eceivable – 4.2nterest Subsidy eceivable 86.00 121.73nutilised PB icence 25.98 7.74
nsurance Claim eceivable 1.11 0.01Balance ith Central xcise uthorities 0.05 0.1
ent eceivable 0.23 Foreign Currency Monetary tem Translation ifference ccount 0.03
113.40 133. 2Considered Doubtfulnterest Subsidy eceivable 9.31 .31ess Provision 9.31 .31
– TOTAL 113.40 133. 2
20. REVENUE FROM OPERATIONS
(` Crore)PARTICULARS Year Ended
31-Mar-12Year Ended
31-Mar-11a) Sale of product Sales ocal 6,066.31 4,2 1. 3 Sales xport 3,029.55 2,217.43
9,095.86 ,47 .b) Sale of services ob or charges collected 30.90 12.77c) Sale of Scrap 8.05 .1 TOTAL 9,134.81 , 00. 1
21. OTHER INCOME
(` Crore)PARTICULARS Year Ended
31-Mar-12Year Ended
31-Mar-11nterest ncome
On ong Term nvestments 5.04 2.30 On Current nvestments 28.19 32.3
33.23 34.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 65F - 2
PARTICULARS Year Ended 31-Mar-12
Year Ended 31-Mar-11
ividend ncome On ong Term nvestments 0.02 On Current nvestments 2.55 2.37
2.57 2.37ain on sale of investments ( et)
On ong Term nvestments – 1.02 On Current nvestments – 0.14
– 1.1ain from sale of xed ssets ( et) 9.65
Provision for doubtful debts ritten bac 2.15 1. 4Sundry Credit Balance ritten bac 3.09 0.43
ent eceived 1.06 0.7nsurance claim received 12.40
Other non operationg ncome 1.45 0.1 TOTAL 65.60 41.0
22. CHANGE IN INVENTORIES OF FINISHED GOODS, WORK IN PROGRESS AND STOCK IN TRADE
(` Crore)PARTICULARS Year Ended
31-Mar-12Year Ended
31-Mar-11CLOSING STOCK AS ON 31 MARCH 2012Finished oods 641.86 4 .33
Stoc in trades (Traded oods) 2.72 13.
Wor -in-progress 2,220.77 .77
2,865.35 1,34 .
LESS : OPENING STOCK AS ON 1 APRIL 2011Finished oods 466.33 2 .
Stoc in trades (Traded oods) 13.59
Wor -in-progress 868.77 2 .4
1,348.69 1,12 .14
TOTAL 1,516.66 222.
23. EMPLOYEE BENEFIT EXPENSES
(` Crore)PARTICULARS Year Ended
31-Mar-12 Year Ended
31-Mar-11Salaries, Wages and Bonus 242.96 1 2.4
Contribution to Provident Fund and Other Funds 13.74 11. 1
mployee Stoc Option Compensation xpenses 2.27
mployees Welfare xpenses 8.31 .37
267.28 1 .7
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 66F - 27
24. FINANCE COSTS(` Crore)
PARTICULARS Year Ended31-Mar-12
Year Ended 31-Mar-11
nterest expense 1,065.33 .
( et of interest subsidy of ` 131.11 crore (Previous year ` 131. crore) and recovery of ` 140.02 crore (Previous year ` 1.47 crore))
nterest on late payment of taxes 2.04 3.07
Other Borro ing costs 82.18 47.2
TOTAL 1,149.55 73 .27
25. OTHER EXPENSES (` Crore)
PARTICULARS Year Ended 31-Mar-12
Year Ended 31-Mar-11
Stores and Spares Consumed 97.89 0. 3Pac ing Materials Consumed 130.36 0.70Po er and Fuel 656.05 3 2.0Processing Charges 65.44 47. 3
abour Charges 66.27 .3xcise uty 6.27 4.14onation 1.21 0. 1
Freight, Coolie and Cartage 106.51 .2egal and Professional Fees 35.41 2 .70ent 15.63 12.1ates and Taxes 5.54 4.epairs and Maintenance
Plant and Machinery 16.91 14. 1 Factory Building 2.08 0. Others 5.25 3.
24.24 1 .7Commission on Sales 37.29 21. 3
oss on exchange rate difference derivative ( et) 248.56 34.1Provision for oubtful ebts 12.87 .37Provision for oubtful dvance 3.76 .31Bad debts and advances ritten off 12.07
oss on sale of investment( et) 0.12 irectors emuneration 7.20 7.20irectors Fees and Commission 5.04 .0uditors emuneration
udit Fees 1.46 1.30 Certi cation Fees 0.05 0.03
1.51 1.33oss on sale of assets ( et) – 1.74nsurance 12.11 12. 7Miscellaneous xpenses 129.95 10 .0(Miscellaneous xpenses includes Printing and Stationery, Ban Charges, dvertisement etc.)TOTAL 1,681.30 1,00 .
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 67F - 28
26 Contingent Liabilities in respect of :
(` Crore) Sr. No. Particulars Current Year Previous Year
A Customs duty on shortfall in export obligation in accordance with EXIM Policy
(The company is hopeful of meeting the export obligation within the stipulated period)
Amount Unascertained
Amount Unascertained
B Pending Litigation 0.05 0.05C Guarantees given by banks on behalf of the Company 73.48 24.69D Corporate Guarantees given to bank for loans taken by
Subsidiary Companies977.62 213.35
E Bills discounted 214.79 242.94F Taxation Matters :
a) Income tax demand mainly on account of alleged short deduction of taxes for AY 2010-11 and AY 2011-12 on certain payments. The company has led an appeal with the Commissioner of Income Tax (A) and is hopeful of favourable decision.
1.69 -
b) Income Tax demand during the previous years of ` 5.91 crore mainly on account of alleged short deposition of TDS amounts arising from wrong TAN numbers mentioned while uploading the TDS return and certain payments not considered by the Tax authorities, although duly paid by the company and short deduction of tax in respect of certain payments with respect to AY 2006-07 to 2009-10. The company had led an appeal with the Commissioner of Income Tax (A) and also made application for recti cation u s 154 providing details of amounts paid to the bank. Such recti cation was carried out during the year for majority of the amount and for the balance of ` 0.23 crore mainly pertaining to short deduction of taxes, the company is hopeful of favourable decision.
0.23 5.91
c) Demands of Works Contract Tax contested not acknowledged as debts as the company is hopeful of favourable decision.
0.59 0.59
d) Income tax amounting to ` 11.29 crore, mainly on account of disallowance of interest and expenditure incurred towards exempt income. The company has led an appeal with the Commissioner of Income Tax
(A) and is hopeful of favourable decision.
11.29 -
27 Capital Commitments
(` Crore)
Particulars Current Year Previous YearEstimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of advances)
445.15 464.55
28 Related Party Disclosure
A) Name and Transaction / balances with related parties
I. Name of related parties and nature of relationship
As per Accounting Standard 18 (AS-18) “Related Party Disclosures”, Company’s related parties disclosed as below:
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 68F - 29
(i) Associate companiesAlspun Infrastructure Limited Next Creation Holdings LLCAshford Infotech Private Limited Nirvan Builders Private Limited
(ii) Entities under common controlAlok Denims (India) Private Limited Green Park EnterprisesAlok Finance Private Limited Jiwrajka Associates Private Limited
Alok Knit Exports Limited Jiwrajka Investment Private LimitedAlok Textile Traders Niraj Realtors & Shares Private LimitedAshok Realtors Private Limited Nirvan ExportsBuds Clothing Co. Nirvan Holdings Private LimitedD. Surendra & Co. Pramatex EnterprisesGogri Properties Private Limited Pramita Creation Private LimitedGrabal Alok Impex Limited (Refer Note 36 on amalgamation)
Triumphant Victory Holdings Limited.
(iii) SubsidiariesAlok Inc. Alok Infrastructure LimitedAlok Industries International Ltd. (Refer note no 35 on transfer of shares to Alok Infrastructure Limited)
Alok Apparels Private Limited
Alok Retail (India) Limited Alok New City Infratex Private LimitedAlok Land Holdings Private Limited Alok Realtors Private LimitedAlok Aurangabad Infratex Private Limited Alok HB Hotels Private LimitedAlok H&A Limited Alok HB Properties Private LimitedAlok International, Inc. Springdale Information and Technologies Private LimitedAlok European Retail, s.r.o. Kesham Developers & Infotech Private LimitedAlok International (Middle East) FZE(incorporated on 01 August 2011)
Alok Singapore Pte Ltd.(Incorporated on 28 December 2011)
Mileta, a.s. Grabal Alok (UK) Limited (Refer note no 36 on amalgamation)Grabal Alok International Limited (Refer note no 35 on transfer of shares to Alok Infrastructure Limited)
(iv) Joint VentureAurangabad Textiles & Apparel Parks LimitedNew City Of Bombay Mfg. Mills Limited
(v) Key Management Personnel Ashok B. Jiwrajka
DirectorsChandrakumar BubnaDilip B. JiwrajkaSurendra B. Jiwrajka
(vi) Relatives of Key Management Alok A. JiwrajkaPersonnel Suryaprakash Bubna
II. Transactions with related parties.
(` Crore)Transaction Associate
companiesEntities under
common control
Subsidiaries Joint Venture
Companies
Key Management
Personnel
Relatives of Key
Management Personnel
Total
a) Unsecured Short Term Borrowing Accepted during the year (on
amalgamation)- - - 11.75 - - 11.75
(-) (-) (-) (-) (-) (-) (-) Balance as at 31 Mar - - - 11.75 - - 11.75
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 69F - 30
Transaction Associate companies
Entities under
common control
Subsidiaries Joint Venture
Companies
Key Management
Personnel
Relatives of Key
Management Personnel
Total
(-) (-) (-) (-) (-) (-) (-)b) Short Term Loans and Advances
Balance as at 1 April - 0.03 69.61 - - - 69.64(-) (-) (32.62) (-) (-) (-) (32.62)
Granted during the year - 10.13 3,998.06 - - - 4,008.19(-) (252.25) (1,482.83) (-) (-) (-) (1735.08)
Repaid during the year - 10.15 3,947.18 - - - 3,957.33(-) (252.22) (1,445.84) (-) (-) (-) (1698.06)
Balance as at 31 Mar - 0.01 120.49 - - - 120.50(-) (0.03) (69.61) (-) (-) (-) (69.64)
c) Non Current Investments Balance as at 1 April - - 37.91 88.75 - - 126.66
(-) (-) (117.76) (87.00) (-) (-) (204.76) Invested during the year - - 23.91 3.63 - - 27.54
(-) (-) (-) (1.75) (-) (-) (1.75) Redeemed Transferred during the year
- - 22.82 - - - 22.82(-) (-) (79.15) (-) (-) (-) (79.15)
Balance as at 31 Mar - - 39.00 92.38 - - 131.38(-) (-) (37.91) (88.75) (-) (-) (126.66)
d) Share Application Money – Non Current Investments Balance as at 31 Mar - - 9.00 - - - 9.00
(-) (-) (9.00) (-) (-) (-) (9.00)e) Trade Receivables
Balance as at 31 Mar - 0.09 143.46 0.04 - - 143.59(-) (26.97) (38.78) (0.09) (-) (-) (65.84)
f) Trade payables Balance as at 31 Mar - - 6.78 18.75 - - 25.53
(-) (18.55) (1.04) (0.02) (-) (-) (19.61)g) Other Current Liabilities
Balance as at 31 Mar - - 261.73 - - - 261.73(-) (-) (-) (-) (-) (-) (-)
h) Advance to Vendor – Short term Loans and AdvancesBalance as at 31 Mar - - 0.02 - - - 0.02
(-) (-) (-) (-) (-) (-) (-)i) Sale of product
Sales of Goods (Including job work charges)
- - 242.74 0.92 - - 243.66(-) (-) (137.94) (1.41) (-) (-) (139.35)
j) Expenditure Purchase of goods Job Charges - - 2.48 61.19 - - 63.67
(-) (2.87) (1.07) (82.87) (-) (-) (86.81) Purchase of Fixed Assets - - 201.66 - - - 201.66(* From three Directors jointly) (-) (0.62) (245.48) (-) (4.54*) (-) (250.64) Rent - - 3.12 - - - 3.12
(-) (-) (0.59) (-) (-) (-) (0.59) LC Charges - - - - - - -
(-) (-) (2.36) (-) (-) (-) (2.36) Sales Promotion Expenses - - 2.67 - - - 2.67
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 70F - 31
Transaction Associate companies
Entities under
common control
Subsidiaries Joint Venture
Companies
Key Management
Personnel
Relatives of Key
Management Personnel
Total
(-) (-) (2.44) (-) (-) (-) (2.44) Legal & Professional Fees - - 12.08 - - - 12.08
(-) (-) (-) (-) (-) (-) (-) Marketing Service Charges - - 12.98 - - - 12.98
(-) (-) (8.84) (-) (-) (-) (8.84) Exchange rate difference - - 68.98 - - - 68.98
(-) (-) (94.37) (-) (-) (-) (94.37) Remuneration - - - - 12.20 0.20 12.40
(-) (-) (-) (-) (12.20) (0.20) (12.40)k) Dividend Paid - - - - 1.54 - 1.54
(-) (-) (-) (-) (1.54) (-) (1.54)l) Income
Dividend - - - 2.00 - - 2.00(-) (-) (-) (2.21) (-) (-) (2.21)
Rent - 0.23 0.52 - - - 0.75(-) (0.03) (0.68) (-) (-) (-) (0.71)
m) Guarantee given - - 763.19 - - - 763.19(-) (-) (-) (-) (-) (-) (-)
Note: Previous year gures are given in brackets
III. Out of the above items, transaction in excess of 10% of the total Related Party transactions are as under:
(` Crore)Transaction Current Year Previous Year
a) Unsecured BorrowingAccepted during the year (on amalgamation)Joint Venture Company New City of Bombay Mfg. Mills Limited 11.75 -
b) Loans and advancesGranted during the yearSubsidiary- Alok Infrastructure Limited 3,539.23 1,090.93 Alok Industries International Limited - 298.50
3,539.23 1,389.43Repaid during the yearSubsidiary- Alok Infrastructure Limited 3,499.01 1,090.84 Alok Industries International Limited - 236.45
3,499.01 1,327.29c) Investment
Invested during the yearSubsidiary- Grabal Alok International Limited 22.60 -Joint Venture- New City of Bombay Mfg. Mills Limited - 1.75 Aurangabad Textiles & Apparel Parks Limited 3.63 -
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 71F - 32
Transaction Current Year Previous YearRedeemed Transferred during the yearSubsidiary- Alok Industries International Limited - 79.15 Grabal Alok International Limited 22.60 -
d) Turnover (including job work charges)Subsidiary- Alok International Inc. 141.77 44.68 Grabal Alok (UK) Ltd. 64.80 79.92 Alok Singapore Pte. Ltd. 25.33 -
231.90 124.60e) Expenditure
Purchase of Goods:Joint Venture Company New City of Bombay Mfg. Mills Limited 60.61 81.71Purchase of Fixed Assets (Under Construction):Subsidiary- Alok Infrastructure Limited 201.66 245.48RentSubsidiary- Kesham Developers Private Limited 2.86 0.59LC ChargesSubsidiary- Grabal Alok (UK) Ltd. - 2.36Sales Promotion ExpensesSubsidiary – Grabal Alok (UK) Ltd. 2.67 2.35Legal & Professional chargesSubsidiary – Grabal Alok (UK) Ltd. 12.08 -Marketing Service ChargesSubsidiary – Alok International Inc. 12.98 8.84Exchange Rate DifferenceSubsidiary- Grabal Alok (UK) Ltd. 68.98 94.37Remuneration:Key Management Personnel- Ashok B. Jiwrajka 3.05 3.05 Surendra B. Jiwrajka 3.05 3.05 Dilip B. Jiwrajka 3.05 3.05 Chandrakumar Bubna 3.05 3.05
12.20 12.20f) Dividend Paid
Key Management Personnel- Ashok B. Jiwrajka 0.50 0.50 Dilip B. Jiwrajka 0.51 0.51 Surendra B. Jiwrajka 0.53 0.53
1.54 1.54
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 72F - 33
Transaction Current Year Previous Yearg) Income
Dividend:Joint Venture Company New City of Bombay Mfg. Mills Limited 1.80 1.80 Aurangabad Textiles & Apparel Parks Limited 0.20 0.41
2.00 2.21Rent received:Entities under common control- Alok Denim (India) Limited 0.18 -Subsidiary- Alok Retail (India) Limited 0.40 0.63 Alok H&A Limited 0.10 -
0.50 0.63h) Guarantee Given
Subsidiary- Alok Industries International Limited 665.03 -
B) Details in accordance with clause 32 of the listing agreement with the stock exchanges are as under :
i) Loans and advances to subsidiary companies
Name of the Company Balance as at 31 March
2012
Maximum balance
during the year 11-12
Balance as at 31 March
2011
Maximum balance
during the year 10-11
Alok Infrastructure Limited 40.34 904.61 0.12 519.73Alok Inc. - 0.21 0.21 0.21Alok Industries International Limited 26.22 218.21 62.28 336.75Alok Apparels Private Limited 28.26 30.39 - 24.96Alok Retail (India) Limited 21.60 21.60 - 0.85Alok H&A Limited - 81.26 - 55.42Grabal Alok (UK) Limited 0.05 30.20 1.59 1.59Alok Realtors Private Limited - 2.14 - 3.60
C) Joint Venture
In compliance with the Accounting Standard 27 on ‘Financial Reporting of interest in Joint Ventures’ as noti ed by the (Companies Accounting Standards) Rules, 2006, the Company has interests in the following jointly controlled entities, which are incorporated in India.
(` Crore)Name of the Companies % of
share holding
Amount of interest based on provisional unaudited Accounts for the year ended 31 March 2012
Assets Liabilities Income Expense Contingent Liability
New City of Bombay Mfg. Mills Limited
49.00% 44.35 9.13 65.84 62.41 -(35.57) (2.38) (65.57) (61.20) (-)
Aurangabad Textile and Apparel Park Limited
49.00% 9.79 1.27 31.42 30.61 -(8.41) (0.69) (26.94) (26.47) –@
@ Disputed various matter relating to NTC ATM-Amount unascertainable.
Note : Previous year gures are given in brackets.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 73F - 34
29 Employee Stock Option Scheme(ESOS)
In 2011, the shareholders of the Company approved the Employee Stock Option Scheme (“Alok Industries Limited – ESOS 2010 Scheme”) vide postal ballot, in accordance with the Securities and Exchange Board of India (ESOP & ESOS) Guidelines, 1999. Such scheme provides for grant of options up to 2,50,00,000 options to the eligible employees and or directors of the Company and or its subsidiaries. The exercise price for such options can be up to 50% discount to the market price as per the discretion of the compensation committee. 1,07,99,250 options were granted during the year and 1,05,95,700 options were outstanding as on 31 March 2012. Such options vest over a period of two years, 50% at the end of one year from the date of grant and 50% at the end of two years from the date of grant.
Details of options granted duly approved by the Remuneration and Compensation Committee under the said scheme are as under:
Grant Date No. of Options granted
Options surrendered /
lapsed
Closing Balance
Exercise Price Vesting period
20 April 2011 12,80,000 1,85,550 10,94,450 18.90 Up to 20 April 201320 April 2011 95,19,250 18,000 95,01,250 21.42 Up to 20 April 2013Total 1,07,99,250 2,03,550 1,05,95,700
The Company has followed the Intrinsic Value-based method of accounting for stock options granted, based on Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India, and accordingly, compensation cost of ` 4.67 crore has been recorded during the year on such grant. The compensation cost recognised as a charge during the year was ` 2.27 crore. Had the compensation cost for the Company’s stock based compensation plan been determined in the manner consistent with the fair value approach as described in the Guidance note, the Company’s net income would be lower by ` 4.20 crore and earnings per share as reported would be lower as indicated below:
Particulars Year-2012Basic and Dilutive Earnings per share – As reported (In `) 4.69 – Adjusted (In `) 4.64
The Company has adopted Black Scholes option pricing model to determine the fair value of stock options. The fair value of each option granted in 2012 is estimated on the date of grant based on the following assumptions:
Particulars Year-2012Expected life (years) 1 year from the
date of vestingRisk free interest rate (%) 7.83%Volatility (%) 39%
30 Earnings per share (EPS)
(` Crore)31 March 2012 31 March 2011
a. Nominal value of equity shares per share ( In Rupees) 10 10b. Basic and Diluted EPS
Net Pro t available for equity shareholders 380.53 404.36Weighted average number of equity shares – Basic 811,187,390 787,784,357Basic EPS 4.69 5.13Add: Effect of dilutive stock options (Nos.) 46,286 -Weighted average number of equity shares – Diluted (Nos.) 811,233,676 787,784,357Diluted EPS 4.69 5.13
i) De ned contribution plans:
Amounts recognized as expenses towards contributions to provident fund, superannuation and other similar funds by the Company are ` 10.58 Crore (Previous Year ` 8.08 crore) for the year ended 31 March 2012.
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 74F - 35
ii) De ned bene t plans:
a) Gratuity Plan: The Company makes annual contribution to the Employee’s Group Gratuity Assurance Scheme, administered by the Life Insurance Corporation of India (‘LIC’), a funded de ned bene t plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to fteen days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs on completion of ve years of service.
b) Compensated absences: Employees’ entitlement to compensated absences in future periods based on unavailed leave as at balance sheet date, as per the policy of the Company, is expected to be a long term bene t and is actuarially valued.
The following table sets out the status of the gratuity plan for the year ended 31 March 2012 as required under AS 15 (Revised)
(` Crore)Particulars Gratuity
(funded) as on 31 March 2012
Gratuity (funded) as on 31 March 2011
15.08 10.52Current Service Cost 4.15 3.31Interest Cost 1.51 1.11Actuarial (Gain) loss (0.63) 0.46Past Service cost – Vested Bene t - -Bene ts Paid (0.33) (0.32)
19.78 15.08Change in Fair Value of assetsOpening in Fair value of assets 4.49 2.76Expected Return on Plan Assets 0.34 0.22Actuarial gain 0.26 0.08Contribution by Employer 2.32 1.75Bene ts Paid (0.33) (0.32)Closing Fair Value of Plan Assets 7.08 4.49Net Liability 12.70 10.59
Expense to be recognized in statement of Pro t and Loss Account (` Crore)
Particulars Year ended 31 March 2012
Year ended 31 March 2011
Current Service Cost 4.15 3.31Interest on De ned Bene t Obligation 1.51 1.11Expected Return on Plan Assets (0.34) (0.22)Net Actuarial Loss (0.89) 0.38Total Included in Employment Expenses 4.43 4.58Actual Return on Plan Assets 0.60 0.30Category of Assets as on 31 MarchInsurer Managed Fund
7.08 4.49
The assumptions used in accounting for the gratuity are set out below:
Particulars Year ended31 March 2012
Year ended 31 March
2011Discount rate 8.70% 8.05%Rate of increase in compensation levels of covered employees
9.00% 9.00%
Expected Rate of return on plan assets * 7.50% 7.50%
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 75F - 36
* Expected rate of return on plan assets is based on expectation of the average long term rate of return expected to prevail over the estimated term of the obligation on the type of the investments assumed to be held by LIC, since the fund is managed by LIC. The estimates of future salary increases, considered in actuarial valuation, takes into account the in ation, seniority, promotions and other relevant factors.
Experience Adjustments
(` Crore)Particulars Year Ended
31 March2012
31 March2011
31 March2010
31 March 2009
31 March 2008
De ned bene t obligation 19.78 15.08 10.52 6.67 -Plan Assets 7.08 4.49 2.76 2.24 -Surplus (De cit) (12.70) (10.59) (7.76) (4.43) -Experience Adjustments on plan Liabilities
1.09 (0.67) 0.16 - -
Experience Adjustments on plan Assets
0.26 0.08 0.07 - -
Asset Allocations
Since the investments are held in the form of deposit with LIC, these are not volatile and the market value of assets is the cost value of assets and has been accordingly considered for the above disclosure.
32 Segment Reporting
a) Primary Segment: Geographical Segment
The company is in the business of manufacturing of Textile products. Considering its high level of international operations and present internal nancial reporting based on geographical location of customer, the company has identi ed geographical segment as primary segment.
The geographic segment consists of:
a) Domestic (Sales to Customers located in India)
b) International (Sales to Customers located outside India)
Revenue directly attributable to segments is reported based on items that are individually identi able to that segment. The company believes that it is not practical to allocate segment expenses, segment results, assets used, except debtors, in the company’s business or liabilities contracted since the resources services assets are used interchangeably within the segments. Accordingly, no disclosure relating to same is made. All xed assets are located in India.
(` Crore)Particulars Current
YearPrevious
YearSegment RevenueOperating Revenue – Sales Domestic [Net of Excise duty of ` 233.95 crore (Previous year
`112.48 crores)]5,840.41 4,158.23
International 3,029.55 2,217.438,869.96 6,375.66
Job Charges Collected (Domestic) 30.90 12.77Total segment revenue 8,900.96 6,388.43Segment AssetsSundry Debtors Domestic 1,799.53 1,548.41 International 352.62 191.78
2,152.15 1,740.19
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 76F - 37
b) Secondary Segment: Business Segment
The company is operating in a single business i.e. Textile and as such all business activities revolve around this segment. Hence, there is no separate secondary segment to be reported considering the requirement of AS 17 on “Segment Reporting”
33 i. Due to unusual depreciation in the value of the Indian Rupee (INR) against US Dollar (USD) during the year, the exchange loss gain arising out of :
(i) Restatement of foreign currency liabilities assets, and
(ii) Mark to Market (MTM) losses on foreign exchange derivatives taken by the Company, has been presented as an exceptional item with corresponding changes for the previous year.
ii. The Company, during the year, based on the announcement of the ICAI (Accounting for derivatives), has accounted for derivative forward exchange contracts taken towards highly probable forecast transactions and rm commitments, at fair values considering the principles of recognition and measurement stated in AS-30 ‘Financial Instruments: Recognition and Measurement‘. Consequent upon such change, the pro t after tax for the year ended March 31, 2012 is higher by `16.78 crore and reserves and surplus are lower by an equivalent amount. Fair value (net loss) of the derivative instruments identi ed as cash ow hedges is ` 16.78 crore as at March 31, 2012, which is expected to be reclassi ed to the pro t and loss account over the next year.
iii. Fair values (Mark to market values) (loss) of Foreign currency options , Interest rate swaps and forward contracts (other than those considered for hedging) as at 31 March 2012 aggregating to ` 179.57 crore (previous year ` 72.96 crore) has been accounted for by the Company. Such fair values are based on the report of counter parties. MTM losses on such derivatives of ` 106.61 crore have been recognised during the year.
iv. Derivative contracts entered into by the company and outstanding as on 31 March 2012 for hedging currency and interest rate related risks. Nominal amounts of derivative contracts entered into by the company and outstanding as on 31 March 2012 amount to ` 3,477.99 Crore (previous year ` 2,841.73 Crore). Category wise break-up is given below.
(` Crore)Sr. No. Particulars 31 March 2012 31 March 2011
1 Interest Rate SwapsUSD INR 476.73 280.68JPY INR 1,150.00 743.27EUR INR 150.00 -
1,776.73 1,023.952 Currency Options * 1,201.21 1,342.263 Forward Contract 500.05 475.52
Total 3,477.99 2,841.73
* Represents monthly currency option for receivables, maturing over a period of 5 years
v. The year end foreign currency exposure that has not been hedged by derivative instruments or otherwise are as below :
a) Amount receivable in foreign currency on account of the following
Particulars Current Year Previous YearForeign
CurrencyAmount
in foreign currency
Rupees
(Crore)
Amount in foreign currency
Rupees
(Crore)Debtors USD - - 1.37 61.12
EUR 0.19 12.99 0.09 5.51GBP 0.00* 0.05 0.01 0.48
Fixed Deposits USD 0.65 33.50 - -
*GBP 6,647
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 77F - 38
b) Amount Payable in foreign currency on account of the following
Particulars Current Year Previous YearForeign
CurrencyAmount
in foreign currency
Rupees(Crore)
Amount in foreign currency
Rupees(Crore)
Secured Loans USD 27.69 1,416.91 21.49 959.31JPY 184.87 115.42 182.81 98.76
EUR 4.39 300.24 1.69 106.78
Interest accrued but not due on loans
USDEUR
0.010.03
0.762.09
0.010.02
0.431.44
Unsecured Loan USD 4.65 237.91 - -JPY 2.06 1.29 - -
EUR 1.78 121.41 1.77 112.22
Sundry creditors USD 2.90 148.49 5.96 266.23JPY - - 4.31 2.33
EUR 0.06 3.82 0.02 0.97
CHF 0.00* 0.16 - -
*CHF 27,571
34 During the previous year, Deutsche Bank, Singapore Branch subscribed to unsecured oating rate compulsory convertible bonds issued by Alok Industries International Limited (“Alok BVI”) and Grabal Alok (UK) Ltd, a company incorporated in the United kingdom (subsidiary) of the company, of USD 56.5 million each, with a green shoe option of USD 25 million. These bonds are secured by subservient charge on current and movable assets of the company which was created by executing a Deed of Hypothecation on 28 October 2010 in favour of AXIS Trustee Services Limited, Mumbai, India.
35 During the year, the company has transferred investments in the form of equity capital and cumulative redeemable preference shares in Alok Industries International Ltd (“Alok BVI”) & Grabal Alok International Ltd (“Grabal BVI”), its two wholly owned subsidiary companies to Alok Infrastructure Limited (“Alok Infra”), another wholly owned subsidiary as a strategy to consolidate all investible assets under one umbrella. During the previous year, vide a novation agreement, the Company had taken over the obligation of Grabal Alok (UK) Ltd, (then an associate company of Alok BVI & Grabal BVI in the United Kingdom) towards its liability pertaining to a JPY USD foreign currency derivative. Consequent to the sale of shares in Alok BVI and Grabal BVI to Alok Infra, Alok Infra has taken over such obligation of Alok Industries Ltd. during the current year.
36 During the year, the Honourable High Court, Bombay sanctioned the scheme of amalgamation (‘scheme’) between the Company (transferee) and Grabal Alok Impex Limited (transferor) with appointed date of 1 April 2011. Grabal Alok Impex is in the business of manufacturing embroidery textiles. The scheme has been effective from 1 March 2012.
The Company issued 2,24,85,000 equity shares of ` 10 each to shareholders of Grabal Alok Impex Limited (of which 19,00,000 shares were issued to Alok Bene t Trust) considering exchange ratio of 1:1 as per the scheme. There were no signi cant differences in accounting policies of two companies. The Company has accounted for such amalgamation under ‘pooling of interest’ method as under
Particulars ` CroreCarrying value of Fixed assets (including CWIP ` 18.94 crore) 193.51Carrying value of Investments (including ` 31.34 crore in Transferee company through Alok Bene t Trust)
62.59
Inventories 46.00Debtors 37.50Cash & Bank balances 147.00Loans & Advances 16.85Total Assets 503.45
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 78F - 39
Particulars ` CroreCurrent liabilities & Provisions 55.82Long term borrowings 113.15Short Term Borrowings 145.79Deferred Tax Liabilities 16.78Share warrants 20.40Total Liabilities 351.94
Shares issued 22.49Reserves taken over 129.02
Pursuant to the scheme, with effect from the Appointed Date up to and including the Effective Date, the transferor company is deemed to have been carrying on all business and activities in trust for Alok Industries Limited. Pending completion of relevant formalities of transfer of certain assets and liabilities pursuant to the Scheme, such assets and liabilities remain under the name of the Grabal Alok Impex Ltd.
On amalgamation of the Company and Grabal Alok Impex Ltd, Grabal Alok (UK) Ltd, an associate company of both companies, has now become a majority owned subsidiary of Alok Industries Ltd.
Current year gures of the Company include amount of revenue of ` 160.96 crore & pro t before tax of ` 7.58 crore for the year and hence are not strictly comparable.
37 In line with the amended Accounting Standard (AS) 11 – ‘Effect of changes in Foreign Exchange Rates’, the Company has chosen to exercise the option under paragraph 46 inserted in the Standard by the noti cation.
i. Added to xed assets capital work-in-progress ` 114.47 crore (previous year ` 23.48 crore) being exchange difference on long term monetary items relatable to acquisition of xed assets.
ii. Carried forward ` 0.99 crore (previous year ` (0.22) crore) in the ‘Foreign Currency Monetary Item Translation Difference Account’ being the amount remaining to be amortised as at 31 March 2012.
38 Addition information
Sales for the year in broad heads (` Crore)
Division 2011-12 2010-11a) Sale of Product Cotton & Cotton yarn Raw Cotton –Traded 117.48 429.78 Cotton Yarn 200.95 120.54 Cotton Yarn –Traded 3.84 2.85
322.27 553.17 Apparel Fabric Woven Fabric 3,660.06 2,718.87 Woven Fabric –Traded 9.58 - Knitted Fabric 266.49 241.56 Embroidery Fabric 162.94 -
4,099.07 2,960.43 Home textile Madeups 1,090.95 889.50 Terry Towel 159.46 110.61
1,250.41 1,000.11 Garment Garments 153.09 93.18 Handkerchief 20.81 21.39 Accessories –Traded 43.40 59.49
217.30 174.06
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 79F - 40
Division 2011-12 2010-11 Polyester Yarn Chips 749.00 158.90 POY 656.60 326.32 Texturised Yarn 1,310.02 1,146.25 FDY 470.59 142.55 Polyester Staple Fibre (PSF) 17.17 13.24 PTA –Traded - 13.11
3,203.38 1,800.37 Others Packing Material 9.78 - Others 1.70 -
Total 9,103.91 6,488.14
Raw Material Consumption for the year in broad heads (` Crore)
Division 2011-12 2010-11Cotton & Cotton yarnRaw Cotton 766.94 456.55Cotton Yarn 610.78 302.36
1,377.72 758.91Apparel FabricWoven Fabric 1,498.11 1,038.67Knitted Fabric 33.72 26.52
1,531.83 1,065.19Polyester YarnPTA 2,767.75 1,352.79Chips 28.58 24.52POY 6.70 22.63Melt 10.31 -
2,813.34 1,399.94OthersPacking Material 25.45 -Total 5,748.34 3,224.04
Purchase of Traded Goods for the year in broad heads (` Crore)
Division 2011-12 2010-11Cotton & Cotton yarnRaw Cotton 108.11 274.02Cotton Yarn 3.33 2.69
111.44 276.71Apparel FabricWoven Fabric 8.98 -GarmentAccessories 41.03 54.33Polyester YarnPTA –Traded - 11.58Total 161.45 342.62
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 80F - 41
Inventory of Work-in-progress as at 31 March 2012 in broad heads (` Crore)
Division 2011-12 2010-11Cotton & Cotton yarnCotton Yarn 33.65 27.77Apparel FabricWoven Fabric 1,850.98 686.02Knitted Fabric 5.80 7.24Embroidery Fabric 20.53 -
1,877.31 693.26Home textileMadeups 226.32 84.00Terry Towel 24.57 23.80
250.89 107.80GarmentGarments 14.51 12.80Handkerchief 3.16 1.36
17.67 14.16Polyester YarnChips 10.83 8.40POY 9.66 2.59Texturised Yarn 17.27 13.95FDY 0.83 0.63Polyester Staple Fibre (PSF) 0.06 0.21
38.65 25.78OthersPacking Material 2.60 -Total 2,220.77 868.77
39 (I) CIF VALUE OF IMPORTS (` Crore)
2011-12 2010-11 – Capital Goods purchased 749.95 399.33 – Stores & Spares purchased 68.33 47.31 – Raw Material purchased 1,281.58 939.55 – Packing Materials purchased 6.89 7.15
2,106.75 1,393.34
(ii) Expenditure in Foreign Currency (` Crore)
Nature of Expenses 2011-12 2010-11
Commission on sales 15.01 9.96
Interest on Fixed Loan 48.28 33.26
Legal and Professional Fees 17.03 1.74
Marketing service charges 12.98 8.84
Sales Promotion Expenses 3.49 10.25
Claim for damaged goods 4.66 2.96
Travelling expenses 1.28 0.11
Bank Charges 4.31 4.68
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 81F - 42
Nature of Expenses 2011-12 2010-11
Exchange Loss 68.98 94.37
Miscellaneous Expenses 10.00 7.16
Total 186.02 173.33
(iii) Value of raw materials, stores and spares consumed during the year.
(` Crore)2011-12 2010-11
Imported Indigenous Imported IndigenousValue % of Total
ConsumptionValue % of Total
Consumption Value % of Total
ConsumptionValue % of Total
ConsumptionRaw Materials 1,381.43 24.03% 4,366.91 75.97% 671.95 20.84% 2,552.09 79.16%Stores and Spares 64.87 66.27% 33.02 33.73% 32.56 64.30% 18.07 35.70%Packing Materials 6.89 5.28% 123.47 94.72% 7.15 8.86% 73.55 91.14%
(iv) Earning in Foreign Currency
(` Crore)2011-12 2010-11
– FOB Value of Exports 2767.98 2032.34– Interest received on Fixed Deposits 0.18 0.06
(v) Dividend Remitted in Foreign Exchange
Year of Dividend 2011-12 2010-11Equity share
No. of shareholders 10.00 -No. of shares held by them 13,600.00 -Dividend remitted during the year (`) 3,400.00 -Year to which dividend relates F.Y. 2010-11 -
40 The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of nancial statements. This has signi cantly impacted the disclosure and presentation made in the nancial statements. Previous year’s gures have been regrouped reclassi ed wherever necessary to correspond with the current year’s classi cation disclosure.
Signatures to Notes 1 to 40In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive ChairmanChartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director
Surendra B. Jiwrajka Jt. Managing DirectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate Affairs) &
Company SecretaryPlace : Mumbai Place : Mumbai Place : MumbaiMumbai: 18 May 2012 Mumbai: 18 May 2012 Mumbai: 18 May 2012
NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 82F - 43
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F - 84F - 45
TO THE BOARD OF DIRECTORS OFALOK INDUSTRIES LIMITED1. We have audited the attached Consolidated Balance Sheet of ALOK INDUSTRIES LIMITED (“the
Company”) and its subsidiaries (collectively referred to as “the Group”) as at 31st March 2012, the Consolidated Statement of Pro t and Loss and the Consolidated Cash Flow Statement for the year ended on that date, both annexed thereto. These nancial statements are the responsibility of the Company’s Management and have been prepared on the basis of the separate nancial statements and other nancial information regarding components. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit.
2. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and the disclosures in the nancial statements. An audit also includes assessing the accounting principles used and the signi cant estimates made by the Management, as well as evaluating the overall nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. Without qualifying our opinion, we draw attention to note no. 39 (b) of the nancial statements regarding goodwill recognised on consolidation of Grabal Alok (UK) Limited during the year. For the reasons stated therein, no provision for impairment is considered necessary at this stage.
4. Financial statements of certain Subsidiaries, which re ect total assets of ` 184.41 crore as at 31st March, 2012, total revenue of `155.98 crore and net cash in ows amounting to ` 254.15 crore for the year then ended, as considered in the Consolidated Financial Statements, have been audited by one of us.
5. We did not audit the nancial statements of certain Subsidiaries, whose nancial statements re ect total assets of ` 1865.17 crore as at 31st March 2012, total revenues of ` 94.93 crore and net cash out ows amounting to ` 42.84 crore for the year ended on that date, as considered in the Consolidated Financial Statements. These nancial statements have been audited by other auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts included in respect of these Subsidiaries is based solely on the reports of the other auditors.
6. We have relied on the unaudited nancial statements of Subsidiaries and Joint Venture companies, whose nancial statements re ect total assets of ` 706.03 crore as at 31st March 2012, total revenue of ` 1085.91
crore and net cash in ows amounting to ` 364.24 crore for the year ended on that date and nancial statements of Associate companies in which the share of pro t of the Group is ̀ 0.08 crore, as considered in the Consolidated Financial Statements. These unaudited nancial statements as approved by the respective Board of Directors of the companies have been furnished to us by the Management and our report in so far as it relates to the amounts included in respect of the Subsidiaries, Joint Venture companies and Associate companies is based solely on such approved unaudited nancial statements.
7. We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard 21 (Consolidated Financial Statements), Accounting Standard 23 (Accounting for Investment in Associates in Consolidated Financial Statements) and Accounting Standard 27 (Financial Reporting of Interests in Joint Ventures) as noti ed under the Companies (Accounting Standards) Rules, 2006.
8. Based on our audit and on consideration of the separate audit reports on individual nancial statements of the Company and certain subsidiaries and on the other nancial information of the components and to the best of our information and according to the explanations given to us, in our opinion, the Consolidated Financial Statements, read with para 6 above, give a true and fair view in conformity with the accounting principles generally accepted in India:
a. in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March, 2012;b. in the case of the Consolidated Statement of Pro t and Loss, of the pro t of the Group for the year ended
on that date andc. in the case of the Consolidated Cash Flow Statement, of the cash ows of the Group for the year ended
on that date.For Deloitte Haskins & SellsChartered AccountantsFirm Registration No. 117366W
R. D. KamatPartnerMembership No.36822 Place : Mumbai Date : 18 May 2012
For Gandhi & ParekhChartered Accountants Firms Registration No. 120318W
Devang B. ParekhPartner Membership No. 105789Place : Mumbai Date : 18 May 2012
AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
F - 85F - 46
In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive ChairmanChartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director
Surendra B. Jiwrajka Jt. Managing DirectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate Affairs) &
Company SecretaryPlace : Mumbai Place : Mumbai Place : MumbaiDate: 18 May 2012 Date: 18 May 2012 Date: 18 May 2012
(` Crore) PARTICULARS NOTES AS AT
31-Mar-12 AS AT
31-Mar-11 I EQUITY AND LIABILITIES
Shareholders' Funds Share Capital 2 826.28 787.79 Reserves and Surplus 3 2,034.09 2,004.27 Minority Interest – 4.62 Non-current Liabilities Long-term Borrowings 4 8,516.96 7,164.48 Deferred Tax Liabilities (net) 5 627.07 507.84 Long-term provisions 6 176.71 79.64 Current Liabilities Short-term Borrowings 7 5,340.01 3,695.97 Trade payables 8 605.23 594.93 Other current liabilities 9 2,908.52 1,563.20 Short-term provisions 10 119.47 72.93
TOTAL 21,154.34 16,475.67 II ASSETS
Non-current Assets Fixed assets Tangible assets 11 8,811.20 7,470.27 Intangible assets 11 41.00 43.58 Capital work-in-progress 11 924.38 899.98 Goodwill on Consolidation 606.27 156.42 Non-current Investments 12 1,589.42 1,689.98 Deferred tax assets (net) 5 9.02 7.54 Long-term Loans & Advances 13 390.32 440.11 Current Assets Current Investments 14 3.94 27.41 Inventories 15 3,697.12 2,149.88 Trade receivables 16 2,204.00 1,814.20 Cash & Bank Balances 17 1,397.80 1,200.91 Short-term Loans & Advances 18 1,364.06 439.01 Other current assets 19 115.81 136.38
TOTAL 21,154.34 16,475.67III Signi cant accounting policies and
accompanying notes forming part of the nancial statements
1 to 44
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2012
F - 86F - 47
In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive ChairmanChartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director
Surendra B. Jiwrajka Jt. Managing DirectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate Affairs) &
Company SecretaryPlace : Mumbai Place : Mumbai Place : MumbaiDate: 18 May 2012 Date: 18 May 2012 Date: 18 May 2012
(` Crore) PARTICULARS NOTES Year Ended
31-Mar-12 Year Ended
31-Mar-11REVENUE Revenue from Operations (gross) 20 10,018.67 6,727.38 Less : Excise Duty 233.95 112.48Revenue from Operations (net) 9,784.72 6,614.90 Other Income 21 95.51 67.07Total Revenue 9,880.23 6,681.97EXPENSES Cost of Materials consumed 5,793.09 3,261.84 Purchase of Traded Goods 1,117.20 468.99 Changes in inventories of nished goods, work-in-
progress and stock-in-trade 22 (1,692.18) (267.67)
Employee bene ts expense 23 312.84 244.22 Finance costs 24 1,234.70 782.15 Depreciation and amortisation expense 11 749.14 530.97 Other expenses 25 1,877.36 1,120.36 Total Expenses 9,392.15 6,140.86
488.08 541.11Exceptional items (Refer note no 42(i)) 121.27 39.87
366.81 501.24Tax Expenses– Current tax (172.93) (81.16) Includes MAT adjustment ` 44.12 crore (` 26.53 crore
pertaining to the previous year (previous year ` 42.42 crore))
– Deferred tax (100.97) (97.34)Total Tax expenses (273.90) (178.50)
92.91 322.74
Share of pro t (loss) from Associates 0.08 (10.89) Minority Interest – (0.31)
92.99 311.54EARNINGS PER SHARE (in `) 34 Basic 1.15 3.95 Diluted 1.15 3.95Signi cant accounting policies and accompanying notes forming part of the nancial statements
1 to 44
CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 MARCH 2012
F - 87F - 48
(` Crore)PARTICULARS Year Ended
31-Mar-12 Year Ended
31-Mar-11A] Cash Flow from Operating Activities Net Pro t Before Tax 366.81 501.24 Adjustments for: Depreciation Amortisation 749.14 530.97 Diminution in the value of investment 8.88 16.88 Employee Stock Option outstanding 2.27 – Exchange rate difference 8.99 (6.34) Dividend Income (0.60) (0.36) Interest Expense (net) 1,108.77 668.26 (Pro t) Loss on sale of xed assets (net) (34.88) 0.03 Loss (Pro t) on sale of current investments (net) 0.12 (1.16) Operating Pro t before working capital changes 2,209.50 1,709.52 Adjustments for (Increase) in Inventories (1,381.63) (599.29) (Increase) in Trade Receivables (283.39) (687.74) (Increase) Decrease in Loans and Advances (958.63) 123.87 (Decrease) Increase in Current Liabilities 93.09 478.43 Cash (used) in generated from operations (321.06) 1,024.79 Income Taxes Paid (129.40) (128.45) Net cash (used) in generated from Operating Activities (450.46) 896.34
Purchase of Fixed Assets (1,551.10) (2,340.79) Proceeds from sale of xed assets 49.40 14.05 Purchase of Investments (341.57) (214.13) Proceeds from sale of Investments 135.57 127.24 Fixed Deposits and earmarked balances matured (placed) 236.57 (318.04) Dividends Received 0.60 0.36 Interest Received 35.86 62.04 Share Application money paid – (0.16) Inter Corporate Deposits granted (4.49) (3.44) Net cash (used) in Investing Activities (1,439.16) (2,672.87)
Proceeds from issue of Equity Share Capital (including premium) (Net)
61.19 –
Share Application money received (repaid) (Net) 350.00 (227.57) Proceeds from Term borrowings 2,430.53 4,144.40 Repayment of Term Borrowings (954.59) (2,751.40) Proceeds from short term borrowings (Net) 1,428.24 898.48 Dividend Paid (Including Tax thereon) (24.52) (23.33) Interest Paid (1,130.38) (791.85) Net cash Generated from Financing Activities 2,160.47 1,248.73
270.85 (527.80) 165.98 693.78 158.62 –
(Refer note no 39) 595.45 165.98
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
F - 88F - 49
1 Purchase of xed assets are stated inclusive of movements of Capital Work in Progress between the commencement and end of the year and is considered as part of investing activity.
2 (` Crore)
PARTICULARS 31 March 2012 March 31, 2011Cash and Bank Balances (Refer note no 17) 1,397.80 1,200.91Less : Earmarked balances deposits with bank* 715.19 981.69Less : Deposit with maturity period of more than 3 months ** 87.16 53.24
595.45 165.98
* Earmarked balances deposits with bank includes balances deposits held as margin money or security against borrowings, guarantees and other commitments, which being restricted for its use, have been excluded from cash and cash equivalent and grouped under the investing activity.
** Fixed Deposits with maturity period of more than three months have been excluded from cash and cash equivalent and grouped under the investing activity.
3 The Cash Flow Statement has been prepared in accordance with the requirements of Accounting Standard 'AS-3' “Cash Flow Statements”.
4 Pursuant to scheme of amalgamation between Alok Industries Limited and Grabal Alok Impex Limited with appointed date of 1 April 2011, the assets and liabilities of Grabal Alok Impex Limited were taken over as per Pooling of Interest method as on 1 April 2011.
This arrangement of amalgamation is a non-cash transaction and considered as such, in the above cash ow statement. (Refer note no 39(a) of the nancial statements)
5 Previous year's gures have been regrouped restated wherever necessary.
In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive ChairmanChartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director
Surendra B. Jiwrajka Jt. Managing DirectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate Affairs) &
Company SecretaryPlace : Mumbai Place : Mumbai Place : MumbaiDate: 18 May 2012 Date: 18 May 2012 Date: 18 May 2012
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012
F - 89F - 50
1 SIGNIFICANT ACCOUNTING POLICIES
i Basis of Preparation of Financial Statements
These consolidated nancial statements of Alok Industries Limited (“the Parent Company”) and its Subsidiaries, Joint Ventures and Associate Companies, (together the “Group” or “the Company”) have been prepared under the historical cost convention in accordance with the requirements of the Companies Act, 1956 and generally accepted accounting principles in India.
ii Principles of Consolidation
The nancial statements of Subsidiary companies, Joint Venture companies and associate companies used in consolidation are drawn up to the same reporting date as that of the Parent Company. The consolidated nancial statements have been prepared on the following basis :
a) The nancial statements of the Parent Company and its subsidiary companies are combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after eliminating intra-group balances, intra-group transactions resulting in unrealised pro t or losses as per Accounting Standard (AS) 21 “Consolidated Financial Statements” as noti ed by the Company (Accounting Standards) Rules 2006. The Financial Statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances.
b) The excess of cost to the Company of its investment in subsidiary companies over its share of equity of the subsidiary companies at the dates, on which the investments in the subsidiary companies are made, is recognised as “Goodwill” being an asset in the consolidated nancial statements. Alternatively, where the share of equity in the subsidiary companies as on the date of investment is in excess of cost of investment of the Company, it is recognised as “Capital Reserve” and shown under the head ‘Reserves & Surplus’, in the consolidated nancial statements.
c) Minority Interest in the net assets of consolidated subsidiaries consist of the amount of equity attributable to the minority shareholders at the dates on which investments are made by the Company in the subsidiary companies and further movements in their share in the equity, subsequent to the dates of investments.
d) The Financial Statements of the Joint Venture entities have been considered on a line by line basis by adding together the book value of like items of assets, liabilities, income and expenses, after eliminating intra-group balances and intra-group transactions resulting in unrealised pro t or losses, by using “proportionate consolidation” method. The investment in Joint Venture entities over the holding company’s portion of equity is recognised as a capital reserve goodwill, as per Accounting Standard 27 on “Financial Reporting of Interest in Joint Venture” as noti ed by the Company (Accounting Standards) Rules 2006.
e) The consolidated nancial statements include the share of pro t loss of associate companies in which the investor has signi cant in uence and which is neither a subsidiary nor a joint venture, which are accounted under the “Equity Method” as per which the share of pro t of the associate Company has been added to the cost of investment, and its share of pre-acquisition pro ts losses is re ected as Capital Reserve Goodwill in the carrying value of Investment in accordance with Accounting Standard 23 on Accounting for Investment in Associates in Consolidated Financial Statement as noti ed by Company (Accounting Standards) Rules 2006.
iii Use of Estimates
The preparation of nancial statements in conformity with the generally accepted accounting principles require estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the nancial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised in the period in which the results are known materialise.
iv Revenue Recognition
a) Revenue on sale of products is recognised when the products are dispatched to customers, all signi cant contractual obligations have been satis ed and the collection of the resulting receivable is reasonably expected. Sales are stated net of trade discount, returns and sales tax collected.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 90F - 51
b) Revenue from construction contracts is recognised by adopting “Percentage Completion Method”. It is stated on the basis of physical measurement of work actually completed at the balance sheet date, taking into account contract price and revision thereto.
c) Revenue in respect of insurance other claims, interest etc. is recognised only when it is reasonably certain that the ultimate collection will be made.
v Fixed Assets
a) Own Assets :
Fixed Assets are stated at cost of acquisition or construction including directly attributable cost. They are stated at historical cost less accumulated depreciation and impairment loss, if any.
b) Assets taken on lease:
Assets taken on lease under which, all the risk and rewards of ownership are effectively retained by the lessor are classi ed as operating lease. Lease rentals under operating leases are recognised as expenses over the lease term in accordance with the respective lease agreements.
c) Assets given on lease:
Lease rentals are recognised as income over the lease term.
vi Investments
Investments classi ed as Long Term Investments are stated at cost. Provision is made to recognise a decline, other than temporary, in the value of investments. Current investments are carried at cost or fair value whichever is lower.
a) Depreciation on Fixed Assets is provided on Straight Line Method at the rates and in the manner speci ed in Schedule XIV to the Companies Act, 1956. Continuous process plant is classi ed based on technical assessment and depreciation is provided accordingly. Depreciation on additions to assets or on sale disposal of assets is calculated from the beginning of the month of such addition or up to the month of such sale scrapped, as the case may be. Assets costing less than ` 5,000 – are fully depreciated in the year of purchase.
b) Cost of leasehold land is amortised over the period of lease.
c) Trademarks Brands are amortised over the period of ten years from the date of capitalisation.
d) Computer Software is amortised over the period of ve years from the date of capitalisation.
e) Goodwill on consolidation is not amortised, but is tested for impairment at each balance sheet date and impairment loss, if any, is provided for.
viii Foreign Currency Transactions and Translation
a) Foreign currency transactions are recorded at the exchange rates prevailing on the date of the transaction. Exchange differences arising on settlement of foreign currency transactions are recognised in the pro t and loss account.
b) Monetary items denominated in foreign currency are restated using the exchange rate prevailing at the balance sheet date and the resultant exchange differences are recognised in the pro t and loss account. Non-monetary items denominated in foreign currency are carried at historical cost.
However, pursuant to the amended Accounting Standard 11 on The Effects of Changes in Foreign Exchange Rates, exchange differences arising on restatement of long term monetary items are dealt with in the following manner :
i. Exchange differences relating to long-term monetary items, arising during the year, in so far as those relate to the acquisition of a depreciable capital asset are added to deducted from the cost of the asset and depreciated over the balance life of the asset.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 91F - 52
ii. In other cases such differences are accumulated in a “Foreign Currency Monetary Item Translation Difference Account” and amortised to the pro t and loss account over the balance life of the long-term monetary item, however that the period of amortisation does not extend beyond 31 March, 2020.
FOREIGN OPERATIONS :
The translation of the nancial statements of non integral foreign operations is accounted for as under :
a) All Expenses and Revenues are translated at average rate.
b) All monetary and non monetary assets and liabilities are translated at rate prevailing at the balance sheet date.
c) Resulting exchange difference is accumulated in Foreign Currency Translation Reserve account until the disposal of net investment in the said non integral foreign operation.
ix Inventories
Items of Inventories are valued on the basis given below:
a) Raw Materials, Packing Materials, Stores and Spares and Trading goods: at cost determined on First – In – First – Out (FIFO) basis or net realisable value, whichever is lower.
b) Process stock and Finished Goods: At cost or net realisable values whichever is lower. Cost comprises of cost of purchase (as above), cost of conversion (absorption cost) and other costs incurred in bringing the inventory to their present location and condition.
a)
Company’s contribution paid payable for the year to de ne contribution retirement bene t scheme is charged to Pro t and Loss account.
b)
Company’s liabilities towards de ned bene t scheme are determined using the projected unit credit method. Actuarial valuation under projected unit credit method are carried out at Balance Sheet date, Actuarial gains losses are recognised in Pro t and Loss Account in the period of occurrence of such gains and losses. Past service cost is recognised immediately to the extent bene ts are vested otherwise it is amortised on straight line basis over running average periods until the bene ts become vested. The retirement bene t obligation is recognised in Balance Sheet represents present value of the de ned bene t obligations as adjusted for unrecognised past service cost and as reduced by fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, the present value is available refunds and reduction in future contribution to the scheme.
c)
Short term employee bene ts are recognised as an expense at undiscounted amount in pro t and loss account of the year in which the related service is rendered. These bene ts include incentive, bonus.
xi Accounting of CENVAT credit
Cenvat credit available is accounted by recording material purchases net of excise duty. Cenvat credit availed is accounted on adjustment against excise duty payable on dispatch of nished goods.
xii Government Grants
Grants, in the nature of interest capital subsidy under the Technology Upgradation Fund Scheme (TUFS), are accounted for when it is reasonably certain that ultimate collection will be made. Government grants not speci cally related to xed assets are recognised in the Pro t and Loss Account in the year of accrual receipt.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 92F - 53
xiii Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue.
xiv Income taxes
Tax expense comprises of current tax and deferred tax. Current tax and deferred tax are accounted for in accordance with Accounting Standard 22 (AS-22) on “Accounting for taxes on Income”. Current tax is measured at the amount expected to be paid recovered from the tax authority using the applicable tax rates. Deferred tax liabilities are recognised for future tax consequence attributable to timing difference between taxable income and accounting income that are capable of reversing in one or more subsequent periods and are measured at relevant enacted substantively enacted tax rates and in the case of deferred tax asset on consideration of prudence, are recognised and carried forward to the extent of reasonable virtual certainty as case may be. At each balance sheet date, the Company reassesses unrealised deferred tax assets to the extent they become reasonably certain or virtually certain of realisation, as the case may be. Minimum Alternate Tax (MAT) credit entitlement is recognised in accordance with the Guidance Note on “Accounting for credit available in respect of Minimum Alternate Tax under the Income-tax Act, 1961” issued by ICAI.
xv Intangible Assets
Intangible assets are recognised only if it is probable that the future economic bene ts that are attributable to the assets will ow to the enterprise and the cost of the assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated amortisation and accumulated impairment losses, if any.
xvi Impairment of Fixed Assets
At the end of each year, the Company determines whether a provision should be made for impairment loss on xed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard (AS) 28 ‘’Impairment of Assets’’. An impairment loss is charged to the Pro t and Loss Account in the year in which, an asset is identi ed as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.
xvii Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an out ow of resources. Contingent liabilities are not recognised but are disclosed in the Notes. Contingent Assets are neither recognised nor disclosed in the nancial statements.
xviii Accounting for Derivatives
a) The company uses derivative instruments like foreign currency forward contracts, foreign currency options and Interest rate swaps to hedge its exposure to movements in foreign exchange rates, interest rates and currency risks. The objective of these derivative instruments is to reduce the risk or cost to the company and is not intended for trading or speculation purposes.
b) Interest Rate Swaps, Foreign Currency Options and Currency Swaps, entered into by the Company for hedging the risks of foreign currency exposure (including interest rate risk) are accounted based on the principles of prudence as enunciated in Accounting Standard 1 (AS-1) “Disclosure of Accounting Policies”. Thus, Mark to Market losses (net) are accounted for by the company, net gains are ignored.
c) In respect of foreign currency forward contracts entered into to hedge foreign currency exposure in respect of recognised monetary items, the premium or discount on such contracts is amortised over the life of the contract. The exchange difference measured by the change in exchange rate between the inception dates of the contract last reporting date as the case may be and the balance sheet date is recognised in the pro t and loss account. Any gain loss on cancellation of such forward contracts are recognised as income expense of the period.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 93F - 54
d) The Company designates foreign currency forward contracts taken with respect to highly probable forecast transactions and rm commitments as hedges and accounts for the same by applying the recognition and measurement principles set out in the Accounting Standard (AS) 30 “Financial Instruments: Recognition and Measurement”. Accordingly, the Company records the gain or loss on effective cash ow hedges in the Cash Flow Hedging Reserve Account until the forecasted transaction materialises. Gain or loss on ineffective cash ow hedges (if any) is recognised in the pro t and loss account. (Refer note no 42(ii)).
2 SHARE CAPITAL
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Authorised100,00,00,000 (Previous Year 90,00,00,000) Equity shares of ` 10 – each 1,000.00 900.00
1,000.00 900.00Issued, Subscribed and fully paid-up
82,62,69,357 (previous year 78,77,84,357) Equity shares of ̀ 10 – each fully paid up
826.27 787.78
Add : Forfeited Share (13,921 shares of ` 10 – each of ` 5 Paid up) 0.01 0.01TOTAL 826.28 787.79
NOTES :
a) During the year 3,84,85,000 (previous year Nil) equity shares were issued as under:
i] 1,60,00,000 Equity shares of ` 10 – each at a premium of ` 41 – each allotted on conversion of warrants issued by Grabal Alok Impex Limited, the amalgamating company. Such warrants were sold by the original warrant holder to Jiwrajka Investment Private Limited, a promoter group company, which exercised such warrants.
ii] 2,24,85,000 Equity shares allotted to the Shareholders of Grabal Alok Impex Limited pursuant to the Scheme of Amalgamation for consideration other than cash (Refer note no 39(a)).
b) Of the remaining shares :
i] 7,45,396 equity shares were allotted as bonus shares by way of capitalisation of General Reserve.
ii] 62,550 equity shares being forfeited shares were reissued during 2001.
c) Reconciliation of shares outstanding at the beginning and end of the reporting period
(` Crore)PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11No of shares outstanding at the beginning of the year 787,784,357 787,798,278Add : Shares allotted during the yearAllotment of Equity shares on conversion of warrants 16,000,000 –Allotment of Equity shares pursuant to the Scheme of Amalgamation 22,485,000 –Less: Shares forfeited on account of non payment of call money – (13,921)No of shares outstanding at the end of the year 826,269,357 787,784,357
d)
The company has only one class of equity shares having a par value of ` 10 – per share. Each holder of equity share is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 94F - 55
e) Shares reserved for issue under options (Refer note no 33)
f) Grabal Alok Impex Limited, the amalgamating company, (Refer note no 39(a)) had issued and allotted 200 Foreign Currency Convertible Bonds of USD 1,00,000 each aggregating to USD 20 million outstanding as at the balance sheet date, which was convertible into shares, at any time on or after 15 April 2007 and prior to the closure of business on 06 March 2012, unless previously redeemed, converted or purchased and cancelled. Such FCCBs have been redeemed after the balance sheet date, on 05 April 2012.
g) During the year ended 31 March 2012, an amount of ` 0.30 per share (previous year ` 0.25 per share) was recognised as proposed dividend to equity share holders.
h) Shareholder holding more than 5 percent of the share capital
(` Crore)Sr.no. Name of the Shareholder AS AT
31-Mar-12 AS AT
31-Mar-11No of
shares Held
% No of shares
Held
%
i] Niraj Realtors & Shares Private Limited
71,637,204 8.67 59,842,184 7.60
ii] Caledonia Investment PLC 36,207,135 4.38 47,825,714 6.07iii] Caledonia Investment PLC (FDI) 24,211,903 2.93 45,184,354 5.74
3 RESERVES AND SURPLUS
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Capital ReserveBalance as per last Balance Sheet 10.23 10.23Add : on amalgamation* 1.49 –Add: Transferred from statement of Pro t and Loss 0.26 –
11.98 10.23Capital Reserve (on Consolidation)Balance as per last Balance Sheet 11.61 10.66Add : Addition on account of additional investment 2.70 –Add : Translation difference on restatement 0.67 0.95
14.98 11.61Revaluation reserveBalance as per last Balance Sheet – –Add : on amalgamation (Refer note no 39(b) 3.86 –
3.86 –Capital Redemption ReserveBalance as per last Balance Sheet 2.20 2.20Add : on amalgamation* 6.90 –
9.10 2.20Securities premium accountBalance as per last Balance Sheet 880.39 880.39Add : on amalgamation* 60.15 –Add : Received during the year (Refer note no 2a(i) above) 65.60 –Less : Premium on redemption of FCCB (12.49) –
993.65 880.39General ReserveBalance as per last Balance Sheet 275.25 250.22Add : on amalgamation* 5.63 –
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 95F - 56
Add: Transferred from statement of Pro t and Loss 0.31 25.03 281.19 275.25
Debenture Redemption ReserveBalance as per last Balance Sheet 220.38 604.68Add: Transferred to statement of Pro t and Loss (51.90) (384.30)
168.48 220.38Foreign Currency Translation ReserveBalance as per last Balance Sheet 9.24 11.24Add: Created during the year (73.51) (2.00)
(64.27) 9.24(Refer note no 42(ii)) (16.78) –
Employee Stock Options Outstanding (Refer note no 33)Options granted during the year 4.67 –Less : Deferred Employee Compensation expenses (2.40) –
2.27 –
Opening balance 594.97 (52.48)Add : on amalgamation* (80.63) –Pro t for the year 92.99 311.54Less : Appropriations(i) Transferred to General Reserve (0.31) (25.03)(ii) Transferred from Debenture Redemption Reserve 51.90 384.30(iii) Transferred to Capital Reserve (0.26) –(iv) Proposed Dividend – Equity Shares (24.79) (19.69)(v) Corporate Dividend Tax thereon (4.02) (3.27)(vi) Short provision of dividend and tax thereon (0.22) (0.40)
629.63 594.97 TOTAL 2,034.09 2,004.27
4 LONG-TERM BORROWINGS
(` Crore)PARTICULARS AS AT 31-Mar-12 AS AT 31-Mar-11
Current Non Current
Current Non Current
Debentures Bonds Debentures (Secured) (Refer note I below) 800.00 500.00 Compulsorily Convertible Debentures
(Unsecured) (Refer note II below) 613.88 312.55
Compulsorily Convertible Bonds (Refer note no 40) 492.74 226.47Term Loans (Secured) (Refer note III & IV below)(a) From banks - Rupee Loans 1,365.90 5,848.08 1,076.94 5,119.30 - Foreign currency loans 555.87 353.06 15.28 574.75
1,921.77 6,201.14 1,092.22 5,694.05
(b) From Financial Institutions - Rupee Loans 121.47 170.05 130.73 183.18 - Foreign currency loans 28.12 148.36 20.57 147.00
149.59 318.41 151.30 330.182,071.36 6,519.55 1,243.52 6,024.23
Term Loans (Unsecured) (Refer note V below) From Banks and Financial Institutions - Foreign Currency Loans 119.64 86.62 16.88 95.35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 96F - 57
Other loans & advances (Refer note VI below) Vehicle loan from Banks (Secured) 2.50 4.17 2.11 5.88
2,193.50 8,516.96 1,262.51 7,164.48
NOTES :
I. a) Debentures outstanding at the year end are redeemable as follows
PARTICULARS Nos 31-Mar-12 (` Crore)
31-Mar-11 (` Crore)
Date of Redemption
12.00% Redeemable Non convertible Debentures 375 37.50 – 1-Feb-2012.00% Redeemable Non convertible Debentures 375 37.50 – 1-Aug-1912.00% Redeemable Non convertible Debentures 375 37.50 – 1-Feb-1910.75% Redeemable Non convertible Debentures 334 33.34 33.34 18-Oct-1812.00% Redeemable Non convertible Debentures 375 37.50 – 1-Aug-1812.00% Redeemable Non convertible Debentures 375 37.50 – 1-Feb-1810.75% Redeemable Non convertible Debentures 333 33.33 33.33 18-Oct-1712.00% Redeemable Non convertible Debentures 375 37.50 – 1-Aug-1712.50% Redeemable Non convertible Debentures 300 30.00 30.00 3-Mar-1712.50% Redeemable Non convertible Debentures 366 36.66 36.66 2-Mar-1712.00% Redeemable Non convertible Debentures 375 37.50 – 1-Feb-1710.75% Redeemable Non convertible Debentures 333 33.33 33.33 18-Oct-1612.00% Redeemable Non convertible Debentures 375 37.50 – 1-Aug-1611.50% Redeemable Non convertible Debentures 600 60.00 60.00 29-Jun-1612.50% Redeemable Non convertible Debentures 367 36.67 36.67 2-Mar-1612.50% Redeemable Non convertible Debentures 300 30.00 30.00 2-Mar-1611.50% Redeemable Non convertible Debentures 700 70.00 70.00 28-Jun-1512.50% Redeemable Non convertible Debentures 367 36.67 36.67 3-Mar-1512.50% Redeemable Non convertible Debentures 300 30.00 30.00 3-Mar-1511.50% Redeemable Non convertible Debentures 700 70.00 70.00 28-Jun-14
TOTAL 800.00 500.00
b) All the debentures in a) above are secured by pari passu charge on the immovable property situated at Mouje Irana, Taluka Kadi, District Mehsana in the state of Gujarat. Further, Debentures of ` 300 crore are secured by rst pari passu charge to be created on xed assets of the company and Debentures of ` 500 crore are secured by subservient charge on xed and current assets of the Company (excluding Land and Building).
II. Compulsorily Convertible Debentures are compulsorily convertible redeemable at the option of the issuer after 26 months from the date of the issue i.e. 29 July 2011 and or in twenty equal quarterly instalments or as mutually decided between the issuer and the holder.
III. Disclosure of Security for term loans
(` Crore)Nature of security Banks Financial
InstitutionsTOTAL
Exclusive charge on Plant & Machinery and speci c assets nanced* 1,041.98 – 1,041.98 (646.34) (–) (646.34)
Pari passu rst charge created to be created on the entire xed assets and speci c immovable properties of the company#
3,260.47(2,964.44)
314.13(336.92)
3,574.60(3,301.36)
Subservient charge on all movable and current assets of the Company @
3,820.46(3,175.49)
153.87(144.56)
3,974.33(3,320.05)
Total 8,122.91 468.00 8,590.91 (6,786.27) (481.48) (7,267.75)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 97F - 58
* Includes loans aggregating to ` 218.47 crore (previous year 218.89 crore) which is further secured by personal guarantees of promoter directors group Companies
# Includes Bank loans aggregating to ` 1,060.17 crore (previous year 998.90 crore) & Financial Institution loans aggregating to ` 30.47 crore (previous year 38.59 crore) which is further secured by personal guarantees of promoter directors group Companies
@ Includes Banks loans aggregating to ` 237.47 crore (previous year 159.80 crore) which is further secured by personal guarantees of promotor directors group Companies
IV. Terms of Repayment of Secured Term Loan
(` Crore)Particulars Rate of Interest* 1-2 Years 2-3 Years 3-4 Years Beyond 4
YearsTotal
Rupee Term Loan From Bank
12% – 15.75%(10.25% – 14.25%)
1,907.37(1,145.32)
1,571.73(1,200.58)
824.29(1,183.15)
1,544.69(1,590.25)
5,848.08(5,119.30)
Foreign Currency Term Loan From Banks
2.53% – 5.34%(2.50% – 8.00%)
34.57(479.66)
46.92(27.51)
62.91(38.68)
208.66(28.90)
353.06(574.75)
Rupee Term Loan From Financial Institutions
9.00% – 12.50%(9.00% – 12.00%)
125.21(124.59)
15.63(13.75)
13.91(15.63)
15.30(29.22)
170.05(183.19)
Foreign Currency Term Loan From Financial Institutions
2.70% – 5.31%(3.92% – 6.00%)
8.90(18.88)
136.80(7.80)
0.24(118.59)
2.42(1.72)
148.36(146.99)
Total 2,076.05 1,771.08 901.35 1,771.07 6,519.55 (1,768.45) (1,249.64) (1,356.05) (1,650.09) (6,024.23)
* Rate of interest is without considering interest subsidy under TUF Scheme
V. Terms of Repayment of Unsecured Term Loan
(` Crore)Particulars Rate of Interest 1-2 Years 2-3 Years 3-4 Years Beyond 4
YearsTotal
Foreign Currency Term Loan From Banks
3.68% – 3.75%(2.95% – 3.00%)
17.32(17.32)
17.32(17.32)
17.32(17.32)
34.66(43.39)
86.62(95.35)
VI. Disclosure of security and terms of repayment of other loans & advances
(` Crore)Nature of security Banks
Vehicle loans are secured by vehicles under hypothecation with banks 6.67 (7.99)
(` Crore)Particulars Rate of Interest 1-2 Years 2-3 Years 3-4 Years Beyond 4
YearsTotal
Vehicle Loan 9.50% – 13.00% 2.50 1.28 0.36 0.03 4.17(9.50% – 13.00%) (2.47) (2.48) (0.93) – (5.88)
Previous year gures are given in brackets
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 98F - 59
5 DEFERRED TAX LIABILITIES (NET)
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11I) Deferred Tax Liability (DTL) Depreciation 702.43 527.97 Share Issue expenses (2.97) (7.35) Mark to Market loss on Derivative Contract (58.26) – Other disallowances (14.13) (12.78)
627.07 507.84II) Deferred Tax Asset (DTA) Gratuity and Compensated Absences 11.54 0.02 Business Depreciation loss as per I. T. Act, 1961 (2.52) 7.52Total 9.02 7.54
* Includes Opening Deferred tax Liability (Net) of Grabal Alok Impex Limited of ` 16.78 crore on account of amalgamation (Refer note no 39(a))
6 LONG-TERM PROVISIONS
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Provision for employee bene ts (Refer note no 35) 17.01 17.83Mark to Market provision on derivative instruments (Refer note no 42(ii) and (iii)) 159.70 60.04Others (Refer note no 37) – 1.77Total 176.71 79.64
7 SHORT-TERM BORROWINGS
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Debenture (Secured) (Refer note a below) – 250.00Cash Credit accounts, working capital demand loan etc. (Secured) (Refer note b below) From Banks (including ̀ 730.00 crore (previous year ̀ 380.34 crore in foreign
currency) 2,740.46 1,725.37
From Financial Institutions (including ` Nil (previous year ` 89.08 crore in foreign currency)
130.74 89.08
Cash Credit accounts, working capital demand loan etc. (Unsecured) From banks 157.53 69.94Compulsorily Convertible Debentures (Unsecured) 196.95 –Commercial Paper (Unsecured) From Banks 103.00 360.00 From Financial Institutions 335.00 360.00Short term loan Secured (Refer note b below) Rupee Loans From Banks 730.00 576.98 From Financial Institutions 85.00 75.00
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 99F - 60
PARTICULARS AS AT31-Mar-12
AS AT31-Mar-11
Foreign currency loans From Banks – 44.65 Unsecured Rupee Loans From Banks 577.90 144.95 Foreign currency loans From Banks 277.44 –Inter Corporate Deposit 5.99 –Total 5,340.01 3,695.97
Note
a) Debentures are secured by pari passu charge on the immovable property situated at Mouje Irana, Taluka Kadi, District Mehsana in the state of Gujarat.
b) Disclosure of security
(` Crore)Nature of security Banks Financial
InstitutionsTOTAL
Working capital loans :(i) Hypothecation of company's current assets and mortgage
of certain immovable properties belonging to the company Guarantor.
(ii) Second charge created to be created on all xed assets (excluding land and building) of the company
2,396.53(450.47)
40.35(20.58)
2,436.88(471.05)
Subservient charge created to be created on all moveable and current assets of the company.
343.93(429.45)
90.39(68.50)
434.32(497.95)
Fixed Deposit placed with the bank. – (845.45)
–(–)
– (845.45)
TOTAL 2,740.46 130.74 2,871.20 (1,725.37) (89.08) (1,814.45)
Short Term LoansSubservient charge on all movable and current assets of the company
537.00 (621.63)
85.00 (75.00)
622.00 (696.63)
Fixed Deposit placed with the bank. 193.00 – 193.00(–) (–) (–)
TOTAL 730.00 85.00 815.00 (621.63) (75.00) (696.63)
Previous year gures are given in brackets
8 TRADE PAYABLE
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Total outstanding due to :– Micro, Small and Medium Enterprises* –– Others 605.23 594.93(Including acceptances ` 2.20 crore (previous year ` 50.94 crore)
605.23 594.93
* As per information available with the company
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 100F - 61
9 OTHER CURRENT LIABILITIES
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Current maturities of long-term debt (Refer Note 4 for details) 2,193.50 1,262.51Interest accrued but not due on borrowings 13.55 21.28Unpaid dividends (Refer note i and ii below) 1.05 0.84Share application money received by subsidiary company (Refer note iv below) 350.00 –Foreign Currency Monetary Item Translation Difference Account – 0.22Other payablesAdvance from customers 68.86 61.62Creditors for Expenses 139.23 8.77Creditors for Capital Goods 35.00 19.12Creditors for statutory Liabilities 9.95 15.93Premium on redemption of FCCB 43.14 –Advance from Related parties (Refer note no 32) 14.75 139.52Temporary overdrawn bank balance (Refer note iii below) 25.12 32.13Forward Contract Payable 10.89 –Advance from Others 3.48 1.26Total 2,908.52 1,563.20
NOTES
(i) This gure doesn’t include any amount due and outstanding to be credited to the Investor Education and Protection Fund.
(ii) During the year company has transferred ` 0.03 crore (previous year ` 0.06 crore) to the Investor Education and Protection Fund.
(iii) Temporary overdrawn bank balances are as per books consequent to issue of cheques at the year end, though the banks have positive balances as on that date.
(iv) The subsidiary company intends to allot shares against the share application money received, which is in excess of the authorised share capital of the subsidiary company. The subsidiary company is taking steps to increase the authorised capital.
10 SHORT-TERM PROVISIONS
PARTICULARS AS AT31-Mar-12
AS AT31-Mar-11
Provision for employee bene ts (Refer note no 35) 7.63 3.23Mark to Market provision on derivative instruments (Refer note no 42(ii) and (iii)) 36.65 12.92Proposed dividend 24.79 19.69Corporate dividend tax 4.02 3.30Provision for taxation (Net of Advance Tax) 10.53 20.09Others (Refer note no 37) 35.85 13.70Total 119.47 72.93
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 101F - 62
11
FIXE
D AS
SETS
SR.
NO.
DES
CRIP
TION
OF
ASSE
TS G
ROSS
BLO
CK D
EPRE
CIAT
ION
NET
BLO
CK A
S AT
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11 A
CQUI
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UGH
AMAL
GAM
ATIO
N (s
ee n
ote
4 be
low)
ADD
ITIO
NS A
DJUS
TMEN
TS A
S AT
31.0
3.20
12 A
S AT
01.0
4.20
11 A
CQUI
SITI
ON
THRO
UGH
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ATIO
N(s
ee n
ote
4 be
low)
FOR
THE
YEA
RAD
JUST
MEN
TS A
S AT
31.0
3.20
12 A
S AT
31.0
3.20
12 A
S AT
31.0
3.20
11
TAN
GIBL
E AS
SETS
1 F
reeh
old
Land
103
.16
3.4
4 1
9.38
5.2
4 1
20.7
4 –
– –
– –
120
.74
103
.16
2 L
ease
hold
Lan
d 0
.56
0.2
4 2
.61
– 3
.41
0.1
4 0
.04
0.0
9* (0
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0.3
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.08
0.4
23
Fac
tory
Bui
ldin
g 1
,925
.56
83.
67 2
47.2
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2,2
51.7
3 1
94.0
2 6
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64.
96 (1
.40)
266
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1,9
85.2
7 1
,731
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4 O
fce
Pre
mise
s 2
6.60
43.
56 1
0.45
3.6
1 7
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2.7
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2.2
1 2
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31.
11 4
5.89
23.
905
Pla
nt a
nd M
achi
nery
6,8
38.3
6 1
88.9
1 1
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(1.8
2) 8
,383
.28
1,4
00.0
6 6
8.94
633
.23
(1.3
2) 2
,103
.55
6,2
79.7
3 5
,438
.30
6 C
ompu
ter a
nd P
erip
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ls 3
0.45
1.1
0 2
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0.7
3 3
3.76
17.
83 0
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2.4
6 0
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20.
41 1
3.35
12.
627
Of
ce E
quip
men
t 1
0.51
0.3
5 1
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0.1
2 1
2.21
3.1
9 0
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0.6
9 0
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3.9
3 8
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7.3
28
Fur
nitu
re a
nd F
ittin
gs 9
8.39
279
.84
35.
57 3
.39
410
.41
21.
58 1
02.6
1 2
7.26
2.1
4 1
49.3
1 2
61.1
0 7
6.81
9 V
ehicl
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3.64
1.8
1 4
.69
0.5
9 2
9.55
7.7
8 0
.76
2.9
3 0
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11.
11 1
8.44
15.
8610
Too
ls an
d Eq
uipm
ent
55.
86 1
.17
16.
14 0
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73.
08 1
0.36
0.1
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0.0
1 1
5.94
57.
14 4
5.50
LEA
SED
ASSE
TS1
Bui
ldin
gs 1
5.63
– 3
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– 1
9.33
0.7
9 –
0.3
6 –
1.1
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8.18
14.
84 S
ub –
Tot
al 9
,128
.72
604
.09
1,6
98.3
9 1
6.70
11,
414.
50 1
,658
.45
208
.09
739
.62
2.8
6 2
,603
.30
8,8
11.2
0 7
,470
.27
INTA
NGIB
LE A
SSET
S1
Com
pute
r Sof
twar
e 1
9.41
0.1
7 7
.59
0.5
7 2
6.60
9.9
3 0
.15
3.7
7 (0
.01)
13.
86 1
2.74
9.4
82
Tra
dem
arks
Br
ands
55.
04 –
– 0
.10
54.
94 2
0.94
– 5
.75
0.0
1 2
6.68
28.
26 3
4.10
3 D
esig
n Ca
rds
– 0
.08
– –
0.0
8 –
0.0
8 –
– 0
.08
– –
Sub
– T
otal
74.
45 0
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7.5
9 0
.67
81.
62 3
0.87
0.2
3 9
.52
– 4
0.62
41.
00 4
3.58
Tot
al 9
,203
.17
604
.34
1,7
05.9
8 1
7.37
11,
496.
12 1
,689
.32
208
.32
749
.14
2.8
6 2
,643
.92
8,8
52.2
0 7
,513
.85
TOT
AL P
REVI
OUS
YEAR
7,4
44.6
5 –
1,7
71.3
2 1
2.80
9,2
03.1
7 1
,157
.20
– 5
30.9
7 (1
.15)
1,6
89.3
2 7
,513
.85
CAPI
TAL
WOR
K-IN
-PRO
GRES
S (In
cludi
ng `
18.
94 c
rore
s on
acc
ount
of a
mal
gam
atio
n (S
ee n
ote
4 be
low)
924
.38
899
.98
Not
es :
1.
Pla
nt &
Mac
hine
ry in
clud
es :
a
E
xcha
nge
diffe
renc
e (n
et) o
f ` 9
7.60
cro
re (p
revi
ous
year
gai
n of
` 1
5.96
cro
re) o
n re
stat
emen
t of l
ong
term
bor
row
ings
pay
able
in fo
reig
n cu
rren
cy.
b
In
tere
st c
apita
lised
` 7
7.92
Cro
re (p
revi
ous
year
` 3
6.08
Cro
re)
2.
Inta
ngib
le a
sset
s co
nsis
ts o
f Tra
de M
arks
B
rand
s ag
greg
atin
g to
` 5
5.04
Cro
re (
prev
ious
yea
r `
55.0
4 cr
ore)
(G
ross
) [W
ritte
n do
wn
valu
e `
28.9
0 cr
ore
(pre
viou
s ye
ar `
34
.41
cror
e)],
whi
ch a
re r
egis
tere
d in
the
nam
e of
a s
ubsi
diar
y co
mpa
ny in
trus
t on
beha
lf of
the
com
pany
. The
Com
pany
has
app
lied
for
regi
ster
ing
thos
e Tr
adem
arks
B
rand
s in
it’s
nam
e w
ith c
once
rned
aut
horit
ies
and
is a
wai
ting
regi
stra
tion.
3.
Cap
ital w
ork
in p
rogr
ess
incl
udes
a
E
xcha
nge
diffe
renc
e (n
et) o
f ` 1
6.87
cro
re (p
revi
ous
year
` 7
.52
cror
e) o
n re
stat
emen
t of l
ong
term
bor
row
ings
pay
able
in fo
reig
n cu
rren
cy.
b
In
tere
st c
apita
lised
` 2
9.14
Cro
re (P
revi
ous
year
` 5
0.73
Cro
re)
c
`
863.
35 c
rore
(pre
viou
s ye
ar `
835
.56
cror
e) o
n ac
coun
t of c
onst
ruct
ion
mat
eria
l and
pla
nt a
nd m
achi
nery
und
er e
rect
ion.
d
P
re-o
pera
tive
expe
nses
agg
rega
ting
to `
4.8
0 cr
ore
(pre
viou
s ye
ar `
12.
74 c
rore
) 4
. In
clud
es a
sset
s of
Gra
bal A
lok
Impe
x Li
mite
d, G
raba
l Alo
k In
tern
atio
nal L
imite
d an
d G
raba
l Alo
k (U
K) L
imite
d (R
efer
not
e no
39)
.*
Am
ount
writ
ten
off i
n re
spec
t of L
ease
hold
Lan
d fo
r the
per
iod
of L
ease
whi
ch h
as e
xpire
d.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 102F - 63
12 NON CURRENT INVESTMENTS
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Investment Property : Property under construction (Refer note no i below) 1,429.05 1,202.75 Freehold Land 33.18 35.68
1,462.23 1,238.43
Triumphant Victory Holdings Limited 0.00 0.00 [2 (previous year 1) equity share of USD 1 each ` 90.14 (previous
year ` 45.14)] Grabal Alok International Limited (` 1,121.25 -) – 0.00 [25 equity shares of USD 1 each] (Refer note no 39(a)) Next Creations Holdings LLC, subscription towards 33%
membership interest 4.47 4.47
Less : share in post acquisition accumulated loss (0.72) (0.80) 3.75 3.67
Nirvan Builders Private Limited – 0.02 Nil (previous year 16,600) Equity Shares of `10 – each] Less : share in post acquisition accumulated loss (previous year `
25,141 -) – (0.00)
– 0.02 Alspun Infrastructure Limited 0.10 0.08 [100,000 (previous year 75,000) Equity shares of `10 each] (Including goodwill on acquisition of stake of associates ` 0.04
crore) Less : share in post acquisition accumulated loss (0.07) (0.06)
0.03 0.02 Grabal Alok (UK) Limited – 310.81 [237,197,008 Ordinary Shares of GBP 0.001 each ] (Refer note no
39(b)) Less : share in post acquisition accumulated loss – (92.17)
– 218.64 Ashford Infotech Private Limited 2.50 2.50 [50,000 Equity Share of `10 each] Less : share in post acquisition accumulated loss (0.06) (0.06)
2.44 2.44
Shirt Company (India) Limited – 0.20 [Nil (previous year 11,333) Equity Shares of `10 – each] Dombivali Nagari Sahakari Bank Limited. 0.05 0.05 [10,000 Equity Shares of ` 50 – each] Kalyan Janata Sahakari Bank Limited 0.03 0.03 [10,000 Equity Shares of ` 25 – each] Saraswat Bank Limited (` 25,000 -) 0.00 0.00 [2,500 Equity Shares (previous year Nil) of ` 10 – each] Wel-Treat Environ Management Organisation (` 36,500 -) 0.00 0.00 [3,650 Equity Shares of ` 10 each]
6.30 225.07
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 103F - 64
Others – Quoted fully paid Grabal Alok Impex Limited – 3.99 [19,00,000 Equity Shares of `10 – each ] (Refer note no 39(a))
– 3.99
In Associates Company Triumphant Victory Holdings Limited 3.84 – [7,50,000 (previous year Nil) Shares USD 1 each] Ashford Infotech Private Limited 65.49 65.49 [5,00,000 Shares ` 10 each] Alspun Infrastructure Limited 16.22 – [5,00,000 (previous year Nil) Shares ` 10 each] Grabal Alok International Limited – 53.45 [11,970,552 of USD 1 – each] (Refer note no 39(a))
85.55 118.94
Convertible Loan Notes of Grabal Alok (UK) Limited – 79.12 – 79.12
Others Interest in Alok Bene t Trust (Refer note no 39(a)) 35.33 – [1,94,59,382 (previous year Nil) Equity Shares of `10 – each ] PowerCor Subscription towards 5% Group B Membership interest 37.88 33.06 Less: Provision (37.88) (24.80)
– 8.26 Aisle 5 LLC 22 senior units of the equity capital 6.70 5.85 Less: Provision (6.70) (5.85)
– – Share Application Money In Associate Company Alspun Infrastructure Limited – 16.16 Other Investment 0.01 0.01
35.34 24.43Total 1,589.42 1,689.981) uoted Investment : Aggregate cost carrying value – 3.99 : Aggregate market value – 6.082) Unquoted Investment : Aggregate cost carrying value 1,589.42 1,685.99
NOTE :
(i) Includes interest capitalised during the year ` 29.89 crore (previous year ` 19.53 crore)
13 LONG TERM LOANS & ADVANCES (Unsecured)
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Considered goodCapital advances 222.76 256.34Lease & Security deposits 16.56 17.47Other Loans & advancesForeign Currency Monetary Item Translation Difference Account 0.95 –Advance Tax (Net of Provision for Tax) 17.90 15.40MAT Credit entitlement 66.27 110.39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 104F - 65
Prepaid Expenses 65.88 40.51 390.32 440.11
Considered doubtfulCapital advances 3.76 –Less : Provision 3.76 –
– – TOTAL 390.32 440.11
14 CURRENT INVESTMENTS (at cost)
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Investments in debentures or bonds Laxmi Vilas Bank Tier II Bonds 2.00 2.00 [20 Bonds of ` 10,00,000 each]
Taurus Liquid Fund – 0.16 (Nil (previous year 16,57,032) units of ` 10 – each) Axis Infrastructure Fund 1 1.94 7.20 [19,378 (previous year 72,035) units of ` 1000 – each] SBI Magnum Insta Cash Fund – 17.00 [Nil (previous year 78,08,875.48) units of ` 10 – each] Peerless Liquid Fund collection A C – 1.00 [Nil (previous year 9,35,506.20) units of ` 10 – each] IDFC Money Manager Fund Daily Dividend – 0.05 [Nil (previous year 49,652.93) units of ` 10 – each]
TOTAL 3.94 27.41
15 INVENTORIES
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Raw Materials 446.05 604.47(Includes material in transit ` 62.09 crore (previous year ` 138.62 crore)Work-in-progress 2,278.38 900.36Finished Goods 671.11 510.21Stock in Trade (Traded Goods) 221.29 68.03Stores & Spares 73.27 59.48Packing Material 7.02 7.33
TOTAL 3,697.12 2,149.88
16 TRADE RECEIVABLES (Unsecured)(` Crore)
PARTICULARS AS AT31-Mar-12
AS AT31-Mar-11
Debts Outstanding for a period exceeding six months from due date 102.31 64.09Less : Provision 20.70 8.72
81.61 55.37Other Debts 2,129.35 1,761.33Less : Provision 6.96 2.50
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 105F - 66
2,122.39 1,758.83 TOTAL 2,204.00 1,814.20
Considered Good 2,204.00 1,814.20Considered Doubtful 27.66 11.22
TOTAL 2,231.66 1,825.42
NOTE :
(i) Sundry Debtors includes ` 70.72 crore (previous year ` 38.23 crore) towards contractual obligations on account of Export Incentives Receivables.
(ii) Debtors include dues from parties aggregating to ` 1.22 crore (previous year ` 3.10 crore) in which a director is a director partner
(iii) Refer note no 32 for related party balances.
17 CASH & BANK BALANCES
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Cash on hand 0.66 1.37Balance with Bank In Current Accounts 563.38 76.48 In EEFC Accounts 0.98 0.41 In Deposit Accounts [Including interest accrued thereon] (Refer Note
i and ii below) 116.51 140.12
In earmarked accounts Unpaid dividend accounts 1.08 0.84 Balances Deposits held as margin money or security against
borrowings, guarantees and other commitments (Refer Note i to iii below)
715.19 981.69
TOTAL 1,397.80 1,200.91
NOTE :
(i) Balances with banks includes deposits amounting to ` 22.64 crore (previous year ` 39.22 crore) and margin monies amounting to ` 77.63 (previous year ` 71.49 crore) which have an original maturity of more than 12 months.
Balances with banks includes deposits amounting to ` 2.16 crore (previous year ` 9.92 crore) and margin monies amounting to ` 2.81 crore (previous year ` 15.42 crore) which have a maturity of more than 12 months from the Balance Sheet date
(ii) Includes ` 33.49 crore (previous year Nil) kept in bank deposits and ` 8.55 crore (previous year ` 41.29 crore) margin money pending utilisation towards project
(iii) Includes ` 437.57 crore (previous year ` 845.45 crore) pledged with banks towards loan availed by subsidiary company.
18 SHORT-TERM LOANS AND ADVANCES (Unsecured)
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Considered goodLoans & advances to Related parties (Refer note no 32) 9.22 32.86OthersAdvance to Creditors 971.61 124.57Advance to Staff (Refer note i below) 9.36 10.82
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 106F - 67
Balance with Central Excise, Customs and Sales Tax Authorities 282.25 204.33Prepaid Expenses 69.29 30.75Inter Corporate Deposits 3.69 4.95Advance Tax (Net of provision for tax) 9.13 20.60Deposits others 9.51 10.13
TOTAL 1,364.06 439.01Considered doubtfulAdvance to others 20.60 19.27Less : Provision 20.60 19.27
- - TOTAL 1,364.06 439.01
NOTE :
(i) Advance to staff includes ` 0.18 crore (previous year ` 1.27 crore) due from of cers of the Company [maximum amount outstanding during the year ` 1.27 crore (previous year ` 1.35 crore)]
19 OTHER CURRENT ASSETS (Unsecured)
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Considered GoodForward Contract Receivable – 4.28Interest Subsidy Receivable 88.09 123.35Unutilised DEPB Licence 25.98 7.85Interest Receivable 0.32 0.07Insurance Claim Receivable 1.11 0.09Balances with Central Excise Authorities 0.05 0.19Foreign Currency Monetary Item Translation Difference Account 0.03 0.55Rent Receivable 0.23 –
115.81 136.38Considered DoubtfulInterest Subsidy Receivable 9.31 9.31Less : Provision 9.31 9.31
- -
TOTAL 115.81 136.38
20 REVENUE FROM OPERATIONS
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Sale of product Sales – Local 6,165.75 4,362.34 Sales – Export 3,813.27 2,342.70
9,979.02 6,705.04Sale of services Job work charges collected 31.19 13.16Sale of Scrap 8.46 9.18
TOTAL 10,018.67 6,727.38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 107F - 68
21 OTHER INCOME
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Interest Income On Long Term Investments 5.04 3.78 On Current Investments 31.08 58.67 Interest on income tax refund 1.40 0.07
37.52 62.52Dividend Income : On Long Term Investments 0.02 0.20 On Current Investments 0.58 0.16
0.60 0.36Gain on sale of investments (net) On Long Term Investments – 1.02 On Current Investments – 0.14
– 1.16Pro t on sale of xed assets (net) 34.88 –Provision for doubtful debts written back 2.21 1.54Insurance claim received 12.40 –Rent Received 2.34 0.42Sundry Credit Balances written back 3.40 0.43Other non operating Income 2.16 0.64
57.39 3.03 TOTAL 95.51 67.07
22 CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11CLOSING STOCK AS ON 31 MARCH 2012 *Finished Goods 671.11 510.21Work-in-progress 2,278.38 900.36Stock in Trade (Traded Goods) 221.29 68.03
3,170.78 1,478.60LESS : OPENING STOCK AS ON 1 APRIL 2011Finished Goods 510.21 354.69Work-in-progress 900.36 856.24Stock in Trade (Traded Goods) 68.03 –
1,478.60 1,210.93 TOTAL (1,692.18) (267.67)
* Includes inventories taken over on amalgamation (Refer note no 39)
23 EMPLOYEE BENEFIT EXPENSES
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Salaries, Wages and Bonus 279.20 230.70Contribution to Provident Fund and Other Funds 22.27 8.52Employee Stock Option Compensation Expenses 2.27 –Employees Welfare Expenses 9.10 5.00
TOTAL 312.84 244.22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 108F - 69
24 FINANCE COSTS
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Interest expense: 1,144.89 727.71(Net of Interest Subsidy of ` 131.11 crore (previous year ` 131.88 crore) and recovery of ` 140.02 crore (previous year ` 81.47 crore))Interest on late payment of taxes 2.04 3.07Other Borrowing cost 87.77 51.37
TOTAL 1,234.70 782.15
25 OTHER EXPENSES
(` Crore) PARTICULARS AS AT
31-Mar-12 AS AT
31-Mar-11Stores and Spares Consumed 98.34 50.93Packing Materials Consumed 130.97 81.17Power and Fuel 667.25 392.40Processing Charges 66.62 49.58Labour Charges 68.22 60.27Excise Duty 6.27 4.15Donation 1.21 0.81Freight, Coolie and Cartage 112.90 100.25Legal and Professional Fees 37.88 30.74Rent 26.57 22.91Rates and Taxes 6.11 6.55Repairs and Maintenance Plant and Machinery 16.91 14.67 Factory Building 2.18 0.67 Others 9.93 5.06Commission on Sales 43.17 23.01Loss on exchange rate difference derivative (Net) 282.51 49.73Provision for Doubtful Debts 17.35 35.00Provision for Doubtful Advances 2.43 –Bad debts and other advances written off 12.18 –Directors Remuneration 7.20 7.20Directors Fees and Commission 5.27 5.06Auditors Remuneration Audit Fees 2.08 1.63 Certi cation Fees 0.04 0.04Insurance 13.04 13.07Loss on Sale of Investment (net) 0.12 –Loss on sale of Assets (Net) – 0.03Diminution in value of investment 8.88 16.88Miscellaneous Expenses 231.73 148.55(Miscellaneous Expenses includes Printing and Stationery, Bank Charges, Advertisement, Bill Discounting Charges etc.)
TOTAL 1,877.36 1,120.36
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 109F - 70
Sr. No.
Name of the subsidiary companies Country of Incorporation
Ownership Interest
31-Mar-12
Ownership Interest
31-Mar-111 Alok Infrastructure Limited India 100% 100%2 Alok Land Holdings Private Limited India 100% 100%3 Alok Realtors Private Limited India 100% 100%4 Alok Retail (India) Limited India 100% 100%5 Alok Apparels Private Limited India 100% 100%6 Alok New City Infratex Private Limited** India 100% 100%7 Alok Aurangabad Infratex Private Limited** India 100% 100%8 Alok HB Hotels Private Limited** India 100% 100%9 Alok HB Properties Private Limited** India 100% 100%
10 Alok Industries International Limited British Virgin Island
100% 100%
11 Alok Inc.* USA 100% 100%12 Alok International Inc. USA 100% 100%13 Mileta, a. s.* Czech
Republic100% 93.20%
14 Alok European Retail, s.r.o.* Czech Republic
100% 100%
15 Alok H&A Limited* India 100% 100%16 Springdale Information and Technologies Private Limited India 100% 100%17 Kesham Developers & Infotech Private Limited India 100% 100%18 Grabal Alok International Limited (Refer note no 39(a)) British Virgin
Island100% Nil
19 Grabal Alok (UK) Limited* (Refer note no 39(b)) UK 90.43% Nil20 Alok Singapore Pte Ltd.* (incorporated on 28 December
2011)Singapore 100% Nil
21 Alok International (Middle East) FZE* Dubai 100% Nil(incorporated on 01 August 2011)
* Consolidated based on unaudited nancial statements, as approved by the Board of Directors of the company.
** Pursuant to the plan of exiting real estate business, such companies were liquidated during the year
For nancial information of subsidiary companies, refer note no 29 below
Sr. No.
Name of the associates Country of Incorporation
Ownership Interest
31-Mar-12
Ownership Interest
31-Mar-111 Aurangabad Textile and Apparel Park Limited* India 49.00% 49.00%2 New City of Bombay Mfg. Mills Limited * India 49.00% 49.00%
* Consolidated based on unaudited nancial statements, as approved by the Board of Directors of the company.
The following amounts are included in the Consolidated Financial Statements in respect of Jointly Controlled Entities based on “proportionate consolidation” method, as per Accounting Standard 27 on
“Financial Reporting of Interest in Joint Venture”
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 110F - 71
(` Crore)Particulars Current Year Previous YearASSETSFixed Assets 4.72 2.07 Inventories 0.43 0.49 Sundry Debtors 29.08 18.04 Cash and Bank Balances 4.32 4.69 Loans and Advances 15.59 18.68 LIABILITIESCurrent Liabilities 10.17 2.46 Provision 0.05 0.43 Deferred Tax Liability 0.18 0.18 INCOMESales 95.34 89.71 Other Income 1.93 2.75 Increase in Stock 0.18 0.05 EXPENSESManufacturing and Other Expenses 93.01 87.56 Depreciation 0.19 0.11 Provision for Tax 1.10 1.39
Sr. No.
Name of the associates Country of Incorporation
Ownership Interest
31-Mar-12
Ownership Interest
31-Mar-111 Grabal Alok (UK) Limited (Refer note no 39(b)) United
Kingdom- 41.72%
2 Ashford Infotech Private Limited* India 50.00% 50.00%3 Alspun Infrastructure Limited India 50.00% 50.00%4 Nirvan Builders Private Limited (liquidated
during the year)India - 33.20%
5 Next Creations Holdings LLC * USA 33.00% 33.00%
* Consolidated based on unaudited nancial statements, as approved by the Board of Directors of the company.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 111F - 72
29
FIN
AN
CIA
L IN
FOR
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ELA
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G T
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UB
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e of
the
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idia
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l R
eser
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abili
ties
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vest
men
t (O
ther
than
in
vest
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t in
Sub
sidi
arie
s)
Turn
over
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re
Tax
Pro
visi
on
for
tax
afte
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iden
d
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strie
s In
tern
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nal L
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atio
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oney
** U
naud
ited
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s
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 112F - 73
30 Contingent Liabilities in respect of:
(` Crore)Sr. No.
Particulars Current Year Previous Year
A Customs duty on shortfall in export obligation in accordance with EXIM Policy(The company is hopeful of meeting the export obligation within the stipulated period)
Amount Unascertained
Amount Unascertained
B Pending Litigation 0.05 0.05
C Guarantees given by banks on behalf of the Company 73.71 28.07
D Bills discounted 214.79 242.94
E Taxation Matters :
a) Income tax demand mainly on account of alleged short deduction of taxes for AY 2010-11 and AY 2011-12 on certain payments. The company has led an appeal with the Commissioner of Income Tax (A) and is hopeful of favourable decision.
1.69 –
b) Income Tax demand during the previous years of ̀ 5.91 crore mainly on account of alleged short deposition of TDS amounts arising from wrong TAN numbers mentioned while uploading the TDS return and certain payments not considered by the Tax authorities, although duly paid by the company and short deduction of tax in respect of certain payments with respect to AY 2006-07 to 2009-10. The company had led an appeal with the Commissioner of Income Tax (A) and also made application for recti cation u s 154 providing details of amounts paid to the bank. Such recti cation was carried out during the year for majority of the amount and for the balance of ` 0.23 crore mainly pertaining to short deduction of taxes, the company is hopeful of favourable decision.
0.23 5.91
c) Demands of Works Contract Tax contested not acknowledged as debts as the company is hopeful of favourable decision.
0.59 0.59
d) Income tax amounting to `11.29 crore, mainly on account of disallowance of interest and expenditure incurred towards exempt income. The company has led an appeal with the Commissioner of Income Tax (A) and is hopeful of favourable decision.
11.29 –
F Disputed various matters relating to NTC ATM* Amount Unascertained
Amount Unascertained
G. Guarantee provided to New City of Bombay Mfg. Mills Limited (Joint Venture company) for loan given to Grabal Alok Impex Limited (51%) (Refer note no 39(a))
– 9.18
* Refer note no 17(i) of provisional nancial statements of Aurangabad Textile and Apparel Park Limited
31 Capital Commitment
(` Crore)Particulars Current Year Previous Year Estimated amount of contracts remaining to be executed on Capital Account and not provided for (Net of advances)
527.17 694.7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 113F - 74
32 Related Party Disclosure
a. Names of related parties and nature of relationship
As per Accounting Standard (AS) 18 “Related Party Disclosures”, Company’s related parties disclosed
as below:
I Associate companiesAlspun Infrastructure Ltd. Ashford Infotech Private LimitedGrabal Alok (UK) Limited (Refer note (ii) below ) Nirvan Builders Private LimitedNext Creations Holdings LLC
II Entities under common controlAlok Denims (India) Limited Jiwrajka Associates Private LimitedAlok Finance Private Limited Jiwrajka Investment Private LimitedAlok Knit Exports Limited Niraj Realtors & Shares Private LimitedAlok Textile Traders Nirvan ExportsAshok Realtors Private Limited Nirvan Holdings Private LimitedGrabal Alok Impex Limited (Refer note (ii) below ) Grabal Alok International Limited
(Refer note (ii) below )Buds Clothing Co. Pramatex EnterprisesD. Surendra & Co. Pramita Creation Private LimitedGogri Properties Private Limited Green Park EnterprisesHoney Comb Knit Fabrics Triumphant Victory Holdings Limited.
III Joint VentureAurangabad Textiles & Apparel Parks Limited New City Of Bombay Mfg. Mills Limited
IV Key Management PersonnelAshok B. Jiwrajka Surendra B. JiwrajkaDilip B. Jiwrajka Chandra Kumar Bubna
V Relatives of Key Management PersonnelAlok A. Jiwrajka Vidhi S. JiwrajkaPrita D. Jiwrajka Niraj D. JiwrajkaVarun S. Jiwrajka Suryaprakash Bubna
b. Nature of transactions
(` Crore)Transaction Associates Entities
under common
control
Joint Venture
Companies
Key Management
Personnel
Relatives of Key
Management Personnel
Total
a) Advance Share Application MoneyBalance as at 1st April – – – – – –
(-) (227.57) (-) (-) (-) (227.57)Received During the year – 350.00 – – – 350.00
(-) (227.57) (-) (-) (-) (227.57)Balance as at 31st March – 350.00 – – – 350.00
(-) (-) (-) (-) (-) (-) (b) Long Term Borrowing
Balance as at 1st April – 312.55 – – – 312.55 (-) (451.40) (-) (-) (-) (451.40)
Received during the year on amalgamation
– 223.25 – – – 223.25
(-) (133.95) (-) (-) (-) (133.95)Translation difference during the year – 78.08 – – – 78.08
(-) (-4.90) (-) (-) (-) (-4.90)Balance as at 31st March – 613.88 – – – 613.88
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 114F - 75
Transaction Associates Entities under
common control
Joint Venture
Companies
Key Management
Personnel
Relatives of Key
Management Personnel
Total
(-) (312.55) (-) (-) (-) (312.55)(c) Unsecured Short Term Borrowing
Accepted during the year (on amalgamation)
– 196.95 5.99 – – 202.94
(-) (-) (-) (-) (-) (-) Balance as at 31st March – 196.95 5.99 – – 202.94
(-) (-) (-) (-) (-) (-) d) Short Term Loans and Advances
Balance as at 1st April – 3.84 – – – 3.84 (-) (5.46) (-) (-) (-) (5.46)
Granted during period 0.63 18.72 – – – 19.35 (-) (22.50) (-) (-) (-) (22.50)
Converted Repaid during the year – 14.26 – – – 14.26 (-) (24.05) (-) (-) (-) (24.05)
Translation difference during the year – 0.29 – – – 0.29 (-) (-0.06) (-) (-) (-) (-0.06)
Balance as at 31st March 0.63 8.59 – – – 9.22 (-) (3.84) (-) (-) (-) (3.84)
e) Non Current InvestmentsBalance as at 1st April 72.54 – – – – 72.54
(0.13) (-) (-) (-) (-) (0.13)Invested during period (0.02) 3.60 – – – 3.58
(72.41) (-) (-) (-) (-) (72.41)Translation difference during the year – 0.23 – – – 0.23
(-) (-) (-) (-) (-) (-) Balance as at 31st March 72.52 3.83 – – – 76.35
(72.54) (-) (-) (-) (-) (72.54)f) Share Application Money –
Non Current InvestmentBalance as at 1st April – 16.16 – – – 16.16
(83.94) (-) (-) (-) (-) (83.94)Given (Received) during the year (Net) – 0.08 – – – 0.08
(0.16) (-) (-) (-) (-) (0.16)Shares Allotted – 16.24 – – – 16.24
(67.94) (-) (-) (-) (-) (67.94)Balance as at 31st March – – – – – –
(16.16) (-) (-) (-) (-) (16.16)g) Trade Receivables
Balance as at 31st March 22.48 0.09 0.03 – – 22.60 (-) (-) (-) (-) (-) (-)
h) Trade payablesBalance as at 31st March – 14.75 9.56 – – 24.31
(-) (-) (0.06) (-) (-) (0.06)i) Other Current Liabilities
Balance as at 31st March – 14.75 – – – 14.75 (-) (-) (-) (-) (-) (-)
j) Sale of productsSales of Goods 56.14 – 0.48 – – 56.62 (Including job work charges) (-) (-) (0.71) (-) (-) (0.71)
k) ExpenditurePurchase of goods Job charges – – 31.22 – – 31.22
(0.03) (-) (42.26) (-) (-) (42.29)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 115F - 76
Transaction Associates Entities under
common control
Joint Venture
Companies
Key Management
Personnel
Relatives of Key
Management Personnel
Total
Purchase of Fixed Assets – – – – – – (* from three directors jointly) (-) (0.62) (0.05) (4.54)* (-) (5.21)Rent – – – – 0.19 0.19
(-) (-) (-) (-) (0.19) (0.19)Remuneration – – – 12.20 0.26 12.46
(-) (-) (-) (12.20) (0.26) (12.46)Upfront Fees – 26.61 – – – 26.61
(-) (-) (-) (-) (-) (-) Electricity Expenses – 0.02 – – – 0.02
(-) (-) (0.08) (-) (-) (0.08)Design Charges – 0.14 – – – 0.14
(-) (-) (0.24) (-) (-) (0.24)Recovery of expenses 2.11 – – – – 2.11
(-) (-) (-) (-) (-) (-) Interest Paid – 31.05 – – – 31.05
(-) (-) (-) (-) (-) (-) l) Dividend Paid – – – 1.54 – 1.54
(-) (-) (-) (1.54) (-) (1.54)m) Income
Rent – 0.23 – – – 0.23 (-) (0.03) (-) (-) (-) (0.03)
n) Contingent LiabilitiesGuarantee Given – – – – – –
(-) (-) (9.18) (-) (-) (9.18)
c. Out of the above items, transaction in excess of 10% of the total Related Party transactions are as under:
Transactions Current YearAmount
Previous YearAmount
a) Advance Share Application Money
Alok Knit Exports Ltd. 100.00 – Alok Denim (I) Limited 70.00 – Nirvan Holdings Pvt. Ltd 100.00 – Jiwrajka Investment Pvt. Ltd. 80.00 –
350.00 – Repaid during the yearAlok Finance Pvt. Ltd. – 32.54 Jiwrajka Associate Pvt. Ltd. – 36.39 Jiwrajka Investment Pvt. Ltd. – 48.65 Niraj Realtors & Shares Pvt. Ltd. – 68.77 Nirvan Holdings Pvt. Ltd. – 41.22
– 227.57 b) Long Term Borrowing
Received during the yearTriumphant Victory Holdings Limited (including ` 223.25 crore on amalgamation)
407.86 –
Repaid during the yearTriumphant Victory Holdings Limited – 138.85
c) Unsecured Short Term BorrowingOn amalgamationNew City of Bombay Mfg. Mills Limited 5.99 –
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 116F - 77
Transactions Current YearAmount
Previous YearAmount
d) Short term Loans and AdvancesGranted during the yearTriumphant Victory Holdings Limited 8.59 – Alok Knit Exports Limited 4.70 – Nirvan Holdings Private Limited 3.90 –
17.19 –
Triumphant Victory Holdings Limited 12.68 – Alok Knit Exports Limited 4.70 – Nirvan Holdings Private Limited 3.89 –
21.27 – e) Non Current Investment
Invested during the yearAshford Infotech Pvt Ltd – 67.94 Triumphant Victory Holdings Limited 3.60 –
f) Share Application Money – Non Current InvestmentReceived during the yearAlspun Infrastructure Limited 0.08 0.16
Ashford Infotech Pvt Ltd – 67.94 g) Turnover (including job work charges)
Grabal Alok Impex Limited – 86.29 Next Creations Holdings LLC 56.14 – Grabal Alok ( UK ) Limited – 80.60
h) ExpenditurePurchase of GoodsNew City of Bombay Mfg. Mills Limited 30.93 41.67
Transactions Current YearAmount
Previous YearAmount
RentVarun Jiwrajka 0.10 – Vidhi Jiwrajka 0.10 – Remuneration:Ashok B. Jiwrajka 3.05 3.05 Chandrakumar Bubna 3.05 3.05 Dilip B. Jiwrajka 3.05 3.05 Surendra B. Jiwrajka 3.05 3.05
12.20 12.20 Electricity ExpensesNew City of Bombay Mfg. Mills Limited 0.02 – Design ChargesNew City of Bombay Mfg. Mills Limited 0.14 0.48
Recovery of ExpensesNext Creations Holdings LLC 2.11 –
i) Dividend Paid:Ashok B. Jiwrajka 0.50 0.50 Dilip B. Jiwrajka 0.51 0.51 Surendra B. Jiwrajka 0.53 0.53
1.54 1.54
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 117F - 78
Transactions Current YearAmount
Previous YearAmount
j) IncomeRent ReceivedAlok Denim (India) Limited 0.18 – Alok Knit Exports Limited 0.05 –
0.23 – k) Guarantee Given on loan given to Grabal Alok Impex
LimitedNew City of Bombay Mfg. Mills Limited – 9.18
Note:
i Previous year gures are given in brackets.
ii Grabal Alok Impex limited was amalgamated with the company w.e.f 1 April 2011 and consequently, Grabal Alok international Limited and Grabal Alok (UK) Limited became subsidiaries of the company from 1 April 2011. Transactions and balances with of such companies for the previous year and as at 31 March 2011 have been considered accordingly in the current year related party disclosure as above. (Refer note no 39)
33 Employee Stock Option Scheme(ESOS)
In 2011, the shareholders of the Company approved the Employee Stock Option Scheme (“Alok Industries Limited – ESOS 2010 Scheme”) vide postal ballot, in accordance with the Securities and Exchange Board of India (ESOP & ESOS) Guidelines, 1999. Such scheme provides for grant of options up to 25,000,000 options to the eligible employees and or directors of the Company and or its subsidiaries. The exercise price for such options can be up to 50% discount to the market price as per the discretion of the compensation committee. 10,799,250 options were granted during the year and 10,595,700 options were outstanding as on 31 March 2012. Such options vest over a period of two years, 50% at the end of one year from the date of grant and 50% at the end of two years from the date of grant.
Details of options granted duly approved by the Remuneration and Compensation Committee under the said scheme are as under:
Grant Date No. of Options granted
Options
lapsed
Closing Balance Exercise Price
Vesting period
20-Apr-11 1,280,000 185,550 1,094,450 18.90 Up to 20 April 2013
20-Apr-11 9,519,250 18,000 9,501,250 21.42 Up to 20 April 2013
TOTAL 10,799,250 203,550 10,595,700
The Company has followed the Intrinsic Value-based method of accounting for stock options granted, based on Guidance Note on Accounting for Employee Share-based Payments, issued by the Institute of Chartered Accountants of India, and accordingly, compensation cost of ` 4.67 crore has been recorded during the year on such grant. The compensation cost recognised as a charge during the year was ` 2.27 crore. Had the compensation cost for the Company’s stock based compensation plan been determined in the manner consistent with the fair value approach as described in the Guidance note, the Company’s net income would be lower by ` 4.20 crore and earnings per share as reported would be lower as indicated below:
Particulars Year-2012Basic and Dilutive Earnings per share
As reported (In `) 1.15
Adjusted (In `) 1.10
The Company has adopted Black Scholes option pricing model to determine the fair value of stock options. The fair value of each option granted in 2012 is estimated on the date of grant based on the following assumptions:
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 118F - 79
Particulars Year-2012Expected life (years) 1 year from the
date of vestingRisk free interest rate (%) 7.83%Volatility (%) 39%
34 Earnings per share (EPS)(` Crore)
31-Mar-12 31-Mar-11a. Nominal value of equity shares per share ( In Rupees) 10 10 b. Basic & Diluted EPS
Net Pro t Available for Equity Shareholders 92.99 311.54 Weighted average number of Equity Shares – Basic 811,187,390 787,784,357 Basic Earnings per share (Rupees) 1.15 3.95 Add : Shares to be issued in ESOS 46,286 – Weighted average number of Equity Shares – Dilutive 811,233,676 787,784,357 Diluted Earnings per share (Rupees) 1.15 3.95
(a) Amounts recognised as expenses towards contributions to provident fund, superannuation and other similar funds by the Company including for it’s subsidiary companies and joint venture companies in India are ` 10.75 crore (previous year ` 8.13 crore) for the year ended 31 March 2012.
(b) The Company contributed ` 8.17 crore (previous year ` 7.57 crore) towards various other de ned contribution plans of subsidiaries located outside India during year ended March 31, 2012 as per laws of the respective country.
ii.
In respect of holding company, subsidiary companies and joint venture companies in India :
(a) Gratuity Plan:
The Company makes annual contribution to the Employee’s Group Gratuity Assurance Scheme, administered by the Life Insurance Corporation of India (‘LIC’), a funded de ned bene t plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to fteen days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs on completion of ve years of service.
(b) Compensated absences:
Employees’ entitlement to compensated absences in future periods based on unavailed leave as at balance sheet date, as per the policy of the Company, is expected to be a long term bene t and is actuarially valued.
The following table sets out the status of the gratuity plan for the year ended 31 March 2012 as required under AS 15 (Revised)
(` Crore) PARTICULARS Gratuity
(funded) as on 31-Mar-12
Gratuity (funded) as
on 31-Mar-11
15.40 10.77 Current Service Cost 4.34 3.53 Interest Cost 1.55 1.15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 119F - 80
PARTICULARS Gratuity (funded) as
on 31-Mar-12
Gratuity (funded) as
on 31-Mar-11 Actuarial (gain) loss (0.71) 0.27 Past Service cost – Vested Bene t – – Bene ts Paid (0.33) (0.32)
20.25 15.40 Change in Fair Value of assetsOpening Fair value of assets 4.71 2.85 Expected Return on Plan Assets 0.36 0.23 Actuarial Gain 0.26 0.08 Contribution by Employer 2.40 1.87 Bene ts Paid (0.33) (0.32)Closing Fair Value of Plan Assets 7.40 4.71 Net Liability 12.85 10.69
Expense to be recognised in statement of Pro t and Loss Account
PARTICULARS Year ended 31-Mar-12
Year ended 31-Mar-11
Current Service Cost 4.34 3.53 Interest on De ned Bene t Obligation 1.55 1.15 Expected Return on Plan Assets (0.36) (0.23)Net Actuarial (gain) loss (0.97) 0.19 Past Service cost – vested bene t recognised during the year – – Total Included in Employment Expenses 4.56 4.64 Actual Return on Plan Assets 0.60 0.30 Category of Assets as on 31 MarchInsurer Managed Fund 7.40 4.71
The assumptions used in accounting for gratuity are set out below:
PARTICULARS Year ended 31-Mar-12
Year ended 31-Mar-11
Discount rate 8.70% 8.05%Rate of increase in compensation levels of covered employees 9.00% 9.00%Expected Rate of return on plan assets * 7.50% 7.50%
* Expected rate of return on plan assets is based on expectation of the average long term rate of return expected to prevail over the estimated term of the obligation on the type of the investments assumed to be held by LIC, since the fund is managed by LIC. The estimates of future salary increases, considered in actuarial valuation, takes into account the in ation , seniority , promotions and other relevant factors.
Experience Adjustments
PARTICULARS Year ended31-Mar-
1231-Mar-
1131-Mar-
1031-Mar-
0931-Mar-
08De ned bene t obligation 20.25 15.40 10.68 6.67 –Plan Assets 7.40 4.71 2.86 2.24 –Surplus (De cit) (12.74) (10.60) (7.82) (4.43) –Experience Adjustments on plan Liabilities
1.09 0.71 0.16 – –
Experience Adjustments on plan Assets
0.26 0.08 0.07 – –
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 120F - 81
Asset Allocations
Since the investments are held in the form of deposit with LIC, these are not volatile and the market value of assets is the cost value of assets and has been accordingly considered for the above disclosure.
36 Segment Reporting
i) Primary Segment: Geographical Segment
The company is in the business of manufacturing of Textile products. Considering its high level of international operations and present internal nancial reporting based on geographical location of customer, the company has identi ed geographical segment as primary segment.
The geographic segment consists of:
a) Domestic (Sales to Customers located in India)
b) International (Sales to Customers located outside India)
Revenue directly attributable to segments is reported based on items that are individually identi able to that segment. The company believes that it is not practical to allocate segment expenses, segment results, assets used, except debtors, in the company’s business or liabilities contracted since the resources services assets are used interchangeably within the segments. Accordingly, no disclosure relating to same is made. All xed assets are located in India.
(` Crore)Particulars Current
Year Previous
YearSegment RevenueOperating Revenue – SalesDomestic [Net of Excise duty of ` 233.95 crore (Previous year ` 112.48 crore)]
5,940.26 4,259.04
International 3,813.27 2,342.70Job Charges collected (Domestic) 31.19 13.16Total segment revenue 9,784.72 6,614.90Segment AssetsSundry DebtorsDomestic 1,535.47 1,609.67International 668.53 204.53
TOTAL 2,204.00 1,814.20
ii) Secondary Segment: Business Segment
The Group is operating in a single business segment i.e. Textile and as such all business activities revolve around this segment. Hence, there is no separate secondary segment to be reported considering the requirement of AS 17 on “Segment Reporting”
37 During the year, the company has transferred investments in the form of equity capital and cumulative redeemable preference shares in Alok Industries International Limited (“Alok BVI”) & Grabal Alok International Limited (“Grabal BVI”), its two wholly owned subsidiary companies to Alok Infrastructure Limited (“Alok Infra”), another wholly owned subsidiary as a strategy to consolidate all investible assets under one umbrella. During the previous year, vide a novation agreement, the Company had taken over the obligation of Grabal Alok (UK) Limited, (then an associate company of Alok BVI & Grabal BVI, in the United Kingdom) towards its liability pertaining to a JPY USD foreign currency derivative. Consequent to the sale of shares in Alok BVI and Grabal BVI to Alok Infra, Alok Infra has taken over such obligation of Alok Industries Limited during the current year and provided an amount of ` 35.85 crore (previous year ` 15.47 crore) towards such obligation.
38 The company has taken premises for operating stores on operating lease. Lease rentals paid during the year are recognised as an expense as per Accounting Standard 19 (AS-19) “Leases”. Details of lease rentals payable in future are as follows:
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 121F - 82
Sr. No.
Due ` Crore
1 With in one year 12.172 Later than one year and not later than 5 years 44.533 Later than 5 years 70.87
Total 127.57
Lease rentals aggregating to ` 26.57 crore (previous year ` 22.91 crore) recognised during the year in statement of Pro t & Loss
39 a) During the year, the Honourable High Court, Bombay sanctioned the scheme of amalgamation (‘scheme’) between the Company (transferee) and Grabal Alok Impex Limited (transferor) with appointed date of 1 April 2011. Grabal Alok Impex Limited is in the business of manufacturing embroidery textiles. The scheme has been effective from 1 March 2012.
The Company issued 22,485,000 equity shares of ` 10 each to shareholders of Grabal Alok Impex Limited (of which 1,900,000 shares were issued to Alok Bene t Trust) considering exchange ratio of 1:1 as per the scheme. There were no signi cant differences in accounting policies of two companies. The Company has accounted for such amalgamation under ‘pooling of interest’ method as under;
PARTICULARS ` croreCarrying value of Fixed assets (including CWIP ` 18.94 crore) 193.51Carrying value of Investments (including ` 31.34 crore in 62.59Transferee company through Alok Bene t Trust)Inventories 46.00Debtors 37.50Cash & Bank balances 147.00Loans & Advances 16.85Total Assets 503.45Current liabilities & Provisions 55.82Long term borrowings 113.15Short Term Borrowings 145.79Deferred Tax Liabilities 16.78Share warrants 20.40Total Liabilities 351.94Shares issued 22.49Reserves taken over 129.02Total Liabilities 503.45
Current year gures of the Company include amount of revenue of `160.96 crore & pro t before tax of ` 7.58 crore for the year.
On such amalgamation, Grabal Alok International Limited, the wholly owned subsidiary of Grabal Alok Impex Limited, has now become a wholly owned subsidiary.
b) The Company vide Alok Industries International Limited (Alok BVI), held 42% stake in Grabal Alok (UK) Limited, (“GAUK”) and Grabal Alok Impex Limited, vide its wholly owned subsidiary, Grabal Alok International Limited, held 48.71% stake in GAUK. On amalgamation, GAUK, an associate company of both companies until March 31, 2011, has now become a majority owned subsidiary of Alok Industries Limited.
Accordingly, the Company has consolidated the nancial statements of GAUK on a line by line basis and Goodwill aggregating to ` 448.00 crore has been recognised in these nancial statements on consolidation. While Grabal Alok (UK) Limited had embarked upon a plan for revamping its retailing operations in the United Kingdom, the same has not made much headway and the operations have recorded losses eroding the net worth, in view of the current economic downturn in the UK. The Management believes that the current performance, impacted by the dif cult economic situation in the UK as above, is not indicative of the long term economic value of the investment. On the basis of objective assessment made by the management, no provision for impairment of goodwill aggregating to ` 448.00 crore is considered necessary.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 122F - 83
40 During the previous year, Deutsche Bank, Singapore Branch subscribed to unsecured oating rate compulsory convertible bonds issued by Alok Industries International Limited (“Alok BVI”) and Grabal Alok (“GAUK”) Limited, a company incorporated in the United kingdom (subsidiary) of the company, of USD 56.5 million each, with a green shoe option of USD 25 million. Such bonds are convertible into Class A preference shares of Alok Industries International Limited (“Alok BVI”) of USD 1.00 each (USD 56.50 million) and ordinary shares of GAUK of GBP 0.001 each. (USD 56.50 million) at the end of maturity (July 2014). Grabal Alok International Limited (“Grabal BVI”), a subsidiary company and Alok BVI, have agreed to purchase such bonds from the holders on scheduled put option dates between the 33rd month (July 2013) to 42nd month (April 2014) from the issue date. The payment obligations under the put option are inter alia secured by way of pledge of 93.21% of shareholding of Alok BVI in Mileta, a.s. – a step down subsidiary of the Company and 90.43% shareholding of Alok BVI and Grabal BVI in GAUK, an associate of the Company. Further, these bonds are secured by subservient charge on current and movable assets of the company which was created by executing a Deed of Hypothecation on 28th October, 2010 in favour of AXIS Trustee Services Limited, Mumbai, India
41 During the year, Triumphant Victory Holdings limited (“TVHL”) a promoter group company, obtained a loan from Axis Bank. Such loan is secured by all assets of Grabal Alok (UK) Limited, the Company’s majority owned subsidiary company.
42 i Due to unusual depreciation in the value of the Indian Rupee (INR) against US Dollar (USD) during the year, the exchange loss gain arising out of :
a) Restatement of foreign currency liabilities assets, and;
b) Mark to Market (MTM) losses on foreign exchange derivatives taken by the Company, has been presented as an exceptional item with corresponding changes for the previous year.
ii The Company, during the year, based on the announcement of the ICAI (Accounting for derivatives), has accounted for derivative forward exchange contracts taken towards highly probable forecast transactions and rm commitments, at fair values considering the principles of recognition and measurement stated in AS-30 ‘Financial Instruments: Recognition and Measurement’. Consequent upon such change, the pro t after tax for the year ended 31 March 2012 is higher by ` 16.78 crore and reserves and surplus are lower by an equivalent amount. Fair value (net loss) of the derivative instruments identi ed as cash ow hedges is ` 16.78 crore as at 31 March 2012, which is expected to be reclassi ed to the pro t and loss account over the next year.
iii Fair values (Mark to Market values) (loss) of Foreign currency options , Interest rate swaps and forward contracts (other than those considered for hedging) as at 31 March 2012 aggregating to ` 179.57 crore (previous year ` 72.96 crore) has been accounted for by the Company. Such fair values are based on the report of counter parties. MTM losses on such derivatives of ` 106.61 crore have been recognised during the year.
iv Derivative contracts entered into by the company and outstanding as on 31 March 2012 for hedging currency and interest rate related risks. Nominal amounts of derivative contracts entered into by the company and outstanding as on 31 March 2012 amount to ` 3,554.72 crore (previous year ` 2,908.71 crore). Category wise break-up is given below.
Sr. No.
Particulars 31-Mar-12 31-Mar-11
1 Interest Rate SwapsUSD INR 476.73 280.68JPY INR 1,150.00 743.27EUR INR 150.00 –
1,776.73 1,023.952 Currency Options * 1,201.21 1,342.263 Forward Contracts 500.05 475.524 Foreign Currency Derivative (USD JPY) (Refer note no 37) 76.73 66.98
Total 3,554.72 2,908.71 * Represents monthly currency option for receivables, maturing over a period of 5 years
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
F - 123F - 84
v. The year end foreign currency exposure that has not been hedged by derivative instruments or otherwise are as below:
a) Amount receivable in foreign currency on account of the following
Particulars Foreign Currency
Current Year Previous YearAmount
in foreign currency
Rupees (Crore)
Amount in foreign currency
Rupees (Crore)
Debtors USD – – 0.79 35.41EUR 0.19 12.99 0.09 5.51GBP 0.00* 0.06 0.01 0.48CZK – – 12.25 31.81
Cash & Bank Balance CZK – – 2.62 7.00EUR 0.00* 0.01 – –USD 0.02 1.10 – –
Fixed Deposit USD 0.65 33.50 – –
b) Amount payable in foreign currency on account of the following
Particulars Foreign Currency
Current Year Previous YearAmount
in foreign currency
Rupees Amount in foreign currency
Rupees
Secured Loans USD 27.69 1,416.91 26.56 1,185.78JPY 184.87 115.42 182.81 98.76EUR 4.39 300.24 1.69 106.78CZK – – 3.11 8.07
Interest accrued but not due on loans
USD 0.01 0.76 0.06 2.80
EUR 0.03 2.09 0.02 1.44Unsecured Loan USD 2.00 102.31 7.00 312.55
EUR 1.52 103.94 1.77 112.22Sundry creditors USD 2.90 148.49 7.74 345.72
JPY – – 4.31 2.33EUR 0.06 3.82 – –CHF 0.00* 0.16 – –
* CHF 27,571
43 In line with the amended Accounting Standard (AS) 11 – ‘Effect of changes in Foreign Exchange Rates’, the Company has chosen to exercise the option under paragraph 46 inserted in the Standard by the noti cation.
i) Added to xed assets capital work-in-progress ` 114.47 crore (previous year ` 23.48 crore) being exchange difference on long term monetary items relatable to acquisition of xed assets.
ii) Carried forward ` 0.99 crore (previous year ` (0.22) crore) in the ‘Foreign Currency Monetary Item Translation Difference Account’ being the amount remaining to be amortised as at 31 March 2012.
44 The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of nancial statements. This has signi cantly impacted the disclosure and presentation made in the nancial statements. Previous year’s gures have been regrouped reclassi ed wherever necessary to correspond with the current year’s classi cation disclosure.
Signatures to Notes 1 to 44In terms of our report attached For and on behalf of the BoardFor Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive ChairmanChartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director
Surendra B. Jiwrajka Jt. Managing DirectorR. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cerPartner Partner K. H. Gopal President (Corporate Affairs) &
Company SecretaryPlace : Mumbai Place : Mumbai Place : MumbaiDate: 18 May 2012 Date: 18 May 2012 Date: 18 May 2012
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012
46
STOCK MARKET DATA FOR EQUITY SHARES
The Equity Shares of the Company are listed and traded on the BSE and the NSE. The stock market data presented below
is given for BSE and the NSE separately.
As on the date of the Letter of Offer, 826,269,357 Equity Shares were issued and outstanding. As the Equity Shares are
actively traded on the BSE and NSE, the stock market data has been given separately for each of these Stock Exchanges.
The Equity Shares have been listed on the BSE since November, 1993 and on the NSE since April, 1996.
The high and low closing prices recorded on BSE and NSE for the preceding three calendar years and the number of
Equity Shares traded on the days the high and low prices were recorded as stated below.
BSE
Year High^
(`) Date of High
No. of
Shares
traded on
date of
high
Total
Volume
traded on
date of
high
(` in
crore)
Low$
(`) Date of Low
No. of
Shares
traded on
date of low
Total
Volume
traded on
date of low
(` in crore)
Average
price for
the year
(`)*
2012 23.90 February 13, 2012 2,279,723 5.34 10.48 December 13, 2012 1,961,906 2.08 16.40
2011 29.50 January 4, 2011 4,813,251 13.87 15.60 August 19, 2011 4,989,919 8.16 22.31
2010 35.00 November 11, 2010 17,298,671 58.90 17.75 May 25, 2010 15,916,088 28.42 22.75
^High based on daily high prices
$Low based on daily low prices
*Average of daily closing prices
(Source: www.bseindia.com)
NSE
Year High^
(`) Date of High
No. of
Shares
traded on
date of
high
Total
Volume
traded on
date of
high
(` in
crore)
Low$
(`) Date of Low
No. of
Shares
traded on
date of low
Total
Volume of
traded on
date of low
(` in crore)
Average
price for
the year
(`)*
2012 23.85 February 13, 2012 9,159,627 21.47 10.45 December 13, 2012 5,816,365 6.16 16.42
2011 29.25 January 3, 2011 22,278,838 64.35 15.60 August 19, 2011 12,291,022 20.05 22.31
2010 35.00 November 11, 2010 48,192,149 164.02 17.8 June 10, 2010 2,090,543 3.77 22.76
^High based on daily high prices
$Low based on daily low prices
* Average of the daily closing prices.
(Source: www.nseindia.com)
47
The high and low prices and volume of Equity Shares traded on the respective dates during the last six months is as
follows:
BSE
Month Date of High High^
(`)
Volume
(No. of
Shares)
Date of Low Low$
(`)
Volume
(No. of
Shares)
Average
Price for
the Month
(`)*
Total No
of Trading
Days
September,
2012 September 26 12.90 36,31,781 September 13 10.77 23,94,953 11.88 20
October,
2012 October 4 13.55 23,16,979 October 31 11.00 63,08,299 12.24 21
November,
2012 November 2 12.40 24,27,616 November 29 10.68 1,12,54,097 11.54 20
December,
2012 December 19 12.05 1,05,36,607 December 13 10.48 19,61,906 11.04 20
January,
2013 January 10 12.60 21,90,944 January 25 10.62 15,90,359 11.48 23
February,
2013 February 4 11.08 9,67,744 February 28 8.25 18,27,503 9.94 20
(Source: www.bseindia.com)
^High based on daily high prices
$Low based on daily low prices
* Average of the daily closing prices.
NSE
Month Date of High High^
(`)
Volume
(No. of
Shares)
Date of Low Low$
(`)
Volume
(No. of
Shares)
Average
Price for
the
Month
(`)*
Total No
of
Trading
Days
September,
2012 September 18 14.00 55,78,306
September 13 10.75 66,34,256
11.87 20
October,
2012 October 4 13.55 71,23,684
October 16, 11.15 49,89,461
12.24 21
November,
2012 November 2 12.40 1,02,14,386
November 29 10.65 4,65,21,090
11.54 20
December,
2012 December 20 12.05 1,10,69,022
December 13 10.45 58,16,385 11.03 20
January,
2013 January 7 12.60 79,68,324
January 24 10.30 46,96,196
11.48 23
February,
2013
February 04 11.10 37,81,510
February 28 8.25 58,72,795
9.94 20
^High based on daily high prices
$Low based on daily low prices
* Average of the daily closing prices.
(Source: www.nseindia.com)
In the event the high, or low or closing price of the Equity Shares are the same on more than one day, the day on which
there has been higher volume of trading has been considered for the purposes of this section.
48
a) The week-end closing prices of the Equity Shares for the last four weeks on BSE and NSE are provided in the table
below:
Week Ended on Closing Price in (`)
BSE NSE
March 15, 2013 8.55 8.55
March 08, 2013 8.96 8.95
March 01, 2013 8.00 8.00
February 22, 2013 9.87 9.85
(Source: www.bseindia.com); (Source: www.nseindia.com)
b) The highest and lowest prices of the Equity Shares on BSE and NSE during the last four weeks are provided in the
table below:
Date of High High (`) Date of Low Low (`)
BSE February 20, 2013 10.29 March 4, 2013 7.80 NSE February 20, 2013 10.30 March 04, 2013 7.80
(Source: www.bseindia.com); (Source: www.nseindia.com)
c) The closing current market price as of March 19, 2013 on NSE was ` 7.65 per share and BSE was ` 7.68 per share.
49
MATERIAL DEVELOPMENTS
1. Limited Review of Unaudited Financial Results for the quarter and nine months ended
December 31, 2012
AUDITOR‟S REPORT ON LIMITED REVIEW OF UNAUDITED FINANCIAL RESULTS
TO THE BOARD OF DIRECTORS OF ALOK INDUSTIRES LIMITED
We have reviewed the accompanying statement of unaudited Financial Results (“the Statement”) of ALOK
INDUSTRIES LIMITED (“the Company”) for the quarter and Nine months ended 31st December, 2012. This
Statement is the responsibility of the Company‟s Management and has been approved by the Board of Directors.
Our responsibility is to issue a report on the Statement based on our review.
We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE)
2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”, issued by
the Institute of Chartered Accountants of India. This Standard requires that we plan and perform the review to
obtain moderate assurance as to whether the Statement is free of material misstatements. A review is limited
primarily to inquiries of Company personnel and analytical procedures applied to financial data and thus provide
less assurance than an audit. We have not performed an audit and accordingly, we do not express an opinion.
Based on our review conducted as stated above, nothing has come to our attention that causes us to believe that
the accompanying Statement, prepared in accordance with the Accounting Standards referred to in Section 211
(3C) of the Companies Act, 1956 and other recognised accounting practices and policies, has not disclosed the
information required to be disclosed in terms of Clause 41 of the Listing Agreements with the stock exchanges,
including the manner in which it is to be disclosed, or that it contains any material misstatement.
Further, we also report that we have traced the number of shares as well as the percentage of shareholding in
respect of the aggregate amount of public shareholding and the number of shares as well as the percentage of
shares pledged/encumbered and non-encumbered in respect of the aggregate amount of promoters and promoter
group shareholding in terms of Clause 35 of the Listing Agreements from the details furnished by the
Management and the particulars relating to undisputed investor complaints from the details furnished by the
Management / Registrars.
For Deloitte Haskins & Sells
Chartered Accountants
Firm Registration No: 117366W
Mumbai, 13th February 2013
50
Statement of standalone unaudited results for the Quarter and Nine months ended
December 31, 2012 (Rs. in
crore )
PARTICULARS
QUARTER ENDED
Period
Ended
Period
Ended
Year
Ended
31.12.2012
30.09.2012
31.12.2011
31.12.2012
31.12.2011
31.03.2012
[3 Months] [3 Months] [3 Months] [9 Months] [9 Months] [12 Months]
(Reviewed)
(Reviewed)
(See note
no.4
below) (Reviewed)
(Reviewed)
(See note
no.4 below) (Reviewed)
(Audited)
1 Income from
Operations
Net Sales / Income
from operations 3,520.81 3,324.77 2,425.25 9,268.33 6,261.14 8,900.86
Total Income
from Operations
(net)
3,520.81 3,324.77 2,425.25 9,268.33 6,261.14 8,900.86
2 Expenses
a) Cost of
materials
consumed
2,647.10 1,513.12 1,386.08 5,624.47 3,785.64
5,748.34
b)
Purchase of
stock-in-trade
14.53 20.78 67.07 55.32 117.17
161.45
c) Changes in
inventories of
finished goods,
work-in-
progress and
stock-in-trade
(581.96) 289.55 (323.01) (655.63) (964.82) (1,516.66)
d) Employee
benefits
expense
69.32 72.87 77.47 215.37 201.83 267.28
e) Depreciation
and
Amortisation
expense
228.61 218.32 191.97 660.30 539.84 713.43
f) Other
expenses 416.27 544.10 544.89 1,439.67 1,291.03 1,681.30
Total Expenses 2,793.87 2,658.74 1,944.47 7,339.50 4,970.69 7,055.14
3 Profit from
operations before
other income,
finance costs and
exceptional items
726.94 666.03 480.78 1,928.83 1,290.45 1,845.72
4 Other Income 9.05 4.44 5.57 23.52 57.00 65.60
5 Profit from
ordinary activities
before finance costs
and exceptional
items
735.99 670.47 486.35 1,952.35 1,347.45 1,911.32
6 Finance Costs 370.52 322.95 293.89 1,021.88 814.94 1,149.55
51
7 Profit from
ordinary activities
after finance costs
but before
exceptional items
365.47 347.52 192.46 930.47 532.51 761.77
8 Exceptional Items
(Refer note no. 3 ) 30.28 (99.91) 192.56 103.33 348.83 121.27
9 Profit from
ordinary activities
before tax
335.19 447.43 (0.10) 827.14 183.68 640.50
10 Tax expenses for
the period 95.37 157.81 37.48 267.63 86.69 259.97
11 Net Profit 239.82 289.62 (37.58) 559.51 96.99 380.53
12 Paid up Equity
Share Capital (Face
Value Rs.10/- per
equity share)
826.28 826.28 810.27 826.28 810.27 826.28
13 Reserves excluding
revaluation
reserves (as per
Balance sheet of
previous
accounting year)
2,829.22
14 Earnings per share
(of Rs.10 each) :
Basic 2.90* 3.51* (0.46)* 6.77* 1.20* 4.69
Diluted 2.90* 3.51* (0.46)* 6.77* 1.20* 4.69
* - Not annualised
See accompanying notes to the financial results
PART II
PARTICULARS
QUARTER ENDED Period
Ended Period
Ended Year Ended
31.12.2012 30.09.2012 31.12.2011 31.12.2012 31.12.2011 31.03.2012
[3 Months] [3 Months] [3 Months] [9 Months] [9 Months] [12 Months]
(Reviewed) (Reviewed) (See note no.
4 below)
(Reviewed)
(Reviewed) (See note no.
4 below)
(Reviewed)
(Audited)
A PARTICULARS OF
SHAREHOLDING
1 Public Shareholding
- Number of shares 544,052,839 544,052,839 563,652,839 544,052,839 563,652,839 563,652,839
-Percentage of
shareholding
65.84% 65.85% 69.56% 65.84% 69.56% 68.22%
2 Promoters and
Promoter Group
Share Holding
a) Pledged/Encumb
ered
- Number of
Shares 268,840,283 276,411,608 222,705,038 268,840,283 222,705,038 192,528,869
52
- Percentage of
Shares (as a % of
the total
shareholding of
promoter and
promoter group)
95.26% 97.94% 90.30% 95.26% 90.30% 73.31%
-Percentage of
Shares (as a % of
the total share
capital of the
Company)
32.54% 33.45% 27.49% 32.54% 27.49% 23.30%
b) Non-
encumbered
- Number of Shares 13,376,235 5,804,910 23,911,480 13,376,235 23,911,480 70,087,649
- Percentage of Shares
(as a % of the total
shareholding of
promoter and
promoter group
4.74% 2.06% 9.70% 4.74% 9.70% 26.69%
-Percentage of Shares
(as a % of the total
share capital of the
Company)
1.62% 0.70% 2.95% 1.62% 2.95% 8.48%
B INVESTOR
COMPLAINTS
Pending at the
beginning of the
quarter
5
Received during the
quarter
28
Disposed off during
the quarter 33
Remaining
unresolved at the end
of the quarter
0
NOTES:
1. The above unaudited financial results of the Company for the quarter and nine months ended 31
December 2012, reviewed and recommended by the Audit Committee, were taken on record by the
Board of Directors of the Company at its meeting held on 13 February 2013 and have been reviewed by
the Statutory Auditors.
2. a. The company, considering its high level of international operations and present internal financial
reporting based on geographical location of customer, has identified geographical segment as its
primary segment.
The geographical segment consists of domestic sales and export sales. Revenue directly attributable to
segments is reported based on items that are individually identifiable to that segment. The company
believes that it is not practical to allocate segment expenses, assets except debtors, used in the
company's business or liabilites contracted since the resources/services/assets are used interchangeably
within the segments. Accordingly, no disclosure relating to same is made.
PARTICULARS
QUARTER ENDED Period
Ended Period Ended Year Ended
31.12.2012 30.09.2012 31.12.2011 31.12.2012 31.12.2011 31.03.2012
(3 Months) (3 Months) (3 Months) (9 Months) (9 Months) (12 Months)
(Reviewed) (Reviewed) (See note (Reviewed) (See note no. (Audited)
53
no. 4 below) (Reviewed)
4 below) (Reviewed)
Segment Revenue Domestic 2,811.43 2,491.80 1,605.88 6,889.34 4,046.49 5,871.31 International 709.38 832.97 819.37 2,378.99 2,214.65 3,029.55
3,520.81 3,324.77 2,425.25 9,268.33 6,261.14 8,900.86
Trade Receivables Domestic 4,103.08 2,478.85 1,614.92 4,103.08 1,614.92 1,799.53
International 209.63 240.07 360.01 209.63 360.01 352.62
4,312.71 2,718.92 1,974.93 4,312.71 1,974.93 2,152.15
b. The Company has identified business segment as its secondary segment. The company is operating
in a single business segment i.e. Textile and as such all business activities revolve around the segment.
3. Exceptional Items include:
i) Exchange loss/ gain arising out of a) restatement of foreign currency liabilities/ assets and b) Mark to
market (MTM) losses on foreign exchange derivatives taken by the Company, considering the volatility
in the Indian Rupee (INR) against US Dollar (USD)
ii) Provision for diminution in the value of investments and impairment of loans to subsidiaries in the
retail business (Rs. 7.35 crore for quarter and Rs. 99.04 crore for nine months ended 31 December
2012). Considering the business plan for retail operations such diminution/impairment is not regarded
as temporary.
4. The amalgamation of Grabal Alok Impex Limited (GAIL) into the company was completed on 1
March 2012 with effect from 1 April 2011, as per the terms and conditions mentioned in the Scheme of
Amalgamation. 2,24,85,000 equity shares were issued to the shareholders of Grabal Alok Impex Ltd.
Figures for the quarter/period ended 31 December 2011, include figures of Grabal Alok Impex Limited
and EPS has been restated for such periods.
5. Subsequent to the period end, the Company has proposed a rights issue of equity shares upto Rs. 551
crore, with issue price of Rs 10 per share, ratio of Rights entitlement of 2:3 and record date of 19
February 2013.
The figures of previous periods have been reclassified/regrouped wherever necessary to correspond
with those of the current period.
2. Other Developments
Information as required as per sub-item B of item (X) of Part E of the SEBI ICDR Regulations and in
accordance with the Ministry of Finance, GoI, Circular no.F.2/5/SE/76 dated February 5, 1977, amended on
March, 1977.
Our working results, on a standalone basis for the period April 1, 2012 till January 31, 2013:
Sr. No Particulars Amount (`in crore)
A (i) Sales /Turnover (Net) 10,474.87
- Local Sales 7,724.99
- Export Sales 2,749.88
A (ii) Other income 25.01
A (iii) Total Income 10,499.88
B EBITDA 2,942.83
C Provision for interest and Financial charges 1,142.44
D EBTDA [Estimated Gross Profit (excluding Depreciation & Taxes)] 1,800.39
E (i) Provision for depreciation 736.55
54
E (ii) Profit from ordinary activities 1,063.84
E (iii) Exceptional Items 100.24
E (iv) Profit before tax 963.60
E (v) Provision for Taxes 326.11
F Net Profit 637.49
G Net Cash Accruals 1,513.18
Developments on Real Estate
Our real estate business is carried on through our Subsidiaries, Alok Infrastructure Limited (through its step-
down Subsidiaries and Associates) and Alok Land Holdings Private Limited, and entails investment in real
estate for onward sale. The real estate portfolio of our Subsidiaries include both commercial and residential
properties and the current partial sale/ proposed sale pertains to only 2 (two) of the commercial properties.
Name and
address of the
property
Status Status of transaction of sale Amount of
consideration/proposed
consideration (in `
Crores)
Peninsula
Business Park,
Ganpatrao
Kadam Marg, Off
Senapati Bapat
Marg, Lower
Parel, Mumbai
400 013
Sale/ proposed
sale of 19.50
floors out of 20
floors
Agreements entered for two units each for
floor no. 7, 11, 12, 13 and 18 and one unit
of 9th Floor, the most of the amount of
consideration has been received.
276.29
LoI entered for two units each for floor no.
2, 3, 4, 5, 6, 8, 10, 14, 15, 16, 17, 19 and
20 and one unit for floor 1 and 9 and the
token money has been received.
592.99
Ashford Centre,
Shankarrao
Naram Marg,
Lower Parel,
Mumbai 400 013
Proposed sale of
5 floors out of 8
floors
LoI entered for floor no. 1, 5, 6, 7 and 8
and token money has been received. 78.81
Total 948.09
For further details on real estate, please refer to risk factor no. 5 under section titled “Risk Factors” on page xvi.
Confirmation from Board of Directors
In the opinion of the Board of Directors of the Company, there have not arisen, since the date of the last
audited/limited review financial statements included in this Letter of Offer, any circumstance that materially and
adversely affect or is likely to affect its business or profitability or the value of the assets or the ability to pay
Company‟s liabilities. There is no subsequent development after the date of the last Auditor‟s Report, except as
stated in the “Risk Factors”, which Board of Directors believe is expected to have a material impact on reserves,
profits, earning per share and book value of the shares.
55
ACCOUNTING RATIOS AND CAPITALISATION STATEMENT
The following table presents certain accounting and other ratios derived from our consolidated and standalone
limited review of the half year ended September 30, 2012 and audited consolidated and standalone financial
statements as at and for the years ended March 31, 2012 and March 31, 2011 included in “Financial
Information” on page 45 in the Letter of Offer.
This table should be read in conjunction with “Financial Information” and “Risk Factors” appearing on page 45
and xvi, respectively in the Letter of Offer.
Particulars
Consolidated Standalone
As on
September
30, 2012
(Limited
Review)
As on March
31, 2012
(Audited)
As on March
31, 2011
(Audited)
As on
September
30, 2012
(Limited
Review)
As on March
31, 2012
(Audited)
As on March
31, 2011
(Audited)
Weighted average
number of Equity
Shares outstanding
during the period
for basic EPS
82,62,69,357 81,11,87,390 78,77,84,357 82,62,69,357 81,11,87,390 78,77,84,357
Weighted average
number of Equity
Shares outstanding
during the period
for diluted EPS
82,62,69,357 81,12,33,676 78,77,84,357 82,62,69,357 81,12,33,676 78,77,84,357
Basic EPS (`) 2.72** 2.64 4.46 4.75** 6.19 5.66 Diluted EPS (`) 2.72** 2.64 4.46 4.75** 6.19 5.66 Return on Net
Worth (%) 14.60* 7.50 12.59 19.67* 13.73 14.39
NAV per Equity
Share (`) 37.33 35.21 35.44 48.34 45.06 39.32
** Not Annualised
*Annualised
The ratios have been computed as below:
a. Basic Earnings Per share: Net Profit after tax (excluding extraordinary items and exceptional items)
_________________________________________________________
Weighted average number of equity shares outstanding during the
year/period)
b. Diluted Earnings Per share: Net Profit after tax (excluding extraordinary items and exceptional items)
__________________________________________________________
Weighted average number of diluted shares outstanding during the
year/period
c. Return on Net Worth (%): Net Profit after Tax (excluding extraordinary items and exceptional items)
___________________________________________
Net Worth at the end of year/period
d. Net asset value per share: Net Worth at the end of year/period
____________________________________________________
Total number of equity shares outstanding during the year/period
e. Net worth = Equity share capital + all Reserves.(excl. Revaluation Reserves);
56
Capitalisation Statement of our Company on a standalone and consolidated basis
(` in crore)
Particulars Standalone basis Consolidated basis
As at September 30, 2012
(Limited Review)
As at September 30, 2011
(Limited Review)
Pre-Issue Post-Issue** Pre-Issue Post-Issue**
Loan Funds:
Long Term Debt 6,907.67 6,907.67 8,296.85 8,296.85
Short Term Debt and Current
Maturity of Long Term Debt 6,916.67 6,916.67 8,130.39 8,130.39
Total debt (A) 13,824.34 13,824.34 16,427.24 16,427.24
Shareholders‟ funds:
Share capital 826.27 1,377.12** 826.27 1,377.12**
Share Forfeiture Account 0.01 0.01 0.01 0.01
Securities premium 993.65 993.65 991.87 991.87
Other reserves and surplus 2,174.28 2,174.28 1,269.95 1,269.95
Total Shareholders‟ funds/Equity
(B) 3,994.21 4,545.06 3,088.10 3,638.95
Total Capitalisation (A+B) 17,818.55 18,369.40 19,515.35 20,066.19
Long term Debt/Equity 1.73 1.52 2.69 2.28
Total Debt to Equity (A/B) 3.46 3.04 5.32 4.51
**Assuming full subscription to the extent of 55,08,46,238 Equity Shares at the Issue Price of `10.
57
SECTION VII – LEGAL AND OTHER INFORMATION
OUTSTANDING LITIGATIONS
Our Company, our Subsidiaries and our Joint Ventures are not aware of any outstanding litigations including,
suits, criminal or civil prosecutions and taxation related proceedings against our Company and/ or our
Subsidiaries/ Joint Ventures that would have a material adverse effect on our business. Further, there are no
defaults, non-payment of statutory dues including, institutional/ bank dues and dues payable to holders of any
debentures, bonds and fixed deposits that would have a material adverse effect on our business other than
unclaimed liabilities against us as of the date of this Letter of Offer.
Further, our Company, our Subsidiaries and our Joint Ventures are not aware of any litigation involving moral
turpitude or criminal liability, material violations of statutory regulations or proceedings relating to economic
offences which have arisen in the last ten years.
In addition to the above, our Company, our Subsidiaries and our Joint Ventures are not subject to (i) any
outstanding litigation which, on a several basis, impacts more than 1% of our networth or our total revenue, for
the last completed financial year; or (ii) any outstanding case which is likely to affect the decision in similar
cases and such cases, collectively, impacts more than 1% of our networth or our total revenue, for the last
completed financial year.
However, from time to time, our Company and our Subsidiaries have been and continue to be involved in legal
proceedings, arising in the ordinary course of our business. None of the legal proceedings filed against our
Company and our Subsidiaries are in the nature of criminal proceedings and we believe that the number of
proceedings in which our Company and our Subsidiaries are/ were involved is not unusual for a company of our
size doing business in India. Accordingly, set out below is the status of pending litigations against our Company
and Subsidiaries:
The following tables list out details on the litigation as on March 19, 2013:
Sr. No Nature of Litigation No. of Pending Cases Approximate Monetary Liability
(` in crore) Alok Industries Limited
1. Civil 7 19.99 2. Taxation 7 0.83 3. Labour 8 Not ascertainable
Total 22 20.82*
* To the extent ascertainable
Sr. No Nature of Litigation No. of Pending Cases Approximate Monetary Liability
(` in crore) Alok Retail ( India) Limited
1. Civil 1 0.08
58
GOVERNMENT APPROVALS
We have received the necessary consents, licenses, permissions and approvals from the Government of India
and various governmental agencies required for our present business and to undertake the Issue and no further
material approvals are required for carrying on our present activities. In addition, except as mentioned in this
chapter as on the date of this Letter of Offer, there are no pending regulatory and government approvals and no
pending material renewals of licenses or approvals in relation to the activities undertaken by us or in relation to
the Issue.
Pending Approvals and Registrations
1. Weaving, Texturising, Polyester Staple Fibre, Polyester Oriented Yarn and Fully Dyed Yarn Units at
Village Rakholi/Saily, Silvassa
(a) Application dated May 23, 2012 for obtaining a fresh no objection certificate from the Station Fire
Officer, Department of Fire & Emergency Services, Dadra Nagar Haveli, Silvassa, since the previous
no objection certificate bearing no.DFES/SFO/DNH/NOC/ANNUALLY/2011/147 expired on May 23,
2012.
2. Spinning Unit at Village Silvassa
(a) Application dated October 8, 2011 for obtaining a fresh no objection certificate from the Station Fire
Officer, Department of Fire & Emergency Services, Dadra Nagar Haveli, Silvassa, since the previous
no objection certificate bearing no. DFES/SFO/DNH/NOC/ANNUALLY/2010/97 expired on
November 9, 2011.
3. Garments and Made-ups Unit at Village Saily, Silvassa
(a) Application dated November 16, 2012 for renewal of the registration certificate bearing no.
LEO/Renewal/1208/2011, to the Labour Enforcement Officer/Registering Officer, Dadra & Nagar
Haveli, Silvassa, which has expired on December 6, 2012;
(b) Application dated November 27, 2012 for renewal of the registration certificate bearing no.
LEO/License/CL(R&A)Act/951/2009, to the Labour Enforcement Officer/Registering Officer, Dadra
& Nagar Haveli, Silvassa, which has expired on November 27, 2012;
(c) Application dated November 27, 2012 for renewal of the registration certificate bearing no.
LEO/License/CL(R&A)Act/520/2009, to the Labour Enforcement Officer/Registering Officer, Dadra
& Nagar Haveli, Silvassa, which has expired on November 27, 2012;
(d) Application dated November 27, 2012 for renewal of the registration certificate bearing no.
LEO/License/CL(R&A)Act/150/2011, to the Labour Enforcement Officer/Registering Officer, Dadra
& Nagar Haveli, Silvassa, which has expired on November 27, 2012;
(e) Application dated February 2, 2013 for renewal of the registration certificate under the Contract Labour
Act bearing no. LEO/License/CL(R&A)Act/34/2007 to the Labour Enforcement Officer/ Registering
Officer, Dadra & Nagar Haveli, Silvassa, which has expired on March 1, 2013; and
(f) Application dated March 6, 2013 for renewal of the registration certificate under the Contract Labour
Act bearing no. LEO/License/CL(R&A)Act/29/2012 to the Labour Enforcement Officer/ Registering
Officer, Dadra & Nagar Haveli, Silvassa, which has expired on March 8, 2013.
4. Process house at Navi Mumbai (Pawane factory)
59
Application dated November 30, 2012 for renewal of consent under section 26 under Water Act and
section 21 of the Air Act to Member Secretary, Maharashtra Pollution Control Board bearing
no.MPCB/PCI-III/EIC No. NM – 1624-10/CC-132 which has expired on December 31, 2012.
5. Balitha Processing Unit I and Balitha Process Unit II
(a) Application dated November 30, 2012 for renewal of license to import and store petroleum products to
Chief Controller of Explosives, Nagpur bearing no.P/HQ/GJ/15/4426(P19175), which has expired on
December 31, 2012;
(b) Application dated November 26, 2012 for renewal of certificate for the use of Boiler to Office of the
Assistant Director of Boiler bearing no.GT-4662, which has expired on December 20, 2012;
(c) Application dated October 30, 2012 for renewal of certificate for the use of Boiler to Office of the
Assistant Director of Boiler bearing no. GT-4663, which has expired on November 29, 2012;
(d) Application dated October 27, 2012 for renewal of certificate for the use of Boiler to Office of the
Assistant Director of Boiler bearing no. MR12814, which has expired on November 17, 2012;
(e) Application dated November 10, 2012 for registration under the Contract Labour Act to the Licensing
officer, the Contract Labour (R&A), Valsad bearing no.ACL/VAL/CLL/LIC/569/2011, which has
expired on November 10, 2012;
(f) Application dated February 11, 2013 for renewal of registration under the Contract Labour Act to the
Licensing Officer, the Contract Labour (R&A), Valsad bearing no. ACL/VAL/CLL/LIC/NO/689/2012,
which has expired on March 12, 2013; and
(g) Application dated February 11, 2013 for renewal of registration under the Contract Labour Act to the
Licensing Officer, the Contract Labour (R&A), Valsad bearing no.
ACL/VAL/CLL/LIC/NO/688/2012, which has expired on March 12, 2013.
6. Bhiwandi Unit
(a) Application dated December 11, 2012 for NOC regarding pollution control to Dy. Municipal
Commissioner, Bhiwandi for license bearing no. BNC/ENV/T/11-12/336, which has expired on
November 29, 2012.
7. Made-ups Garment at Morai
(a) Application dated October 18, 2012 for license to work a factory to the Directorate Industrial Safety
and Health, Gujarat for license expired on December 31, 2012; and
(b) Application dated December 17, 2012 for registration under the Contract Labour Act to the Licensing
officer, the Contract Labour (R&A), Valsad bearing no.ACL/VAL/CLL/LIC/414/2009, which has
expired on December 17, 2012.
8. Garment Unit at Morai
(a) Application dated July 4, 2011 for registering the provident fund in the name of the Company, which
was originally in the name of APD Exports bearing registration no. GJ/SRO/VAP/48075/ENF/1801 to
Assistant Commissioner, Sub-Regional Office, Vapi; and
60
(b) Application to Dakshin Gujarat VIJ Company Limited for change of name for power supply from APD
Exports to the Company.
9. Embroidery Division, Vasona
(a) The following approvals remain in the name of Grabal Alok Impex Limited, which has been merged
with our Company. Company has made applications, to change the name from Grabal Alok Impex
Limited to our Company and are yet to receive the new license:
(i) No objection certificate u/s 25 of the Water Act of the Pollution Control Committee of Dadra
Nagar Haveli bearing no. PCC/DDD/G-4178/VA/AA/04-05/175;
(ii) No objection certificate u/s 25 of the Water Act of the Pollution Control Committee of Dadra
Nagar Haveli bearing no. PCC/DDD/G-4178/VA/AA/04-05/174;
(iii) No objection certificate regarding satisfactory maintenance of all the fire safety measures bearing
no. DFES/SFO/NOC/ANNUALLY/2012/01;
(iv) Approval for release of additional HT Power connection bearing no. DNH/ELE/Div-
II/HT/13/09/439 of the Executive Engineer, Electricity Department of Dadra and Nagar Haveli;
(v) Approval for release of additional HT Power connection bearing no. 1-1(186)/ELE/2006/465 of
the Executive Engineer, Electricity Department of Dadra and Nagar Haveli;
(vi) Approval for release of additional HT Power connection bearing no. DNH/ELE/DG/19/2010/787
of the Executive Engineer - II, Electricity Department of Dadra and Nagar Haveli;
(vii) Allotment of separate code for the provident fund under certificate bearing no.
GJ/SRO/VAP/47183/ENF/2872 by the Assistant Provident Fund Commissioner, Sub Regional
Office, Vapi. The Company has made an application for transferring the same in its own name
vide an application dated May 1, 2012; and
(b) Application dated November 30, 2012 for registration under the Contract Labour Act, the for the
license bearing no.LEO/CL(R&A)/691/2012, which has expired on December 8, 2012.
10. Packing Unit at Falandi
(a) Application dated November 6, 2012, consent to establish a unit by the Single Window, Directorate of
Industries, Dadra Nagar Haveli, Silvassa; and
(b) Application dated February 6, 2013 to Chief Inspector of Boiler, Boiler Inspectorate Department,
Silvassa for renewal of Certificate to use a Boiler under Section 5 of the Indian Boiler Act bearing no.
DNH 15 expired on March 1, 2013.
11. Hemming Unit at Rakholi
(a) Renewal of no objection certificate for fire safety measures bearing no.
DFES/SFO/NOC/ANNUALLY/2009/277 dated July 10, 2009; and
(b) Application dated January 29, 2013 for registration under the registration under the Contract Labour
Act, the for the license bearing no.LEO/CL(R&A)/177/2011, which has expired on December 30,
2012.
61
OTHER REGULATORY AND STATUTORY DISCLOSURES
Authority for the Issue
The Issue of Equity Shares to the Eligible Equity Shareholders is being made in accordance with the resolution
passed by our Board of Directors under Sections 81(1), and other provisions of the Companies Act on
September 25, 2012. The Board of Directors or Committee thereof (including the Committee of Directors) in
their meeting held on February 7, 2013 have determined the Issue Price as ` 10 per Equity Shares and the Rights
Entitlement as 2 Equity Share(s) for every 3 Equity Share(s) held on the Record Date. The Issue Price has been
arrived at in consultation with the Lead Managers.
Prohibition by SEBI or RBI
None of the Directors or person(s) in control of the Promoters has been prohibited from accessing the capital
markets under any order or direction passed by the SEBI. Further the Promoter, their relatives (as per the
Companies Act), the Company and group companies are not declared as wilful defaulters by the
RBI/Government authorities.
Eligibility for the Issue
We are an existing company registered under the Companies Act and our Equity Shares are listed on BSE and
NSE. We are eligible to undertake the Issue in terms of Chapter IV of the SEBI ICDR Regulations.
We are eligible to make disclosures in this Letter of Offer as per clause 5 under Part E of Schedule VIII of the
SEBI ICDR Regulations as we are in compliance with the following:
a) We have been filing periodic reports, statements and information in compliance with the listing
agreement for the last three years immediately preceding the date of filing of the Draft Letter of Offer
with SEBI and this Letter of Offer;
b) The reports, statements and information referred to in sub-clause (a) above are available on the website of
BSE and NSE which are recognised stock exchange with nationwide trading terminals;
c) We have an investor grievance-handling mechanism, which includes meeting of the Share Transfer and
Investors‟ Grievance Committee at frequent intervals, appropriate delegation of power by the Board of
Directors as regards share transfer to the Share Transfer and Investors‟ Grievance Committee and clearly
laid down systems and procedures for timely and satisfactory redressal of investor grievances.
DISCLAIMER CLAUSE OF SEBI
AS REQUIRED, A COPY OF THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI.
IT IS TO BE DISTINCTLY UNDERSTOOD THAT THE SUBMISSION OF THE DRAFT LETTER OF
OFFER TO SEBI SHOULD NOT, IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME
HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY
EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH
THE ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS
MADE OR OPINIONS EXPRESSED IN THE DRAFT LETTER OF OFFER. THE LEAD
MANAGERS, SBI CAPITAL MARKETS LIMITED, AXIS CAPITAL LIMITED, CENTBANK
FINANCIAL SERVICES LIMITED, EMKAY GLOBAL FINANCIAL SERVICES LIMITED,
FORTUNE FINANCIAL SERVICES (INDIA) LIMITED AND IDBI CAPITAL MARKET SERVICES
LIMITED, HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT LETTER OF
OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (ISSUE OF
62
CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 IN FORCE FOR THE
TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED
DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.
IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS
PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF
ALL RELEVANT INFORMATION IN THE DRAFT LETTER OF OFFER, THE LEAD MANAGERS
IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY
DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS
PURPOSE THE LEAD MANAGERS, SBI CAPITAL MARKETS LIMITED, AXIS CAPITAL
LIMITED, CENTBANK FINANCIAL SERVICES LIMITED, EMKAY GLOBAL FINANCIAL
SERVICES LIMITED, FORTUNE FINANCIAL SERVICES (INDIA) LIMITED AND IDBI CAPITAL
MARKET SERVICES LIMITED, HAVE FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE
DATED SEPTEMBER 26, 2012 WHICH READS AS FOLLOWS:
(1) WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO
LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH
COLLABORATORS, ETC. AND OTHER MATERIAL DOCUMENTS MORE PARTICULARLY
REFERRED TO IN THE ANNEXURE HERETO IN CONNECTION WITH THE
FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO THE ISSUE;
(2) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY,
ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT
VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE,
PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER
PAPERS FURNISHED BY THE COMPANY, WE CONFIRM THAT:
(a) THE DRAFT LETTER OF OFFER FILED WITH SEBI IS IN CONFORMITY WITH
THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;
(b) ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE
REGULATIONS GUIDELINES, INSTRUCTIONS, ETC. FRAMED/ ISSUED BY SEBI,
THE GOVERNMENT OF INDIA AND ANY OTHER COMPETENT AUTHORITY IN
THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND
(c) THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR
AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED
DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH
DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE
COMPANIES ACT, 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA
(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009
AND OTHER APPLICABLE LEGAL REQUIREMENTS.
(3) WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN
THE DRAFT LETTER OF OFFER ARE REGISTERED WITH SEBI AND THAT UNTIL DATE
SUCH REGISTRATION IS VALID.
(4) WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS
TO FULFIL THEIR UNDERWRITING COMMITMENTS – NOTED FOR COMPLIANCE
(5) WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED
FOR INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS‟
CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIES PROPOSED
TO FORM PART OF PROMOTERS‟ CONTRIBUTION SUBJECT TO LOCK-IN SHALL NOT
63
BE DISPOSED/ SOLD/ TRANSFERRED BY THE PROMOTERS DURING THE PERIOD
STARTING FROM THE DATE OF FILING THE DRAFT RED HERRING PROSPECTUS/ RED
HERRING PROSPECTUS WITH SEBI TILL THE DATE OF COMMENCEMENT OF LOCK-
IN PERIOD AS STATED IN THE DRAFT RED HERRING PROSPECTUS/ RED HERRING
PROSPECTUS – NOT APPLICABLE
(6) WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF
INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009,
WHICH RELATES TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION OF
PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE
DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE
IN THE DRAFT RED HERRING PROSPECTUS / RED HERRING PROSPECTUS – NOT
APPLICABLE
(7) WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C)
AND (D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND
EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS)
REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM THAT
ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS‟ CONTRIBUTION
SHALL BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE
UNDERTAKE THAT AUDITORS‟ CERTIFICATE TO THIS EFFECT SHALL BE DULY
SUBMITTED TO SEBI. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN
MADE TO ENSURE THAT PROMOTERS‟ CONTRIBUTION SHALL BE KEPT IN AN
ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE
RELEASED TO THE ISSUER ALONG WITH THE PROCEEDS Of THE PUBLIC ISSUE – NOT
APPLICABLE
(8) WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE COMPANY FOR WHICH THE
FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE OBJECTS
LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR
OTHER CHARTER OF THE COMPANY AND THAT THE ACTIVITIES WHICH HAVE BEEN
CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS
MEMORANDUM OF ASSOCIATION.
(9) WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE
THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE
BANK ACCOUNT AS PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 73 OF
THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE
SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK
EXCHANGES MENTIONED IN THE LETTER OF OFFER. WE FURTHER CONFIRM THAT
THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE
ISSUER SPECIFICALLY CONTAINS THIS CONDITION. – NOTED FOR COMPLIANCE,
SUBJECT TO COMPLIANCE WITH REGULATION 56 OF THE SEBI ICDR REGULATIONS
(10) WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF
OFFER THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN
DEMAT OR PHYSICAL MODE.
(11) WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE
SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION TO
64
DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE
INVESTOR TO MAKE A WELL INFORMED DECISION.
(12) WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE
DRAFT LETTER OF OFFER:
(a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE
SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE
COMPANY AND
(b) AN UNDERTAKING FROM THE COMPANY THAT IT SHALL COMPLY WITH SUCH
DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY SEBI FROM TIME TO
TIME.
(13) WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO
ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA
(ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE
MAKING THE ISSUE. – NOTED FOR COMPLIANCE
(14) WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS
BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS
BACKGROUND OR THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS
STANDS, THE RISK FACTORS, PROMOTERS EXPERIENCE,ETC.
(15) WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH
THE APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF
INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009,
CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS
OF COMPLIANCE, PAGE NUMBER OF THE DRAFT LETTER OF OFFER WHERE THE
REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.
(16) WE ENCLOSE STATEMENT ON „PRICE INFORMATION OF PAST ISSUES HANDLED BY
MERCHANT BANKERS BELOW (WHO ARE RESPONSIBLE FOR PRICING THIS ISSUE)‟,
AS PER FORMAT SPECIFIED BY SEBI THROUGH CIRCULAR. - NOT APPLICABLE
THE FILING OF THE DRAFT LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE
COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE
COMPANIES ACT OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR
OTHER CLEARANCE AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE.
SEBI FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE
LEAD MANAGERS ANY IRREGULARITIES OR LAPSES IN THE DRAFT LETTER OF OFFER.
Caution
Disclaimer clauses from the Company and the Lead Managers
We and the Lead Managers accept no responsibility for statements made otherwise than in this Letter of Offer or
in any advertisement or other material issued by us or by any other persons at our instance and anyone placing
reliance on any other source of information would be doing so at his own risk.
We and the Lead Managers shall make all information available to the Eligible Equity Shareholders and no
selective or additional information would be available for a section of the Eligible Equity Shareholders in any
65
manner whatsoever including at presentations, in research or sales reports etc. after filing of this Letter of Offer
with SEBI.
No dealer, salesperson or other person is authorized to give any information or to represent anything not
contained in this Letter of Offer. You must not rely on any unauthorized information or representations. This
Letter of Offer is an offer to sell only the Equity Shares and rights to purchase the Equity Shares offered hereby,
but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this
Letter of Offer is current only as of its date.
Investors who invest in the Issue will be deemed to have represented to us and Lead Managers and their
respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable
laws, rules, regulations, guidelines and approvals to acquire Equity Shares, and are relying on independent
advice/ evaluation as to their ability and quantum of investment in the Issue.
Disclaimer with respect to jurisdiction
This Letter of Offer has been prepared under the provisions of Indian laws and the applicable rules and
regulations thereunder. Any disputes arising out of the Issue will be subject to the jurisdiction of the appropriate
court(s) in Mumbai, India only.
Disclaimer Clause of BSE
BSE has given vide its letter bearing Ref. No. BCS/PREF/S1/IP-RT/568/12-13 dated November 2, 2012,
permission to this Company to use the exchange‟s name in this Letter of Offer as one of the stock exchanges on
which this Company‟s securities are proposed to be listed. The exchange has scrutinized the Draft Letter of Offer
for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company.
The exchange does not in any manner:
i) warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer; or
ii) warrant that this Company‟s securities will be listed or will continue to be listed on the exchange; or
iii) take any responsibility for the financial or other soundness of this Company, its promoters, its
management, or any scheme or project of this Company;
and it should not for any reason be deemed or construed that the Draft Letter of Offer has been cleared or
approved by the exchange. Every person who desires to apply for or otherwise acquired any securities of this
Company may do so pursuant to an independent inquiry, investigation and analysis and shall not have any claim
against the exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in
connection with such subscription / acquisition whether by reason of anything stated or omitted to be stated
herein or for any reason whatsoever.
Disclaimer Clause of NSE
As required a copy of the Draft Letter of Offer has been submitted to NSE, NSE has given vide its letter Ref. No.
NSE/LIST/184573-5 dated October 23, 2012 permission to the Company to use the exchange‟s name in this
Letter of Offer as one of the stock exchanges on which this Company‟s securities are proposed to be listed. The
exchange has scrutinized the Draft Letter of Offer for its limited internal purpose of deciding on the matter of
granting the aforesaid permission to this Company. It is to be distinctly understood that the aforesaid permission
given by NSE should not be deemed or construed that the Draft Letter of Offer has been cleared or approved by
NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents
of the Draft Letter of Offer; nor does it warrant that this Issuer‟s securities will be listed or will continue to be
listed on the exchange; nor does it take any responsibility for the financial or other soundness of the Company, its
promoters, its management, or any scheme or project of this Company.
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Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant
to an independent inquiry, investigation and analysis and shall not have any claim against the exchange
whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such
subscription / acquisition whether by reason of anything stated or omitted to be stated herein or for any other
reason whatsoever.
Filing
This Draft Letter of Offer has been filed with the Corporation Finance Department of the SEBI, located at SEBI
Bhavan, C-4-A, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai 400 051, India for its observations.
After SEBI gives its observations, the Letter of Offer will be filed with the Designated Stock Exchange as per
the provisions of the Companies Act.
Selling Restrictions
The distribution of this Letter of Offer and the issue of Equity Shares on a rights basis to persons in certain
jurisdictions outside India may be restricted by the legal requirements prevailing in those jurisdictions. Persons
into whose possession this Letter of Offer may come are required to inform themselves about and observe such
restrictions. We are making this Issue of Equity Shares on a rights basis to our Eligible Equity Shareholders and
will dispatch the Letter of Offer/ Abridged Letter of Offer and CAFs to the Eligible Equity Shareholders who
have provided an Indian address.
No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for
that purpose, except that Letter of Offer has been filed with SEBI for observations. Accordingly, the rights or
Equity Shares may not be offered or sold, directly or indirectly, and this Letter of Offer may not be distributed
in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction.
Receipt of this Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to
make such an offer and, under those circumstances, this Letter of Offer must be treated as sent for information
only and should not be copied or redistributed. Accordingly, persons receiving a copy of this Letter of Offer
should not, in connection with the issue of the rights or Equity Shares or rights, distribute or send the same in or
into the United States or any other jurisdiction where to do so would or might contravene local securities laws or
regulations. If this Letter of Offer is received by any person in any such territory, or by their agent or nominee,
they must not seek to subscribe to the Equity Shares or the rights referred to in this Letter of Offer.
Neither the delivery of this Letter of Offer nor any sale hereunder, shall under any circumstances create any
implication that there has been no change in the Company‟s affairs from the date hereof or that the information
contained herein is correct as at any time subsequent to this date.
IMPORTANT INFORMATION FOR INVESTORS – ELIGIBILITY AND TRANSFER
RESTRICTIONS
As described more fully below, there are certain restrictions regarding the rights and Equity Shares that affect
potential investors. These restrictions are restrictions on the ownership of Equity Shares by such persons
following the offer.
This Issue and the Equity Shares have not been and will not be registered under the Securities Act or any
other applicable law of the United States and, unless so registered, may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the
Securities Act) (“U.S. Persons”) except pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act and applicable state securities laws.
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This Issue and the Equity Shares have not been and will not be registered, listed or otherwise qualified in
any jurisdiction outside India and may not be offered or sold, and bids may not be made by persons in
any such jurisdiction, except in compliance with the applicable laws of such jurisdiction.
Until the expiry of 40 days after the commencement of the Issue, an offer or sale of rights or Equity Shares
within the United States by a dealer (whether or not it is participating in the Issue) may violate the registration
requirements of the Securities Act.
Eligible Investors
The rights or Equity Shares are being offered and sold only to persons who are outside the United States and are
not U.S. Persons, nor persons acquiring for the account or benefit of U.S. Persons, in offshore transactions in
reliance on Regulation S under the Securities Act and the applicable laws of the jurisdiction where those offers
and sales occur. All persons who acquire the rights or Equity Shares are deemed to have made the
representations set forth immediately below.
Equity Shares and Rights Offered and Sold in this Issue
Each purchaser acquiring the rights or Equity Shares, by its acceptance of this Letter of Offer and of the rights
or Equity Shares, will be deemed to have acknowledged, represented to and agreed with us and the Lead
Managers that it has received a copy of this Letter of Offer and such other information as it deems necessary to
make an informed investment decision and that:
(1) the purchaser is authorized to consummate the purchase of the rights or Equity Shares in compliance with all
applicable laws and regulations;
(2) the purchaser acknowledges that the rights and Equity Shares have not been and will not be registered under
the Securities Act or with any securities regulatory authority of any state of the United States and,
accordingly, may not be offered or sold within the United States or to, or for the account or benefit of, U.S.
Persons except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act;
(3) the purchaser is purchasing the rights or Equity Shares in an offshore transaction meeting the requirements
of Rule 903 of Regulation S under the Securities Act;
(4) the purchaser and the person, if any, for whose account or benefit the purchaser is acquiring the rights or
Equity Shares, is a non-U.S. Person and was located outside the United States at each time (i) the offer was
made to it and (ii) when the buy order for such rights or Equity Shares was originated, and continues to be a
non-U.S. Person and located outside the United States and has not purchased such rights or Equity Shares
for the account or benefit of any U.S. Person or any person in the United Sates or entered into any
arrangement for the transfer of such rights or Equity Shares or any economic interest therein to any U.S.
Person or any person in the United States;
(5) the purchaser is not an affiliate of the Company or a person acting on behalf of an affiliate;
(6) if, in the future, the purchaser decides to offer, resell, pledge or otherwise transfer such rights or Equity
Shares, or any economic interest therein, such rights or Equity Shares or any economic interest therein may
be offered, sold, pledged or otherwise transferred only (A) outside the United States in an offshore
transaction complying with Rule 903 or Rule 904 of Regulation S under the Securities Act and (B) in
accordance with all applicable laws, including the securities laws of the states of the United States. The
purchaser understands that the transfer restrictions will remain in effect until the Company determines, in its
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sole discretion, to remove them, and confirms that the proposed transfer of the rights or Equity Shares is not
part of a plan or scheme to evade the registration requirements of the Securities Act;
(7) the purchaser agrees that neither the purchaser, nor any of its affiliates, nor any person acting on behalf of
the purchaser or any of its affiliates, will make any “directed selling efforts” as defined in Regulation S
under the Securities Act in the United States with respect to the rights or the Equity Shares;
(8) the purchaser understands that such rights or Equity Shares (to the extent they are in certificated form),
unless the Company determine otherwise in accordance with applicable law, will bear a legend substantially
to the following effect:
THE EQUITY SHARES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH
ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE
UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, AND IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
(9) the purchaser agrees, upon a proposed transfer of the rights or the Equity Shares, to notify any purchaser of
such rights or Equity Shares or the executing broker, as applicable, of any transfer restrictions that are
applicable to the rights or Equity Shares being sold;
(10) the Company will not recognize any offer, sale, pledge or other transfer of such rights or Equity Shares
made other than in compliance with the above-stated restrictions; and
(11) the purchaser acknowledges that the Company, the Lead Managers, their respective affiliates and others
will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements
and agrees that, if any of such acknowledgements, representations and agreements deemed to have been
made by virtue of its purchase of such rights or Equity Shares are no longer accurate, it will promptly notify
the Company, and if it is acquiring any of such rights or Equity Shares as a fiduciary or agent for one or
more accounts, it represents that it has sole investment discretion with respect to each such account and that
it has full power to make the foregoing acknowledgements, representations and agreements on behalf of
such account.
Each person in a Member State of the EEA which has implemented the Prospectus Directive (each, a “Relevant
Member State) who receives any communication in respect of, or who acquires any rights or Equity Shares
under, the offers contemplated in this Letter of Offer will be deemed to have represented, warranted and agreed
to and with each Lead Manager and the Company that in the case of any rights or Equity Shares acquired by it
as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive:
(a) the rights or Equity Shares acquired by it in the placement have not been acquired on behalf of, nor have
they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than
qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the
prior consent of the Lead Managers has been given to the offer or resale; or
(b) where rights or Equity Shares have been acquired by it on behalf of persons in any Relevant Member
State other than qualified investors, the offer of those rights or Equity Shares to it is not treated under the
Prospectus Directive as having been made to such persons.
For the purposes of this provision, the expression an “offer of Equity Shares to the public” in relation to any of
the rights or Equity Shares in any Relevant Member States means the communication in any form and by any
means of sufficient information on the terms of the offer and the rights or Equity Shares to be offered so as to
69
enable an investor to decide to purchase or subscribe for the rights or Equity Shares, as the same may be varied
in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member
State.
Listing
The existing Equity Shares are listed on BSE and NSE. We have received the in-principle approvals in respect
of the Equity Shares to be offered in terms of the Letter of Offer from BSE and NSE. We will apply to BSE and
NSE for obtaining final listing and trading approvals for the Equity Shares to be issued pursuant to this Issue. If
the listing and trading approvals for the Equity Shares to be issued pursuant to this Issue is not granted by any of
the Stock Exchanges, we shall forthwith repay, without interest, all monies received from applicants in
pursuance of the Letter of Offer.
We will issue and dispatch Allotment advice/ share certificates/ demat credit and/ or letters of regret along with
refund order or credit the Allotted Equity Shares to the respective beneficiary accounts, if any, within a period
of 15 days from the Issue ⦁ Date.
If such allotment is not made or money is not repaid within eight days from the day we become liable to repay
it, we and every Director of the Company who is an officer in default shall, on and from expiry of eight days, be
jointly and severally liable to pay the money with interest as prescribed under Section 73 of the Companies Act.
Consents
Consents in writing of the Directors, the Auditor, the Lead Managers, the Legal Advisors to the Issue, the
Registrar to the Issue, Compliance Officer, M/s. Narendra Poddar & Co., Chartered Accountants, Bankers to the
Company, Bankers to the Issue and the Monitoring Agency have been obtained and such consents have not been
withdrawn up to the date of this Letter of Offer.
Experts to our Company for the Issue
M/s. Deloitte Haskins & Sells, Chartered Accountants, and M/s. Gandhi & Parekh, Chartered Accountants, have
provided their written consents for the inclusion of the reports on the standalone and consolidated financial
statements in the form and context in which the reports will appear in this Letter of Offer, and to be named as
experts in relation thereto, and such consent has not been and will not be withdrawn up to the time of delivery of
this Letter of Offer to SEBI. Pursuant to the AGM held on August 14, 2012, M/s. Deloitte Haskins & Sells,
Chartered Accountants are the sole Statutory Auditors of the Company and the standalone and consolidated
Limited Review Statements for the half year ended September 30, 2012 and the standalone limited review report
for December 31, 2012, have been signed by them.
M/s. Narendra Poddar & Co., Chartered Accountants, have provided their written consent for the inclusion of
the statement of special tax benefits in the form and context in which it appears in this Letter of Offer, and to be
named as an expert in relation thereto, and such consent has not been and will not be withdrawn up to the time
of delivery of this Letter of Offer to SEBI.
Issue Related Expenses
The estimated issue related expenses are:
Activity Amount
(` in crore)
As a % of total
expenses As a % of Issue
Size
Fees payable to intermediaries including Lead
Managers and Registrar to the Issue 3.89 57.29. % 0.71%
Advertising, Printing and stationery (including 2.01 29.61% 0.36%
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Activity Amount
(` in crore)
As a % of total
expenses As a % of Issue
Size
courier and distribution charges)
Others (legal fees, listing charges, depositories‟ fees,
auditor fees, out of pocket reimbursements,
monitoring agency fees, etc.) 0.89 13.10% 0.16%
Total 6.79 100.00% 1.23%
Investor Grievances and Redressal System
We have adequate arrangements for the redressal of investor complaints in compliance with the corporate
governance requirements under the Listing Agreements. Additionally, we have been registered with the SEBI
Complaints Redress System (SCORES) as required by the SEBI Circular no. CIR/ OIAE/ 2/ 2011 dated June 3,
2011. The share transfer and dematerialization for us is being handled by Link Intime India Private Limited,
Registrar and Share Transfer Agent, which is also the Registrar to the Issue. Letters are filed category wise after
being attended to. All investor grievances received by us have been handled by the Registrar and Share Transfer
agent in consultation with the compliance officer.
Our Board has constituted the Share Transfer and Investors‟ Grievance Committee by way of a resolution dated
June 25, 1994. This committee currently comprises Mr. Ashok Rajani, Mr. Dilip Jiwrajka, Mr. Surendra
Jiwrajka and Mr. Ashok Jiwrajka. The Share Transfer and Investors‟ Grievance Committee oversees the reports
received from the Registrar and Share Transfer agent and facilitates the prompt and effective resolution of
complaints from our shareholders and investors. Its broad terms of reference include:
Redressal of Equity Shareholder and Investor complaints including, but not limited to non-receipt of Share
Certificates, transfer of Equity Shares and issue of duplicate Share Certificates, non-receipt of balance
sheet, non-receipt of declared dividends, etc.; and
Monitoring transfers, transmissions, dematerialization, rematerialisation, splitting and consolidation of
shares issued by the Company.
Time normally taken for disposal of various types of investor complaints: Not more than one month.
Status of outstanding investor complaints
As on March 18, 2013, there were three outstanding investor complaints, all of which were in relation to non-
receipt of dividend. The aggregate amount involved is ` 2645 We have sent a request to the bank for preparing
demand drafts of the dividend amounts, which we will send to the six complainants on receipt.
Investor Grievances arising out of the Issue
The Investor grievances arising out of the Issue will be handled by Link Intime India Private Limited, the
Registrar to the Issue. The Registrar will have a separate team of personnel handling post-Issue correspondences
only.
The agreement between us and the Registrar provides for retention of records with the Registrar for a period of
at least one year from the last date of dispatch of Allotment Advice/ share certificate/ demat credit/ refund order
to enable the Registrar to redress grievances of Investors.
All grievances relating to the Issue may be addressed to the Registrar to the Issue or the SCSB in case of ASBA
Investors giving full details such as folio no. / demat account no., name and address, contact telephone/ cell
numbers, email id of the first applicant, number of Equity Shares applied for, CAF serial number, amount paid
on application and the name of the bank/ SCSB and the branch where the CAF was deposited, along with a
photocopy of the acknowledgement slip. In case of renunciation, the same details of the Renouncee should be
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furnished.
The Company is registered with the SEBI Complaints Redress System (“SCORES”) as required by the SEBI
Circular no. CIR/ OIAE/ 2/ 2011 dated June 3, 2011. Consequently, investor grievances are tracked online by
us.
The average time taken by the Registrar for attending to routine grievances will be within 15 days from the date
of receipt of complaints. In case of non-routine grievances where verification at other agencies is involved, it
would be the endeavour of the Registrar to attend to them as expeditiously as possible. We undertake to resolve
the Investor grievances in a time bound manner.
Registrar to the Issue
Link Intime India Private Limited
C-13, Pannalal Silk Mills Compound,
LBS Marg, Bhandup (West),
Mumbai – 400 078,
Maharashtra, India.
Tel: +91 22 2596 7878
Fax: +91 22 2596 0329
Investor Greivance E-mail: [email protected]
E-mail: [email protected]
Website: www.linkintime.co.in
Contact Person: Mr. Pravin Kasare
SEBI Registration No.: INR000004058
Investors may contact the Compliance Officer in case of any pre-Issue/ post -Issue related problems such
as non-receipt of Allotment advice/ share certificates/ demat credit/ refund orders etc. The contact details
of the Compliance Officer are as follows:
Compliance Officer for the Issue
Mr. K.H. Gopal,
Executive Director and Company Secretary
Peninsula Towers, “A” Wing,
Peninsula Corporate Park,
G. K. Marg, Lower Parel,
Mumbai – 400 013,
Maharashtra
India
Tel: +91 22 2499 6341
Fax: +91 22 2493 6078
E-mail: [email protected]
Minimum Subscription
If our Company does not receive minimum subscription of 90% of the Issue, or the subscription level falls
below 90%, after the Issue Closing Date on account of cheques being returned unpaid or withdrawal of
applications, our Company shall refund the entire subscription amount received within 15 days from the Issue
Closing Date. If there is a delay in the refund of subscription by more than eight days after our Company
becomes liable to pay the subscription amount i.e. 15 days after the Issue Closing Date, our Company and every
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Director of our Company who is an officer in default will be liable to pay interest for the delayed period, as per
the rates prescribed under Section 73 of the Companies Act.
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SECTION VIII – OFFERING INFORMATION
TERMS OF THE ISSUE
The Equity Shares proposed to be issued are subject to the terms and conditions contained in this Letter of
Offer, the Abridged Letter of Offer, including the CAF, the Memorandum of Association and Articles of
Association, the provisions of the Companies Act and FEMA, applicable guidelines and regulations issued by
SEBI and RBI, or other statutory authorities and bodies from time to time, the Listing Agreements entered into
by our Company, terms and conditions as stipulated in the allotment advice or security certificate and rules as
may be applicable and introduced from time to time. All rights/ obligations of Eligible Equity Shareholders in
relation to application and refunds pertaining to this Issue shall apply to the Renouncee(s) as well.
Please note that Eligible Equity Shareholders being QIBs, Non-Institutional Investors, and other Eligible
Equity Shareholders (whose application amount exceeds ` 2,00,000) can participate in the Issue only
through the ASBA process. Furthermore, Eligible Equity Shareholders not being individuals or HUFs are
mandatorily required to make use of ASBA, even if the application amount does not exceed ` 2,00,000.
Retail Individual Investors whose application amounts do not exceed ` 2,00,000 can participate in this
Issue either through the ASBA process or the non ASBA process.
Please note that an ASBA Investor is an Eligible Equity Shareholder who (i) is holding our Equity Shares
in dematerialized form as on the Record Date and has applied for Rights Entitlements and/ or additional
Equity Shares in dematerialized form; (ii) has not renounced Rights Entitlements in full or in part; (iii) is
not a Renouncee; and (iv) who is applying through blocking of funds in a bank account maintained with
SCSBs.
All Investors (apart from Retail Individual Investors) having bank accounts with SCSBs that are
providing ASBA in cities / centers where such Investors are located, are mandatorily required to make
use of the ASBA facility. Otherwise, applications of such Investors are liable for rejection. All Investors
are encouraged to make use of the ASBA facility wherever such facility is available.
ASBA Investors should note that the ASBA process involves application procedures that may be different
from the procedure applicable to non-ASBA process. ASBA Investors should carefully read the
provisions applicable to such applications before making their application through the ASBA process.
For details, please refer to “Procedure for Application through the Applications Supported by Blocked
Amount Process” on page 84.
Authority for the Issue
The Issue of Equity Shares to the Eligible Equity Shareholders of our Company as on the Record Date is being
made in accordance with the resolution passed by our Board of Directors under Section 81(1) of the Companies
Act, on September 25, 2012.
The RBI has by its letter dated March 15, 2013 permitted renunciation of rights entitlement in this Issue (except
OCBs) by a (i) non resident Equity Shareholder to a resident investor, (ii) a non resident Equity Shareholder to a
non resident investor and (iii) a resident Equity Shareholder to a non resident investor of the Company, on the
floor of the Stock Exchanges subject to the conditions prescribed therein, including the applicable guidelines on
pricing. The offer price to non-resident investor should not be less than at which the offer is made to the resident
Equity Shareholder in terms of Regulation 6 notification no. FEMA 20/ 2000 – RB dated May 3, 2000 as
amended from time to time.
Any renunciation other than as stated above is subject to the renouncer(s)/renouncee(s) obtaining the approval of
the FIPB and/or necessary permission of the RBI under the FEMA and such permissions should be attached to
the CAF. Applications not accompanied by the aforesaid approvals are liable to be rejected.
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Basis for the Issue
The Equity Shares are being offered for subscription for cash to those Equity Shareholders whose names appear
as beneficial owners as per the list furnished by the Depositories for the purpose of this Rights Issue in respect
of the Equity Shares held in the electronic form and on the Register of Members in respect of the Equity Shares
held in physical form at the close of business hours on the Record Date i.e. February 19, 2013, fixed in
consultation with the Designated Stock Exchange.
Rights Entitlement
As your name appears as a beneficial owner in respect of the Equity Shares held in the electronic form or
appears in the register of members as an Equity Shareholder as on the Record Date, i.e., February 19, 2013, you
are entitled to the number of Equity Shares as set out in Part A of the CAF.
The distribution of the Letter of Offer/ Abridged Letter of Offer and the Issue of Equity Shares on a
rights basis to persons in certain jurisdictions outside India may be restricted by legal requirements
prevailing in those jurisdictions. Persons into whose possession the Letter of Offer/ Abridged Letter of
Offer or CAF may come are required to inform themselves about and observe such restrictions. We are
making this Issue of Equity Shares on a rights basis to the Eligible Equity Shareholders and will dispatch
the Abridged Letter of Offer and CAFs to such shareholders who have a registered address in India or
who have provided an Indian address. Any person who acquires Rights Entitlements or the Equity Shares
will be deemed to have declared, warranted and agreed, by accepting the delivery of the Letter of Offer,
that it is not and that at the time of subscribing for the Equity Shares or the Rights Entitlements, it will
not be, in the United States and in other restricted jurisdictions.
Principal Terms of the Equity Shares issued under this Issue
Face Value
Each Equity Share will have the face value of ` 10.
Issue Price
Each Equity Share shall be offered at an Issue Price of ` 10 for cash at par per Equity Share. The Issue Price has
been arrived at by our Company in consultation with the Lead Managers.
ASBA
Simple, Safe, Smart way of Application – Make use of it!!!
*Application supported by block amount (ASBA) is a better way of applying to issues by simply blocking the
fund in the bank account, investors can avail the same. For further details check section on ASBA on page 84
below.
Rights Entitlement Ratio
The Equity Shares are being offered on a rights basis to the Eligible Equity Shareholders in the ratio of 2 Equity
Shares for every 3 Equity Shares held on the Record Date.
Terms of Payment
The full amount of ` 10 per Equity Share is payable on application.
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Fractional Entitlements
The Equity Shares are being offered on a rights basis to the Eligible Equity Shareholders in the ratio of 2 Equity
Shares for every 3 Equity Shares held as on the Record Date. For Equity Shares being offered on a rights basis
under this Issue, if the shareholding of any of the Eligible Equity Shareholders is less than 3 Equity Shares or is
not in multiple of 3, the fractional entitlement of such Eligible Equity Shareholders shall be ignored for
computation of the Rights Entitlement. However, Eligible Equity Shareholders whose fractional entitlements are
being ignored earlier will be given preference in the allotment of one additional Equity Share each, if such
Eligible Equity Shareholders have applied for additional Equity Shares over and above their Rights Entitlement.
Those Eligible Equity Shareholders holding less than 2 Equity Shares and therefore entitled to zero Equity
Shares under this Issue shall be dispatched a CAF with zero entitlement. Such Eligible Equity Shareholders are
entitled to apply for additional Equity Shares. However, Eligible Equity Shareholders with zero entitlement will
be given preference in the allotment of one additional Equity Share each, if such Eligible Equity Shareholders
have applied for additional Equity Shares. However, they cannot renounce the same in favour of any third
parties. CAF with zero entitlement will be non-negotiable/ non-renounceable.
An illustration stating the Rights Entitlement for number of Equity Shares is set out below:
No. of Equity Shares Rights Entitlement 1 0
2 1 3 2
Ranking
The Equity Shares being issued shall be subject to the provisions of our Memorandum of Association and
Articles of Association. The Equity Shares issued under this Issue shall rank pari passu, in all respects including
dividend, with our existing Equity Shares.
Mode of payment of dividend
In the event of declaration of dividend, we shall pay dividend to Eligible Equity Shareholders as per the
provisions of the Companies Act and the provisions of our Articles of Association.
Listing and trading of Equity Shares proposed to be issued
Our existing Equity Shares are currently listed and traded on BSE (Scrip Code: 521070 under the ISIN -
INE270A01011) and NSE (Symbol: ALOKTEXT under the ISIN – INE270A01011).
The listing and trading of the Equity Shares shall be based on the current regulatory framework applicable
thereto. Accordingly, any change in the regulatory regime would affect the schedule. Upon Allotment, the
Equity Shares shall be traded on Stock Exchanges in the demat segment only.
We have received “in-principle” approvals for the listing of the Equity Shares to be issued pursuant to the Issue
in accordance with Clause 24(a) of the Listing Agreement from BSE and NSE pursuant to letters dated
November 2, 2012 and October 23, 2012, respectively. We will apply to BSE and NSE for final approval for the
listing and trading of the Equity Shares. All steps for the completion of the necessary formalities for listing and
commencement of trading of the Equity Shares to be Allotted pursuant to the Issue shall be taken as per the
regulatory requirement. The Equity Shares proposed to be issued on a rights basis shall be listed and admitted
for trading on BSE and NSE under the existing ISIN for Equity Shares.
Rights of the Eligible Equity Shareholders
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Subject to applicable laws, the Eligible Equity Shareholders shall have the following rights:
1. Right to receive dividend, if declared;
2. Right to attend general meetings and exercise voting powers, unless prohibited by law;
3. Right to vote in person or by proxy;
4. Right to receive offers for rights shares and be allotted bonus shares, if announced;
5. Right to receive surplus on liquidation;
6. Right to free transferability of Equity Shares; and
7. Such other rights as may be available to a shareholder of a listed public company under the Companies Act
and Memorandum of Association and Articles of Association.
General Terms of the Issue
Market Lot
The market lot for the Equity Shares in dematerialised mode is one Equity Share. In case an Eligible Equity
Shareholder holds Equity Shares in physical form, we would issue to the allottees one certificate for the Equity
Shares allotted to each folio (“Consolidated Certificate”) and in case an Eligible Equity Shareholder seeks
allotment in demat form (whether existing Equity Shares being held in demat or physical form) and provides all
relevant and correct details we would allot him in demat form. In respect of Consolidated Certificates, we will
upon receipt of a request from the respective Eligible Equity Shareholders, split such Consolidated Certificates
into smaller denominations within one week‟s time from the receipt of the request in respect thereof, subject to a
maximum of five denominations. We shall not charge a fee for splitting any of the Consolidated Certificates.
Joint Holders
Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the
same as joint tenants with the benefit of survivorship subject to the provisions contained in the Articles of
Association.
Nomination
In terms of Section 109A of the Companies Act, nomination facility is available in respect of the Equity Shares.
An Investor can nominate any person by filling the relevant details in the CAF in the space provided for this
purpose.
In case of Eligible Equity Shareholders who are individuals, a sole Equity Shareholder or the first named Equity
Shareholder, along with other joint Equity Shareholders, if any, may nominate any person(s) who, in the event
of the death of the sole holder or all the joint-holders, as the case may be, shall become entitled to the Equity
Shares. A person, being a nominee, becoming entitled to the Equity Shares by reason of the death of the original
Eligible Equity Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he were
the registered holder of the Equity Shares. Where the nominee is a minor, the Eligible Equity Shareholder(s)
may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the Equity
Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand
rescinded upon the sale of the Equity Shares by the person nominating. A transferee will be entitled to make a
fresh nomination in the manner prescribed. Fresh nominations can be made only in the prescribed form available
on request at our Registered Office or such other person at such addresses as may be notified by us. The Investor
can make the nomination by filling in the relevant portion of the CAF. In terms of Section 109B of the
Companies Act, any person who becomes a nominee by virtue of the provisions of Section 109A of the
Companies Act, shall upon the production of such evidence as may be required by the Board, elect either:
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1. to register himself or herself as the holder of the Equity Shares; or
2. to make such transfer of the Equity Shares, as the deceased holder could have made.
Further, the Board may, at any time, give notice requiring any nominee to choose either to be registered himself
or herself or to transfer the Equity Shares, and if the notice is not complied within a period of 90 days, the Board
may thereafter withhold payment of all dividends, bonuses or other money payable in respect of the Equity
Shares, until the requirements of the notice have been complied with.
Only one nomination would be applicable for one folio. Hence, in case the Eligible Equity Shareholder(s) has
already registered the nomination with us, no further nomination needs to be made for Equity Shares that may
be allotted in this Issue under the same folio.
In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate
nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective
Depositary Participant (“DP”) of the Investor would prevail. Any Investor desirous of changing the
existing nomination is requested to inform their respective DP.
Notices
All notices to the Eligible Equity Shareholder (s) required to be given by us shall be published in one English
national daily with wide circulation, one Hindi national daily with wide circulation, one regional language daily
newspaper with wide circulation in the state/ union territory within which the Company‟s registered office is
located and/ or will be sent by speed post to the registered addresses of the Eligible Equity Shareholders in India
or the Indian address provided by the Eligible Equity Shareholders, from time to time.
Subscription by our Promoters and Promoter Group
Our Promoters and Promoter Group have confirmed, by their respective letters dated September 26, 2012, that
they intend to subscribe to the full extent of their respective Rights Entitlement in the Issue, either by themselves
or through any of the Promoters / and any member of the Promoter Group, in compliance with the Takeover
Regulations. In this regard, the Promoters and members of the Promoter Group may bring in an amount upto
their full portion of Rights Entitlement in the Issue prior to the Issue Opening Date. In case the Issue fails or is
withdrawn for any reason, such Application Money if so received from the Promoters and members of the
Promoter Group shall be treated as unsecured loans repayable on demand at terms to be decided thereon.
Our Promoters and Promoter Group have further reserved their respective rights to acquire beyond their
entitlement, and may subscribe to, and / or make arrangements for the subscription of Equity Shares if any,
which remain unsubscribed, as well as by subscribing to renunciation(s). Such subscription to additional Equity
Shares and the unsubscribed portion, if any, shall be in accordance with and subject to the provisions of the
Takeover Regulations. Further, such subscription shall not result in a breach of the minimum public
shareholding requirement stipulated in the Listing Agreements.
For further details, please refer to “Terms of the Issue - Basis of Allotment” on page 94.
Procedure for Application
The CAF for Equity Shares offered as a part of the Issue would be printed for all Eligible Equity Shareholders.
In case the original CAFs are not received by the Eligible Equity Shareholders or is misplaced by the Eligible
Equity Shareholders, the Eligible Equity Shareholders may request the Registrar to the Issue, for issue of a
duplicate CAF, by furnishing the registered folio number, DP ID Number, Client ID Number and their full name
and address. In case the signature of the Eligible Equity Shareholder(s) does not match with the specimen
registered with us, the application is liable to be rejected.
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Please note that neither the Company nor the Registrar shall be responsible for delay in the receipt of the CAF/
duplicate CAF attributable to postal delays or if the CAF/ duplicate CAF are misplaced in the transit.
Please note that Eligible Equity Shareholders being QIBs, Non-Institutional Investors and other Eligible
Equity Shareholders (whose application amount exceeds ` 2,00,000) can participate in the Issue only
through the ASBA process. Furthermore, Eligible Equity Shareholders not being individuals or HUFs are
mandatorily required to make use of ASBA, even if the application amount does not exceed ` 2,00,000.
Retail Individual Investors whose application amounts do not exceed ` 2,00,000 can participate in this
Issue either through the ASBA process or the non ASBA process.
Please also note that by virtue of Circular No. 14, dated September 16, 2003, issued by the RBI, Overseas
Corporate Bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI has
subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas
Corporate Bodies) Regulations, 2003. Any Eligible Equity Shareholders being an OCB is required to
obtain prior approval from RBI for applying in this Issue.
The CAF consists of four parts:
Part A: Form for accepting the Equity Shares offered as a part of this Issue, in full or in part, and for applying
for additional Equity Shares;
Part B: Form for renunciation of Equity Shares;
Part C: Form for application for renunciation of Equity Shares by Renouncee(s);
Part D: Form for request for split Application forms.
Option available to the Eligible Equity Shareholders
The CAFs will clearly indicate the number of Equity Shares that the Shareholder is entitled to.
If the Eligible Equity Shareholder applies for an investment in the Equity Shares offered as a part of this Issue,
then he can:
Apply for his Rights Entitlement of Equity Shares in full;
Apply for his Rights Entitlement of Equity Shares in part;
Apply for his Rights Entitlement of Equity Shares in part and renounce the other part of the Equity Shares
(by requesting for split forms);
Apply for his Rights Entitlement in full and apply for additional Equity Shares;
Renounce his Rights Entitlement in full.
Acceptance of the Issue
You may accept the offer to participate and apply for the Equity Shares offered, either in full or in part, by
filling Part A of the CAF and submit the same along with the application money payable to the collection
branches of the Bankers to the Issue as mentioned on the reverse of the CAF before the close of the banking
hours on or before the Issue Closing Date. Investors at centres not covered by the branches of Bankers to the
Issue can send their CAFs together with the cheque drawn at par on a local bank at Mumbai/ demand draft
payable at Mumbai to the Registrar to the Issue by registered post/ speed post. Such applications sent to anyone
other than the Registrar to the Issue are liable to be rejected. For further details on the mode of payment, please
refer to “Mode of Payment for Resident Eligible Equity Shareholders / Investors” and “Mode of Payment for
Non-Resident Eligible Equity Shareholders / Investors” on page 104.
Additional Equity Shares
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You are eligible to apply for additional Equity Shares over and above your Rights Entitlement, provided that
you are eligible to apply under applicable law and have applied for all the Equity Shares offered without
renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares
shall be considered and allotment shall be made at the sole discretion of the Board, subject to sectoral caps and
in consultation if necessary with the Designated Stock Exchange and in the manner prescribed under “Terms of
the Issue - Basis of Allotment” on page 94.
If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for
additional Equity Shares in Part A of the CAF. The Renouncees applying for all the Equity Shares renounced in
their favour may also apply for additional Equity Shares.
Where the number of additional Equity Shares applied for exceeds the number available for Allotment, the
Allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange.
Renunciation
This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in
part in favour of any other person or persons. Your attention is drawn to the fact that we shall not Allot and/ or
register and Equity Shares in favour of more than three persons (including joint holders), partnership firm(s) or
their nominee(s), minors, HUF, any trust or society (unless the same is registered under the Societies
Registration Act, 1860 or the Indian Trust Act, 1882 or any other applicable law relating to societies or trusts
and is authorized under its constitution or bye-laws to hold equity shares, as the case may be). Additionally,
Eligible Equity Shareholders may not renounce in favour of persons or entities in the United States, or to, or for
the account or benefit of a “U.S. Person” (as defined in Regulation S), or who would otherwise be prohibited
from being offered or subscribing for Equity Shares or Rights Entitlement under applicable securities laws.
The RBI has by its letter dated March 15, 2013 permitted renunciation of rights entitlement in this Issue (except
OCBs) by a (i) non resident Equity Shareholder to a resident investor, (ii) a non resident Equity Shareholder to a
non resident investor and (iii) a resident Equity Shareholder to a non resident investor of the Company, on the
floor of the Stock Exchanges subject to the conditions prescribed therein, including the applicable guidelines on
pricing. The offer price to non-resident investor should not be less than at which the offer is made to the resident
Equity Shareholder in terms of Regulation 6 notification no. FEMA 20/ 2000 – RB dated May 3, 2000 as
amended from time to time.
Any renunciation other than as stated above is subject to the renouncer(s)/renouncee(s) obtaining the approval of
the FIPB and/or necessary permission of the RBI under the FEMA and such permissions should be attached to
the CAF. Applications not accompanied by the aforesaid approvals are liable to be rejected.
Renunciation by OCBs
By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, OCBs have been derecognized as
an eligible class of investors, and the RBI has subsequently issued the Foreign Exchange Management
(withdrawal of General Permission to Overseas Corporate Bodies) Regulations, 2003. Accordingly, the Eligible
Equity Shareholders who do not wish to subscribe to the Equity Shares being offered but wish to renounce the
same cannot renounce (whether for consideration or otherwise) in favour of OCB(s).
The RBI has however clarified in its A.P. (DIR Series) Circular No. 44, dated December 8, 2003, that
OCBs which are incorporated and are not under the adverse notice of the RBI are permitted to
undertake fresh investments as incorporated non-resident entities in terms of Regulation 5(1) of RBI
Notification No.20/ 2000-RB dated May 3, 2000 under the Consolidated FDI Policy with the prior
approval of the Government, if the investment is through Government Route, and with the prior
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approval of the RBI, if the investment is through the Automatic Route on case by case basis. Eligible
Equity Shareholders renouncing their rights in favour of OCBs may do so provided such Renouncee
obtains a prior approval from the RBI. On submission of such approval to us at our Registered Office,
the OCB shall receive the Abridged Letter of Offer and the CAF.
Renunciation by non-resident shareholders
We had made an application to the RBI, seeking its approval to allow renunciation of Equity Shares from a
resident Eligible Equity Shareholders to non-residents, from non-resident Eligible Equity Shareholders to
residents and from non-resident Eligible Equity Shareholders to other non-residents. RBI by its letter dated
March 15, 2013 has granted its permission for the same. Irrespective of the above approval, Investors may
independently make an application to the RBI seeking such approval on a case to case basis.
Part „A‟ of the CAF must not be used by any person(s) other than those in whose favour this offer has been
made. If used, this will render the application invalid. Submission of the CAF to the Banker to the Issue at its
collecting branches specified on the reverse of the CAF with the form of renunciation (Part „B‟ of the CAF) duly
filled in shall be conclusive evidence for us of the person(s) applying for Equity Shares in Part „C‟ of the CAF to
receive Allotment of such Equity Shares. Part „A‟ of the CAF must not be used by the Renouncee(s) as this will
render the application invalid. Renouncee(s) will have no further right to renounce any Equity Shares in favour
of any other person.
Procedure for renunciation
To renounce all the Equity Shares offered to an Eligible Equity Shareholders in favour of one Renouncee
If you wish to renounce the offer indicated in Part „A‟, in whole, please complete Part „B‟ of the CAF. In case of
joint holding, all joint holders must sign Part „B‟ of the CAF. The person in whose favour renunciation has been
made should complete and sign Part „C‟ of the CAF. In case of joint Renouncees, all joint Renouncees must sign
Part „C‟ of the CAF.
To renounce in part/ or renounce the whole to more than one person(s)
If you wish to either accept this offer in part and renounce the balance or renounce the entire offer under this
Issue in favour of two or more Renouncees, the CAF must be first split into requisite number of SAFs. Please
indicate your requirement of SAFs in the space provided for this purpose in Part „D‟ of the CAF and return the
entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date
of receiving requests for SAFs. On receipt of the required number of SAFs from the Registrar, the procedure as
mentioned in paragraph above shall have to be followed.
In case the signature of the Eligible Equity Shareholder (s), who has renounced the Equity Shares, does not
match with the specimen registered with us/ Depositories, the application is liable to be rejected.
Renouncee(s)
The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part „C‟ of the CAF and
submit the entire CAF to the Bankers to the Issue or to any of the collection branches of the Bankers to the Issue
as mentioned in the reverse of the CAF on or before the Issue Closing Date along with the application money in
full. The Renouncee cannot further renounce.
Change and/ or introduction of additional holders
If you wish to apply for Equity Shares jointly with any other person(s), not more than three (including you), who
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is/ are not already a joint holder with you, it shall amount to renunciation and the procedure as stated above for
renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount
to renunciation and the procedure, as stated above shall have to be followed.
However, this right of renunciation is subject to the express condition that the Board of Directors shall be
entitled in its absolute discretion to reject the request for Allotment from the Renouncee(s) without assigning
any reason thereof.
Instructions for Options
The summary of options available to the Eligible Equity Shareholder is presented below. You may exercise any
of the following options with regard to the Equity Shares offered, using the CAF:
Option Available Action Required
1. Accept whole or part of your Rights
Entitlement without renouncing the
balance.
Fill in and sign Part A (All joint holders must sign)
2. Accept your Rights Entitlement in
full and apply for additional Equity
Shares
Fill in and sign Part A including Block III relating to the
acceptance of entitlement and Block IV relating to additional
Equity Shares (All joint holders must sign)
3. Accept a part of your Rights
Entitlement and renounce the balance
to one or more Renouncee(s)
OR
Renounce your Rights Entitlement
of all the Equity Shares offered to
you to more than one Renouncee
Fill in and sign Part D (all joint holders must sign) requesting
for SAFs. Send the CAF to the Registrar to the Issue so as to
reach them on or before the last date for receiving requests for
SAFs. Splitting will be permitted only once.
On receipt of the SAF take action as indicated below.
For the Equity Shares you wish to accept, if any, fill in and
sign Part A.
For the Equity Shares you wish to renounce, fill in and sign
Part B indicating the number of Equity Shares renounced and
hand it over to the Renouncee. Each of the Renouncees should
fill in and sign Part C for the Equity Shares accepted by them.
4. Renounce your Rights Entitlement in
full to one person (Joint Renouncees
are considered as one).
Fill in and sign Part B (all joint holders must sign) indicating
the number of Equity Shares renounced and hand it over to the
Renouncee. The Renouncee must fill in and sign Part C (All
joint Renouncees must sign)
5. Introduce a joint holder or change the
sequence of joint holders
This will be treated as a renunciation. Fill in and sign Part B
and the Renouncee must fill in and sign Part C in the desired
sequence.
In case of Equity Shares held in physical form, applicants must provide information in the CAF as to
their respective bank account numbers, name of the bank, to enable the Registrar to print the said details
on the refund order. Failure to comply with this may lead to rejection of application. In case of Equity
Shares held in demat form, bank account details furnished by the Depositories will be printed on the
refund order.
Please note that:
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Part „A‟ of the CAF must not be used by any person(s) other than the Eligible Equity Shareholder to whom
the Letter of Offer /Abridged Letter of Offer has been addressed. If used, this will render the application
invalid.
Request for SAF should be made for a minimum of one Equity Share or, in either case, in multiples thereof.
Request by the Eligible Equity Shareholder for the SAFs should reach the Registrar on or before April 20,
2013 (Saturday).
Only the Eligible Equity Shareholder to whom the Letter of Offer has been addressed shall be entitled to
renounce and to apply for SAFs. Forms once split cannot be split further.
SAFs will be sent to the Eligible Equity Shareholder(s) by post at the applicant‟s risk.
Eligible Equity Shareholders may not renounce in favour of persons or entities in restricted jurisdictions
including the United States or to or for the account or benefit of a “U.S. Person” (as defined in Regulation
S), or who would otherwise be prohibited from being offered or subscribing for the Equity Shares or the
Rights Entitlement under applicable securities laws.
Submission of the CAF to the Banker to the Issue at its collecting branches specified on the reverse of the
CAF with the form of renunciation (Part „B‟ of the CAF) duly filled in shall be conclusive evidence for us
of the person(s) applying for Equity Shares in Part „C‟ of the CAF to receive Allotment of such Equity
Shares.
While applying for or renouncing their Rights Entitlement, joint Eligible Equity Shareholders must sign the
CAF in the same order as per specimen signatures recorded with us or the Depositories.
Non-resident Eligible Equity Shareholders: Application(s) received from Non-Resident/ NRIs, or persons
of Indian origin residing abroad for allotment of Equity Shares alloted as a part of this Issue shall, amongst
other things, be subject to conditions, as may be imposed from time to time by the RBI in the matter of
refund of application money, allotment of equity shares, subsequent issue and allotment of equity shares,
interest, export of share certificates, etc. In case a Non-Resident or NRI Investor has specific approval from
the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF.
Applicants must write their CAF number at the back of the cheque / demand draft.
Availability of duplicate CAF
In case the original CAF is not received, or is misplaced by the Equity Shares holders, the Registrar to the Issue
will issue a duplicate CAF on the request of the Eligible Equity Shareholder who should furnish the registered
folio number/ DP and Client ID number and his/ her full name and address to the Registrar to the Issue. Please
note that the request for duplicate CAF should reach the Registrar to the Issue at least 7 days prior to the Issue
Closing Date. Please note that those who are making the application in the duplicate form should not utilize the
original CAF for any purpose including renunciation, even if it is received/ found subsequently. If the Investor
violates such requirements, he/ she shall face the risk of rejection of both the applications.
Neither the Registrar nor the Lead Managers or us, shall be responsible for postal delays or loss of duplicate
CAFs in transit, if any.
Application on Plain Paper - non ASBA
An Eligible Equity Shareholder who has neither received the original CAF nor is in a position to obtain the
duplicate CAF may make an application to subscribe to the Issue on plain paper, along with cheque/ demand
draft (after deducting banking and postal charges) payable at Mumbai which should be drawn in favour of “Alok
Industries – Rights Issue - R” in case of resident shareholders and non-resident shareholders applying on non-
repatriable basis and in favour of “Alok Industries – Rights Issue – NR” in case of non-resident shareholders
applying on repatriable basis and send the same by registered / speed post directly to the Registrar to the Issue
so as to reach Registrar to the Issue on or before the Issue Closing Date.
Furthermore, Eligible Equity Shareholders have an option to print application on plain paper from the website of
the Registrar to the Issue, i.e. www.linkintime.co.in, by providing his/ her folio. no. / DP ID/ Client ID in order
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to enable the Eligible Equity Shareholder to apply for the Issue. Further, they also can make an application on
plain paper giving necessary details as given below.
The envelope should be superscribed “Alok Industries – Rights Issue” in case of resident shareholders and
Non-resident shareholders applying on non-repatriable basis, and “Alok Industries – Rights Issue” in case of
non-resident shareholders applying on repatriable basis.
The application on plain paper, duly signed by the applicant(s) including joint holders, in the same order as per
specimen signature recorded with us or the Depositories, must reach the office of the Registrar to the Issue
before the Issue Closing Date and should contain the following particulars:
Name of Issuer, being Alok Industries Limited;
Name and address of the Eligible Equity Shareholder including joint holders;
Registered Folio Number/ DP and Client ID no.;
Number of Equity Shares held as on Record Date;
Number of Equity Shares entitled to;
Number of Equity Shares applied for;
Number of additional Equity Shares applied for, if any;
Total number of Equity Shares applied for;
Total amount paid at the rate of ` 10 per Equity Share;
Particulars of cheque/ demand draft / pay order;
Savings/ Current Account Number and name and address of the bank where the Eligible Equity
Shareholder will be depositing the refund order. In case of Equity Shares allotted in demat form, the bank
account details will be obtained from the information available with the Depositories;
Except for applications on behalf of the Central or State Government, the residents of Sikkim and the
officials appointed by the courts (subject to submitting sufficient documentary evidence in support of
their claim for exemption, provided that such transactions are undertaken on behalf of the Central and
State Government and not in their personal capacity), PAN of the Investor and for each Investor, in case
of joint names, irrespective of the total value of the Equity Shares applied for pursuant to the Issue;
Share certificate numbers and distinctive numbers of Equity Shares, if held in physical form;
Allotment option preferred - physical or demat form, if held in physical form;
Signature of the Eligible Equity Shareholders to appear in the same sequence and order as they appear in
our records or the Depositories‟ records
In case of Non Resident Eligible Equity Shareholders, NRE/ FCNR/ NRO A/c No. name and address of
the bank and branch;
If payment is made by a draft purchased from an NRE/ FCNR/ NRO A/c No., as the case may be, an
Account debit certificate from the bank issuing the draft, confirming that the draft has been issued by
debiting NRE/FCNR/ NRO A/c; and
Additionally, all such applicants are deemed to have accepted the following:
“I/ We understand that neither the Rights Entitlement nor the Equity Shares have been, and will be,
registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any United States
state securities laws, and may not be offered, sold, resold or otherwise transferred within the United
States or to the territories or possessions thereof (the “United States”) or to, or for the account or benefit
of a “U.S. Person” as defined in Regulation S of the Securities Act (“Regulation S”). I/ we understand
the Equity Shares referred to in this application are being offered in India but not in the United States. I/
we understand the offering to which this application relates is not, and under no circumstances is to be
construed as, an offering of any Equity Shares or Rights Entitlement for sale in the United States, or as a
solicitation therein of an offer to buy any of the said Equity Shares or Rights Entitlement in the United
States. Accordingly, I/ we understand this application should not be forwarded to or transmitted in or to
the United States at any time. I/ we understand that neither us, nor the Registrar, the Lead Managers or
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any other person acting on behalf of us will accept subscriptions from any person, or the agent of any
person, who appears to be, or who we, the Registrar, the Lead Managers or any other person acting on
behalf of us have reason to believe is, a resident of the United States or a “U.S. Person” (as defined in
Regulation S) or is ineligible to participate in the Issue under the securities laws of their jurisdiction.
I/ We will not offer, sell or otherwise transfer any of the Equity Shares which may be acquired by us in
any jurisdiction or under any circumstances in which such offer or sale is not authorized or to any person
to whom it is unlawful to make such offer, sale or invitation except under circumstances that will result in
compliance with any applicable laws or regulations. We satisfy, and each account for which we are
acting satisfies, all suitability standards for investors in investments of the type subscribed for herein
imposed by the jurisdiction of our residence.
I/ We understand and agree that the Rights Entitlement and Equity Shares may not be reoffered, resold,
pledged or otherwise transferred except in an offshore transaction in compliance with Regulation S, or
otherwise pursuant to an exemption from, or in a transaction not subject to, the registration requirements
of the Securities Act.
I/ We (i) am/ are, and the person, if any, for whose account I/ we am/ are acquiring such Rights
Entitlement and/ or the Equity Shares is/ are, outside the United States, (ii) am/ are not a “U.S. Person”
(as defined in Regulation S), and (iii) is/ are acquiring the Rights Entitlement and/ or the Equity Shares
in an offshore transaction meeting the requirements of Regulation S.
I/ We acknowledge that the Company, the Lead Managers, their affiliates and others will rely upon the
truth and accuracy of the foregoing representations and agreements.”
Please note that those who are making the application otherwise than on original CAF shall not be entitled to
renounce their rights and should not utilize the original CAF for any purpose including renunciation even if it is
received subsequently. If the Investor violates such requirements, he/ she shall face the risk of rejection of both
the applications. We shall refund such application amount to the Investor without any interest thereon.
Investors are requested to strictly adhere to these instructions. Failure to do so could result in an application
being rejected, with our Company, the Lead Managers and the Registrar not having any liability to the Investor.
Last date for Application
The last date for submission of the duly filled in CAF is April 27, 2013 (Saturday).
If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar to the Issue on
or before the close of banking hours on the aforesaid last date, the invitation to offer contained in the Letter of
Offer/ Abridged Letter of Offer shall be deemed to have been declined and the Board or any authorised
committee thereof shall be at liberty to dispose of the Equity Shares hereby offered, as provided under the
chapter “Terms of the Issue – Basis of Allotment” on page 94.
PROCEDURE FOR APPLICATION THROUGH THE APPLICATIONS SUPPORTED BY BLOCKED
AMOUNT (“ASBA”) PROCESS
This section is for the information of the ASBA Investors proposing to subscribe to the Issue through the
ASBA Process. The Lead Managers and we are not liable for any amendments or modifications or
changes in applicable laws or regulations, which may occur after the date of the Letter of Offer. Investors
who are eligible to apply under the ASBA Process are advised to make their independent investigations
and to ensure that the CAF is correctly filled up.
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The Lead Managers, our Company, our directors, affiliates, associates and their respective directors and
officers and the Registrar to the Issue shall not take any responsibility for acts, mistakes, errors,
omissions and commissions etc. in relation to applications accepted by SCSBs, Applications uploaded by
SCSBs, applications accepted but not uploaded by SCSBs or applications accepted and uploaded without
blocking funds in the ASBA Accounts. It shall be presumed that for applications uploaded by SCSBs, the
amount payable on application has been blocked in the relevant ASBA Account.
Please note that Eligible Equity Shareholders being QIBs, Non-Institutional Investors and Eligible Equity
Shareholders (whose application amount exceeds ` 2,00,000) can participate in the Issue only through the
ASBA process. Furthermore, Eligible Equity Shareholders not being individuals or HUFs are
mandatorily required to make use of ASBA, even if the application amount does not exceed ` 2,00,000.
Retail Individual Investors whose application amounts do not exceed ` 2,00,000 can participate in this
Issue either through the ASBA process or the non ASBA process.
Please note that an ASBA Investor is an Eligible Equity Shareholder who (i) is holding our Equity Shares
in dematerialized form as on the Record Date and has applied for Rights Entitlements and/ or additional
Equity Shares in dematerialized form; (ii) has not renounced Rights Entitlements in full or in part; (iii) is
not a Renouncee; and (iv) who is applying through blocking of funds in a bank account maintained with
SCSBs.
All Investors (apart from Retail Individual Investors) having bank accounts with SCSBs that are
providing ASBA in cities / centers where such Investors are located, are mandatorily required to make
use of the ASBA facility. Otherwise, applications of such Investors are liable for rejection. All Investors
are encouraged to make use of the ASBA facility wherever such facility is available.
The list of banks which have been notified by SEBI to act as SCSBs for the ASBA Process is provided on
http://www.sebi.gov.in/sebiweb/home/list/5/33/0/0/Recognised-Intermediaries. For details on Designated
Branches of SCSBs collecting the CAF, please refer the above mentioned SEBI link.
In terms of SEBI circulars dated September 13, 2012 and January 2, 2013, SCSBs should ensure that for
making applications on own account using ASBA facility, they should have a separate account in own
name with any other SEBI registered SCSBs. Such account shall be used solely for the purpose of making
application in public issues and clear demarcated funds should be available in such account for ASBA
applications.
Eligible Equity Shareholders who are eligible to apply under the ASBA Process
The option of applying for Equity Shares through the ASBA Process is available only to the Eligible Equity
Shareholders who are eligible under applicable securities laws to subscribe for the Rights Entitlement and the
Equity Shares in the Issue.
To qualify as ASBA Investors, Eligible Equity Shareholders:
are required to hold Equity Shares in dematerialized form as on the Record Date and apply for (i) their
Rights Entitlement or (ii) their Rights Entitlement and Equity Shares in addition to their Rights
Entitlement in dematerialized form;
should not have renounced their Right Entitlement in full or in part;
should not have split the CAF (unless all the SAFs are used by the original shareholder);
should not be Renouncees; and
should apply through blocking of funds in bank accounts maintained with SCSBs.
CAF
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The Registrar will dispatch the CAF through speed post to all Eligible Equity Shareholders as per their Rights
Entitlement on the Record Date for the Issue. Those Eligible Equity Shareholders who must apply or who wish
to apply through the ASBA will have to select for this ASBA mechanism in Part A of the CAF and provide
necessary details.
Eligible Equity Shareholders desiring to use the ASBA Process are required to submit their applications by
selecting the ASBA Option in Part A of the CAF. Application in electronic mode will only be available with
such SCSBs who provide such facility. The Eligible Equity Shareholder shall submit the CAF to the Designated
Branch of the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the
application in the ASBA Account.
More than one ASBA Investor may apply using the same ASBA Account, provided that SCSBs will not accept
a total of more than five CAFs with respect to any single ASBA Account.
Acceptance of the Issue
You may accept the Issue and apply for the Equity Shares either in full or in part, by filling Part A of the
respective CAFs sent by the Registrar, selecting the ASBA Mechanism in Part A of the CAF and submit the
same to the Designated Branch of the SCSB before the close of the banking hours on or before the Issue
Closing.
Mode of payment
The Eligible Equity Shareholder applying under the ASBA Process agrees to block the entire amount payable on
application with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to the
amount payable on application, in an ASBA Account.
After verifying that sufficient funds are available in the ASBA Account details of which are provided in the
CAF, the SCSB shall block an amount equivalent to the amount payable on application mentioned in the CAF
until it receives instructions from the Registrar. Upon receipt of intimation from the Registrar, the SCSBs shall
transfer such amount as per the Registrar‟s instruction from the ASBA Account. This amount will be transferred
in terms of the SEBI ICDR Regulations, into the separate bank account maintained by us as per the provisions
of section 73(3) of the Companies Act. The balance amount, if any, remaining after the finalisation of the Basis
of Allotment shall be unblocked by the SCSBs on the basis of the instructions issued in this regard by the
Registrar to the Issue and the Lead Managers to the respective SCSB.
The SCSB may reject the application at the time of acceptance of CAF if the ASBA Account with the SCSB
details of which have been provided by the Eligible Equity Shareholder in the CAF does not have sufficient
funds equivalent to the amount payable on application mentioned in the CAF. Subsequent to the acceptance of
the application by the SCSB, we would have a right to reject the application only on technical grounds.
In terms of SEBI circulars dated September 13, 2012 and January 2, 2013, SCSBs should ensure that for
making applications on own account using ASBA facility, they should have a separate account in own
name with any other SEBI registered SCSBs. Such account shall be used solely for the purpose of making
application in public issues and clear demarcated funds should be available in such account for ASBA
applications.
Options available to the Eligible Equity Shareholders applying under the ASBA Process
The summary of options available to the Eligible Equity Shareholders is presented below. You may exercise any
of the following options with regard to the Equity Shares, using the respective CAFs received from Registrar:
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Option Available Action Required
1. Accept whole or part of your Rights
Entitlement without renouncing the balance.
Fill in and sign Part A of the CAF (All joint holders must sign)
2. Accept your Rights Entitlement in full and
apply for additional Equity Shares
Fill in and sign Part A of the CAF including Block III relating
to the acceptance of entitlement and Block IV relating to
additional Equity Shares (All joint holders must sign)
The Eligible Equity Shareholders applying under the ASBA Process will need to select the ASBA process
option in the CAF and provide required necessary details. However, in cases where this option is not
selected, but the CAF is tendered to the designated branch of the SCSBs with the relevant details
required under the ASBA process option and the SCSBs block the requisite amount, then that CAF
would be treated as if the Eligible Equity Shareholder has selected to apply through the ASBA process
option.
Please note that Eligible Equity Shareholders being QIBs, Non-Institutional Investors and other Eligible
Equity Shareholders (whose application amount exceeds ` 2,00,000) can participate in the Issue only
through the ASBA process. Furthermore, Eligible Equity Shareholders not being individuals or HUFs are
mandatorily required to make use of ASBA, even if the application amount does not exceed ` 2,00,000.
Retail Individual Investors whose application amounts do not exceed ` 2,00,000 can participate in this
Issue either through the ASBA process or the non ASBA process.
Additional Equity Shares
You are eligible to apply for additional Equity Shares over and above the number of Equity Shares that you are
entitled to, provided that you are eligible to apply for Equity Shares under applicable law and you have applied
for all the Equity Shares (as the case may be) offered without renouncing them in whole or in part in favour of
any other person(s). Where the number of additional Equity Shares applied for exceeds the number available for
Allotment, the Allotment would be made on a fair and equitable basis in consultation with the Designated Stock
Exchange. Applications for additional Equity Shares shall be considered and Allotment shall be made at the sole
discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed under
“Terms of the Issue - Basis of Allotment” on page 94.
If you desire to apply for additional Equity Shares please indicate your requirement in the place provided for
additional Equity Shares in Part A of the CAF. The Renouncee applying for all the Equity Shares renounced in
their favour may also apply for additional Equity Shares.
Renunciation under the ASBA Process
Renouncees are not eligible to participate in this Issue through the ASBA Process.
Application on Plain Paper - ASBA
An Eligible Equity Shareholder who has neither received the original CAF nor is in a position to obtain the
duplicate CAF and who is applying under the ASBA Process may make an application to subscribe to the Issue
on plain paper.
Furthermore, Eligible Equity Shareholders have an option to print application on plain paper from the website of
the Registrar to the Issue, i.e. www.linkintime.co.in, by providing his/ her folio. no. / DP ID/ Client ID in order
to enable the Eligible Equity Shareholder to apply for the Issue. Further, they also can make an application on
plain paper giving necessary details as given below.
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The envelope should be superscribed “Alok Industries – Rights Issue”. The application on plain paper, duly
signed by the Investors including joint holders, in the same order as per the specimen recorded with us or the
Depositories, must reach the Designated Branch of the SCSBs before the Issue Closing Date and should contain
the following particulars:
Name of Issuer, being Alok Industries Limited;
Name and address of the Eligible Equity Shareholder including joint holders;
Registered Folio Number/ DP and Client ID no.;
Number of Equity Shares held as on Record Date;
Number of Equity Shares entitled to;
Number of Equity Shares applied for;
Number of additional Equity Shares applied for, if any;
Total number of Equity Shares applied for;
Total amount to be blocked at the rate of ` 10 per Equity Share;
Details of the ASBA Account such as the account number, name, address and branch of the relevant SCSB;
In case of non-resident investors, details of the NRE/ FCNR/ NRO account such as the account number,
name, address and branch of the SCSB with which the account is maintained;
1. Except for applications on behalf of the Central or State Government, residents of Sikkim and the officials
appointed by the courts, PAN number of the Investor and for each Investor in case of joint names,
irrespective of the total value of the Equity Shares applied for pursuant to the Issue; and
2. Signature of the Eligible Equity Shareholder to appear in the same sequence and order as they appear in our
records.
3. Additionally, all such applicants are deemed to have accepted the following:
“I/ We understand that neither the Rights Entitlement nor the Equity Shares have been, and will be,
registered under the U.S. Securities Act of 1933 (the “Securities Act”) or any United States state securities
laws, and may not be offered, sold, resold or otherwise transferred within the United States or to the
territories or possessions thereof (the “United States” or to or for the account or benefit of a “U.S.
Person” as defined in Regulation S of the Securities Act (“Regulation S”). I/ we understand the Equity
Shares referred to in this application are being offered in India but not in the United States. I/ we
understand the offering to which this application relates is not, and under no circumstances is to be
construed as, an offering of any Equity Shares or Rights Entitlement for sale in the United States, or as a
solicitation therein of an offer to buy any of the said Equity Shares or Rights Entitlement in the United
States. Accordingly, I/ we understand this application should not be forwarded to or transmitted in or to the
United States at any time. I/ we understand that none of we, the Registrar, the Lead Managers or any other
person acting on behalf of us will accept subscriptions from any person, or the agent of any person, who
appears to be, or who, we, the Registrar, the Lead Managers or any other person acting on behalf of we
have reason to believe is, a resident of the United States or a “U.S. Person” (as defined in Regulation S), or
is ineligible to participate in the Issue under the securities laws of their jurisdiction.
I/ We will not offer, sell or otherwise transfer any of the Equity Shares which may be acquired by us in any
jurisdiction or under any circumstances in which such offer or sale is not authorized or to any person to
whom it is unlawful to make such offer, sale or invitation except under circumstances that will result in
compliance with any applicable laws or regulations. We satisfy, and each account for which we are acting
satisfies, all suitability standards for investors in investments of the type subscribed for herein imposed by
the jurisdiction of our residence.
I/ We understand and agree that the Rights Entitlement and Equity Shares may not be reoffered, resold,
pledged or otherwise transferred except in an offshore transaction in compliance with Regulation S, or
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otherwise pursuant to an exemption from, or in a transaction not subject to, the registration requirements of
the Securities Act.
I/ We (i) am/ are, and the person, if any, for whose account I/ we am/ are acquiring such Rights Entitlement
and/ or the Equity Shares is/ are, outside the United States, (ii) am/ are not a “U.S. Person” as defined in
Regulation S, and (iii) is/ are acquiring the Rights Entitlement and/ or the Equity Shares in “an offshore
transaction” meeting the requirements of Regulation S.
I/ We acknowledge that the Company, the Lead Managers, their affiliates and others will rely upon the
truth and accuracy of the foregoing representations and agreements.”
Option to receive Equity Shares in Dematerialized Form
ELIGIBLE EQUITY SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT
THE EQUITY SHARES UNDER THE ASBA PROCESS CAN BE ALLOTTED ONLY IN
DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN, WHICH THE
EQUITY SHARES ARE HELD BY SUCH ASBA INVESTOR ON THE RECORD DATE.
Issuance of Intimation Letters
Upon approval of the Basis of Allotment by the Designated Stock Exchange, the Registrar to the Issue shall
send to the Controlling Branches, a list of the ASBA Investors who have been allocated Equity Shares in the
Issue, along with:
The amount to be transferred from the ASBA Account to the separate bank account opened by the
Company for the Issue, for each successful ASBA;
The date by which the funds referred to above, shall be transferred to the aforesaid bank account; and
The details of rejected ASBA applications, if any, to enable the SCSBs to unblock the respective ASBA
Accounts.
General instructions for Eligible Equity Shareholders applying under the ASBA Process
1) Please read the instructions printed on the CAF carefully.
2) Application should be made on the printed CAF and should be completed in all respects. The CAF
found incomplete with regard to any of the particulars required to be given therein, and/ or which are
not completed in conformity with the terms of the Letter of Offer, Abridged Letter of Offer are liable to
be rejected. The CAF must be filled in English.
3) The CAF in the ASBA Process should be submitted at a Designated Branch of the SCSB and whose
ASBA Account/ bank account details are provided in the CAF and not to the Bankers to the Issue/
Collecting Banks (assuming that such Collecting Bank is not a SCSB), to us or Registrar or Lead
Managers to the Issue.
4) All applicants, and in the case of application in joint names, each of the joint applicants, should
mention his/ her PAN number allotted under the IT Act, irrespective of the amount of the application.
Except for applications on behalf of the Central or State Government, the residents of Sikkim and the
officials appointed by the courts, CAFs without PAN will be considered incomplete and are liable
to be rejected. With effect from August 16, 2010, the demat accounts for Investors for which PAN
details have not been verified shall be “suspended for credit” and no allotment and credit of
Equity Shares shall be made into the accounts of such Investors.
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5) All payments will be made by blocking the amount in the ASBA Account. Cash payment or payment
by cheque/ demand draft/ pay order is not acceptable. In case payment is affected in contravention of
this, the application may be deemed invalid and the application money will be refunded and no interest
will be paid thereon.
6) Signatures should be either in English or Hindi or in any other language specified in the Eighth
Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb impression
must be attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The
Eligible Equity Shareholders must sign the CAF as per the specimen signature recorded with us and/ or
Depositories.
7) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as
per the specimen signature(s) recorded with the depository/ us. In case of joint applicants, reference, if
any, will be made in the first applicant‟s name and all communication will be addressed to the first
applicant.
8) All communication in connection with application for the Equity Shares, including any change in
address of the Eligible Equity Shareholder should be addressed to the Registrar to the Issue prior to the
date of Allotment in this Issue quoting the name of the first/ sole applicant Eligible Equity Shareholder,
folio numbers and CAF number.
9) Only the person or persons to whom the Equity Shares have been offered shall be eligible to participate
under the ASBA Process.
10) Only persons outside restricted jurisdictions and who are eligible to subscribe for Rights Entitlement
and Equity Shares under applicable securities laws are eligible to participate.
11) Only the Eligible Equity Shareholders holding Equity Shares in demat are eligible to participate
through ASBA process.
12) Eligible Equity Shareholders who have renounced their entitlement in part/ full are not entitled to apply
using ASBA process.
13) Please note that Eligible Equity Shareholders being QIBs, Non-Institutional Investors and other
Eligible Equity Shareholders (whose application amount exceeds ` 2,00,000) can participate in the
Issue only through the ASBA process. Furthermore, Eligible Equity Shareholders not being individuals
or HUFs are mandatorily required to make use of ASBA, even if the application amount does not
exceed ` 2,00,000. Retail Individual Investors whose application amounts do not exceed ` 2,00,000 can
participate in this Issue either through the ASBA process or the non ASBA process.
14) All Investors (apart from Retail Individual Investors) having bank accounts with SCSBs that are
providing ASBA in cities / centers where such Investors are located, are mandatorily required to make
use of the ASBA facility. Otherwise, applications of such Investors are liable for rejection. All
Investors are encouraged to make use of the ASBA facility wherever such facility is available.
15) In case of non – receipt of CAF, application can be made on plain paper mentioning all necessary
details as mentioned under the heading “Application on Plain Paper - ASBA” on page 87.
16) In terms of SEBI circulars dated September 13, 2012 and January 2, 2013, SCSBs should ensure
that for making applications on own account using ASBA facility, they should have a separate
account in own name with any other SEBI registered SCSBs. Such account shall be used solely
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for the purpose of making application in public issues and clear demarcated funds should be
available in such account for ASBA applications.
Do‟s:
Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in.
Ensure that the details about your Depository Participant and beneficiary account are correct and the
beneficiary account is activated as Equity Shares will be allotted in the dematerialized form only.
Ensure that the CAFs are submitted with the Designated Branch of the SCSBs and details of the correct
bank account have been provided in the CAF.
Ensure that there are sufficient funds (equal to {number of Equity Shares applied for} X {Issue Price of
Equity Shares}) available in the ASBA Account mentioned in the CAF before submitting the CAF to the
respective Designated Branch of the SCSB.
Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on
application mentioned in the CAF, in the ASBA Account, of which details are provided in the CAF and
have signed the same.
Ensure that you receive an acknowledgement from the Designated Branch of the SCSB for your
submission of the CAF in physical form.
Except for CAFs submitted on behalf of the Central or State Government, the residents of Sikkim and the
officials appointed by the courts, each applicant should mention their PAN allotted under the I T Act.
Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary
account is held with the Depository Participant. In case the CAF is submitted in joint names, ensure that
the beneficiary account is also held in same joint names and such names are in the same sequence in which
they appear in the CAF.
Ensure that the Demographic Details are updated, true and correct, in all respects.
Ensure that the account holder in whose bank account the funds are to be blocked has signed authorising
such funds to be blocked.
Apply under the ASBA process only if you comply with the definition of an ASBA investor
Don‟ts:
Do not apply if you are not eligible to participate in the Issue under the securities laws applicable to your
jurisdiction.
Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB.
Do not pay the amount payable on application in cash, by money order, by pay order or by postal order.
Do not send your physical CAFs to the Lead Managers to Issue/ Registrar/ Collecting Banks (assuming
that such Collecting Bank is not a SCSB)/ to a branch of the SCSB which is not a Designated Branch of
the SCSB/ Company; instead submit the same to a Designated Branch of the SCSB only.
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Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground.
Do not apply if the ASBA account has been used for five applicants.
Do not apply through the ASBA Process if you are not an ASBA Investor.
Do not instruct the SCSBs to release the funds blocked under the ASBA Process.
Grounds for Technical Rejection under the ASBA Process
In addition to the grounds listed under “Grounds for Technical Rejection for non-ASBA Investors” on page 101,
applications under the ABSA Process are liable to be rejected on the following grounds:
Application on a SAF (unless all the SAFs are used by the original shareholder).
Application for allotment of Rights Entitlements or additional shares which are in physical form.
DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available
with the Registrar.
Sending CAF to a Lead Managers/ Registrar/ Collecting Bank (assuming that such Collecting Bank is not
a SCSB)/ to a branch of a SCSB which is not a Designated Branch of the SCSB/ Company.
Insufficient funds are available with the SCSB for blocking the amount.
Funds in the bank account with the SCSB whose details have been mentioned in the CAF / Plain Paper
Application having been frozen pursuant to regulatory order.
ASBA Account holder not signing the CAF or declaration mentioned therein.
CAFs that do not include the certification set out in the CAF to the effect that the subscriber is not a “U.S.
Person” (as defined under Regulation S) and does not have a registered address (and is not otherwise
located) in the United States or other restricted jurisdictions and is authorized to acquire the rights and the
securities in compliance with all applicable laws and regulations.
CAFs which have evidence of being executed in/ dispatched from a restricted jurisdiction or executed by
or for the account or benefit of a “U.S. Person” (as defined in Regulation S).
Renouncees applying under the ASBA Process.
Applications by persons not competent to contract under the Contract Act, 1872, as amended, except
applications by minors having valid demat accounts as per the demographic details provided by the
Depositories.
Submission of more than five CAFs per ASBA Account.
Multiple CAFs, including cases where an Investor submits CAFs along with a plain paper application.
Submitting the GIR instead of the PAN.
An Eligible Equity Shareholder, who is not complying with any or all of the conditions for being an
ASBA Investor, applies under the ASBA process.
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The Application by an Eligible Equity Shareholder whose cumulative value of Equity Shares applied for
is more than ` 200,000 but has applied separately through split CAFs of less than ` 200,000 each and has
not done so through the ASBA process.
Applications by SCSBs not complying with the SEBI circulars dated September 13, 2012 and January 2,
2013, whereby SCSBs need to ensure that for making applications on own account using ASBA facility,
they should have a separate account in own name with any other SEBI registered SCSBs. Such account
should be used solely for the purpose of making application in public issues and clear demarcated funds
should be available in such account for ASBA applications.
Depository account and bank details for Eligible Equity Shareholders applying under the ASBA Process
IT IS MANDATORY FOR ALL THE ELIGIBLE EQUITY SHAREHOLDERS APPLYING UNDER
THE ASBA PROCESS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM AND
TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES ARE HELD BY THE
ELIGIBLE EQUITY SHAREHOLDER ON THE RECORD DATE. ALL ELIGIBLE EQUITY
SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS SHOULD MENTION THEIR
DEPOSITORY PARTICIPANT‟S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION
NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF. ELIGIBLE EQUITY
SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS MUST ENSURE THAT THE NAME
GIVEN IN THE CAF IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY
ACCOUNT IS HELD. IN CASE THE CAF IS SUBMITTED IN JOINT NAMES, IT SHOULD BE
ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES
AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE CAF.
Eligible Equity Shareholders applying under the ASBA Process should note that on the basis of name of
these Eligible Equity Shareholders, Depository Participant‟s name and identification number and
beneficiary account number provided by them in the CAF, the Registrar to the Issue will obtain from the
Depository demographic details of these Eligible Equity Shareholders such as address, bank account
details for printing on refund orders and occupation (“Demographic Details”). Hence, Eligible Equity
Shareholders applying under the ASBA Process should carefully fill in their Depository Account details
in the CAF.
These Demographic Details would be used for all correspondence with such Eligible Equity Shareholders
including mailing of the letters intimating unblocking of their respective ASBA Accounts. The Demographic
Details given by the Eligible Equity Shareholders in the CAF would not be used for any other purposes by the
Registrar. Hence, Eligible Equity Shareholders are advised to update their Demographic Details as provided to
their Depository Participants.
By signing the CAFs, the Eligible Equity Shareholders applying under the ASBA Process would be deemed to
have authorised the Depositories to provide, upon request, to the Registrar to the Issue, the required
Demographic Details as available on its records.
Letters intimating Allotment and unblocking the funds would be mailed at the address of the Eligible
Equity Shareholder applying under the ASBA Process as per the Demographic Details received from the
Depositories. The Registrar to the Issue will give instructions to the SCSBs for unblocking funds in the
ASBA Account to the extent equity shares are not allotted to such Eligible Equity Shareholders. Eligible
Equity Shareholders applying under the ASBA Process may note that delivery of letters intimating
unblocking of the funds may get delayed if the same once sent to the address obtained from the
Depositories are returned undelivered. In such an event, the address and other details given by the
Eligible Equity Shareholders in the CAF would be used only to ensure dispatch of letters intimating
unblocking of the ASBA Accounts.
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Note that any such delay shall be at the sole risk of the Eligible Equity Shareholders applying under the
ASBA Process and none of us, the SCSBs or the Lead Managers shall be liable to compensate the Eligible
Equity Shareholders applying under the ASBA Process for any losses caused due to any such delay or
liable to pay any interest for such delay.
In case no corresponding record is available with the Depositories that matches three parameters, (a) names of
the Eligible Equity Shareholders (including the order of names of joint holders), (b) the DP ID and (c) the
beneficiary account number, then such applications are liable to be rejected.
Issue Schedule
Issue Opening Date: March 30, 2013 (Saturday)
Last date for receiving requests for SAFs: April 20, 2013 (Saturday)
Issue Closing Date: April 27, 2013 (Saturday)
Basis of Allotment
Subject to the provisions contained in the Letter of Offer, the Articles of Association and the approval of the
Designated Stock Exchange, the Board will proceed to Allot the Equity Shares in the following order of priority:
(a) Full Allotment to those Eligible Equity Shareholders who have applied for their Rights Entitlement either
in full or in part and also to the Renouncee(s) who has/ have applied for Equity Shares renounced in their
favour, in full or in part.
(b) Allotment pertaining to fractional entitlements in case the shareholding is less that 3 Equity Shares or is
not in multiples of 3. Investors whose fractional entitlements are being ignored would be given preference
in allotment of one additional Equity Share each if they apply for additional Equity Share. Allotment
under this head shall be considered if there are any unsubscribed Equity Shares after allotment under (a)
above. If number of Equity Shares required for allotment under for this head are more than number of
Equity Shares available after allotment under (a) above, the Allotment would be made on a fair and
equitable basis in consultation with the Designated Stock Exchange, as a part of Issue and will not be a
preferential allotment.
(c) Allotment to the Eligible Equity Shareholders who having applied for all the Equity Shares offered to
them as part of the Issue and have also applied for additional Equity Shares. The Allotment of such
additional Equity Shares will be made as far as possible on an equitable basis having due regard to the
number of Equity Shares held by them on the Record Date, provided there is an under-subscribed portion
after making full Allotment in (a) and (b) above. The Allotment of such Equity Shares will be at the sole
discretion of the Board or committee thereof, in consultation with the Designated Stock Exchange, as a
part of the Issue and will not be a preferential Allotment.
(d) Allotment to Renouncees who having applied for all the Equity Shares renounced in their favour, have
applied for additional Equity Shares provided there is surplus available after making full Allotment under
(a), (b) and (c) above. The Allotment of such Equity Shares will be at the sole discretion of the Board or
committee thereof, in consultation with the Designated Stock Exchange, as a part of the Issue and not
preferential Allotment.
Our Promoters and Promoter Group have confirmed, by their respective letters dated September 26, 2012, that
they intend to subscribe to the full extent of their respective Rights Entitlement in the Issue, either by themselves
or through any of the Promoters / members of the Promoter Group, in compliance with the Takeover
Regulations. In this regard, the Promoters and members of the Promoter Group may bring in an amount upto
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their full portion of Rights Entitlement in the Issue prior to the Issue Opening Date. In case the Issue fails or is
withdrawn for any reason, such Application Money if so received from the Promoters and members of the
Promoter Group shall be treated as unsecured loans repayable on demand at terms to be decided thereon.Our
Promoters and Promoter Group have further reserved their respective rights to acquire beyond their entitlement,
and may subscribe to, and / or make arrangements for the subscription of Equity Shares if any, which remain
unsubscribed, as well as by subscribing to renunciation(s). Such subscription to additional Equity Shares and the
unsubscribed portion, if any, shall be in accordance with and subject to the provisions of the Takeover
Regulations. Further, such subscription shall not result in a breach of the minimum public shareholding
requirement stipulated in the Listing Agreements.
Underwriting
This Issue is not underwritten and our Company has not entered into any underwriting arrangements.
Allotment Advices/ Refund Orders
Our Company will issue and dispatch Allotment advice/ share certificates/ demat credit and/ or letters of regret
along with refund order or credit the allotted Equity Shares to the respective beneficiary accounts, if any, within
a period of 15 days from the Issue Closing Date.
Investors residing at centers where clearing houses are managed by the RBI will get refunds through National
Electronic Clearing Service (“NECS”) except where Investors have not provided the details required to send
electronic refunds or where the Investors are otherwise disclosed as applicable or eligible to get refunds through
direct credit and real-time gross settlement (“RTGS”).
In case of those Investors who have opted to receive their Rights Entitlement in dematerialized form using
electronic credit under the depository system, advice regarding their credit of the Equity Shares shall be given
separately. Investors to whom refunds are made through electronic transfer of funds will be sent a letter through
ordinary post intimating them about the mode of credit of refund within 15 days of the Issue Closing Date.
In case of those Investors who have opted to receive their Rights Entitlement in physical form and we issue
letter of allotment, the corresponding share certificates will be kept ready within three months from the date of
Allotment thereof or such extended time as may be approved by the Company Law Board under Section 113 of
the Companies Act or other applicable provisions, if any. Investors are requested to preserve such letters of
allotment, which would be exchanged later for the share certificates. For more information, please refer to the
chapter “Terms of the Issue” on page 73.
The letter of allotment/ refund order would be sent by registered / speed post to the sole/ first Investor‟s
registered address in India or the Indian address provided by the Eligible Equity Shareholders from time to time.
Such refund orders would be payable at par at all places where the applications were originally accepted. The
same would be marked „Account Payee only‟ and would be drawn in favour of the sole/ first Investor. Adequate
funds would be made available to the Registrar to the Issue for this purpose.
Payment of Refund
Mode of making refunds
The payment of refund, if any, would be done through any of the following modes in case of applicants residing
in any of the centers specified by SEBI:
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NECS – This would be subject to availability of complete Bank Account Details including MICR code
wherever applicable from the depository. The payment of refund through NECS is mandatory for applicants
having a bank account at any of the centres where NECS facility has been made available by the RBI (subject to
availability of all information for crediting the refund through NECS including the MICR code as appearing on
a cheque leaf, from the depositories), except where applicant is otherwise disclosed as eligible to get refunds
through NEFT or Direct Credit or RTGS.
a) NEFT – Payment of refund shall be undertaken through NEFT wherever the Investors‟ bank has been
assigned the Indian Financial System Code (IFSC), which can be linked to a MICR, allotted to that particular
bank branch. IFSC will be obtained from the website of RBI as on a date immediately prior to the date of
payment of refund, duly mapped with MICR numbers. Wherever the Investors have registered their nine
digit MICR number and their bank account number with the Registrar or with the depository participant
while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that
particular bank branch and the payment of refund will be made to the Investors through this method.
b) RTGS – If the refund amount exceeds ` 2,00,000, the Investors have the option to receive refund through
RTGS. Such eligible Investors who indicate their preference to receive refund through RTGS are required to
provide the IFSC code in the CAF. In the event the same is not provided, refund shall be made through
NECS. Charges, if any, levied by the refund bank(s) for the same would be borne by the Company. Charges,
if any, levied by the Investor‟s bank receiving the credit would be borne by the Investor.
c) Direct Credit – Investors having bank accounts with the Bankers to the Issue shall be eligible to receive
refunds through direct credit. Charges, if any, levied by the relevant bank(s) for the same would be borne by
us.
d) For all other Investors the refund orders will be dispatched by registered post, where the value is Rs 1500/-
or more and by speed post in other cases.
e) Credit of refunds to Investors in any other electronic manner permissible under the banking laws, which are
in force and are permitted by the SEBI from time to time.
Refund payment to Non- resident
Where applications are accompanied by Indian rupee drafts purchased abroad and payable at Mumbai, refunds
will be made in the Indian Rupees based on the U.S. dollars equivalent which ought to be refunded. Indian
Rupees will be converted into U.S. dollars at the rate of exchange, which is prevailing on the date of refund. The
exchange rate risk on such refunds shall be borne by the concerned applicant and our Company shall not bear
any part of the risk.
Where the applications made are accompanied by NRE/FCNR/NRO cheques, refunds will be credited to
NRE/FCNR/NRO accounts respectively, on which such cheques were drawn and details of which were provided
in the CAF.
Printing of Bank Particulars on Refund Orders
As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement,
the particulars of the Investor‟s bank account are mandatorily required to be given for printing on the refund
orders. Bank account particulars, where available, will be printed on the refund orders/ refund warrants which
can then be deposited only in the account specified. We will in no way be responsible if any loss occurs through
these instruments falling into improper hands either through forgery or fraud.
Allotment advice/ Share Certificates/ Demat Credit
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Allotment advice/ share certificates/ demat credit or letters of regret will be dispatched to the registered address
of the first named Investor or respective beneficiary accounts will be credited within 15 days, from the Issue
Closing Date. Allottees are requested to preserve such allotment advice (if any) to be exchanged later for share
certificates. In case our Company issues allotment advice, the relative share certificates will be dispatched
within one month from the date of Allotment.
Option to receive Equity Shares in Dematerialized Form
Investors shall be allotted the Equity Shares in dematerialized (electronic) form at the option of the Investor. We
have signed a tripartite agreement with NSDL and the Registrar to the Issue on October 27, 1998, which enables
the Investors to hold and trade in Equity Shares in a dematerialized form, instead of holding the Equity Shares in
the form of physical certificates. We have also signed a tripartite agreement with CDSL and the Registrar to the
Issue on August 19, 1999, which enables the Investors to hold and trade in Equity Shares in a dematerialized
form, instead of holding the Equity Shares in the form of physical certificates.
In this Issue, the allottees who have opted for Equity Shares in dematerialized form will receive their Equity
Shares in the form of an electronic credit to their beneficiary account as given in the CAF, after verification with
a depository participant. Investor will have to give the relevant particulars for this purpose in the appropriate
place in the CAF. Allotment advice, refund order (if any) would be sent directly to the Investor by the Registrar
to the Issue but the Investor‟s depository participant will provide to him the confirmation of the credit of such
Equity Shares to the Investor‟s depository account. CAFs, which do not accurately contain this information, will
be given the Equity Shares in physical form. No separate CAFs for Equity Shares in physical and/ or
dematerialized form should be made.
INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES CAN BE TRADED ON THE
STOCK EXCHANGE ONLY IN DEMATERIALIZED FORM.
The procedure for availing the facility for Allotment of Equity Shares in this Issue in the electronic form is as
under:
(a) Open a beneficiary account with any depository participant (care should be taken that the beneficiary
account should carry the name of the holder in the same manner as is registered in our records. In the case
of joint holding, the beneficiary account should be opened carrying the names of the holders in the same
order as registered in our records). In case of Investors having various folios with different joint holders, the
Investors will have to open separate accounts for such holdings. Those Eligible Equity Shareholders who
have already opened such beneficiary account(s) need not adhere to this step.
(b) For Eligible Equity Shareholders already holding Equity Shares in dematerialized form as on the Record
Date, the beneficial account number shall be printed on the CAF. For those who open accounts later or
those who change their accounts and wish to receive their Equity Shares by way of credit to such account,
the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may
be noted that the Allotment of Equity Shares arising out of this Issue may be made in dematerialized form
even if the original Equity Shares are not dematerialized. Nonetheless, it should be ensured that the
depository account is in the name(s) of the Eligible Equity Shareholders and the names are in the same
order as in our records.
The responsibility for correctness of information (including Investor‟s age and other details) filled in the CAF
vis-à-vis such information with the Investor‟s depository participant, would rest with the Investor. Investors
should ensure that the names of the Investors and the order in which they appear in CAF should be the same as
registered with the Investor‟s depository participant.
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If incomplete/ incorrect beneficiary account details are given in the CAF, the Investor will get Equity Shares in
physical form.
The Equity Shares allotted to applicants opting for issue in dematerialized form, would be directly credited to
the beneficiary account as given in the CAF after verification. Allotment advice, refund order (if any) would be
sent directly to the applicant by the Registrar to the Issue but the applicant‟s depository participant will provide
to the applicant the confirmation of the credit of such Equity Shares to the applicant‟s depository account. It
may be noted that Equity Shares in electronic form can be traded only on the Stock Exchanges having electronic
connectivity with NSDL or CDSL.
Renouncees will also have to provide the necessary details about their beneficiary account for Allotment of
Equity Shares in this Issue. In case these details are incomplete or incorrect, the application is liable to be
rejected.
Non-transferable allotment advice/refund orders will be directly sent to the Investors by the Registrar.
Dividend or other benefits with respect to the Rights Shares held in dematerialized form would be paid to those
Eligible Equity Shareholders whose names appear in the list of beneficial owners given by the Depository
Participant to our Company as on the date of the book closure.
General instructions for non-ASBA Investors
1. Please read the instructions printed on the CAF carefully.
2. Application should be made on the printed CAF, provided by us except as mentioned under the head
“Application on Plain Paper – non-ASBA” on page 82 and should be completed in all respects. The CAF
found incomplete with regard to any of the particulars required to be given therein, and/ or which are not
completed in conformity with the terms of the Letter of Offer or Abridged Letter of Offer are liable to be
rejected and the money paid, if any, in respect thereof will be refunded without interest and after
deduction of bank commission and other charges, if any. The CAF must be filled in English and the
names of all the Investors, details of occupation, address, father‟s/ husband‟s name must be filled in block
letters.
The CAF together with the cheque/ demand draft should be sent to the Bankers to the Issue/ Collecting
Bank or to the Registrar to the Issue and not to us or Lead Managers to the Issue. Investors residing at
places other than cities where the branches of the Bankers to the Issue have been authorised by us for
collecting applications, will have to make payment by demand draft payable at Mumbai of an amount net
of bank and postal charges and send their CAFs to the Registrar to the Issue by registered post. If any
portion of the CAF is/ are detached or separated, such application is liable to be rejected.
Applications where separate cheques/ demand drafts are not attached for amounts to be paid for
Equity Shares are liable to be rejected.
3. Except for applications on behalf of the Central and State Government, the residents of Sikkim and the
officials appointed by the courts, all Investors, and in the case of application in joint names, each of the
joint Investors, should mention his/ her PAN number allotted under the I.T. Act, irrespective of the
amount of the application. CAFs without PAN will be considered incomplete and are liable to be
rejected.
4. Investors, holding Equity Shares in physical form, are advised that it is mandatory to provide information
as to their savings/ current account number and the name of the bank with whom such account is held in
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the CAF to enable the Registrar to the Issue to print the said details in the refund orders, if any, after the
names of the payees. Application not containing such details is liable to be rejected.
5. All payment should be made by cheque/ demand draft only. Application through the ASBA process as
mentioned above is acceptable. Cash payment is not acceptable. In case payment is effected in
contravention of this, the application may be deemed invalid and the application money will be refunded
and no interest will be paid thereon.
6. Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule
to the Constitution of India. Signatures other than in English or Hindi and thumb impression must be
attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Eligible
Equity Shareholders must sign the CAF as per the specimen signature recorded with us/ Depositories.
7. In case of an application under power of attorney or by a body corporate or by a society, a certified true
copy of the relevant power of attorney or relevant resolution or authority to the signatory to make the
relevant investment under this Issue and to sign the application and certified true a copy of the
Memorandum and Articles of Association and/ or bye laws of such body corporate or society must be
lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case the above
referred documents are already registered with us, the same need not be a furnished again. In case these
papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closing
Date, then the application is liable to be rejected. In no case should these papers be attached to the
application submitted to the Bankers to the Issue.
8. In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as
per the specimen signature(s) recorded with us or the Depositories. Further, in case of joint Investors who
are Renouncees, the number of Investors should not exceed three. In case of joint Investors, reference, if
any, will be made in the first Investor‟s name and all communication will be addressed to the first
Investor.
9. Application(s) received from NRs/ NRIs, or persons of Indian origin residing abroad for Allotment of
Equity Shares shall, inter alia, be subject to conditions, as may be imposed from time to time by the RBI
under FEMA, including regulations relating to QFIs, in the matter of refund of application money,
Allotment of Equity Shares, subsequent issue and Allotment of Equity Shares, interest, export of share
certificates, etc. In case a NR or NRI Eligible Equity Shareholder has specific approval from the RBI, in
connection with his shareholding, he should enclose a copy of such approval with the CAF. Additionally,
applications will not be accepted from NRs/ NRIs in the United States or its territories and possessions, or
any other jurisdiction where the offer or sale of the Rights Entitlements and Equity Shares may be
restricted by applicable securities laws.
10. All communication in connection with application for the Equity Shares, including any change in address
of the Eligible Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of
Allotment in this Issue quoting the name of the first/ sole Investor, folio numbers and CAF number.
Please note that any intimation for change of address of Eligible Equity Shareholders, after the date of
Allotment, should be sent to our Registrar and Transfer Agent, in the case of Equity Shares held in
physical form and to the respective depository participant, in case of Equity Shares held in dematerialized
form.
11. SAFs cannot be re-split.
12. Only the Eligible Equity Shareholder(s) and not Renouncee(s) shall be entitled to obtain SAFs.
13. Investors must write their CAF number at the back of the cheque/ demand draft.
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14. Only one mode of payment per application should be used. The payment must be by cheque/ demand
draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member or a
sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF
where the application is to be submitted.
15. A separate cheque/ draft must accompany each CAF. Outstation cheques/ demand drafts or post-dated
cheques and postal/ money orders will not be accepted and applications accompanied by such outstation
cheques/ outstation demand drafts/ money orders or postal orders will be rejected.
16. No receipt will be issued for application money received. The Bankers to the Issue/ Collecting Bank/
Registrar will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the
bottom of the CAF.
17. The distribution of the Letter of Offer and issue of Equity Shares and Rights Entitlements to persons in
certain jurisdictions outside India may be restricted by legal requirements in those jurisdictions. Persons
in such jurisdictions are instructed to disregard the Letter of Offer and not to attempt to subscribe for
Equity Shares.
Do‟s for non-ASBA Investors:
Check if you are eligible to apply i.e. you are an Eligible Equity Shareholder on the Record Date;
Read all the instructions carefully and ensure that the cheque/ draft option is selected in part A of the
CAF and necessary details are filled in;
In the event you hold Equity Shares in dematerialised form, ensure that the details about your Depository
Participant and beneficiary account are correct and the beneficiary account is activated as the Equity
Shares will be allotted in the dematerialized form only;
Ensure that your Indian address is available to us and the Registrar, in case you hold Equity Shares in
physical form or the depository participant, in case you hold Equity Shares in dematerialised form;
Ensure that the value of the cheque/ draft submitted by you is equal to the (number of Equity Shares
applied for) X (Issue Price of Equity Shares before submission of the CAF. Investors residing at places
other than cities where the branches of the Bankers to the Issue have been authorised by us for collecting
applications, will have to make payment by demand draft payable at Mumbai of an amount net of bank
and postal charges;
Ensure that you receive an acknowledgement from the collection branch of the Banker to the Issue for
your submission of the CAF in physical form;
Ensure that you mention your PAN allotted under the I.T. Act with the CAF, except for Applications on
behalf of the Central and State Governments, residents of the state of Sikkim and officials appointed by
the courts;
Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary
account is held with the Depository Participant. In case the CAF is submitted in joint names, ensure that
the beneficiary account is also held in same joint names and such names are in the same sequence in
which they appear in the CAF;
Ensure that the demographic details are updated, true and correct, in all respects.
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Don‟ts for non-ASBA Investors:
Do not apply if you are not eligible to participate in the Issue under the securities laws applicable to your
jurisdiction;
Do not apply on duplicate CAF after you have submitted a CAF to a collection branch of the Banker to
the Issue;
Do not pay the amount payable on application in cash, by money order or by postal order;
Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this
ground;
Do not submit Application accompanied with Stock invest;
Grounds for Technical Rejections for non-ASBA Investors.
Investors are advised to note that applications are liable to be rejected on technical grounds, including the
following:
Amount paid does not tally with the amount payable;
Bank account details (for refund) are not given and the same are not available with the DP (in the case of
dematerialized holdings) or the Registrar (in the case of physical holdings);
Age of Investor(s) not given (in case of Renouncees);
Except for CAFs on behalf of the Central or State Government, the residents of Sikkim and the officials
appointed by the courts, PAN number not given for application of any value;
In case of CAF under power of attorney or by limited companies, corporate, trust, relevant documents
are not submitted;
If the signature of the Eligible Equity Shareholders does not match with the one given on the CAF and
for Renouncee(s) if the signature does not match with the records available with their Depositories;
CAFs are not submitted by the Investors within the time prescribed as per the CAF and the Letter of
Offer;
CAFs not duly signed by the sole/ joint Investors;
CAFs/ SAFs by OCBs not accompanied by a copy of an RBI approval to apply in this Issue;
CAFs accompanied by Stockinvest/ outstation cheques/ post-dated cheques/ money order/ postal order/
outstation demand draft;
In case no corresponding record is available with the Depositories that matches three parameters,
namely, names of the Investors (including the order of names of joint holders), the Depositary
Participant‟s identity (DP ID) and the beneficiary‟s identity;
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CAFs that do not include the certifications set out in the CAF to the effect that the subscriber is not a
“U.S. Person” (as defined in Regulation S) and does not have a registered address (and is not otherwise
located) in the United States or other restricted jurisdictions and is authorized to acquire the Rights
Entitlements and Equity Shares in compliance with all applicable laws and regulations;
CAFs which have evidence of being executed in/ dispatched from restricted jurisdictions;
CAFs by ineligible non-residents (including on account of restriction or prohibition under applicable
local laws) and where the registered addressed in India has not been provided;
CAFs where we believe that CAF is incomplete or acceptance of such CAF may infringe applicable
legal or regulatory requirements;
In case the GIR number is submitted instead of the PAN;
Applications by persons not competent to contract under the Contract Act, 1872, as amended, except
bids by minors having valid demat accounts as per the demographic details provided by the
Depositaries.
Applications by Renouncees who are persons not competent to contract under the Indian Contract Act,
1872, including minors; and
Multiple CAFs, including cases where an Investor submits CAFs along with a plain paper application.
QIBs and other Eligible Equity Shareholders applying for Equity Shares in this Issue for value of more
than ` 2,00,000 who hold Equity Shares in dematerialised form, applying through the non-ASBA
process.
Eligible Equity Shareholders not being individuals or HUFs applying for Equity Shares in this Issue for
a value not exceeding ` 2,00,000, who hold Equity Shares in dematerialised form, applying through the
non-ASBA process.
The application by an Eligible Equity Shareholder whose cumulative value of Equity Shares applied for
is more than ` 2,00,000 but has applied separately through split CAFs of less than ` 2,00,000 and has
not done so through the ASBA process.
Please read the Letter of Offer or Abridged Letter of Offer and the instructions contained therein and in the CAF
carefully before filling in the CAF. The instructions contained in the CAF are an integral part of the Letter of
Offer and must be carefully followed. The CAF is liable to be rejected for any non-compliance of the provisions
contained in the Letter of Offer or the CAF.
Investment by FIIs
In accordance with the current regulations, the following restrictions are applicable for investment by FIIs:
No single FII can hold more that 10% of our post-Issue paid-up share capital. In respect of an FII investing in
the Equity Shares on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed
5% of our total paid-up share capital.
Applications will not be accepted from FIIs in restricted jurisdictions.
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Please note that Eligible Equity Shareholders being QIBs, Non-Institutional Investors and other Eligible
Equity Shareholders (whose application amount exceeds ` 2,00,000) can participate in the Issue only
through the ASBA process. Furthermore, Eligible Equity Shareholders not being individuals or HUFs are
mandatorily required to make use of ASBA, even if the application amount does not exceed ` 2,00,000.
Retail Individual Investors whose application amounts do not exceed ` 2,00,000 can participate in this
Issue either through the ASBA process or the non ASBA process.
Investment by NRIs
Investments by NRIs are governed by the Portfolio Investment Scheme under Regulation 5(3)(i) of the Foreign
Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000.
Applications will not be accepted from NRIs in restricted jurisdictions.
Please note that Eligible Equity Shareholders being QIBs, Non-Institutional Investors and other Eligible
Equity Shareholders (whose application amount exceeds ` 2,00,000) can participate in the Issue only
through the ASBA process. Furthermore, Eligible Equity Shareholders not being individuals or HUFs are
mandatorily required to make use of ASBA, even if the application amount does not exceed ` 2,00,000.
Retail Individual Investors whose application amounts do not exceed ` 2,00,000 can participate in this
Issue either through the ASBA process or the non ASBA process.
Procedure for Applications by Mutual Funds
A separate application can be made in respect of each scheme of an Indian mutual fund registered with the SEBI
and such applications shall not be treated as multiple applications. The applications made by asset management
companies or custodians of a mutual fund should clearly indicate the name of the concerned scheme for which
the application is being made.
Please note that Eligible Equity Shareholders being QIBs, Non-Institutional Investors and other Eligible
Equity Shareholders (whose application amount exceeds ` 2,00,000) can participate in the Issue only
through the ASBA process. Furthermore, Eligible Equity Shareholders not being individuals or HUFs are
mandatorily required to make use of ASBA, even if the application amount does not exceed ` 2,00,000.
Retail Individual Investors whose application amounts do not exceed ` 2,00,000 can participate in this
Issue either through the ASBA process or the non ASBA process.
Procedure for Applications by AIFs, FVCIs and VCFs
The SEBI (Venture Capital Funds) Regulations, 1996, as amended (“SEBI VCF Regulations”) and the SEBI
(Foreign Venture Capital Investor) Regulations, 2000, as amended (“SEBI FVCI Regulations”) prescribe,
amongst other things, the investment restrictions on VCFs and FVCIs registered with SEBI. Further, the SEBI
(Alternative Investments Funds) Regulations, 2012 (“SEBI AIF Regulations”) prescribe, amongst other things,
the investment restrictions on AIFs.
As per the SEBI VCF Regulations and SEBI FVCI Regulations, VCFs and FVCIs are not permitted to invest in
listed companies pursuant to rights issues. Accordingly, applications by VCFs or FVCIs will not be accepted in
this Issue.
Venture capital funds registered as category I AIFs, as defined in the SEBI AIF Regulations, are not permitted
to invest in listed companies pursuant to rights issues. Accordingly, applications by venture capital funds
registered as category I AIFs, as defined in the SEBI AIF Regulations, will not be accepted in this Issue. Other
categories of AIFs are permitted to apply in this Issue subject to compliance with the SEBI AIF Regulations.
Such AIFs having bank accounts with SCSBs that are providing ASBA in cities / centers where such AIFs
are located, are mandatorily required to make use of the ASBA facility. Otherwise, applications of such
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AIFs are liable for rejection.
Investment by QFIs
In terms of circulars dated January 13, 2012, SEBI and RBI have permitted investment by QFIs in Indian equity
issues, including in rights issues. A QFI can invest in the Issue through its depository participant with whom it
has opened a demat account. No single QFI can hold more than 5% of the paid up equity capital of our
Company at any point of time. Further, the aggregate shareholding of all QFIs shall not exceed 10% of the paid
up equity capital of the Company at any point of time.
Applications will not be accepted from QFIs in restricted jurisdictions.
QFI applicants (not being Retail Individual Investors) having bank accounts with SCSBs that are
providing ASBA in cities / centers where such Investors are located, are mandatorily required to make
use of the ASBA facility. Otherwise, applications of such Investors are liable for rejection. Furthermore,
Eligible Equity Shareholders not being individuals or HUFs are mandatorily required to make use of
ASBA, even if the application amount does not exceed ` 2,00,000.
Mode of payment for Resident Eligible Equity Shareholders / Investors
a. All cheques/ drafts accompanying the CAF should be drawn in favour of the Collecting Bank (specified on
the reverse of the CAF), crossed „A/c Payee only‟ and marked “Alok Industries – Rights Issue - R”;
Investors residing at places other than places where the bank collection centres have been opened by us for
collecting applications, are requested to send their CAFs together with Demand Draft for the full application
amount, net of bank and postal charges favouring the Bankers to the Issue, crossed „A/c Payee only‟ and marked
“Alok Industries – Rights Issue - R” payable at Mumbai directly to the Registrar to the Issue by registered /
speed post so as to reach them on or before the Issue Closing Date. Our Company or the Registrar to the Issue
will not be responsible for postal delays or loss of application in transit, if any, on this account and applications
received through mail after closure of the Issue are liable to be rejected.
Applications through mails should not be sent in any other manner except as mentioned above. The CAF along
with the application money must not be sent to our Company or the Lead Manager or the Registrar. Applicants
are requested to strictly adhere to these instructions.
Mode of payment for Non-Resident Eligible Equity Shareholders / Investors
As regards the application by non-resident Eligible Equity Shareholders / Investors, the following conditions
shall apply:
a. Individual non-resident Indian applicants who are permitted to subscribe for Equity Shares by applicable
local securities laws can also obtain application forms from the following address:
Link Intime India Private Limited
C-13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai – 400 078
Maharashtra, India
Tel: +91 22 2596 7878
Fax: +91 22 2596 0329
Investor Greivance E-mail: [email protected]
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E-mail: [email protected]
Website: www.linkintime.co.in
Contact Person: Mr. Pravin Kasare
SEBI Registration No.: INR000004058
Note: the Letter of Offer/ Abridged Letter of Offer and CAFs to NRIs shall be sent only to their Indian
address, if provided
b. Applications will not be accepted from non-resident from any jurisdiction where the offer or sale of the
Rights Entitlements and Equity Shares may be restricted by applicable securities laws.
c. All non-resident Investors should draw the cheques/ demand drafts in favour of “Alok Industries – Rights
Issue – NR”, crossed “A/c Payee only” for the full application amount, net of bank and postal charges and
which should be submitted along with the CAF to the Bankers to the Issue/ collection centres or to the
Registrar to the Issue.
d. Non-resident Investors applying from places other than places where the bank collection centres have been
opened by the Company for collecting applications, are requested to send their CAFs together with Demand
Draft for the full application amount, net of bank and postal charges drawn in favour of Bankers to the
Issue, crossed “A/c Payee only” and marked “Alok Industries – Rights Issue – NR” payable at Mumbai
directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing
Date. The Company or the Registrar to the Issue will not be responsible for postal delays or loss of
applications in transit, if any.
e. Payment by non-residents must be made by demand draft payable at Mumbai/ cheque payable drawn on a
bank account maintained at Mumbai or funds remitted from abroad in any of the following ways:
Application with repatriation benefits
1. By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from abroad
(submitted along with Foreign Inward Remittance Certificate);
2. By local cheque / bank drafts remitted through normal banking channels or out of funds held in Non-
Resident External Account (NRE) or FCNR Account maintained with banks authorized to deal in foreign
currency in India, along with documentary evidence in support of remittance;
3. By Rupee draft purchased by debit to NRE/ FCNR Account maintained elsewhere in India and payable in
Mumbai;
4. FIIs registered with SEBI must remit funds from special non-resident rupee deposit account; or
5. Non-resident Investors applying with repatriation benefits should draw cheques/ drafts in favour of „Alok
Industries – Rights Issue - NR‟ and must be crossed „account payee only‟ for the full application amount.
6. Investors may note that where payment is made by drafts purchased from NRE/ FCNR accounts as the case
may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been
issued by debiting the NRE/ FCNR account should be enclosed with the CAF. Otherwise the application
shall be considered incomplete and is liable to be rejected.
7. In the case of NRI Investors who remit their application money from funds held in FCNR/NRE Accounts,
refunds and other disbursements, if any, shall be credited to such account details of which should be
furnished in the appropriate columns in the CAF. In the case of NRI Investors who remit their application
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money through Indian Rupee drafts from abroad, refunds and other disbursements, if any, will be made in
U.S Dollars at the rate of exchange prevailing at such time subject to the permission of RBI. Our Company
will not be liable for any loss on account of exchange rate fluctuation for converting the Rupee amount
into U.S. Dollar or for collection charges charged by the Investor‟s bankers.
8. Payments through NRO accounts will not be permitted.
Investors may note that where payment is made by drafts purchased from NRE/ FCNR accounts as the case may
be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has been issued by
debiting the NRE/ FCNR account should be enclosed with the CAF. Otherwise the application shall be
considered incomplete and is liable to be rejected.
Application without repatriation benefits
(a) As far as non-residents holding Equity Shares on non-repatriation basis are concerned, in addition to the
modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary)
Account maintained in India or Rupee Draft purchased out of NRO Account maintained elsewhere in India
but payable at Mumbai. In such cases, the Allotment of Equity Shares will be on non-repatriation basis.
(b) All cheques/ drafts submitted by non-residents applying on a non-repatriation basis should be drawn in
favour of „Alok Industries – Rights Issue – R‟ and must be crossed „account payee only‟ for the full
application amount. The CAFs duly completed together with the amount payable on application must be
deposited with the Collecting Bank indicated on the reverse of the CAFs before the close of banking hours
on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.
(c) Investors may note that where payment is made by drafts purchased from NRE/ FCNR/ NRO accounts as
the case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft has
been issued by debiting the NRE/ FCNR/ NRO account should be enclosed with the CAF. Otherwise the
application shall be considered incomplete and is liable to be rejected.
(d) New demat account shall be opened for holders who have had a change in status from resident Indian to
NRI. Any application from a demat account which does not reflect the accurate status of the Applicant are
liable to be rejected.
Notes:
(a) In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the
investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to the
I.T. Act.
(b) In case Equity Shares are allotted on a non-repatriation basis, the dividend and sale proceeds of the Equity
Shares cannot be remitted outside India.
(c) The CAF duly completed together with the amount payable on application must be deposited with the
Collecting Bank indicated on the reverse of the CAFs before the close of banking hours on or before the
Issue Closing Date. A separate cheque or bank draft must accompany each CAF.
(d) In case of an application received from non-residents, Allotment, refunds and other distribution, if any, will
be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making
such Allotment, remittance and subject to necessary approvals.
Impersonation
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As a matter of abundant caution, attention of the Investors is specifically drawn to the provisions of sub-
section (1) of section 68A of the Companies Act which is reproduced below:
“Any person who makes in a fictitious name an application to a Company for acquiring, or subscribing for,
any shares therein, or otherwise induces a Company to Allot, or register any transfer of shares therein to
him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may
extend to five years”.
Payment by Stockinvest
In terms of RBI Circular DBOD No. FSC BC 42/ 24.47.00/ 2003-04 dated November 5, 2003, the Stockinvest
Scheme has been withdrawn. Hence, payment through Stockinvest would not be accepted in this Issue.
Disposal of application and application money
No acknowledgment will be issued for the application moneys received by us. However, the Bankers to the
Issue/ Registrar to the Issue/ Designated Branch of the SCSBs receiving the CAF will acknowledge its receipt
by stamping and returning the acknowledgment slip at the bottom of each CAF.
The Board reserves its full, unqualified and absolute right to accept or reject any application, in whole or in part,
and in either case without assigning any reason thereto.
In case an application is rejected in full, the whole of the application money received will be refunded.
Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money
due on Equity Shares allotted, will be refunded to the Investor within a period of 15 days from the Issue Closing
Date.
If there is a delay in the refund of subscription by more than eight days after our Company becomes liable to pay
the subscription amount, our Company and every Director of our Company who is an officer in default will be
liable to pay interest for the delayed period, as per the rates prescribed under Section 73 of the Companies Act.
For further instructions, please read the CAF carefully.
Utilisation of Gross Proceeds
The Board of Directors declares that:
(i) All monies received out of this Issue shall be transferred to a separate bank account referred to sub-section
(3) of Section 73 of the Companies Act;
(ii) Details of all monies utilized out of the Issue shall be disclosed under an appropriate separate head in our
balance sheet indicating the purpose for which such monies have been utilized till the time any of the Gross
Proceeds remained unutilised;
(iii) Details of all unutilized monies out of the Issue, if any, shall be disclosed under an appropriate separate
head in our balance sheet indicating the form in which such unutilized monies have been invested; and
(iv) Our Company may utilize the funds collected in the Issue only after finalisation of the Basis of Allotment.
Undertakings by us
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We undertake the following:
(1) The complaints received in respect of the Issue shall be attended to by us expeditiously and satisfactorily.
(2) All steps for completion of the necessary formalities for listing and commencement of trading at all Stock
Exchange where the Equity Shares are to be listed will be taken within seven working days of finalization
of basis of Allotment.
(3) The funds required for making refunds to unsuccessful applicants as per the modes disclosed shall be
made available to the Registrar to the Issue by us.
(4) We undertake that where refunds are made through electronic transfer of funds, a suitable communication
shall be sent to the Investor within 15 days of the Issue Closing Date, giving details of the banks where
refunds shall be credited along with amount and expected date of electronic credit of refund.
(5) Adequate arrangements shall be made to collect all ASBA applications and to consider them similar to
non-ASBA applications while finalising the basis of Allotment.
(6) The certificates of the securities/ refund orders to the non-resident Indians shall be dispatched within the
specified time.
(7) No further issue of securities affecting our equity capital shall be made till the securities issued/ offered
through the Letter of Offer Issue are listed or till the application money are refunded on account of non-
listing, under-subscription, etc.
(8) At any given time there shall be only one denomination of our Equity Shares.
(9) We accept full responsibility for the accuracy of information given in the Letter of Offer and confirm that
to the best of our knowledge and belief, there are no other facts, the omission of which make any
statement made in the Letter of Offer misleading and further confirm that we have made all reasonable
enquiries to ascertain such facts.
(10) All information shall be made available by the Lead Managers and the Issuer to the Investors at large and
no selective or additional information would be available for a section of the Investors in any manner
whatsoever including at road shows, presentations, in research or sales reports etc.
(11) We shall comply with such disclosure and accounting norms specified by SEBI from time to time.
Minimum Subscription
If our Company does not receive minimum subscription of 90% of the Issue, or the subscription level falls
below 90%, after the Issue Closing Date on account of cheques being returned unpaid or withdrawal of
applications, our Company shall refund the entire subscription amount received within 15 days from the Issue
Closing Date. If there is a delay in the refund of subscription by more than eight days after our Company
becomes liable to pay the subscription amount i.e. 15 days after the Issue Closing Date, our Company and every
Director of our Company who is an officer in default will be liable to pay interest for the delayed period, as per
the rates prescribed under Section 73 of the Companies Act.
Important
A. Please read the Letter of Offer carefully before taking any action. The instructions contained in the
accompanying CAF are an integral part of the conditions and must be carefully followed; otherwise the
application is liable to be rejected.
B. All enquiries in connection with the Letter of Offer or accompanying CAF and requests for SAFs must be
addressed (quoting the Registered Folio Number/ DP and Client ID number, the CAF number and the name
of the first Eligible Equity Shareholders as mentioned on the CAF and superscribed „Alok Industries -
Rights Issue‟ on the envelope and postmarked in India) to the Registrar to the Issue at the following
address:
Link Intime India Private Limited
109
C-13, Pannalal Silk Mills Compound
LBS Marg, Bhandup (West)
Mumbai – 400 078
Maharashtra, India
Tel: +91 22 2596 7878
Fax: +91 22 2596 0329
Investor Greivance E-mail: [email protected]
E-mail: [email protected]
Website: www.linkintime.co.in
Contact Person: Mr. Pravin Kasare
SEBI Registration No.: INR000004058
C. It is to be specifically noted that this Issue of Equity Shares is subject to the risk factors mentioned in the
section “Risk Factors” on page xvi.
The Issue will remain open for a minimum 15 days up to a maximum of 30 days.
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SECTION IX – STATUTORY AND OTHER INFORMATION
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION
The following contracts (not being contracts entered into in the ordinary course of business carried out by our
Company or entered into more than two years prior to the date of this Letter of Offer) which may or may be
deemed material have been entered or are to be entered into by our Company. These contracts together with the
documents referred in para (B) below may be inspected at the Corporate Office of the Company situated at
Peninsula Towers, “A” Wing, Peninsula Corporate Park, G. K. Marg, Lower Parel, Mumbai – 400 013,
Maharashtra, India from 10.00 AM to 3.00 PM from the date of the Letter of Offer until the date of closure of
the Issue.
A. Material Contracts
1) Engagement letter dated September 25, 2012 received from the Company appointing SBI Capital
Markets Limited, Centbank Financial Services Limited, Emkay Global Financial Services Limited,
Enam Securities Private Limited, Fortune Financial Services (India) Limited and IDBI Capital
Market Services Limited.
2) Issue agreement dated September 26, 2012 amongst the Company, SBI Capital Markets Limited,
Centbank Financial Services Limited, Emkay Global Financial Services Limited, Enam Securities
Private Limited, Fortune Financial Services (India) Limited, and IDBI Capital Market Services
Limited.
3) Memorandum of understanding dated September 26, 2012 between the Company and the Registrar
to the Issue.
4) Tripartite agreement amongst the Company, CDSL and the Registrar to the Issue dated August 19,
1999.
5) Tripartite agreement amongst the Company, NSDL and the Registrar to the Issue dated October 27,
1998.
B. Material Documents for Inspection
1. Certificate of Incorporation of our Company dated March 12, 1986 and subsequent fresh certificates
of incorporation consequent on change of name dated November 17, 1992, February 11, 1993 and
November 8, 2000.
2. Memorandum of Association and Articles of Association of our Company.
3. Resolution of the Board of Directors under section 81(1) of Companies Act dated September 25,
2012, authorising the Issue and related matters.
4. Shareholders‟ resolution passed at the AGM held on August 14, 2012, appointing M/s. Deloitte
Haskins & Sells, Chartered Accountants, as statutory auditors for FY 2013.
5. Copy of the resolution dated February 13, 2013 and the Executive Chairman‟s Agreement dated
March 10, 2013 reappointing the Executive Chairman of the Company for a term of five years.
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6. Copy of the resolution dated February 13, 2013 and the Managing Director‟s Agreement dated
March 10, 2013 reappointing the Managing Director of the Company for a term of five years.
7. Copy of the resolution dated February 13, 2013 and the Joint Managing Director‟s Agreement dated
March 10, 2013 reappointing the Joint Managing Director of the Company for a term of five years.
8. Copy of the resolutions dated April 29, 2004, April 25, 2005 and September 25, 2007 and the
Executive Director‟s Agreement dated May 1, 2009 appointing Mr. Chandrakumar Bubna as the
Executive Director of the Company.
9. Copy of the resolutions dated November 10, 2012 and the Executive Director‟s Agreement dated
November 10, 2012 appointing Mr. Sunil O. Khandelwal as the Executive Director of the
Company.
10. Copy of the resolutions dated November 10, 2012 and the Executive Director‟s Agreement dated
November 10, 2012 appointing Mr. K.H. Gopal as the Executive Director of the Company.
11. Consents of the Directors, Auditors, Lead Managers, Legal Advisors to the Issue, Company
Secretary and Compliance Officer, Bankers to the Issue, Bankers to the Company, Monitoring
Agency, Registrar and M/s. Narendra Poddar & Co., Chartered Accountants, to include their names
in this Letter of Offer and to act in their respective capacities.
12. Appointment of Company Secretary, Compliance Officer & Executive Director for the Issue and
consent thereto.
13. Statement of tax benefits dated February 7, 2013 received from M/s. Narendra Poddar & Co.,
Chartered Accountants, regarding the special tax benefits available to the Equity Shareholders.
14. Annual reports of the Company for the last five years ended March 31, 2008, March 31, 2009,
March 31, 2010, March 31, 2011 and March 31, 2012.
15. Auditors‟ report on the standalone financial statements dated May 18, 2012 by M/s. Deloitte
Haskins & Sells and M/s. Gandhi & Parekh, Chartered Accountants, our statutory auditors for the
financial year ended March 31, 2012.
16. Auditors‟ report on the consolidated financial statements dated May 18, 2012 by M/s. Deloitte
Haskins & Sells and M/s. Gandhi & Parekh, Chartered Accountants, our statutory auditors for the
financial year ended March 31, 2013.
17. Standalone and consolidated limited review financial statements as at and for the period ended
September 30, 2012 by M/s. Deloitte Haskins & Sells, Chartered Accountants, our statutory
auditors dated December 31, 2012.
18. Standalone limited review financial statements as at and for the period ended December 31, 2012
by M/s. Deloitte Haskins & Sells, Chartered Accountants, our statutory auditors dated February 13,
2013.
19. Certificate dated February 8, 2013 from the Statutory Auditor on the compliances with the
applicable accounting standards.
20. Certificate dated September 26, 2012 from the Company as regards compliance with conditions
enumerated in Para 1 of Part E under Schedule VIII of the SEBI ICDR Regulations.
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21. Due Diligence certificate dated September 26, 2012 by SBI Capital Markets Limited, Centbank
Financial Services Limited, Emkay Global Financial Services Limited, Axis Capital, Fortune
Financial Services (India) Limited, and IDBI Capital Market Services Limited.
22. Letter of offer dated March 19, 2009 for the Company‟s last rights issue.
23. In-principle listing approvals for the Issue dated November 2, 2012 and October 23, 2012 from the
BSE and NSE, respectively.
24. Observation letter no. CFD/DIL/ISSUES/HB/EK/1425/2013 dated January 16, 2013 received from
SEBI.
25. In – seriatim Reply dated February 11, 2013 filed by the Lead Managers with SEBI and the SEBI
letter no. CFD/DIL/ISSUES/HB/EK/5325/2013 dated March 1, 2013.
26. Letter dated March 12, 2013 filed by Lead Managers with SEBI and letter no.
CFD/DIL/ISSUES/HB/EK/6815/2013 from SEBI dated March 20, 2013.
27. Application dated February 4, 2013 from the Company to RBI for renunciation of rights entitlement
by and to persons resident outside India and RBI‟s response vide letter no.
FED.CO.FID.No.18856/10/21/296/2012-13 dated March 15, 2013.
Any of the contracts or documents mentioned in this Letter of Offer may be amended or modified at
any time if so required in the interest of our Company or if required by the other parties, without
reference to the Equity Shareholders, subject to compliance with applicable law.
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