C M Y K

C M Y K

KOKUYO CAMLIN LIMITEDKokuyo Camlin Limited (the “Company”) was incorporated in India on December 24, 1946 as “Camlin Private Limited” under the Indian Companies Act, VII of 1913, with registration number 5434 (CIN L24223MH1946PLC005434). The name of the Company was changed to “Camlin Limited” and a certificate of change of name was issued on March 24, 1988. The name of the Company was changed to “Kokuyo Camlin Limited” pursuant to which a fresh certificate of incorporation was issued on January 25, 2012. For further details of our change of name, please see chapter titled “History and Other Corporate Matters” on page 98 of this Letter of Offer.

Registered Office and Corporate Office: 48/2, Hilton House, Central Road, MIDC, Andheri (E), Mumbai-400 093Tel: +91 22 6655 7000, Fax: +91 22 2836 6579

Contact Person: Ravindra Damle, Company Secretary and Compliance OfficerE-mail: investorrelations@kokuyocamlin.com, Website: www.kokuyocamlin.com

OUR PROMOTERS : Kokuyo S&T Co. Ltd., Dilip D. Dandekar and Shriram S. Dandekar FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF THECOMPANY ONLY

ISSUE OF 33,319,505 EQUITY SHARES WITH A FACE VALUE OF ` 1 EACH FOR CASH AT A PRICE OF ` 33 PER EQUITY SHARE INCLUDING A PREMIUM OF ` 32 PER EQUITY SHARE (“RIGHTS ISSUE EQUITY SHARES”) FOR AN AMOUNT AGGREGATING ` 1,099.54 MILLION ON A RIGHTS BASIS TO THE EXISTING EQUITY SHAREHOLDERS OF KOKUYO CAMLIN LIMITED (THE “COMPANY” OR THE “ISSUER”) IN THE RATIO OF 14 EQUITY SHARES FOR EVERY 29 FULLY PAID-UP EQUITY SHARES HELD BY THE EXISTING EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT IS ON AUGUST 2, 2013 (THE “ISSUE”). THE ISSUE PRICE OF EACH RIGHTS ISSUE EQUITY SHARE IS 33 TIMES THE FACE VALUE OF THE RIGHT ISSUE EQUITY SHARE. FOR FURTHER DETAILS, PLEASE SEE CHAPTER TITLED “TERMS OF THE ISSUE” ON PAGE 311 OF THIS LETTER OF OFFER.

GENERAL RISKSInvestment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this 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 this Issue. For taking an investment decision, Investors must rely on their own examination of the Company and the Issue including the risks involved. The Equity Shares being offered in the Issue have not been recommended or approved by Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this Letter of Offer. Investors are advised to see chapter titled “Risk Factors” on page 10 of this Letter of Offer before making an investment in the Issue.

COMPANY’S ABSOLUTE RESPONSIBILITYOur Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Letter of Offer contains all information with regard to our Company 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 of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTINGThe existing Equity Shares are listed on the BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”) (together the “Stock Exchanges”). We have received “in-principle” approval from the BSE and the NSE for listing the Rights Issue Equity Shares arising from the Issue vide letters dated April 30, 2013 and April 10, 2013 respectively. For the purposes of the Issue, the designated stock exchange is NSE.

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE

Kotak Mahindra Capital Company Limited1st Floor, Bakhtawar 229, Nariman PointMumbai – 400 021Tel: +91 22 6634 1100Fax: +91 22 22840492Website: www.investmentbank.kotak.comE-mail: kokuyocamlin.rights@kotak.comInvestor Grievance E-mail: kmccredressal@kotak.comContact Person: Ganesh Rane SEBI Registration No.: INM000008704

Sharepro Services (India) Private Limited 13 AB, Samhita Warehousing Complex2nd Floor, Sakinaka Telephone Exchange Lane, Off Andheri-Kurla Road, Sakinaka, Andheri (E), Mumbai – 400 072Tel: +91 22 61915400 Fax: +91 22 61915444Website: www.shareproservices.com E-mail: camlin.rights@shareproservices.comContact Person: Prakash A. Khare / Anand MoolyaSEBI Registration No.: INR000001476

ISSUE PROGRAMMEISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT

APPLICATION FORMSISSUE CLOSES ON

AUGUST 12, 2013 AUGUST 20, 2013 AUGUST 27, 2013

Letter of OfferJuly 26, 2013

For Equity Shareholders of our Company only

TABLE OF CONTENTS

SECTION I – GENERAL .................................................................................................................................. 1 DEFINITIONS AND ABBREVIATIONS ..................................................................................................................... 1 NOTICE TO OVERSEAS SHAREHOLDERS ............................................................................................................ 6 PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA ........................................ 7 FORWARD LOOKING STATEMENTS ..................................................................................................................... 9

SECTION II - RISK FACTORS ..................................................................................................................... 10

SECTION III – INTRODUCTION ................................................................................................................ 30 SUMMARY OF INDUSTRY ....................................................................................................................................... 30 SUMMARY OF BUSINESS ......................................................................................................................................... 32 SUMMARY FINANCIAL INFORMATION .............................................................................................................. 35 THE ISSUE .................................................................................................................................................................... 44 GENERAL INFORMATION ...................................................................................................................................... 45 CAPITAL STRUCTURE ............................................................................................................................................. 50

SECTION IV – PARTICULARS OF THE ISSUE ........................................................................................ 66 OBJECTS OF THE ISSUE ........................................................................................................................................... 66 BASIS OF ISSUE PRICE ............................................................................................................................................. 72 STATEMENT OF TAX BENEFITS ............................................................................................................................ 75

SECTION V – ABOUT US .............................................................................................................................. 77 INDUSTRY OVERVIEW ............................................................................................................................................ 77 OUR BUSINESS ............................................................................................................................................................ 81 KEY INDUSTRY REGULATIONS ............................................................................................................................ 93 HISTORY AND OTHER CORPORATE MATTERS ............................................................................................... 98 SUBSIDIARIES .......................................................................................................................................................... 109 MANAGEMENT ........................................................................................................................................................ 111 OUR PROMOTER, PROMOTER GROUP AND GROUP COMPANIES............................................................ 126 DIVIDEND POLICY .................................................................................................................................................. 146

SECTION VI – FINANCIAL INFORMATION.......................................................................................... 147 FINANCIAL STATEMENTS .................................................................................................................................... 147 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ...................................................................................................................................................... 256 MARKET PRICE INFORMATION ......................................................................................................................... 270 FINANCIAL INDEBTEDNESS ................................................................................................................................ 272

SECTION VII – LEGAL AND OTHER INFORMATION ........................................................................ 276 OUTSTANDING LITIGATION AND DEFAULTS ................................................................................................ 276 GOVERNMENT AND OTHER APPROVALS ....................................................................................................... 294 OTHER REGULATORY AND STATUTORY DISCLOSURES ........................................................................... 300

SECTION VIII – OFFERING INFORMATION ........................................................................................ 311 TERMS OF THE ISSUE............................................................................................................................................. 311 TERMS OF THE ARTICLES OF ASSOCIATION ................................................................................................. 343 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ................................................................ 402

DECLARATION............................................................................................................................................ 404

1

SECTION I – GENERAL

DEFINITIONS AND ABBREVIATIONS In this Letter of Offer, unless the context otherwise requires, the terms defined and abbreviations expanded herein below shall have the same meaning as stated in this chapter. In this Letter of Offer, unless otherwise indicated or the context otherwise requires, all references to “Kokuyo Camlin Limited”, “KCL”, the “Company”, are references to Kokuyo Camlin Limited. References to “we”, “us” and “our” are references to Kokuyo Camlin Limited along with its Subsidiaries on a consolidated basis. References to “you” are to the prospective investors in the Issue. Conventional / General Terms

Term Description AIF A fund in terms of section 2(1)(b) of the Securities and Exchange Board of India

(Alternative Investment Funds) Regulations, 2012 Act/ Companies Act The Companies Act, 1956 and amendments thereto Depositories Act The Depositories Act, 1996 and amendments thereto Depository A depository registered with SEBI under the SEBI (Depositories and Participant)

Regulations, 1996 Depository Participant/ DP

A depository participant as defined under the Depositories Act

IT Act The Income Tax Act, 1961 and amendments thereto Mutual Fund/ MF A mutual fund registered with SEBI under the SEBI (Mutual Funds) Regulations,

1996 SEBI Act Securities and Exchange Board of India Act, 1992 and amendments thereto SEBI ICDR Regulations The SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 and

amendments thereto Takeover Code The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 Takeover Regulations The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 Issue related terms

Term Description Abridged Letter of Offer The abridged letter of offer to be sent to the Eligible Equity Shareholders with

respect to this Issue in accordance with SEBI ICDR Regulations Allot/ Allotted/ Allotment

Unless the context requires, the allotment of Rights Issue Equity Shares pursuant to the Issue

Allottees Persons to whom Rights Issue Equity Shares are issued pursuant to the Issue Application

Unless the context otherwise requires, refers to an application for Allotment of Rights Issue Equity Shares in this 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 their specified bank account

ASBA Account Account maintained by an ASBA Investor with a SCSB which will be blocked by such SCSB to the extent of the appropriate amount in relation to an application by an ASBA Investor

ASBA Investor Equity Shareholders proposing to subscribe to the Issue through ASBA process and: a. 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;

b. Who have not renounced their Rights Entitlements in full or in part; c. Who are not Renouncees; and d. Who are applying through blocking of funds in a bank account maintained with

SCSBs

2

Term Description All (i) QIBs, (ii) Non-Insitutional Investors, and (iii) other investors whose application value exceeds ` 200,000, complying with the above conditions, must mandatorily invest through the ASBA process

Banker to the Issue Kotak Mahindra Bank Limited Composite Application Form / CAF

The form used by an Investor to make an application for the Allotment of Rights Issue Equity Shares in the Issue

Consolidated Certificate In case of holding of Equity Shares in physical form, the certificate that we would issue for the Rights Issue Equity Shares Allotted to one folio

Controlling Branches/ Controlling Branches of the SCSBs

Such branches of the SCSBs which coordinate with the Lead Manager, 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 and/or such other website(s) as may be prescribed by the SEBI / Stock Exchange(s) from time to time

Designated Stock Exchange

National Stock Exchange of India Limited

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 and/or such other website(s) as may be prescribed by the SEBI / Stock Exchange(s) from time to time

Draft Letter of Offer The Draft Letter of Offer dated March 26, 2013 filed with SEBI and which does not contain complete particulars of the Issue Price and the Issue Size in terms of the number of Rights Issue Equity Shares proposed to be offered in this Issue

Equity Share(s) Equity shares of our Company having a face value of `1 each unless otherwise specified in the context thereof

Eligible Equity Shareholder / Shareholder

Means a holder of Equity Shares as on the Record Date

Group Companies Includes those companies, firms and ventures that are promoted by our Promoters, irrespective of whether these entities are covered under Section 370(1)(B) of the Companies Act

Investor(s) Eligible Equity Shareholders as on the Record Date and/or Renouncees applying in the Issue

Issue/ Rights Issue Issue of 33,319,505 Equity Shares with a face value of ` 1 each for cash at a price of ` 33 per Equity Share including a premium of ` 32 per Equity Share for an amount aggregating ` 1,099.54 million on a rights basis to the Eligible Equity Shareholders in the ratio of 14 Equity Share(s) for every 29 fully paid-up Equity Share(s) held by the existing Equity Shareholders on the Record Date. The issue price is 33 times the face value of the Equity Shares. The Issue includes a right exercisable by the Eligible Equity Shareholders to renounce the Rights Issue Equity Shares offered to them, either in full or in part, in favour of any other person or persons

Issue Closing Date August 27, 2013 Issue Opening Date August 12, 2013 Issue Price ` 33 per Rights Issue Equity Share Issue Proceeds The proceeds of the Issue that are available to us Issue Size The issue of 33,319,505 Equity Shares aggregating ` 1,099.54 million Kokuyo S&T Co. Ltd. Kokuyo S&T Lead Manager Kotak Mahindra Capital Company Limited Letter of Offer The final letter of offer to be filed with the Stock Exchanges after incorporating the

observations received from the SEBI on this Draft Letter of Offer Listing Agreement The listing agreement entered into between the Company and the Stock Exchanges Net Proceeds The Issue Proceeds less the Issue related expenses. For further details, please see

chapter titled “Objects of the Issue” on page 66 of this Letter of Offer Non-Institutional Investors

All Investors, whether resident in India or otherwise, including sub-accounts of FIIs registered with SEBI, which are foreign corporate or foreign individuals, that are not QIBs or Retail Individual Investors and who have applied for Rights Issue

3

Term Description Equity Shares for a cumulative amount of more than ` 200,000

Promoters Our Promoters, being Kokuyo S&T, Dilip D. Dandekar and Shriram S. Dandekar Promoter Group Such persons and entities constituting our promoter group pursuant to Regulation

2(1)(zb) of the SEBI ICDR Regulations. Please see chapter titled “Our Promoter, Promoter Group and Group Companies” on page 129 of this Letter of Offer

Qualified Foreign Investors / QFIs

QFI shall mean a person who fulfills the following criteria: i. Resident in a country that is a member of Financial Action Task Force (“FATF”)

or a member of a group which is a member of FATF; and ii. Resident in a country that is a signatory of the International Organization of

Securities Commission’s Multilateral Memorandum of Understanding or a signatory of a bilateral Memorandum of Understanding with SEBI.

Provided that the person is not resident in a country listed in the public statements issued by FATF from time to time on (i) jurisdictions having a strategic Anti-Money Laundering/ Combating the Financing of Terrorism (“AML/CFT”) deficiencies to which counter measures apply, (ii) jurisdictions that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies; Provided further such person is not resident in India; Provided further that such person is not registered with SEBI as Foreign Institutional Investor or Sub-account or Foreign Venture Capital Investor

QIBs or Qualified Institutional Buyers

Public financial institutions as specified in section 4A of the Companies Act, scheduled commercial banks, mutual fund registered with SEBI, FIIs and sub-account registered with SEBI, other than a sub-account which is a foreign corporate or foreign individual, multilateral and bilateral development financial institution, AIF registered with SEBI, foreign venture capital investor registered with SEBI, state industrial development corporation, insurance company registered with the Insurance Regulatory Development Authority, provident fund with minimum corpus of ` 250 million, pension fund with minimum corpus of ` 250 million, National Investment Fund set up by the Government of India and insurance funds set up and managed by the army, navy or air force of the Union of India and insurance funds set up and managed by the Department of Posts, India

Record Date August 2, 2013 Refund Bank Kotak Mahindra Bank Limited Refund through electronic transfer of funds

Refunds through NECS, Direct Credit, NEFT or ASBA process, as applicable

Registrar of Companies/ RoC

The Registrar of Companies, Mumbai

Registrar to the Issue / Registrar and Transfer Agent

Sharepro Services (India) Private Limited

Renouncees Any persons who has / have acquired Rights Entitlements from the Eligible Equity Shareholders

Retail Individual Investors

Individual Investors who have applied for Equity Shares for an amount not more than ` 200,000 (including HUFs applying through their Karta)

Rights Entitlement The number of Equity Shares that an Eligible Equity Shareholder is entitled to in proportion to the number of Equity Shares held by the Eligible Equity Shareholder on the Record Date

Rights Issue Equity Share(s)

The Equity Share(s) offered in this Issue

SAF(s) Split Application Form(s) SCSB(s) A Self Certified Syndicate Bank, 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

4

Term Description and/or such other website(s) as may be prescribed by the SEBI / Stock Exchange(s) from time to time

Share Certificate The certificate in respect of the Rights Issue Equity Shares allotted to a folio Stock Exchanges BSE and NSE, where the Equity Shares are presently listed and traded Company related and industry related terms

Term Description Articles/ Articles of Association

The articles of association of our Company, as amended

Auditor M/s. B. K. Khare & Co., Chartered Accountants, our statutory auditor Board/ Board of Directors

Board of Directors of our Company including any committees thereof

Exiting Promoters Rajani Subhash Dandekar, Ashish Subhash Dandekar, Leena Ashish Dandekar, Subhash Digambar Dandekar (HUF), Dilip and Subhash Dandekar (HUF), DDI Consultants Private Limited, Shriram Sharad Dandekar, (HUF), Shubhada Shriram Dandekar, Jahnavi Shriram Dandekar, Madhav Govind Dandekar, Saroj Madhav Dandekar, Rajiv Madhav Dandekar, Kalpana Rajiv Dandekar, Chinmaya Rajiv Dandekar, Neeraj Rajiv Dandekar, Deepak Madhav Dandekar, Sangeeta Deepak Dandekar, Adwait D. Dandekar, Siddharth D. Dandekar, Camellia Management Services LLP, Anjali Dilip Phadke, Camlink Consultants Private Limited and Deepak Madhav Dandekar (HUF)

ESOS 2008 / ESOS Employee Stock Option Scheme 2008 for our employees as approved by the shareholders in the annual general meeting held on July 3, 2008

Financial Year/ Fiscal/ Fiscal Year/ FY

Any period of twelve months ended March 31 of that particular year, unless otherwise stated

Joint Venture Agreement / JVA

Joint Venture Agreement dated May 30, 2011 between the Company, Kokuyo S&T, Non Selling Promoters, Selling Promoters and Exiting Promoters. For further details, please see chapter titled “History and Other Corporate Matters” on page 105 of this Letter of Offer

Memorandum/ Memorandum of Association

The memorandum of association of our Company, as amended

Non Selling Promoters Dilip D. Dandekar, Cafco Consultants Limited, Dandekar Developers LLP, Dandekar Investments & Consultants Private Limited, Anagha Subhash Dandekar and Ketki Amit Sawant

Registered Office/ Corporate Office

Our registered and corporate office, located at 48/2, Hilton House, Central Road, MIDC, Andheri (E), Mumbai 400 093

Selling Promoters Subhash Digambar Dandekar, Aditi Dilip Dandekar, Rahul Dilip Dandekar, Shriram Sharad Dandekar, Nikhil Shriram Dandekar, Neelima V. Divekar, Aparna U. Kanitkar, Kanchan D. Gokhale and Camart Industries Limited

Share Subscription Agreement/ SSA

Share subscription agreement dated May 30, 2011 between the Company, our Promoters and the Exiting Promoters. For further details, please see chapter titled “History and Other Corporate Matters” on page 105 of this Letter of Offer

Subsidiaries Camlin Alphakids Limited and Camlin International Limited

Abbreviations

Term Description AGM Annual General Meeting AS Accounting Standards issued by the Institute of Chartered Accountants of India BSE BSE Limited CDSL Central Depository Services (India) Limited DIN Director Identification Number DP ID Depository Participant Identity EGM Extraordinary General Meeting EPS Earnings Per Share FDI Foreign Direct Investment

5

Term Description FEMA Foreign Exchange Management Act, 1999, including the regulations framed

thereunder FII(s) Foreign Institutional Investors defined under the SEBI (Foreign Institutional

Investors) Regulations, 1995 registered with SEBI under applicable laws. FIPB Foreign Investment Promotion Board Financial Year/ Fiscal/ FY

Period of 12 months ended March 31 of that particular year

FVCI Foreign Venture Capital Investors as defined under the Securities and Exchange Board of India (Foreign Venture Capital Investors) Regulations, 2000 registered with SEBI under applicable laws in India

GOI Government of India HUF Hindu Undivided Family ICAI Institute of Chartered Accountants of India IFRS International Financial Reporting Standards IFSC Indian Financial System Code Indian GAAP Generally accepted accounting principles followed in India ISIN International Securities Identification Number IT Information Technology JV Joint Venture MICR Magnetic Ink Character Recognition MIDC Maharashtra Industrial Development Corporation (A Government of Maharashtra

Undertaking) NAV Net Asset Value NECS National Electronic Clearing Services NEFT National Electronic Funds Transfer NR Non Resident NRI(s) Non Resident Indian(s) NRE Non Resident External Account NRO Non Resident Ordinary Account NSDL National Securities Depository Limited NSE National Stock Exchange of India Limited OCB Overseas Corporate Body p.a. Per Annum PAN Permanent Account Number PAT Profit After Tax RBI Reserve Bank of India Regulation S Regulation S of the Securities Act RoC Registrar of Companies, Mumbai Rs./`/Rupees/INR Indian Rupees RTGS Real Time Gross Settlement SEBI Securities and Exchange Board of India Securities Act U.S. Securities Act of 1933, as amended SKUs Stock Keeping Units U.S. / US / USA Unites States of America

The words and expressions used but not defined herein shall have the same meaning as is assigned to such terms under the Companies Act, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the rules and regulations made thereunder.

Notwithstanding the foregoing, terms in chapters titled “Terms of the Articles of Association”, “Statement of Tax Benefits”, “Key Industry Regulations” and “Financial Statements” on pages 343, 75, 93 and 147 respectively of this Letter of Offer, shall have the meanings given to such terms in these respective chapters.

6

NOTICE TO OVERSEAS SHAREHOLDERS

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 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 Equity Shareholders and will dispatch this Letter of Offer / Abridged Letter of Offer and CAFs to such shareholders who have provided an Indian address. Those overseas shareholders who do not update our records with their Indian address or the address of their duly authorized representative in India, prior to the date on which we propose to dispatch this Letter of Offer / Abridged Letter of Offer and CAFs, shall not be sent this Letter of Offer / Abridged Letter of Offer and CAFs. 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 this Letter of Offer has been filed with SEBI. 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, 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 rights or Equity Shares referred to in this Letter of Offer. Envelopes containing a CAF should not be dispatched from any jurisdiction where it would be illegal to make an offer, and all persons subscribing for the Equity Shares in this Issue must provide an Indian address. Any person who makes an application to acquire rights and the Equity Shares offered in this Issue will be deemed to have declared, represented, warranted and agreed that he is authorised to acquire the rights and the Equity Shares in compliance with all applicable laws and regulations prevailing in his jurisdiction. We, the Registrar, the Lead Manager or any other person acting on behalf of us reserve the right to treat any CAF as invalid 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. 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 the date of this Letter of Offer. The contents of this Letter of Offer should not be construed as legal, tax or investment advice. Prospective investors may be subject to adverse foreign, state or local tax or legal consequences as a result of the offer of Equity Shares. As a result, each investor should consult its own counsel, business advisor and tax advisor as to the legal, business, tax and related matters concerning the offer of Equity Shares. In addition, neither our Company nor the Lead Manager is making any representation to any offeree or purchaser of the Equity Shares regarding the legality of an investment in the Equity Shares by such offeree or purchaser under any applicable laws or regulations.

7

PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA Unless stated otherwise, the financial data in this Letter of Offer is derived from the Restated Consolidated Financial Information of our Company which has been prepared in accordance with Indian GAAP and the Companies Act and restated in accordance with the SEBI ICDR Regulations for the Fiscal 2013, 2012, 2011, 2010 and 2009 are included in this Letter of Offer. Our financial year commences on April 1 and ends on March 31. In compliance with the listing agreement, we have filed the limited review financial results for the quarter ended June 30, 2013 with the Stock Exchanges. The financial results as of and for the quarter ended June 30, 2013 as filed with the Stock Exchanges have been reproduced in this Letter of Offer. This Letter of Offer also includes the Restated Standalone Financial Information of our Company which has been prepared in accordance with Indian GAAP and the Companies Act and restated in accordance with the SEBI ICDR Regulations for the Fiscal 2013, 2012, 2011, 2010 and 2009. 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. All references in this Letter of Offer to “Rupees”, “`”, “Indian Rupees” and “Rs.” 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. All references to “Yen”, “¥” or “JPY” are to the Japanese Yen, the official currency of Japan. Please note: � One million is equal to 1,000,000/10 Lacs � One billion is equal to 1,000 million � One Lacs / Lacs is equal to 100 thousand � One crore is equal to 10 million/100 Lacs

Unless stated otherwise, industry data used throughout this Letter of Offer has been obtained from industry publications. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe that industry data used in this Letter of Offer is reliable, it has not been independently verified. Exchange Rates 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 tables sets forth, for the periods indicated, information with respect to the exchange rate between the Rupee, the U.S. Dollar and Japanese Yen 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 and Japanese Yen or could have been or could be converted into U.S. Dollars and Japanese Yen at the rates indicated, at any other rates or at all. 1 USD – INR Period End Average#* High* Low* Financial Year: 2013 54.39***** 54.45 57.22 50.56 2012 51.16** 47.95 54.24 43.95 2011 44.65 45.58 47.57 44.03 Quarter Ended: June 30, 2013 59.70****** 55.95 60.59 53.74 March 31, 2013 54.39***** 54.17 55.33 52.97 December 31, 2012 54.78 54.14 55.70 51.62 September 30, 2012 52.70*** 55.24 56.38 52.70

8

Period End Average#* High* Low* June 30, 2012 56.31**** 54.22 57.22 50.56 # Average official rate for each working day of the relevant period * Note: High, low and average are based on the RBI reference rate ** Data as on March 30, 2012 *** Data as on September 28, 2012 **** Data as on June 29, 2012 ***** Data as on March 28, 2013 ****** Data as on June 28, 2013 Source: www.rbi.org.in 100 JPY Yen – INR Period End Average#* High* Low* Financial Year: 2013 57.76***** 65.97 72.12 56.36 2012 62.43** 60.81 69.49 51.75 2011 54.02 53.30 57.14 46.93 2010 48.44 51.12 54.38 48.12 Quarter Ended: June 30, 2013 60.49****** 56.70 62.08 53.50 March 31, 2013 57.76***** 58.93 63.33 56.36 December 31, 2012 63.66 66.69 69.13 63.46 September 30, 2012 68.00*** 70.30 72.12 68.00 June 30, 2012 70.90**** 67.80 71.93 61.63 # Average official rate for each working day of the relevant period * Note: High, low and average are based on the RBI reference rate ** Data as on March 30, 2012 *** Data as on September 28, 2012 **** Data as on June 29, 2012 ***** Data as on March 28, 2013 ****** Data as on June 28, 2013 Source: www.rbi.org.in

9

FORWARD LOOKING STATEMENTS Certain statements in this Letter of Offer which contain words or phrases such as “will”, “may”, “aim”, “is likely to result”, “believe”, “expect”, “continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “pursue” and similar expressions or variations of such expressions, that are “forward looking statements”. All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from plans, objectives, estimates, intentions and expectations expressed in such forward looking statements include, but are not limited to: � Disruptions in our manufacturing facilities; � Disruption in raw material supply and prices; � Growth of unorganized sector and threat from national/regional players; � Increase in cost of power or other fuel; � Competition from existing and new players; � Seasonality of the nature of our business; � Working capital arrangements; � Changes in laws and regulations relating to the industry in which we operate; � Loss or shutdown of our operations at any time due to strike or labour unrest or any other reason; � Our ability to successfully implement our strategy, growth and expansion plans; � Increase in the interest rates with respect to our borrowings; � Any adverse outcome in the material legal proceedings in which we are involved; � Changes in government policies and regulatory actions that apply to or affect our business; � Contingent liabilities, environmental problems and uninsured losses; � Financial instability in Indian financial markets; � Developments affecting the Indian economy; and � Uncertainty in global financial markets.

For a further discussion of factors that could cause the actual results to differ, please see chapter titled “Risk Factors” on page 10 of this Letter of Offer. 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 Manager make any representation, warranty or prediction that the result anticipated by such forward looking statement will be achieved, and such forward looking statements represent, in each case, only one of the many possible scenarios and should not be viewed as the most likely or standard scenario. Neither we nor the Lead Manager nor any of its 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 and Stock Exchanges’ requirements, we and Lead Manager shall ensure that investors in India are informed of material developments until the time of the grant of listing and trading permission by the Stock Exchanges.

10

SECTION II - RISK FACTORS

RISK FACTORS An investment in equity and equity related securities involves a high degree of risk and you should not invest any funds in this issue unless you can afford to take the risk of losing your 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 the Equity Shares. 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. To obtain a complete understanding, you should read this chapter in conjunction with chapters titled “Our Business”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and chapter titled “Financial Information” on page 81, 256 and 147 respectively of this Letter of Offer. For taking an investment decision, investors must rely on their own examination of the Issuer and the Issue including the risks involved. Additionally, our business operations could also be affected by additional factors that are not presently known to us or that we currently consider as immaterial to our operations. RISKS ASSOCIATED WITH OUR BUSINESS 1. The Company is involved in certain legal and regulatory proceedings that, if determined against us,

could have a material adverse impact on our business, financial condition and results of operations. The Company is involved in disputes with various parties arising from their operations from time to time. The legal proceedings are pending at different levels of adjudication before various courts and tribunals. Should any new developments arise, such as a change in law or rulings against the Company, by appellate courts or tribunals, the Company may need to make provisions in its financial statements, which could adversely impact its business results.

Furthermore, if significant claims are determined against the Company and it is required to pay all or a portion of the disputed amounts, there could be a material adverse effect on the Company’s business and profitability. The summary details of litigation against the Company are given below: Litigations against the Company: S No. Nature of litigation Number of outstanding

litigations Aggregate approximate amount

involved (` in million) 1. Civil Suits 4 0.11 2. Tax Litigations 37 24.93 3. Labour Litigations 3 1.31 4. Notices 4 0.18

Total 48 26.53 For further details regarding outstanding litigations involving our Company, please see chapter titled “Outstanding Litigation and Defaults” on page 276 of this Letter of Offer. 2. Some of our Directors, Promoter(s) and Group Companies are involved in certain legal and regulatory

proceedings. An adverse outcome of these proceedings could have a negative impact on our reputation and thereby on our business, financial conditions and results of operations.

Some of our Directors, Promoter(s), and Group Companies are currently involved in certain legal and regulatory proceedings. These proceedings are pending at different levels of adjudication before various courts and tribunals. We cannot assure you that these legal proceedings will be decided in favour of these parties. Though we are not a direct party to some of these proceedings, an adverse outcome of these proceedings could have a negative impact on our reputation and thereby on our business, financial conditions and results of operations. The amounts claimed in these proceedings have been disclosed to the extent ascertainable. A summary of these legal and other proceedings is given in the following table:

11

Litigations against the Directors of the Company: S No. Name of the director Nature of litigation

Number of outstanding litigations

Aggregate approximate amount involved

(` in million) 1. Dilip D. Dandekar Criminal Complaint 1 - 2. Shriram S. Dandekar Criminal Complaint 1 -

Litigations against our Promoters:

S No. Name of the

promoter Nature of litigation Number of

outstanding litigations

Aggregate approximate amount involved

(` in million) 1. Dilip D. Dandekar Criminal Complaint 1 - 2. Shriram S. Dandekar Criminal Complaint 1 -

Litigations against our Group Companies: S No. Name of the Company Nature of

litigation

Number of outstanding litigations

Aggregate approximate amount involved

(` in million) 1. Camart Industries Limited Taxation 1 0.99 2. Triveni Pencils Limited Labour 2 0.61 3. Triveni Pencils Limited Taxation 1 Nil 4. Nilmac Packaging Industries

Limited Taxation 14 45.38

5. Nilmac Packaging Industries Limited

Others 1 0.20

Total 19 47.18 For further details regarding outstanding litigation involving our Directors, our Promoters and our Group Companies, please see chapter titled “Outstanding Litigation and Defaults” on page 276 of this Letter of Offer.

3. We have not entered into any formal contracts with our distributors / stockists and our revenues are

dependent on the sales made to distributors/ stockists. Any loss of our major distributors(s) / stockist(s) or a decrease in the volume of stationery items they source from us may adversely affect our revenues and results of operations.

We have not entered into any formal contracts with our distributors/stockists. Considering the dynamics of the stationery industry in India, any adverse change in the buying pattern of our distributors/stockists may adversely impact our business and results of operations. Further, in the absence of any such formal contracts, there can be no assurance that a particular distributor / stockist would continue to purchase stationery products from us in the future. Should these distributors/stockists not agree to source products from us on mutually agreed terms and conditions or at all, we may have to seek arrangements with other distributors/stockists which may have an adverse effect on our business. Further, in the event these distributors/stockists impose certain terms and conditions which may not be favourable to us, it may have an adverse effect on our business. As there are no arrangements for sale of a minimum quantity of our products to the distributors/stockists, the number of products procured by our distributors/stockists from us varies from month to month. There are a number of factors that impact customer demand from these distributors, which may not be predictable. Our distributors may decide to reduce the quantity of stationery products sourced from us because of changing market conditions and other factors, internal and external, relating to their business. The loss of any of the distributors/stockists or a decrease in the volume of the products they source from us or reduction of price of stationery products may adversely affect our revenue and results of operations. Further, with increased competition, the distributors/stockists now have an increased choice of entities from whom to source products. Some of our competitors may have advantages that enable them to offer products similar to ours at a lower price, respond more quickly and effectively than we do to specific demands of the

12

distributors/stockists, which may lead to our distributors/stockists procuring their requirements from our competitors.

4. We have not entered into any definitive agreements to utilize the Net Proceeds of the Issue. We intend to utilize the Net Proceeds of the Issue primarily towards setting-up of an integrated manufacturing and assembling facility as stated in chapter titled “Objects of the Issue” on page 67 of this Letter of Offer. Of the Net Proceeds of the Issue, we propose to utilize an estimated amount of ` 156.41 million towards land acquisition. In this regards, our Company had applied to MIDC for allotment of 14 acres of land at Additional Patalganga Industrial Area of MIDC, a Government of Maharashtra Undertaking. Our Company is in receipt of a comfort letter dated March 7, 2013 from MIDC informing that the Land Allotment Committee of MIDC in its meeting held on February 7, 2013 has taken a decision to allot 14 acres i.e. 56,000 sq. mtrs. (approx.) of land at Additional Patalganga Industrial Area of MIDC to our Company for setting-up the proposed project. While we are in receipt of the comfort letter from MIDC allotting the land to our Company, we are yet to enter into a definitive agreement with MIDC for the same. Any delay or failure to enter into any such agreement on favourable terms, in a timely manner or at all, may have an adverse effect on the proposed setting-up of the integrated manufacturing and assembling unit. Further, our Company would be required to make payment of part sale consideration upon receipt of a letter of offer from MIDC, and the balance payment prior to entering into a definitive agreement with MIDC. In addition, MIDC may impose certain terms and conditions, either in relation to setting-up of the proposed integrated manufacturing and assembling facility, or in relation to the land allotment. In the event there is any failure by our Company to make payments in a timely manner when called upon to do so, or comply with the terms and conditions as may be laid down, our Company may lose its right over the allotted land, which may have an adverse effect on our proposed expansion plans. We may also not be in a position to recover the payments, if any, already made. Further, in the event, we lose our right over the allotted land, we cannot assure you that we will be in a position to identify alternate land parcel for setting-up of the proposed integrated manufacturing and assembling facility in a timely manner, or at all, on terms commercially acceptable to us. Our Company proposes to construct a two storey building in order to accommodate the integrated manufacturing and assembling unit. While the cost budgeted towards the building and related civil works is based on a budgetary project cost report dated March 16, 2013 prepared by Structwel Designers & Consultants Private Limited, our Company has not entered into any definitive agreements in this regards with any contractor. Additionally, certain portion of the Net Proceeds of the Issue is proposed to be utilized towards acquisition of certain plant and machinery as part of the setting-up of the proposed project. We are only in receipt of quotations for such plant and machinery and we are yet to place orders for the same. For details, please see chapter titled “Objects of the Issue” on page 68 of this Letter of Offer. In the absence of any definitive agreements in relation to the proposed “Objects of the Issue”, any delays in the land acquisition, building construction or purchase of plant and machinery, may have adverse effect on our proposed expansion plans, which may adversely affect our business, results of operations and financial condition.

5. We are dependent on third party vendors to whom we outsource part of our manufacturing process /

from whom we procure certain finished goods on non-exclusive basis and any significant loss or disruption of production from our third party vendors for any reasons could adversely affect our business, results of operations and financial condition.

We outsource manufacturing of certain products to third party vendors. We do not have direct control over the timing or quality of the services and supplies provided by such third party vendors. Production at facilities of these third party manufacturers are beyond our control and any significant loss or disruption of production at these facilities for any reason may adversely affect our business and results of operations. We also procure certain finished goods on non-exclusive basis from third party vendors. For Fiscal 2013 and Fiscal 2012, income from traded goods constituted 40.86% and 42.18% respectively of our gross sale of products. Arrangements with third party vendors expose us to execution risks, legal risk and reputation risk. The risk we face include, delay in the delivery of products, non-conformance to the prescribed product standards, delay in meeting milestones or delayed payment to us by customers due to delay in supply. As we expand, we may have to use more specialized third party vendors with whom we are not familiar, which may increase the risk of manufacturing defects and failures to meet scheduled timelines. In the event of a material failure or disruption in committed supplies, we cannot be certain that we will be able to make alternative arrangements in a reasonable time, on commercially viable terms, or at all. As a result, our business, results of operations and financial

13

condition may be adversely affected. Furthermore, we cannot be certain that such third party vendors will continue to be available to us at reasonable rates in the future. Any deterioration in our relationships with our identified third party vendors or our failure to renegotiate acceptable terms may result in our incurring substantial additional costs, beyond our budgeted expenditure, in identifying and entering into alternative arrangements with other vendors. Further, we do not have exclusive arrangements with the third party vendors whom we engage for the purpose of manufacturing our products. As a result, such vendors may manufacture products similar or identical to ours for our competitors or manufacture entirely for such competitors, which may have an adverse effect on our business and results of operation. Such vendors may also decide to directly sell such products in the market under their own brand, which may result in increased competition. 6. Significant increases in prices of key raw materials or our inability to continue to procure raw materials

at favourable terms could have an adverse effect on our Company's results of operations and financial condition.

We are dependent on external suppliers for the timely supply of raw materials. We purchase dyes & pigments, wood, plastic containers, chemicals, metal containers, paper products etc. from third party suppliers. The raw material cost accounted for 38.14% and 36.67% of our consolidated total income for Fiscal 2013 and Fiscal 2012 respectively. Volatility in the prices of raw materials, including mismatches between trends in prices for raw materials and stationery products, as well as limitations on or disruptions in the supply of raw materials, could adversely affect our results of operations. Furthermore, we procured 20.29% and 17.79% of our total raw materials consumed from international markets in Fiscal 2013 and Fiscal 2012. Any volatility in the prices of such raw materials in such jurisdictions or fluctuations in the currency exchange values could adversely affect our financial condition and results of operations. Currently and historically, we have been able to pass on the increase in cost of our raw materials onto our customers. However, our cash flows may be adversely affected because of a time lag between the date of the procurement of such raw material and date on which we can reset the prices for our customers due to increase in raw material price. We cannot assure you that we will be able to continue to pass on the increase in raw materials costs to our customers in the future. In the event we are unable to procure raw materials at favourable terms or there is a substantial delay in supply or non-conformance to our quality requirements by the suppliers, it may impact our financial condition, business and results of operations. 7. We have not entered into formal contracts with our suppliers from whom we procure raw materials.

Furthermore, we do not have any formal exclusive arrangement with our suppliers. In the event, we are unable to procure raw materials at terms favourable to us, or at all, our business, financial condition and results of operations may be adversely affected.

We have not entered into formal contracts with our suppliers and our inability to procure these raw materials at terms favourable to us, or at all, may constrain our raw material supply, resulting in disruption and may have an adverse effect on our business, financial condition and results of operations. Further, we have non-exclusive arrangements with our suppliers and they can supply raw materials to our competitors, which may increase competition for us and may result in an adverse effect on our financial condition. 8. We have not placed orders for the plant and machinery, as disclosed in chapter titled “Objects of the

Issue” and as a result, we may face time and cost overruns. The completion of installation of the plant and machineries is dependent on performance of external agencies and any shortfall in the performance of these external agencies may adversely affect our growth plans.

We are yet to place orders for the plant and machinery proposed to be acquired with the Net Proceeds of the Issue and as disclosed in chapter titled “Objects of the Issue” on page 68 of this Letter of Offer. The completion of installation of the machineries is dependent on performance of external agencies, which are responsible for supply, installation, commissioning and testing of the machineries. We cannot assure you that the performance of external agencies will meet the required specifications and performance parameters and whether they will deliver the plant and machineries on time. If the performance of these agencies is inadequate in terms of these requirements, this may result in incremental cost and time overruns, which in turn may adversely affect our growth plans. Further, some of the quotations are in foreign currency denominations and the cost of these machineries have

14

been estimated at the prevailing conversion rate. The payment for the machinery has to be made in the currency of the quotation and at the exchange rates prevailing on the date of the actual payment. The conversion rates may undergo a change at the time of delivery of the machinery and consequent payment. Such a change in conversion rate may affect the value of the machinery and consequently the estimated cost of the machineries. These factors may increase the overall cost of the machineries and in order to fund such additional expenditure, we may need additional funds, which may have an adverse effect on our business and results of operations. 9. We have witnessed losses in the recent past, and we cannot assure you that we will be able to generate

sufficient revenues to be profitable.

We have, in the recent past, witnessed losses. Our Restated Net Profit/ (Loss) after Tax for Fiscal 2013, Fiscal 2012 and Fiscal 2011 was ` (147.42) million, ` (2.12) million and ` 77.13 million respectively. These recent losses and decline in profits has been primarily on account of increased raw material cost, and employees related and other operating costs on account of addition made to the existing sales force for expanding its distribution reach. Although, our revenue from operations has increased in the last three Fiscal years, you should not rely on the revenue growth of any prior period as an indication of our future performance. Further, our operating expenses and administrative and employee related costs have witnessed a significant increase in the recent years. These expenditures might not yield additional revenue that we anticipate or at all. If we are unable to achieve revenue growth that outpaces the growth in our expenses, we will not achieve profitability and our financial position may be adversely affected. 10. Our Company will be required to obtain certain approvals and licenses in relation to the proposed

setting-up of the integrated manufacturing and assembling facility which we plan to fund from the Net Proceeds of the Issue. Any failure to obtain such approvals and licenses in a timely manner or at all may adversely affect our business, results of operations and financial condition.

Our Company proposes to set-up an integrated manufacturing and assembling facility, which we plan to fund from the Net Proceeds of the Issue. Our Company will be required to obtain certain approvals and licenses in relation to setting-up of this proposed facility. Any failure to apply for and obtain the required approvals and licences in a timely manner, or any suspension or revocation of any of the approvals and licences would result in a delay in the setting-up of the proposed facility which may adversely affect our business, results of operations and financial condition. 11. We rely heavily on our top five vendors for the procurement of our raw materials and finished goods. In

the event there is any disruption in the supply from these key vendors, our business and results of operations could be adversely affected.

In Fiscal 2013 and 2012, 34.12% and 34.07% of our total raw material and finished goods were procured from our top five vendors. Should there be any disruptions in the supply of such raw materials and finished goods from these key vendors, it could adversely affect our business and results of operations. 12. We rely on contractors for certain aspects of our business, and are therefore exposed to risks, including

in relation to the timing or quality of their services and compliance with applicable laws. We rely on the availability of skilled and experienced contractors and specialist agencies for operating certain aspects of our business. For the year ended March 31, 2013, March 31, 2012 and March 31, 2011, the expenditure incurred in relation to works undertaken by such contractors and specialist agencies stood at ` 83.39 million, ` 62.45 million and ` 50.68 million, which constituted 1.82%, 1.61% and 1.46% of our total expenditure for the respective years. As of March 31, 2013 and March 31, 2012, the top five contractors and specialist agencies constituted 66.06% and 55.21% of the total expenditure incurred in relation to works undertaken by all such contractors and specialist agencies. We do not have direct control over the timing or quality of the services and supplies provided by such contractors. The contractors may engage contract labourers to complete specified assignments and although we do not engage such labourers directly, we may be held responsible under applicable Indian laws for wage payments or statutory dues to such labourers should the contractors default on such payments. Further, pursuant to the provisions of the Contract Labour (Regulation and Abolition) Act, 1970, we may be required to retain such contract labourers as our employees. Any requirement to fund such payments and any such order from a court or any other regulatory authority may adversely affect our business and results of operations. Since we engage contractors, we are also exposed to possible risks arising from third party defaults. In the event

15

of a material failure or disruption in committed services or supplies, we cannot be certain that we will be able to make alternative arrangements in a reasonable time, on commercially viable terms, or at all. As a result, our business, results of operations and financial condition may be adversely affected.

13. We face significant competition in the Indian stationery industry. Any failure to compete effectively may

have a material adverse effect on our business and results of operations. There is significant competition in the stationery industry in India, both in the organized and the unorganized market segments. The stationery industry in India is highly competitive with several domestic and foreign brands present in the market and we expect that competition will continue to increase with entry of new companies (both domestic and international) in this industry. In such a competitive environment, our brands may face considerable pressure to sustain customer loyalty and brand equity. Further, many of our competitors may have access to considerable financial and technological resources with which they may be able to compete aggressively, including by funding future growth and expansion and investing in improving the product quality and in acquisitions. We face a variety of competitive challenges including: • anticipating and quickly responding to changing consumer demands and preferences; • maintaining favourable brand recognition; • developing innovative, high-quality products that appeal to consumers of varying age; • pricing the products effectively and achieving customer perception of value; and • providing strong and effective marketing support. With increase in competition, we may inter alia witness lower demand for our products, pressure on pricing, loss in market share, which may impact our business and results of operations. Our inability to withstand competitive pressures and effectively respond to changing business dynamics may have a material adverse effect on our business prospects, financial condition and results of operations.

14. Our loan from Mizuho Corporate Bank Limited may be recalled by them at any time affecting our

immediate cash flows. Our Company has outstanding unsecured cash credit facility, working capital demand loan, export packing credit (sub-limit of cash credit) facility, vendor bill financing, letter of credit and bank guarantee facility from Mizuho Corporate Bank Limited. We have availed these loans for meeting our working capital requirements. The details pertaining to our loans, their terms of repayment and rate of interest are set out in chapter titled “Financial Indebtedness” on page 272 of this Letter of Offer. Some of these loans are either repayable on demand or there is no specific term with regard to the repayment as set out in the loan agreements. Due to the absence of any specific terms regarding their repayment, the said loans can be recalled by Mizuho Corporate Bank Limited at any given point of time and our Company will be forced to make arrangements for their repayment, which in turn could adversely affect our immediate cash flows. 15. Our indebtedness and the conditions and restrictions imposed on us by our financing agreements, or the

interest rate fluctuations to which we are exposed, could adversely affect our ability to conduct our business.

As of March 31, 2013, we had consolidated outstanding indebtedness, being long-term borrowings (including amount repayable within one year) and short-term borrowings of ` 652.44 million. We may incur additional indebtedness in the future. Our indebtedness could have several important consequences, including but not limited to the following:

• a portion of our cash flow may be used towards repayment of our existing debt, which would reduce the

availability of cash to fund our working capital needs, capital expenditures and other general corporate requirements;

• our ability to obtain additional financing in the future at reasonable terms may be restricted; • fluctuations in market interest rates may affect the cost of our borrowings, as some of our loans are at

variable interest rates; and

• we may be more vulnerable to economic downturns, may be limited in our ability to withstand competitive

16

pressures and may have reduced flexibility in responding to changing business, regulatory and economic conditions.

The agreements governing our existing indebtedness contain restrictions and limitations, such as restriction on, changing our capital structure, restriction on modifying our constitutional documents, Kokuyo S&T continuing to hold 51% in the Company, declaring dividends in certain other cases, utilization of facility solely for the purpose sanctioned, incurring further indebtedness, creating further encumbrances on our assets, effecting any scheme of amalgamation or restructuring and undertaking guarantee obligations. In addition, some of these borrowings may contain financial covenants, which require us to maintain, among other matters, positive net worth. We cannot assure you that we will be able to comply with these financial or other covenants or that we will be able to obtain the consents necessary to take the actions we believe are necessary to operate and grow our business. A default under one facility may also trigger cross-defaults under other facilities. Further, under one of our loan agreements, in the event of a default the lender has the right to appoint a nominee director or to change the management, specifically the managing director, whole time director, technical staff, financial and executive staff of proper qualification and experience for the post. In any event, an event of default under any debt instrument, if not cured or waived, could have a material adverse effect on us. Any of these factors may adversely affect our business, financial condition and results of operations. A large portion of our debt comprises of working capital which is repayable on demand. In the event such demand is raised on us, our cash flows may be adversely affected. For further details please see chapter titled “Financial Indebtedness” on page 272 of this Letter of Offer. 16. The objects of the Issue are based on the internal estimates of our management, and have not been

appraised by any bank or financial institution.

Our funding requirements and the deployment of the net proceeds of the Issue are based on management estimates and have not been appraised by any bank or financial institution or any independent agency. We may have to revise our management estimates from time to time and consequently, our funding requirements may also change. Our revised estimates may exceed the value that we have determined earlier and may require us to reschedule our expenditure which may have a bearing on our expected revenues and earnings.

17. In the event there is any delay in the completion of the Issue, there would be a corresponding delay in the completion of the objects of this Issue, which would in turn affect our revenues and results of operations.

The funds that we would receive, would be utilized for the objects of the Issue as has been stated in chapter titled “Objects of the Issue” on page 66 of this Letter of Offer. The proposed schedule of implementation of the objects of the Issue is based on our management’s estimates. If the schedule of implementation is delayed for any other reason whatsoever, including any delay in the completion of the Issue, we may face time and cost overruns and this may affect our revenues and results of operations. 18. While the basic infrastructure facilities such as roads, electricity, water, etc. over the allotted land at

Additional Patalganga Industrial Area will be provided by MIDC, any delay in timely provision of the same may have an adverse effect on our overall project implementation schedule.

Our Company has been allotted land by MIDC at Additional Patalganga Industrial Area for the proposed setting-up of integrated manufacturing and assembling facility. The necessary infrastructure facilities such as roads, electricity, water, etc. over the allotted land will be made available by MIDC. In the event there is any delay in making such basic infrastructure facilities available and in a timely manner, it may have an adverse effect on our overall project implementation schedule. This may lead to cost and time overruns and may have an adverse effect on our business, results of operations and financial condition. 19. Our Promoters and members of the Promoter Group will continue to jointly retain majority control over

our Company after the Issue, which will allow them to determine the outcome of matters submitted to shareholders for approval.

After completion of the Issue, our Promoters and Promoter Group will continue to jointly retain majority control over our Company and will be able to exercise a significant degree of influence over us and will be able to control the outcome of any proposal that can be approved by a majority shareholder vote, including, the election of members to our Board, in accordance with the Companies Act and our Articles of Association. Such a concentration of ownership may also have the effect of delaying, preventing or deterring a change in control of our Company.

17

In addition, our Promoters will continue to have the ability to cause us to take actions that may be in conflict with our interests or the interests of some or all of our creditors or minority shareholders, and we cannot assure you that such actions will not have an adverse effect on our future financial performance or the price of our Equity Shares. 20. While one of our Promoters, Kokuyo S&T, has confirmed their intention to subscribe to the full extent of

their Rights Entitlement in the Issue and have also confirmed their intent to subscribe for additional Equity Shares, and subscribe for unsubscribed portion in the Issue in compliance with regulation 10 (4) of Takeover Regulations, none of our other Promoters and Promoter Group intends to subscribe to their Rights Entitlement in the Issue.

One of our Promoters, Kokuyo S&T, has confirmed vide their letter dated February 5, 2013 that they intend to subscribe to the full extent of their Rights Entitlement in the Issue, in compliance with regulation 10 (4) of Takeover Regulations. Further, Kokuyo S&T has also confirmed vide this letter that, they intend to (i) subscribe for additional Equity Shares, and (ii) subscribe for unsubscribed portion in the Issue, if any. Such subscription to additional Equity Shares and the unsubscribed portion, if any, to be made by Kokuyo S&T, shall be in accordance with regulation 10 (4) of Takeover Regulations. However, none of our other Promoters and Promoter Group intends to subscribe to their rights entitlement in the Issue. 21. We are dependent on our senior management team and the loss of key members or failure to attract

skilled personnel may adversely affect our business. Our success depends largely on the efforts, expertise and abilities of our senior management, as well as other skilled personnel, including Dilip D. Dandekar and Shriram S. Dandekar who have 42 years and 29 years of experience respectively. Our senior management, some of whom have been with us for over 10 years, are important to our business because of their experience and knowledge of the industry. We cannot assure you that we will be able to retain any or all of the key members of our management team. The loss of the services of such key members may have an adverse effect on our business and results of operations. Further, our ability to maintain our position in the stationery business depends on our ability to attract, train, motivate, and retain highly skilled personnel. In the event we fail to meet these requirements, it may have an adverse effect on our business and results of operations. For further details of our senior management team, please see chapter titled “Management” on page 114 of this Letter of Offer. 22. Our business and results of operations depends on consumer spending patterns and could be adversely

affected by the impact of economic conditions in India.

Our business is sensitive to a number of factors that influence the levels of consumer spending, including political and economic conditions such as recessionary environments, the levels of disposable consumer income, consumer debt, interest rates and consumer confidence. Consumer purchases of stationery items generally decline during recessionary periods and other periods in which disposable income is adversely affected. Adverse economic and business conditions particularly declining levels of disposable consumer income, higher consumer debt, higher interest rates, higher taxation, and increase in unemployment, have a direct impact on discretionary consumer spending. Our consumers anticipate and respond to adverse changes in economic conditions and adjust their consumption patterns accordingly, which has a direct impact on our sales and revenues. Unfavourable changes in business and economic conditions affecting our consumers in India could result in decrease in demand for our products or lower our profit margins, and may have a material adverse effect on our financial condition and results of operations.

23. We are dependent on our research and development for our success and failure to continue developing/

improving products/ processes may adversely affect our business.

Our success depends on our ability to continue to develop and improve our products and processes for which we make continuous investments in research and development. We cannot assure that we will be able to enhance our research and development investments or continue the current level of research and development investments in our business, or that our research and development investments will yield satisfactory results or at all. The upgradation and development of new product / processes may be lengthy and costly and there can be no assurance that a new/ improved product or process developed by us will be commercially successful. Further, research undertaken by our competitors may lead to the launch of a competing or improved product or process that may affect the sales of our products and adversely affect our business, results of operations and financial

18

condition. 24. Our manufacturing facilities are located in few geographical areas. Any breakdown of services in such

areas may have a material and adverse effect on our results of operations and financial condition.

Our manufacturing facilities are located in Taloja, Vasai, Tarapur in the State of Maharashtra and Samba and Gangyal in the State of Jammu and Kashmir. As a result, we are exposed to risks including any change in policies relating to these states, any localized social or political unrest, any natural disaster and any event or development which could make projects in such states less economically viable. Any such risk, if it materializes, may have a material adverse effect on the business, financial position and results of operations of our Company. 25. We do not own certain of our offices, depots, regional hubs, state hubs and premises out of which we

operate. Any dispute in relation to the lease of our premises may have a material adverse effect on our business and results of operations.

We do not own certain of our offices, depots, regional hubs, state hubs and premises out of which we operate. We cannot assure you whether the leases for such properties would be renewed on favourable terms or at all. If the owners of any of these premises do not renew the agreements under which we occupy the premises or renew such agreements on terms and conditions that are not favourable to us, we may suffer a disruption in our operations or may have to pay increased rentals which may have an adverse effect on our business and results of operations. For further information, please see chapter titled “Our Business” on page 90 of this Letter of Offer. 26. As a manufacturing business, our success depends on efficiently managing our supply chain logistics.

Transportation of our products from our manufacturing facilities to our mother depot onward to the regional / state hubs needs to be efficiently managed. Such supply chain logistics are subject to various uncertainties and risks, and delays in delivery may result in rejected or discounted deliveries.

We depend on trucking to deliver our products from our manufacturing facilities to our mother depot onward to the regional / state hubs. Disruptions of transportation services due to heavy rains, storm, theft, inadequacies in road infrastructure; or due to labour problems like strikes, lock-outs; or other events may impair our ability to manage the supplies of our products. There can be no assurance that such disruptions will not occur. Any such disruptions may materially adversely affect our business, financial condition and results of operations. 27. We are dependent on our Promoters including Kokuyo S&T, for their expertise in the stationery business

and our separation from our Promoters and Kokuyo group may adversely affect our business. In the year 2011, Kokuyo S&T, a Japanese corporation engaged in the business of stationery acquired majority stake in the Company. We believe that our association with the Kokuyo group lends strength to the trust and reliability reposed in us. Consequently, our separation from the Kokuyo group for any reason whatsoever may adversely affect our business and results of operations. We are also dependent on Dilip D. Dandekar and Shriram S. Dandekar who have been involved in defining and monitoring our business strategy and we expect that we will continue to be dependent on them for their guidance and expertise. However, there can be no assurance that all or any of our Promoters will continue to be involved in our business. In the event any or all of them leave or are unable to continue to work with us, it may be difficult to find suitable replacements in a timely manner or at all which may adversely affect our business, results of operations, financial condition and prospects. 28. Certain covenants in the joint venture agreements entered into by us may have an adverse effect on our

financial condition and results of operations. The Joint Venture Agreement entered into between our Company, Kokuyo S&T and the Continuing Promoters and their affiliates provide for certain restrictive covenants and non-compete clauses.The Joint Venture Agreement contemplates that the Continuing Promoters and their affiliates shall not for a period of 3 years from the date on which each Continuing Promoter and/or its respective affiliate ceases to be a shareholder of the Company, (a) directly or indirectly undertake any business, or invest in or advise any business or solicit business or customers with regard to the business operations that is the same as or similar to the business of the Company or its subsidiaries or offer products similar to the products offered by the Company or its subsidiaries; (b) enter into any agreements or arrangements relating to the business which is same or similar to the business of the Company or engage in acts which would be prejudicial to the interests of Kokuyo S&T, the Company or its subsidiaries; and (c) directly or indirectly solicit or attempt to solicit, the business or employment of any current

19

client or customer of the Company and / or its subsidiaries for any business which directly or indirectly competes with the business of the Company and / or its subsidiaries; or induce or attempt to induce any current client, customer or supplier to cease dealing with the company and / or its subsidiaries. The Joint Venture Agreement also provides that the Sellers and the Continuing Promoters shall not directly or indirectly use the trade names, trademarks or logos or any other designations same as that of the Company and its Subsidiaries. In the event the covenants under the Joint Venture Agreement are breached by the Continuing Promoters and the same is not cured within a period of 30 (thirty) days of being notified, Kokuyo S&T reserves the right to terminate the Joint Venture Agreement. Pursuant to the Joint Venture Agreement, the Continuing Promoters are required to maintain the promoter threshold and in the event the shareholding of the Continuing Promoters falls below the contemplated promoter threshold, the Joint Venture Agreement shall stand terminated effective from the date of falling of shareholding below the promoter threshold. In the event, the Joint Venture Agreement is terminated for breach of covenants or otherwise, our financial condition and results of operations may be adversely affected. Further, we have also provided certain representations, warranties and indemnity under the Joint Venture Agreement. In the event, we become liable to honour any indemnity arising out of breach of any representations provided by us under the Joint Venture Agreement; it may have an adverse effect on our financial condition and results of operations. For further details, please see chapter titled “History and Corporate Matters” on page 105 of this Letter of Offer.

29. Certain government/statutory approvals and/or licenses may have expired or applications for the same

are pending before the concerned authorities. Certain governmental or statutory approvals and/or licenses may have expired or applications for the same (or renewals thereof) made by our Company are still pending before the concerned authorities. In future, our Company will be required to renew such permits, licenses and approvals, and obtain new permits, licenses and approvals in order to carry on current business operations and for any proposed new operations. While we believe that we will be able to renew or obtain such permits, licenses and approvals as and when required, there can be no assurance that the relevant authorities will issue or renew any of such permits, licenses or approvals in the time-frame anticipated by us or at all. Such non-issuance or non-renewal may result in the interruption of our business operations and may have a material adverse effect on our results of operations and financial condition. For further details, please see chapter titled “Government and Other Approvals” on page 298 of this Letter of Offer.

30. Certain government/statutory approvals and/or licenses may have been procured in our erstwhile name

‘Camlin Limited’ and applications for the change of name are either made or pending before the concerned authorities.

While our Company has initiated the process to obtain or apply for change of name for all regulatory permits, licenses and approvals in its present name ‘Kokuyo Camlin Limited’ to operate its business, certain governmental or statutory approvals and/or licenses may be in our erstwhile name ‘Camlin Limited’ or in some cases, applications for the same are still pending before the concerned authorities. For further details, please see chapter titled “Government and Other Approvals” on page 294 of this Letter of Offer.

31. Our business is cyclical in nature. Factors affecting demand for, and price and production of, school and

education products, in particular, may adversely affect our business, results of operations and prospects. The sales of some of our products, particularly our school and education products segment, may be cyclical in nature. Our revenues are generally higher during the start of the school term in the beginning of the year as compared to the second half of the calendar year as students buy our stationery products. We expect that this cyclicality will continue to have an effect on our business and results of operations. Any disruptions in production during this period may lead to a reduction in sales and may have an adverse effect on the financial performance of our Company. 32. Demand for our products is affected by global and national economic conditions. Any development

which decelerates the demand for stationery products may have an adverse impact on our Company.

The stationery industry in India in general and our business and results of operations in particular are affected by various global and national economic conditions. Changes or a downturn in the global or national economy could add uncertainty to currency inflation or deflation, interest rates, taxation, stock market performance,

20

consumers' confidence and consumers' perception of economic conditions, which in turn may affect the consumers' willingness to purchase stationery products. Any global or national economic distress would cause a material adverse effect on the demand for our products and hence on our business and results of operations. 33. Our success depends upon our ability to sustain effective implementation of our business and growth

strategy. The success of our business depends greatly on our ability to effectively implement our business and growth strategy. Whilst we believe that we have successfully executed our business strategy in the past, there can be no assurance that we will be able to execute our strategy on time and within the estimated budget, or that we will meet the expectations of targeted customers. Any future organic growth and other acquisitions may place significant demands on our management, operational, financial and internal controls across the