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: Mr. K. H. Gopal, Company Secretary & Compliance Officer

E-mail: alokrights@alokind.com Website: www.alokind.com

FOR PRIVATE CIRCULATION TO THE ELIGIBLE EQUITY SHAREHOLDERS OF ALOK INDUSTRIES LIMITED

(THE “COMPANY” OR THE “ISSUER”) ONLY ISSUE OF [●] EQUITY SHARES WITH A FACE VALUE OF `10 EACH (“EQUITY SHARES”) FOR CASH AT A PREMIUM OF ` [●] PER EQUITY

SHARE FOR AN AGGREGATE AMOUNT NOT EXCEEDING ` 551 CRORE ON A RIGHTS BASIS TO THE ELIGIBLE EQUITY SHAREHOLDERS

OF THE COMPANY IN THE RATIO OF [●] EQUITY SHARE(S) FOR EVERY [●] FULLY PAID-UP EQUITY SHARE(S) HELD BY THE ELIGIBLE

EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT IS ON [●] (“THE ISSUE”). THE ISSUE PRICE IS [●] TIMES THE FACE VALUE OF

THE EQUITY SHARES. FOR FURTHER DETAILS, PLEASE REFER TO “TERMS OF THE ISSUE” ON PAGE 59.

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 Draft Letter of Offer. Investors are advised to refer to the section “Risk Factors” on page xiii 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 Draft 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 Draft 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 Draft 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 [●] and [●], respectively. For the purposes of the Issue, the Designated Stock Exchange is [●].

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 2217 8332 Email: alokrights@sbicaps.com Investor Grievance E-mail.: investor.relation@sbicaps.com Website: www.sbicaps.com Contact Person: Ms. Shikha Agarwal SEBI Registration No: INM000003531

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: alok.rights@cfsl.in Investor Grievance E-mail: mbd@cfsl.in Website: www.cfsl.in Contact Person: Mr. Rakesh K. 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:alok.rights@emkayglobal.com Investor Grievance E-mail: ibg@emkayglobal.com Website: www.emkayglobal.com Contact Person: Mr. Rajesh Ranjan SEBI Registration No: INM000011229

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: alok.rights@linkintime.co.in Investor Grievance E-mail: alok.rights@linkintime.co.in Website: www.linkintime.co.in Contact Person: Mr. Pravin Kasare SEBI Registration No: INR000004058

LEAD MANAGERS TO THE ISSUE

Enam Securities Private Limited

1st floor, Axis House, C-2 Wadia International Centre, P.B. Marg, Worli, Mumbai- 400025 Maharashtra, India Tel: +91 22 2425 2525 Fax: +91 22 4325 3000 Email: alokrights@enam.com Investor Grievance E-mail.: complaints@enam.com Website: www.enam.com Contact Person: Ms. Dipali Dalal SEBI Registration No:INM000006856

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: alok.rights@fortune.co.in Investor Grievance I.D.: mbdcompliance@fortune.co.in 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: alok.rights@idbicapital.com Investor Grievance I.D.: redressal@idbicapital.com 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

[●] [●] [●]

Draft Letter of Offer

September 26, 2012 For our Eligible Equity Shareholders only

TABLE OF CONTENTS

SECTION I – GENERAL ..................................................................................................................................... I

DEFINITIONS AND ABBREVIATIONS .............................................................................................................. I

NOTICE TO OVERSEAS SHAREHOLDERS ................................................................................................... VII

CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND CURRENCY OF PRESENTATION ............................................................................................................ X

FORWARD LOOKING STATEMENTS ............................................................................................................ XII

SECTION II - RISK FACTORS ...................................................................................................................... XIII

SECTION III – INTRODUCTION ..................................................................................................................... 1

SUMMARY OF THE ISSUE ................................................................................................................................. 1

SUMMARY FINANCIAL INFORMATION ......................................................................................................... 2

GENERAL INFORMATION ............................................................................................................................... 10

CAPITAL STRUCTURE ..................................................................................................................................... 15

OBJECTS OF THE ISSUE ................................................................................................................................... 24

SECTION IV - STATEMENT OF TAX BENEFITS ....................................................................................... 29

SECTION V - OUR MANAGEMENT ................................................................................................................. 30

SECTION VI – FINANCIAL INFORMATION .............................................................................................. 38

STOCK MARKET DATA FOR EQUITY SHARES ....................................................................................... 39

MATERIAL DEVELOPMENTS ......................................................................................................................... 41

ACCOUNTING RATIOS AND CAPITALISATION STATEMENT ................................................................. 44

SECTION VII – LEGAL AND OTHER INFORMATION ............................................................................. 46

OUTSTANDING LITIGATIONS ........................................................................................................................ 46

GOVERNMENT APPROVALS .......................................................................................................................... 47

OTHER REGULATORY AND STATUTORY DISCLOSURES ........................................................................ 50

SECTION VIII – OFFERING INFORMATION ............................................................................................. 59

TERMS OF THE ISSUE....................................................................................................................................... 59

SECTION IX – STATUTORY AND OTHER INFORMATION .................................................................... 90

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .............................................................. 90

DECLARATION ................................................................................................................................................ 92

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SECTION I – GENERAL

DEFINITIONS AND ABBREVIATIONS

In this Draft 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 CFO Chief Financial Officer 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 ESIC Employee State Insurance Corporation Factories Act Factories Act, 1948, as amended 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 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. 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

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Term Description

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 The 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 PLR Prime Lending Rate 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 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, as amended 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 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.

Centbank Centbank Financial Services Limited

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Term Description

Composite Application Form/ CAF

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

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 This 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

Emkay Emkay Global Financial Services Limited Enam Enam Securities Private 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 [●] Equity Shares with a face value of `10 each for cash at a premium of [●] per Equity Share for an amount aggregating ` [●] crore on a rights basis to the Eligible Equity Shareholders in the ratio of [●] Equity Shares for every [●] Equity Shares held by them on the Record Date (i.e. [●]).

Issue Closing Date [●] Issue Opening Date [●]

Issue Price ` [●] 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 [●] Equity Shares aggregating to ` [●] crore.

Lead Managers 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.

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, which will contain complete particulars of the Issue

Listing Agreement The listing agreements entered into between us and each of the Stock Exchanges Monitoring Agency [●]

Net Proceeds The Gross Proceeds less the Issue related expenses. For further details, please refer to “Objects of the Issue” on page 24

Non Institutional Investor(s)

Non institutional investor as defined under Regulation 2(1)(w) of the SEBI 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

iv

Term Description

Force to address the deficiencies. QIBs or Qualified Institutional Buyers

Qualified institutional buyers as defined under Regulation 2(1)(zd) of the SEBI ICDR Regulations

Record Date [●] “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, that is determined as a proportion to the number of Equity Shares held by such Eligible Equity Shareholder on the Record Date, i.e., [●] Equity Shares for [●] Equity Shares held on [●]

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.

“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. David Rasquinha, 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.

v

Term Description 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 Limited 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

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 & 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 Draft 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 Landholdings 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 Underwriters [●]

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, on a consolidated basis. Technical/ Industry Related Terms Term Description

POY Partially Oriented Yarn PTA Purified Terephthalic Acid MEG Mono Ethylene Glycol FDY Fully Drawn Yarn DTY Double Texturising Yarn MPLS-VPN Multiprotocol Label Switching to create Virtual Private Networks NCD Non Convertible Debentures

vi

Term Description

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.

vii

NOTICE TO OVERSEAS SHAREHOLDERS

The distribution of this Draft Letter of Offer, 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 this Draft Letter of Offer, 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 this 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 Draft Letter of Offer may not be distributed in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt of this Draft 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 Draft 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 Draft 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 Draft 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 Draft Letter of Offer. Neither the delivery of this Draft 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 Draft 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.

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 Draft 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

viii

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 Draft 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 Draft 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 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 Draft 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 Draft Letter of Offer or 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

ix

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.

x

CERTAIN CONVENTIONS, USE OF FINANCIAL, INDUSTRY AND MARKET DATA AND

CURRENCY OF PRESENTATION

Certain Conventions

References in this Draft 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 Draft 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 Draft Letter of Offer, the audited financial statements for Fiscal 2012 have been included. For details of such financial statements, please refer to “Financial Information” on page 38. We have also included (i) the limited review results for the three month period ended June 30, 2012; and (ii) our working results, on a standalone basis, for the four month period from April 1, 2012 till July 31, 2012. For further details, please refer to “Material Developments” on page 41. 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 Draft 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 Draft 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 Draft 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 Draft 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

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.

xi

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 `)

March 2012 51.15 50.32 51.30 49.15 April 2012 52.51 51.80 52.79 50.56

May 2012 56.42 54.47 56.42 52.85

June 2012 56.30 56.03 57.21 55.14 July 2012 55.80 55.49 56.37 54.55

August 2012 55.72 55.52 56.08 55.14 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 August 31, 2012 - 1 USD = ` 55.72

xii

FORWARD LOOKING STATEMENTS

Certain statements in this Draft Letter of Offer are not historical facts but are “forward-looking” in nature. Forward looking statements appear throughout this Draft 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”, as well as those included elsewhere in this Draft 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 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; 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 xiii, respectively. 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 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.

xiii

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 Draft 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 Draft 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 Draft 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 Draft 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.

1. Our substantial indebtedness of ` 16,050.47 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 March 31, 2012, we had a total outstanding debt of approximately ` 16,050.47 crore, on a consolidated basis, and ` 12,772.22 crore, on a standalone basis. Further, our net debt outstanding was ` 14,652.67 crore and our net debt (excluding cash and bank balances) to equity (equity includes share capital and all reserves) ratio was 5.12, 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 March 31, 2012, our long-term borrowing is ` 8,516.96 crore, which includes our borrowing under TUFs aggregating to ` 2,674.05 crore, and our short-term borrowing (including amounts due within the year) are ` 7,533.51 crore. For further details on our indebtedness, please refer to “Financial Information” on page 38 of this Draft 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;

xiv

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 September 21, 2012, 96.66% of our Promoters and Promoter Group holding in our Company i.e. 33.01% of the total paid-up equity share capital of our Company has been pledged in favour of various lenders. Furthermore, as of September 26, 2012, 99.01% of our Promoters and Promoter Group holding in our Company i.e. 33.81% 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. 5, “99.01% 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 xv of this Draft 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 would adversely affect our operations and profitability. Furthermore, we may also be 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.

2. Our Company’s financing documents require our Company to obtain consents from its lenders for

undertaking the Issue, which have not been obtained as of the date of this Draft Letter of Offer.

Undertaking the Issue without consents from lenders constitutes a default by our Company under the

relevant financing documents and will entitle the respective lenders enforce remedies under the terms of

the financing documents.

Under the terms of its financing documents, our Company requires consents from its lenders in order to undertake the Issue. While our Company has sought consents from its lenders for the Issue, as of the date of this Draft Letter of Offer, our Company is yet to receive these consents. Undertaking the Issue without consents from lenders constitutes a default by our Company under the relevant financing documents and will entitle the respective lenders to call a default against our Company, enforce remedies under the terms of the financing documents, that include, amongst other things, acceleration of repayment of the amounts outstanding under the financing documents, enforcement of the security interests created under the financing documents, and taking possession of secured assets. A default by our Company under the terms of any financing document will also trigger a cross-default under some of the other financing documents of our Company, or any other agreements or instruments of our Company containing a cross-default provision, which may individually or in the aggregate, have a material adverse effect on our Company’s operations, financial position and credit rating. Also, our Company may have to dedicate a substantial portion of its cash flow from operations to make payments under such financing documents, thereby reducing the availability of our Company’s cash flow to fund capital expenditures, meet working capital requirements and use for other general corporate purposes. Such defaults may also result in a decline in the trading price of the Equity Shares and you may lose all or part of your investment. If the lenders of a material amount of the outstanding loans declare an event of default simultaneously, the Company may be unable to pay its debts as they fall due. 3. 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.

xv

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.

4. 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. 5. 99.01% 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 September 21, 2012, 96.66% of our Promoters and Promoter Group holding in our Company i.e. 33.01% of the total paid-up equity share capital of our Company has been pledged in favour of various lenders. Furthermore, as of September 26, 2012, 99.01% of our Promoters and Promoter Group holding in our Company i.e. 33.81% 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 on or prior to the Record Date for this Issue could reduce the Rights Entitlements of our Promoters and Promoter Group, thereby resulting in a decrease in the stake of our Promoters and Promoter Group after this Issue. 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 15 of this Draft Letter of Offer. 6. 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

xvi

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 Fiscal 2012, our Company’s key raw materials such as cotton, PTA and MEG constituted approximately 61.49% 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. 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. 7. 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. 8. 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 Draft 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 business is therefore significantly dependent on 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 heightens our exposure to adverse developments related to competition, as well as economic, demographic and other changes in this union territory, which may adversely affect our business prospects, financial conditions and results of operations.

xvii

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 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.

9. We rely significantly on exports of our products to the United States and Europe 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 19.19% and 18.08% as a percentage of our Company’s total sales in Fiscals 2011 and 2012, 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. 10. 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 working capital deployed was ` 6,036.96 crore as on March 31, 2012, on a standalone 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. 11. 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:

xviii

(` in crore)

Subsidiaries For the year ended March 31

2011 2012

Subsidiaries Alok Industries International Limited (70.34) (44.34) Alok Infrastructure Limited 2.01 (15.00) Alok HB Properties Private Limited@ (0.00)^^ (0.04) Alok HB Hotels Private Limited@ (0.00) ^^ (0.04) Alok Realtors Private Limited (0.00) ^^ (0.06) Springdale Information & Technology Private Limited (0.04) (0.17) Alok Land Holdings Private Limited (0.00) ^^ (0.11) Alok New City Infratex Private Limited@ 0.00^^ (0.04) Alok Aurangabad Infratex Private Limited@ (0.00) ^^ (0.04) Mileta, a.s. 4.55 (8.77) * Alok European Retail, s.r.o. (0.07) –* Alok Retail (India) Limited (13.32) (10.92) Alok Apparels Private Limited (5.25) (4.36) Alok International Inc. (0.85) (0.29) Alok Inc. (0.00) ^^ –* ## Alok Singapore Pte. Ltd. –# (2.54)* Alok International (Middle East) FZE –^ (0.38)* Grabal Alok (UK) Limited** – (151.76)* Grabal Alok International Limited** – (13.78) Alok H&A Limited (1.49)* (26.37)* # 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

^^ 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. 12. 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. 13. 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

xix

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.

14. We have certain contingent liabilities which, if materialised, may adversely affect our financial

condition.

As of March 31, 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 March 31, 2012:

Sr.

No. Particulars Fiscal 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 73.71

D Bills discounted 214.79

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 filed 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 filed an appeal with the Commissioner of Income Tax (A) and also made application for rectification u/s 154 providing details of amounts paid to the bank. Such rectification 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

c) Demands of Works Contract Tax contested not acknowledged as debts as the company is hopeful of favourable decision.

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 filed an appeal with the Commissioner of Income Tax (A) and is hopeful of favourable decision.

11.29

xx

Sr.

No. Particulars Fiscal 2012

(` in crore)

F Disputed various matters relating to NTC / ATM Amount unascertained

Total 302.35*

* To the extent ascertainable

The following table sets forth certain information relating to our contingent liabilities, on a standalone basis, as of March 31, 2012:

Sr. No. Particulars Fiscal 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 73.48

D Corporate Guarantees given to bank for loans taken by Subsidiary Companies

977.62

E Bills discounted 214.79

F Taxation Matters :

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 filed an appeal with the Commissioner of Income Tax (A) and is hopeful of favourable decision.

1.69

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 filed an appeal with the Commissioner of Income Tax (A) and also made application for rectification u/s 154 providing details of amounts paid to the bank. Such rectification 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

Demands of Works Contract Tax contested not acknowledged as debts as the company is hopeful of favourable decision.

0.59

Income tax amounting to ` 11.29 crore, mainly on account of disallowance of interest and expenditure incurred towards exempt income. The Company has filed an appeal with the Commissioner of Income Tax (A) and is hopeful of favourable decision..

11.29

1,279.74*

* To the extent ascertainable

15. Our Company has entered into, and expects to continue to enter into, related party transactions. There

can be no assurance that we could not have achieved more favourable terms had such transactions been

entered into with un-related parties.

Our Company has, on a standalone basis, entered into the following transactions as at and for the Financial Year ended March 31, 2012, with related parties that include our Promoters and Promoter Group and entities affiliated with our Promoters and Promoter Group:

xxi

Transaction

Associate

companie

s

Entities

under

common

control

Subsidiari

es

Joint

Venture

Companie

s

Key

Managem

ent

Personnel

Relatives

of Key

Managem

ent

Personnel

Total

(` in

crore)

a) Unsecured Short Term Borrowing

Accepted during the year (on amalgamation)

- - - 11.75 - - 11.75

(-) (-) (-) (-) (-) (-) (-)

Balance as at 31 Mar - - - 11.75 - - 11.75

(-) (-) (-) (-) (-) (-) (-)

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)

xxii

Transaction

Associate

companie

s

Entities

under

common

control

Subsidiari

es

Joint

Venture

Companie

s

Key

Managem

ent

Personnel

Relatives

of Key

Managem

ent

Personnel

Total

(` in

crore)

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 Advances

Balance 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

(-) (-) (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)

xxiii

Transaction

Associate

companie

s

Entities

under

common

control

Subsidiari

es

Joint

Venture

Companie

s

Key

Managem

ent

Personnel

Relatives

of Key

Managem

ent

Personnel

Total

(` in

crore)

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 figures are given in brackets

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 38. 16. 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 March 31, 2012, our Company’s borrowing under TUFs is ` 2,674.05 crore, which amounts to 20.94% of our Company’s total indebtedness on a standalone basis. Any adverse change in TUFs or discontinuation or non-renewal of the same could adversely affect our expansion plans.

17. 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 Fiscal Year 2012, approximately 34% of our Company’s revenues, particularly relating to our export sales, and approximately 21.88% of our cash expenses, including cost of raw materials, are denominated in currencies other than Indian rupees, most significantly the U.S. dollar. 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 March 31, 2012, approximately 16% of our Company’s total indebtedness 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

xxiv

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 34% 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 Draft 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. 18. 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.

19. 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 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. 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

20. 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.

xxv

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. 21. 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. 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.

22. 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. 23. 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

xxvi

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.

24. 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. 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 47 of this Draft Letter of Offer. 25. 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. Our H&A stores are operated through franchise arrangements with third parties. As of August 31, 2012, approximately 108 of our H&A stores were operated through the franchise model wherein we typically do not incur any capital or rental costs. 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.

26. 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

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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. 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. 27. 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. 28. 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. 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.

29. 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.

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Our garments and home textile businesses are more labour intensive due to the requirement of stitching operations. These businesses contributed 2.44% and 14.05%, respectively, of our Company’s revenue in Fiscal 2012. 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. 30. 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. 31. 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.

32. 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

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 Fiscals 2011 and 2012, export sales from India contributed 34.71% and 34.04%, respectively, of our total sales in these periods.

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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.

33. 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 March 31, 2012, we had outstanding export obligations pursuant to the EPCG scheme of ` 3,449 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.

34. 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 Litigation” on page 46. 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. 35. 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

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changing demands of our customers will have an adverse effect on our business, profitability and growth prospects.

36. 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 40 trademarks registered and 32 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.

37. 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 ` 6,388.43 crore in Fiscal 2011 to ` 8,900.86 crore in Fiscal 2012. Similarly, our Company’s exports have grown from ` 2,217.43 crore in Fiscal 2011 to ` 3,029.55 crore in Fiscal 2012. 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; 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.

38. 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,

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financial condition and results of operations.

39. 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.

40. 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. 41. 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

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of which could have an adverse effect on our business, results of operations, financial condition and cash flows. 42. 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. 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.

43. 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 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.

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44. 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. 45. Information relating to the installed capacities of our manufacturing facilities included in this Draft

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 Draft Letter of Offer is based on various assumptions and estimates of our management, including proposed operations, assumptions relating to availability and quality of raw materials and assumptions relating to potential plant utilization levels and potential operational efficiencies. 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 Draft Letter of Offer.

46. 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.

Risks relating to the objects of this Issue

47. We have not commissioned an independent appraisal for the use of the proceeds of this Issue.

Furthermore, while we will appoint 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

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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 24 of this Draft Letter of Offer. External Risks 48. 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 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. 49. 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.

50. 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. 51. 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.

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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.

52. 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.

53. 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.

54. 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.

55. 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

56. 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 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

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assurance that any approval required from the RBI or any other government agency can be obtained on any particular terms or at all.

57. 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. 58. 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. 59. Our Equity Shares trade in the Futures and Options (“F&O”) segment and we are currently not subject

to a daily “circuit breaker” imposed by all stock exchanges in India, which could result in significant

volatility in the price of the Equity Shares. There can be no assurance that our Equity Shares will

continue to remain in the F&O segment and that the circuit breaker will not apply to our Equity Shares.

There are two types of circuit breakers applicable to the stocks listed on the Stock Exchanges, namely, (i) a daily “price based circuit breaker”, which specifies the band within which the price of a particular stock is allowed to move freely; and (ii) an index based market wide circuit breaker, which applies to a stock at three stages of the index movement either way at 10%, 15% and 20%. While the daily price based circuit breaker is applicable to a stock depending on whether it is traded in the F&O segment, an index based market wide circuit breaker is applicable to all the stocks listed on all the Stock Exchanges. Further, the daily “price based circuit breaker” operates independently of the index based market wide circuit breakers imposed by SEBI on Indian stock exchanges. Our Equity Shares are traded in the F&O segment and we are therefore currently not subject to a daily “price based circuit breaker” imposed by the Stock Exchanges in India, which does not allow transactions beyond specified increases or decreases in the price of the Equity Shares. There can be no assurance that our Equity Shares will continue to remain in the F&O segment and that the daily “price based circuit breaker” will not apply to our Equity Shares in the future.

xxxvii

However, the index based market-wide circuit breaker system is still applicable to our Equity Shares and these circuit breakers bring about a coordinated trading halt in trading on all equity and equity derivatives markets across the country. The breakers are triggered by movements in either Nifty 50 or Sensex, whichever is breached earlier. There cannot be any assurance that the Stock Exchanges will not halt trading due to the index-based market-wide circuit breaker in future and closure of, or trading stoppage on, the Stock Exchanges could adversely affect the trading price of our Equity Shares. 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 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

xxxviii

prices at which the Equity Shares will trade in the future.

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. Prominent Notes:

The net worth (net worth means share capital and all reserves) of our Company, as at March 31, 2012, on a

consolidated basis, is ` 2860.37 crore and, on a standalone basis, is ` 3655.50 crore, as per the financial statements of our Company prepared in accordance with the Indian GAAP in “ Financial Information” beginning on page 38;

This is a rights issue of [●] Equity Shares of ` 10 each for cash at a price of ` [●] per Equity Share,

including premium of ` [●] per Equity Share, for an aggregate amount not exceeding ` 551 crore to the Eligible Equity Shareholders of our Company in the ratio of [●] Equity Shares for every [●] Equity Shares held as on the Record Date i.e. [●];

Our Company has entered into the following related party transactions as at and for the Financial Year

ended March 31, 2012, with related parties that include our Promoters and Promoter Group and entities affiliated with our Promoters and Promoter Group:

Transaction Associate companies

Entities under

common control

Subsidiaries Joint

Venture Companies

Key Management

Personnel

Relatives of Key

Management Personnel

Total (` in

crore)

a) Unsecured Short Term Borrowing

Accepted during the year (on amalgamation)

- - - 11.75 - - 11.75

(-) (-) (-) (-) (-) (-) (-)

Balance as at 31 Mar

- - - 11.75 - - 11.75

(-) (-) (-) (-) (-) (-) (-)

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

xxxix

Transaction Associate companies

Entities under

common control

Subsidiaries Joint

Venture Companies

Key Management

Personnel

Relatives of Key

Management Personnel

Total (` in

crore)

(-) (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 Advances

Balance as at 31 - - 0.02 - - - 0.02

xl

Transaction Associate companies

Entities under

common control

Subsidiaries Joint

Venture Companies

Key Management

Personnel

Relatives of Key

Management Personnel

Total (` in

crore)

Mar

(-) (-) (-) (-) (-) (-) (-)

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

(-) (-) (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

xli

Transaction Associate companies

Entities under

common control

Subsidiaries Joint

Venture Companies

Key Management

Personnel

Relatives of Key

Management Personnel

Total (` in

crore)

(-) (-) (-) (-) (-) (-) (-)

Note: Previous year figures are given in brackets

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 Draft 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 59.

Equity Shares offered in this Issue [●] Equity Shares Rights Entitlement [●] Equity Share(s) for every [●] fully paid-up Equity Share(s)

held on the Record Date. Record Date [●] Face Value per Equity Share `10 Issue Price per Equity Share `[●] 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)

[●] Equity Shares

Terms of the Issue For further information, please refer to “Terms of the Issue” on page 59.

Use of Gross Proceeds For further information, please refer to “Objects of the Issue” on page 24.

Terms of Payment

Due Date Amount

On the Issue application (i.e. along with the CAF) ` [●], which constitutes 100% of the Issue Price payable

Note on Outstanding Instruments

Employee Stock Options

Of the options granted under ALOK ESOS 2010, 1,03,86,350 options remain outstanding as on June 30, 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 consolidated and audited standalone financial statements as on and for Fiscal 2012 prepared in accordance with Indian GAAP and the Companies Act and the limited reviewed financial results for the quarter and three months ended June 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 38.

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 3,655.50 3,097.59

(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

3

Standalone Profit and Loss Account

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,

(1,516.66) (222.55) work-in-progress and stock-in-trade

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)

Include MAT adjustment of ` 44.12 Crore

(` 26.53 Crore pertaining to the previous year (previous year ` 42.42 crore))

– 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

4

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) 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 108.29 673.4 Cash and Cash equivalents pursuant to amalgamation 147 –

Cash and Cash equivalents at the end of the year 542.76 108.29

5

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.

6

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 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

7

Consolidated Profit and Loss Account

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

8

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 –

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

9

Particulars

For the year ended

March 31, 2012

For the year ended

March 31, 2011

(` in crore) (` in crore)

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.

10

GENERAL INFORMATION

Registered Office

17/5/1 and 521/1, Village Rakholi / Saily, Silvassa - 396230, Union Territory of Dadra & Nagar Haveli, India. E-mail: alokrights@alokind.com 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

Dadra and Nagar Haveli, ROC Bhavan, Opposite: Rupal Park Society, Naranpura, Ahmedabad -380 013 Gujarat, India Tel: +91 079-27438531 Fax: +91 079-27438531 Company Secretary and Compliance Officer

Mr. K.H. Gopal 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: alokrights@alokind.com 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.

11

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: alokrights@sbicaps.com Investor Grievance E-mail.: investor.relation@sbicaps.com Website: www.sbicaps.com Contact Person: Ms. Shikha Agarwal SEBI Registration No: INM000003531

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: alok.rights@cfsl.in Investor Grievance E-mail: mbd@cfsl.in 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:alok.rights@emkayglobal.com Investor Grievance E-mail: ibg@emkayglobal.com Website: www.emkayglobal.com Contact Person: Mr. Rajesh Ranjan SEBI Registration. No: INM000011229

Enam Securities Private Limited

1st floor, Axis House C-2 Wadia International Centre, P.B. Marg, Worli, Mumbai- 400025 Maharashtra, India Tel: +91 22 2425 2525 Fax: +91 22 4325 3000 Email: alokrights@enam.com Investor Grievance E-mail.: complaints@enam.com Website: www.enam.com Contact Person: Ms. Ms. Dipali Dalal SEBI Registration No: INM000006856

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: alok.rights@fortune.co.in Investor Grievance I.D.: mbdcompliance@fortune.co.in 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: alok.rights@idbicapital.com Investor Grievance I.D.: redressal@idbicapital.com 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: mumbai@azbpartners.com

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

12

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: alok.rights@linkintime.co.in E-mail: alok.rights@linkintime.co.in Website: www.linkintime.co.in Contact Person: Mr. Pravin Kasare SEBI Registration No.: INR000004058

Bankers to the Issue

[●]

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 consolidated and standalone financial statements in the form and context in which the reports will appear in this Draft 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 Draft Letter of Offer to SEBI. 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 Draft 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 Draft Letter of Offer to SEBI.

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

13

S.

No.

Activity Responsibility Coordinator

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: · Finalising 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

Enam

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

Enam

Debenture trustee

This being an issue of equity shares, a debenture trustee is not required.

Issue Schedule

Issue Opening Date: [●] Last date for receiving requests for SAFs: [●] Issue Closing Date: [●]

Monitoring Agency

14

The Company has appointed [●] as the monitoring agency, to monitor the utilization of the Net Proceeds in terms of Regulation 16 of the SEBI ICDR Regulations. [●] Tel: [●] Fax: [●] Contact Person: [●] E-mail: [●] Website: [●]

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 38. Underwriting

Our Company is currently contemplating entering into an underwriting agreement with the Underwriters for underwriting the Equity Shares offered through this Issue for a maximum of up to ` [●] crore. Our Board or a committee thereof shall ensure that the Underwriters appointed shall have sufficient resources to enable them to discharge their underwriting obligations in full. Details of the underwriting agreement shall be appropriately incorporated in the Letter of Offer. If our Company does not receive minimum subscription of 90% of the Issue, including devolvement of the Underwriters, the entire subscription shall be refunded to the Applicants within 70 days from the Issue Closing Date, where minimum subscription including devolvement obligations paid by the Underwriters is not received within 60 days of 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.

15

CAPITAL STRUCTURE Our capital structure and related information as on date of this Draft 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 Draft Letter of Offer*

[●] Equity Shares at an Issue Price of ` [●] per Equity Share (premium of ` [●] per Equity Share) [●] [●]

F. Issued capital after the Issue (assuming full subscription for and

allotment of the Rights Entitlement)

[●] Equity Shares of ` 10 each fully paid-up [●]

G. Subscribed and paid up capital after the Issue (assuming full

subscription for and allotment of the Rights Entitlement)

[●] Equity Shares of `10 each fully paid-up [●] *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, 1,03,86,350 options remain outstanding as on June 30, 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 members of the Promoters / Promoter Group, in compliance with the Takeover Regulations. 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.

2. Our shareholding pattern as on September 21, 2012 is as follows:

Category

Code

Category of Shareholder

Number of Sharehold

ers

Total number of shares

Number of shares held

in dematerializ

ed form

Total shareholding as a percentage of total number of shares

Shares Pledged or otherwise encumbered

As a percentage of (A+B)1

As a percentage of (A+B+C)

Number of shares

As a percentage

16

(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX)=

(VIII)/(IV)*100

(A) Shareholding of Promoter and Promoter Group2

1 Indian

(a) Individuals/ Hindu Undivided Family

12.00 65,746,696 65,746,696 7.96 7.96 63,787,078 97.02

(b) Central Government/ State Government(s)

- - - - - - -

(c) Bodies Corporate 7.00 197,010,440 197,010,440 23.84 23.84 191,767,520 97.34

(d) Financial Institutions/ Banks

- - - - - -

(e) Trusts 2.00 19,459,382 19,459,382 2.36 2.36 17,236,000 -

Sub Total(A)(1) 21.00 282,216,518 282,216,518 34.16 34.16 272,790,598 96.66

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)

21.00 282,216,518 282,216,518 34.16 34.16 272,790,598 96.66

(B) Public shareholding

1 Institutions

(a) Mutual Funds/ UTI 8.00 1,500,200 1,500,000 0.18 0.18

(b) Financial Institutions / Banks

15.00 90,688,193 90,688,093 10.98 10.98

(c) Central Government/ State Government(s)

- - - - -

(d) Venture Capital Funds

- - - - -

(e) Insurance Companies

- - - - -

(f) Foreign Institutional Investors

61.00 103,799,714 103,799,714 12.56 12.56

(g) Foreign Venture Capital Investors

- - - -

(h) Any Other (specify) - - - -

Sub-Total (B)(1) 84.00 195,988,107 195,987,807 23.72 23.72

B 2 Non-institutions

(a) Bodies Corporate 1,954.00 63,670,107 61,650,707 7.71 7.71

(b) Individuals

I

i. Individual shareholders holding nominal share capital up to Rs 1 lakh

195,466.00 132,089,587 131,690,757 15.99 15.99

II

ii. Individual shareholders holding nominal share capital in excess of Rs. 1 lakh.

1,975.00 107,157,845 107,111,845 12.97 12.97

(c) Any Other - - -

Clearing Member 383.00 5,847,383 5,847,383 0.71 0.71

Market Member 72.00 1,008,862 1,008,862 0.12 0.12

Non Resident 1,351.00 5,824,329 5,801,129 0.70 0.70

17

Category

Code

Category of Shareholder

Number of Sharehold

ers

Total number of shares

Number of shares held

in dematerializ

ed form

Total shareholding as a percentage of total number of shares

Shares Pledged or otherwise encumbered

As a percentage of (A+B)1

As a percentage of (A+B+C)

Number of shares

As a percentage

(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX)=

(VIII)/(IV)*100

Indians (Repat)

Non Resident Indians (Non Repat)

289.00 1,570,427 1,570,427 0.19 0.19

Foreign Companies 1.00 30,875,742 30,875,742 3.74 3.74

Overseas Bodies Corporates

1.00 3,000 3,000 - -

Trusts 7.00 17,450 17,450 - -

Sub-Total (B)(2) 201,499.00 348,064,732 345,577,302 42.12 42.12

(B) Total Public Shareholding (B)= (B)(1)+(B)(2)

201,583.00 544,052,839 541,565,109 65.84 65.84

TOTAL (A)+(B) 201,604.00 826,269,357 823,781,627 100.00 100.00

(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)

201,604.00 826,269,357 823,781,627 100.00 100.00

The list of Equity Shareholders belonging to the category “Promoter and Promoter Group” as on September 21, 2012 is detailed in the table below:

Sr. No.

Name of the

shareholder

Details of Shares held Encumbered shares (*) Details of warrants

Details of convertible securities

Total shares (includ

ing underlying

shares assuming full conversion of warrants and conver

tible securities) as a % of diluted share capital

No. of shares held

As a % of grand total

(A) +(B) +( C )

No. As a %

As a % of grand total

(A)+(B)+(C) of sub-clause (I)(a )

Number of

warrants

held

As a % tota

l nu

mber of warrant

s of the sam

e clas

s

Number of

convertible

securities

held

As a % total

number of

convertible

securities

of the same class

(I) (II) (III) (IV) (V) (VI)=(V)/(III)*100

(VII) (VIII) (IX) (X) (XI) (XII)

1 Ashok B. Jiwrajka

20,270,684 2.45 20,270,684 100.00 2.45 - - - -

18

Sr. No.

Name of the

shareholder

Details of Shares held Encumbered shares (*) Details of warrants

Details of convertible securities

Total shares (includ

ing underlying

shares assuming full conversion of warrants and conver

tible securities) as a % of diluted share capital

No. of shares held

As a % of grand total

(A) +(B) +( C )

No. As a %

As a % of grand total

(A)+(B)+(C) of sub-clause (I)(a )

Number of

warrants

held

As a % tota

l nu

mber of warrant

s of the sam

e clas

s

Number of

convertible

securities

held

As a % total

number of

convertible

securities

of the same class

2 Dilip B. Jiwrajka

20,507,053 2.48 20,505,823 99.99 2.48 - - - -

3 Surendra B. Jiwrajka

21,294,951 2.58 21,294,372 100.00 2.58 - - - -

4 Chandrakumar Bubna

432,755 0.05 - - - - - - -

5 Chandrakala A. Jiwrajka

515,543 0.06 514,006 99.70 0.06 - - - -

6 Pramila D. Jiwrajka

1,236,963 0.15 1,202,193 97.19 0.15 - - - -

7 Geeta S. Jiwrajka

449,065 0.05 - - - - - - -

8 Narbada B. Jiwrajka

373,972 0.05 - - - - - - -

9 Jayshree Jivrajka

319,090 0.04 - - - - - - -

10 Vinod Jivrajka

319,090 0.04 - - - - - - -

11 Manju Bubna

25,030 0.00 - - - - - - -

12 Alok A. Jiwrajka

2,500 0.00 - - - - - - -

13

Dilip B. Jiwrajka, J1. Sunil O Khandelwal*

1,900,000 0.23 - - - - - - -

14

Surendra B. Jiwrajka, J1. K H Gopal*

17,559,382 2.13 17,236,000 98.16 2.09 - - - -

15

Nirvan Holdings Private Limited (NHPL)**

15,515,501 1.88 15,458,501 99.63 1.87 - - - -

16

Niraj Realtors & Shares Private Limited (NRSPL)

86,137,204 10.42 85,865,204 99.68 10.39 - - - -

19

Sr. No.

Name of the

shareholder

Details of Shares held Encumbered shares (*) Details of warrants

Details of convertible securities

Total shares (includ

ing underlying

shares assuming full conversion of warrants and conver

tible securities) as a % of diluted share capital

No. of shares held

As a % of grand total

(A) +(B) +( C )

No. As a %

As a % of grand total

(A)+(B)+(C) of sub-clause (I)(a )

Number of

warrants

held

As a % tota

l nu

mber of warrant

s of the sam

e clas

s

Number of

convertible

securities

held

As a % total

number of

convertible

securities

of the same class

17

Jiwrajka Investment Private Limited

24,274,091 2.94 24,274,091 100.00 2.94 - - - -

18

Ashok Realtors Private Limited

957,792 0.12 957,000 99.92 0.12 - - - -

19 Alok Knit Exports Limited

9,854,768 1.19 8,700,000 88.28 1.05 - - - -

20

Jiwrajka Associates Private Limited (JAPL)***

37,056,067 4.48 36,268,567 97.87 4.39 - - - -

21

Alok Finance Private Limited

23,215,017 2.81 20,244,157 87.20 2.45 - - - -

TOTAL 282,216,518 34.16 272,790,598 96.66 33.01 - - - - -

* Trustee on behalf of Alok Benefit Trust

** Out of 15515501 shares held by NHPL, the beneficial owners of 57000 shares are Mr. Santosh Jiwrajka (28500) and Mrs. Kiran Jiwrajka (28500

shares) *** Out of 37056067 shares held by JAPL, the beneficial owners of 787500 shares are M/s. Belisev Fashion Establishment.

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 September 21, 2012 is detailed in the table below

Sr. No.

Name of the shareholder Number of shares held

Shares as a %

Details of warrants Details of convertible

securities Total

shares

20

of total no. of shares

{i.e., Grand Total

(A)+(B)+(C)

indicated in

Statement at para (I)(a)

above}

No. of warrant

s held

As a % total

number of

warrants of the

same class

Number of convertible securities

held

% w.r.t total

number of convertible securities

of the same

class

(including underlying

shares assuming

full conversion

of warrants

and convertible securities) as a % of diluted share capital

1 Caledonia Investments PLC

30,875,742 3.74 - - - -

2 Life Insurance Corporation of India

26,964,136 3.26 - - - -

3 IFCI Limited 21,440,823 2.59 - - - -

4 Axis Bank Limited 17,329,800 2.10 - - - -

5 Swiss Finance Corporation (Mauritius) Limited

13,049,066 1.58 - - - -

6 Credit Suisee (Singapore) Limited

12,540,000 1.52 - - - -

7 The Royal Bank of Scotland N V (London) Branch

11,859,000 1.44

8 Goldman Sachs Investments (Mauritius) Limited

11,823,199 1.43 - - - -

9 IDBI Bank Limited 10,788,161 1.31 - - - -

10 Religare Finvest Ltd 10,293,670 1.25

11

IL&FS Trust Company Limited A/c IL&FS Private Equity Trust -Leverage India Fund

9,955,642 1.20

12 Bharat Kanaiyalal Sheth

9,775,000 1.18 - - - -

TOTAL 186,694,239 22.59 - - - - -

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:

Sr. No.

Name(s) of the

shareholder(s)

and the Persons

Acting in

Concert (PAC)

with them

Number

of shares

Shares as a

percentage of

total number of

shares {i.e.,

Grand Total

(A)+(B)+(C)

indicated in

Statement at para

(I)(a) above}

Details of warrants Details of convertible securities

Number

of

warrants

As a %

total

number

of

warrants

of the

same

class

Number of

convertible

securities

held

% w.r.t total

number of

convertible

securities of the

same class

Nil Nil Nil Nil Nil Nil Nil

21

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 Nil Nil Nil

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

22

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 Draft 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

15-Mar-12 Allotment of equity shares, pursuant to amalgamation of Grabal Alok Impex Limited with the Company

N.A. 22,95,020

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

16,795,020

Nirvan Holdings Private Limited

15-Mar-12 Allotment of equity shares, pursuant to amalgamation of Grabal Alok Impex Limited with the Company

N.A. 10,79,000

30-Apr-12 Off Market Purchase 30.00 30,00,000

40,79,000

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

Alok Finance Private Limited

15-Mar-12 Allotment of equity shares, pursuant to amalgamation of Grabal Alok Impex Limited with the Company

N.A. 16,08,614

16,08,614

Jiwrajka Investment Private Limited

10-Mar-12 Preferential Allotment 51.00 1,60,00,000

15-Mar-12 Allotment of equity shares, pursuant to amalgamation of Grabal Alok Impex Limited with the Company

N.A. 10,42,100

1,70,42,100

4. As on the date of this Draft Letter of Offer, there are no outstanding convertibles into Equity Shares other than the

options granted under Alok ESOS 2010.

5. Of the options granted under ALOK ESOS 2010, 1,03,86,350 options remain outstanding as on June 30, 2012, all of which have been vested but not yet exercised.

6. 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.

7. If our Company does not receive minimum subscription of 90% of the Issue, including devolvement of the

Underwriters, the entire subscription shall be refunded to the Applicants within 70 days from the Issue Closing Date, where minimum subscription including devolvement obligations paid by the Underwriters is not received within 60 days of 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.

23

8. 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 Draft Letter of Offer with the Stock Exchanges/SEBI until the Equity Shares to be issued pursuant to the Issue have been listed.

9. The ex-rights price of the Equity Shares as per Regulation 10(4) (b) of the Takeover Regulations is [•].

24

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 551.00 Less: Issue related expenses [●]* Net Proceeds [●]* *Amounts will be finalised at the time of filing of the Letter of Offer

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 ` [●]. 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 and Means of Finance

The details of the utilization of Net Proceeds will be as per the table set forth below:

Particulars

Amount estimated to be utilized through the

Net Proceeds

(` in crore)

Incremental working capital requirement to be funded from Net Proceeds 475.00 General corporate purposes [●]* Total [●]*

25

*Amounts will be finalised at the time of filing of the Letter of Offer

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 over the last 15 months in our Company’s facilities in India on a standalone basis:

Segments/Divisions Unit Installed capacity as

on March 31, 2011

Installed

Capacity as of

March 31, 2012

Installed

Capacity as of

June 30, 2012 Cotton Yarn MT 69,040 80,000 80,000 Ring Frame Ring Spindles 3,43,840 4,11,840 4,11,840 Open End Rotors 3,792 5,680 5,680

Polyester Yarn Continuous Polymerization MT 3,00,000 5,00,000 5,00,000 which includes

(a) Drawn Texturized Yarn MT 1,14,000 1,30,000 1,30,000 (b) POY/Dyed Yarn/ Chips MT 1,20,300 3,00,000 3,00,000 (c) Fully Drawn Yarn MT 65,700 70,000 70,000

Apparel Fabric Processing Woven Million Meters 105.00 130.00 130.00 Weaving Million Meters 93.00 186.00 186.00 Knits MT 18,200 18,200 18,200

Home Textiles Processing Million Meters 82.50 105.00 105.00 Weaving Million Meters 68.00 92.00 96.00 Terry Towels MT 6,700 13,400 13,400

Garments Million Pieces 22 22 22

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 47.89% from ` 1,638.19 crore for the three month period ended June 30, 2011 to ` 2,422.75 crore for the three month period ended June 30, 2012. 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:

26

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 years, namely Fiscal 2013, based on the various expansion activities carried on by our Company as set out in “Capacity Expansion” above. 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 Holding level (in

days of sales)

FY2012 Holding level (in days of

sales)

FY2013

(` in crore) (` in crore)

Historical Audited Estimates*

CURRENT ASSETS

Inventory 139 3,379.91 116 3,694.20

which includes

- Raw Material 18 435.09 16 501.63

- Stock In Progress (including stock in trade) 91 2,223.49 73 2,318.78

- Finished Goods 26 641.86 24 758.54

- Store Consumable (Spares and Packaging material) 3 79.47 3 115.25

Sundry Debtors 88 2,152.15 110 3,505.50

Other Current Assets (incl. Advances) 1,512.38 1,410.00

Total Current Assets (A) 7,044.44 8,609.70

CURRENT LIABILITIES

Trade Payables 21 506.42 32 1,026.36

Provisions 75.60 111.28

Other current liabilities 425.46 88.25

Total Current Liabilities (B) 1,007.48 1,225.90

NET WORKING CAPITAL (A-B) 6036.96 7,383.80

Incremental Working Capital Requirement 1,346.84

Bank Finance / Internal Accruals 871.84

Incremental Working Capital Requirement to be funded from Net Proceeds

475.00

27

*Based on management estimates

B. General Corporate Purposes

We also intend to utilise a portion of the Net Proceeds for general corporate purposes including, amongst other things, brand building initiatives, 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. C. Issue Related Expenses

The expenses of this Issue include, among others, lead management expenditure, printing and distribution expenses, legal fees, advertisement cost, registrar fees, depository charges and listing fees. The total Issue expenses are estimated to be approximately ` [●] 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

[●] [●] [●]

Advertising, Printing and stationery (including courier and distribution charges)

[●] [●] [●]

Others (underwriting commission, legal fees, listing charges, depositories’ fees, auditor fees, out of pocket reimbursements etc.)

[●] [●] [●]

Total [●] [●] [●]

* Will be incorporated at the time of filing the Letter of Offer with the Stock Exchanges.

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 [●] 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.

28

Bridge Financing

Our Company has not availed any bridge loans from any bank/financial institutions as on the date of this Draft Letter of Offer, which are proposed to be repaid form the Net Proceeds.

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.

29

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: 25th September, 2012

30

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 and we currently have 11 directors on our Board The following table sets forth certain details regarding the Board of Directors as on the date of this Draft 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, 2008 Nationality: Indian

61

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, 2008 Nationality: Indian

55

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;

31

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, 2008 Nationality: Indian

53 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

59 Indian Companies

1. Jiwrajka Associates Private Limited

32

Particulars Age

(years)

Other directorships

Occupation: Businessman Term: 5 years with effect from May 1, 2009 Nationality: Indian

Mr. Ashok Rajani

(S/o Mr. Giridardas Rajani) 101/102, Red Rose Apts, Pochkhanwala Rd, Mumbai 400 018, Maharashtra, India Designation: Independent Director

DIN: 00267748

Occupation: Businessman Term: Liable to retire by rotation. Nationality: Indian

63

Indian Companies

1. Midas Touch Apparel Private Limited; 2. Flair Apparel Industries Private Limited; and 3. Vision Apparel Private Limited

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: Former 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

33

Particulars Age

(years)

Other directorships

Mr. David Rasquinha

(s/o Late Mr. Albert Ignatius Rasquinha) 902, Wallace Apartments 1, Slater Road, Grant Road (West), Mumbai – 400 007, Maharashtra, India Designation: Independent Director (Nominee Director of EXIM Bank) DIN: 01172654 Occupation: Executive Director of EXIM Bank Term: As decided by EXIM Bank Nationality: Indian

50 Indian Companies

1. Pipavav Shipyard Limited; 2. Global Procurement Consultants Limited; 3. Gokaldas Images Private Limited.

Mrs. Thankom Mathew

(wife of 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

59 Nil

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

65 Indian Companies

1. IFCI Financial Services Limited

2. Parijatha Business Solution Private Limited

34

Particulars Age

(years)

Other directorships

the Technical Development Board of Government of India as Finance Expert. Term: As decided by IFCI Limited Nationality: Indian

Ms. Maya Chakravorty

(daughter of 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, IDBI Bank Limited

Term: As decided by IDBI Bank Limited Nationality: Indian

47 Nil

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. Brief Biography of our Directors

Mr. Ashok Jiwrajka is the Executive Chairman of the Company. He completed his schooling and college from Mumbai. Immediately after his graduation, he joined the family partnership firm and incorporated our Company in 1986. Mr. Jiwrajka 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 Alok Industries Limited in 1986. 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 incorporated Alok Industries Limited in 1986. Mr. Jiwrajka 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

35

polyester and spinning businesses and project implementation of our Company. Mr. Chandrakumar Bubna is the Executive Director of our Company. He is commerce graduate and associated with the textile industry in the field of marketing for more than two decades. He 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. 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. He 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. David Rasquinha secured a first class degree in Economics from Bombay University and followed it up with a post graduate qualification in Business Management from the XLRI, Jamshedpur where he was awarded the Gold Medal in Economics. He is a qualified assessor for the CII – Exim Award for Business Excellence, a Total Quality Management award based on the TQM model of the European Foundation for Quality Management. He heads the Project & Trade Finance Group of the EXIM Bank, He joined EXIM Bank in 1985 and since then he has wide ranging exposure to the broad field of export credit, having worked in the areas of Treasury, Multilateral Agency Funded Projects, Planning & Research, Risk Management, Trade Finance and Project Finance. He was a member of an EXIM Bank team that conducted a feasibility study for setting up an export credit agency for the Gulf co-operation Council countries. He served as a member on the Working group set up by Reserve Bank of India for working capital finance to software units. From 1999 – 2004, he served as Resident Representative at the Bank’s Washington DC Representative Office. Mrs. Thankom Mathew has been nominated as a 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 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. 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 , 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 May 7, 2012, passed by the shareholders of our Company in accordance with Section 192A of the Companies Act read with the Companies (Passing of Resolution by Postal Ballot) Rules, 2001 (including any statutory modification or re-enactment thereof for the time being in force), 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

36

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. Mr. David Rasquinha EXIM Bank 2. Mrs. Thankom Mathew Life Insurance Corporation of India 3. Mr. M. V. Muthu IFCI Limited 4. Ms. Maya Chakravorty IDBI Bank Limited

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, 2008, are as follows: Tenure of

Appointment

5 years with effect from March 10, 2008

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 dependants; 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, 2008, are as follows: Tenure of

Appointment

5 years with effect from March 10, 2008

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 dependants; 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.

37

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, 2008, are as follows: Tenure of

Appointment

5 years with effect from March 10, 2008

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 dependants; 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: Tenure of

Appointment

5 years with effect from May 1, 2009

Annual

Salary:

` 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 dependants; 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.

38

SECTION VI – FINANCIAL INFORMATION

Sr. No. Particulars Page Nos.

1 Standalone audited financial statements as at and for the year ended FY 2012 F – 1 2 Consolidated audited financial statements as at and for the year ended FY 2012 F – 45

F - 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 - 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 - 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 - 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 -

In terms of our report attached For and on behalf of the Board

For Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka xecutive Chairman

Chartered ccountants Chartered ccountants Dilip B. Jiwrajka Managing irector

Surendra B. Jiwrajka t. Managing irector

R. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cer

Partner Partner K. H. Gopal President (Corporate ffairs) Company Secretary

Place 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-11

I 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 -

In terms of our report attached For and on behalf of the Board

For Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka xecutive Chairman

Chartered ccountants Chartered ccountants Dilip B. Jiwrajka Managing irector

Surendra B. Jiwrajka t. Managing irector

R. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cer

Partner Partner K. H. Gopal President (Corporate ffairs) Company Secretary

Place 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-11

I. 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 EXPENSES

Cost 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 - 7

(` Crore)

PARTICULARS Year Ended 31-Mar-12

Year Ended 31-Mar-11

A] Cash Flow from Operating Activitieset Pro t Before Tax 640.50 3.1

Adjustments for:epreciation mortisation 713.43 1 .7

xchange rate difference 124.47 41.4

ividend 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) 1.74

Pro 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. 4

Adjustments 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 . 1

ncrease in Current iabiltites and Provisions 136.14 4 .3

Cash generated from operations 17.07 1,243. 1

ncome 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 1.74

Purchase of nvestments (116.74) (131.1 )

Sale of nvestments 162.48 1 4. 2

Fixed eposits earmar ed balances matured (placed) (refer note 2 belo ) 285.66 (314. 7)

ividends received 2.57 2.37

nterest received 33.23 34.

nter Corporate deposits refunded ( et) 1.26 2.4

et 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 -

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 .32

ess 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 Board

For Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka xecutive Chairman

Chartered ccountants Chartered ccountants Dilip B. Jiwrajka Managing irector

Surendra B. Jiwrajka t. Managing irector

R. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cer

Partner Partner K. H. Gopal President (Corporate ffairs) Company Secretary

Place 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 -

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 - 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 - 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 - 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 - 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-11

Capital Reserve

Balance as per last Balance Sheet 10.23 10.23

dd on amalgmation 1.49

11.72 10.23

Capital Redemption Reserve

Balance as per last Balance Sheet 2.20 2.20

dd on amalgmation 6.90

9.10 2.20

Securities Premium Account

Balance 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 Reserve

Balance 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 Reserve

Balance 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 - 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. 1

dd on amalgmation 54.85

Pro t for the year 380.53 404.3

Less : 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 Current

a) 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 - 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 - 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 - 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 - 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 - 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-11

Provision 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 - 20

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012 11

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F - 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 - 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-11

Considered 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 - 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 - 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-11

oans 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 - 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-11

Considered 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-12

Year Ended 31-Mar-11

a) 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-12

Year Ended 31-Mar-11

nterest 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 - 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-12

Year Ended 31-Mar-11

CLOSING STOCK AS ON 31 MARCH 2012

Finished 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 2011

Finished 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 Ended31-Mar-12

Year Ended 31-Mar-11

Salaries, 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 - 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 - 28

26 Contingent Liabilities in respect of :

(` Crore)

Sr. No. Particulars Current Year Previous YearA 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 - 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 - 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 Advances

Balance 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 - 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 Yeara) Unsecured Borrowing

Accepted 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 - 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 - 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 - 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 - 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 - 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 Ended31 March

201231 March

201131 March

201031 March

200931 March

2008De 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 Year

Previous Year

Segment 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 - 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 20111 Interest Rate Swaps

USD 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 - 38

b) Amount Payable in foreign currency on account of the following

Particulars Current Year Previous Year

Foreign Currency

Amount 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) 193.51

Carrying 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 - 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 - 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 2010-11

Cotton & Cotton yarn

Raw Cotton 766.94 456.55

Cotton Yarn 610.78 302.36

1,377.72 758.91

Apparel Fabric

Woven Fabric 1,498.11 1,038.67

Knitted Fabric 33.72 26.52

1,531.83 1,065.19

Polyester Yarn

PTA 2,767.75 1,352.79

Chips 28.58 24.52

POY 6.70 22.63

Melt 10.31 -

2,813.34 1,399.94

Others

Packing 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 - 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 - 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 Secretary

Place : Mumbai Place : Mumbai Place : Mumbai

Mumbai: 18 May 2012 Mumbai: 18 May 2012 Mumbai: 18 May 2012

NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012

F - 43

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F - 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 - 46

In terms of our report attached For and on behalf of the Board

For Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive Chairman

Chartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director

Surendra B. Jiwrajka Jt. Managing Director

R. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cer

Partner Partner K. H. Gopal President (Corporate Affairs) & Company Secretary

Place : Mumbai Place : Mumbai Place : Mumbai

Date: 18 May 2012 Date: 18 May 2012 Date: 18 May 2012

(` Crore)

PARTICULARS NOTES AS AT31-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 - 47

In terms of our report attached For and on behalf of the Board

For Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive Chairman

Chartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director

Surendra B. Jiwrajka Jt. Managing Director

R. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cer

Partner Partner K. H. Gopal President (Corporate Affairs) & Company Secretary

Place : Mumbai Place : Mumbai Place : Mumbai

Date: 18 May 2012 Date: 18 May 2012 Date: 18 May 2012

(` Crore)

PARTICULARS NOTES Year Ended 31-Mar-12

Year Ended 31-Mar-11

REVENUE 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 - 48

(` Crore)

PARTICULARS Year Ended 31-Mar-12

Year Ended 31-Mar-11

A] 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 - 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 Board

For Deloitte Haskins & Sells For Gandhi & Parekh Ashok B. Jiwrajka Executive Chairman

Chartered Accountants Chartered Accountants Dilip B. Jiwrajka Managing Director

Surendra B. Jiwrajka Jt. Managing Director

R. D. Kamat Devang B. Parekh Sunil O. Khandelwal Chief Financial Of cer

Partner Partner K. H. Gopal President (Corporate Affairs) & Company Secretary

Place : Mumbai Place : Mumbai Place : Mumbai

Date: 18 May 2012 Date: 18 May 2012 Date: 18 May 2012

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2012

F - 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 - 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 - 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 - 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 - 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 AT31-Mar-12

AS AT31-Mar-11

Authorised100,00,00,000 (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 AT31-Mar-12

AS AT31-Mar-11

No 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 - 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 AT31-Mar-12

AS AT31-Mar-11

No 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 - 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 - 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 Institutions

TOTAL

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 - 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 - 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 AT31-Mar-12

AS AT31-Mar-11

Provision 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 AT31-Mar-12

AS AT31-Mar-11

Debenture (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 - 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 Institutions

TOTAL

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 AT31-Mar-12

AS AT31-Mar-11

Total 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 - 61

9 OTHER CURRENT LIABILITIES

(` Crore)

PARTICULARS AS AT31-Mar-12

AS AT31-Mar-11

Current 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 - 62

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ired.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012

F - 63

12 NON CURRENT INVESTMENTS

(` Crore)

PARTICULARS AS AT31-Mar-12

AS AT31-Mar-11

Investment 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 - 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 AT31-Mar-12

AS AT31-Mar-11

Considered 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 - 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 AT31-Mar-12

AS AT31-Mar-11

Investments 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 AT31-Mar-12

AS AT31-Mar-11

Raw 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 - 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 AT31-Mar-12

AS AT31-Mar-11

Cash 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 AT31-Mar-12

AS AT31-Mar-11

Considered 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 - 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 AT31-Mar-12

AS AT31-Mar-11

Considered Good

Forward Contract Receivable – 4.28

Interest Subsidy Receivable 88.09 123.35

Unutilised DEPB Licence 25.98 7.85

Interest Receivable 0.32 0.07

Insurance Claim Receivable 1.11 0.09

Balances with Central Excise Authorities 0.05 0.19

Foreign Currency Monetary Item Translation Difference Account 0.03 0.55

Rent Receivable 0.23 –

115.81 136.38

Considered Doubtful

Interest Subsidy Receivable 9.31 9.31

Less : Provision 9.31 9.31

- -

TOTAL 115.81 136.38

20 REVENUE FROM OPERATIONS

(` Crore)

PARTICULARS AS AT31-Mar-12

AS AT31-Mar-11

Sale of product

Sales – Local 6,165.75 4,362.34

Sales – Export 3,813.27 2,342.70

9,979.02 6,705.04

Sale of services

Job work charges collected 31.19 13.16

Sale 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 - 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 - 69

24 FINANCE COSTS

(` Crore)

PARTICULARS AS AT31-Mar-12

AS AT31-Mar-11

Interest 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 AT31-Mar-12

AS AT31-Mar-11

Stores 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 - 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 - 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 - 72

29

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012

F - 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 - 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 - 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 - 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 - 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 - 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-2012

Basic 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 - 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-11

a. 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 - 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 - 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 CurrentYear

Previous Year

Segment 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 - 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 - 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 - 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 Secretary

Place : Mumbai Place : Mumbai Place : Mumbai

Date: 18 May 2012 Date: 18 May 2012 Date: 18 May 2012

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012

39

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 Draft 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 NSE and BSE for the preceding three calendar years and the number of

Equity Shares traded on the days the high and low prices were recorded are stated below.

BSE

Year High^

(`) Date of High

No. of Shares traded on

date of high

Total Volume

of traded on date of high

(` in

crores)

Low$ (`)

Date of Low No. of Shares traded on date

of low

Total Volume

of traded on date of low (` in

crores)

Average price for the

year (`)*

2011 29.50 January 4, 2011 4,813,251 13.87 15.6 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

2009 29.50 June 5, 2009 11,522,291 32.67 11.55 March 23, 2009 618,698 0.73 19.19

^High based on daily high prices

$Low based on daily low prices

*Average of daily closing prices

(Source: www.bseindia.com) NSE

Year ending

March 31

High^ (`)

Date of High No. of Shares

traded on date of high

Total Volume

of traded on date of

high (` in

crores)

Low$ (`)

Date of Low No. of Shares

traded on date of low

Total Volume of traded on

date of low (` in

crores)

Average price for the year

(`)*

2011 29.25 January 3, 2011 22,278,838 64.35 15.6 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

2009 29.45 June 5, 2009 32,980,247 93.66 11.55 March 23, 2009 1,732,490 2.04 19.18

^High based on daily high prices

$Low based on daily low prices

* Average of the daily closing prices. (Source: www.nseindia.com) The high and low prices and volume of Equity Shares traded on the respective dates during the last eight 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

January January 30, 2012 20.55 1,245,402 January 6, 2012 17.50 425,784 18.85 22 February February 13, 2012 23.90 2,279,723 February 28, 2012 19.55 1,025,908 21.69 20

40

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

March March 5, 2012 21.90 2,489,464 March 29, 2012 18.55 1,538,258 20.13 22 April April 12, 2012 21.50 1,381,853 April 26, 2012 18.70 690,333 19.69 20 May May 8, 2012 19.90 499,997 May 14, 2012 17.65 900,134 18.74 22 June June 11, 2012 19.05 528,884 June 28, 2012 17.25 1,121,363 18.15 21 July July 6, 2012 18.70 2,065,714 July 27, 2012 15.25 2,558,874 17.18 22

August August 9, 2012 16.55 3,237,879 August 30, 2012 11.30 3,714,742 15.04 21 (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)

Avg Price for the Month (`)*

Total No of Trading Days

January January 30, 2012

20.55 5,218,057 January 6, 2012 17.50 2,303,579 18.86 22

February February 13, 2012

23.85 9,159,627 February 2, 2012 19.80 4,407,824 21.72 20

March March 5, 2012 21.90 9,406,211 March 30, 2012 18.00 12,934,965 20.14 22 April April 3, 2012 21.05 10,108,015 April 26, 2012 18.70 18,004,655 19.74 20 May May 8, 2012 20.00 4,335,672 May 14, 2012 17.65 3,340,693 18.78 22 June June 7, 2012 19.25 1,675,953 June 28, 2012 17.20 8,636,185 18.16 21 July July 6, 2012 18.70 10,933,955 July 27, 2012 15.20 8,981,988 17.19 22 August August 10, 2012 16.80 7,805,721 August 28, 2012 11.00 23,881,819 15.05 21 ^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. 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

September 21, 2012 11.81 11.80 September 14, 2012 11.35 11.35 September 8, 2012 11.85 11.85 August 31, 2012 11.9 11.85 (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 August 27, 2012 15.8 September 13, 2012 10.77 NSE August 27, 2012 15.8 September 13, 2012 10.75 (Source: www.bseindia.com) ; (Source: www.nseindia.com)

41

MATERIAL DEVELOPMENTS

Limited Review Financial Results for the three month period ended June 30, 2012

PART I

Statement of standalone audited results for the year ended 30 June 2012 (` in crores )

PARTICULARS

QUARTER ENDED Year ended

30.06.2012 (3 Months)

31.03.2012 (3 Months)

30.06.2011 (3 Months)

31.03.2012 (12 Months)

(Reviewed) (See note no 6

below) (See note no 5

below) (Audited)

1 Income from Operations

a) Net Sales / Income from operations 2,422.75 2,595.38 1,638.19 8,900.86

Total Income from Operations (net) 2,422.75 2,595.38 1,638.19 8,900.86

2 Expenses

a) Cost of Raw materials consumed 1,464.25 1,942.64 1,069.93 5,748.34

b) Purchase of stock-in-trade 20.01 20 6.52 161.45

c) Changes in inventories of finished goods, work-in-progress and stock-in-trade

(363.22) (551.84) (287.78) (1,516.66)

d) Employees Benefit expenses 73.18 65.45 59.07 267.28

e) Depreciation and Amortisation expense 213.37 173.59 169.41 713.43

f) Other Expenditure 479.3 390.35 334.84 1,681.30

Total Expenses 1,886.89 2,040.19 1,351.99 7,055.14

3 Profit from operations before other income, finance costs and exceptional items

535.86 555.19 286.2 1,845.72

4 Other Income 10.03 8.66 8.76 65.6

5 Profit from ordinary activities

545.89 563.85 294.96 1,911.32 before finance costs and exceptional items

6 Finance Costs 328.41 334.6 246.5 1,149.55

7 Profit from ordinary activities after

217.48 229.25 48.46 761.77 finance costs but before exceptional items

8 Exceptional Items ( Refer note no. 3 ) 172.96 (227.56) (18.47) 121.27

9 Profit from ordinary activities

44.52 456.81 66.93 640.5 before tax

10 Tax expenses 14.45 173.31 7.97 259.97

11 Net Profit / (Loss) for the period/Year 30.07 283.5 58.96 380.53

12 Paid up Equity Share Capital (Face Value `10/- per equity shares)

826.28 826.28 810.28 826.28

13 Reserves excluding revaluation reserves (As per Balance sheet of previous accounting year)

2829.22

14 Earnings Per Share (`) :

Basic 0.36* 3.48* 0.73* 4.69

Diluted 0.36* 3.48* 0.73* 4.69

* - Not annualised See accompanying Notes to the financial results

Part II

Selected information for the quarter and year ended 30.06.2012

PARTICULARS

QUARTER ENDED YEAR ENDED

30.06.2012 31.03.2012 30.06.2011 31.03.2012

[3 Months] [3 Months] [3 Months] [12 Months]

(Reviewed) (See note no 6

below) (See note no 5

below) (Audited)

A PARTICULARS OF SHAREHOLDING

1 Public Shareholding

- Number of shares 54,90,52,839 56,36,52,839 56,81,82,772 56,36,52,839

-Percentage of shareholding 66.45% 68.22% 70.12% 68.22%

2 Promoters and Promoter Group Shareholding

42

Selected information for the quarter and year ended 30.06.2012

PARTICULARS

QUARTER ENDED YEAR ENDED

30.06.2012 31.03.2012 30.06.2011 31.03.2012

[3 Months] [3 Months] [3 Months] [12 Months]

a) Pledged/Encumbered

- Number of Shares 22,66,21,148 19,25,28,869 13,95,75,540 19,25,28,869

- Percentage of Shares (as a % of the total shareholding of promoter and promoter group)

81.75% 73.31% 57.66% 73.31%

-Percentage of Shares (as a % of the total share capital of the Company)

27.43% 23.30% 17.23% 23.30%

b) Non- encumbered

- Number of Shares 5,05,95,370 7,00,87,649 10,25,11,045 7,00,87,649

- Percentage of Shares (as a % of the total shareholding of promoter and promoter group

18.25% 26.69% 42.34% 26.69%

-Percentage of Shares (as a % of the total share capital of the Company)

6.12% 8.48% 12.65% 8.48%

B INVESTOR COMPLAINTS

Pending at the beginning of the quarter Nil

Received during the quarter 20

Disposed of during the quarter 20

Remaining unresolved at the end of the quarter

Nil

Notes : 1. The above unaudited financial results of the Company for the quarter ended 30 June 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 August, 2012 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, segment results, assets except debtors, used 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.

PARTICULARS

QUARTER ENDED YEAR ENDED

30.06.2012 31.03.2012 30.06.2011 31.03.2012

[3 Months] [3 Months] [3 Months] [12 Months] (Reviewed) (See note no 5 below) (See note no 4 below) (Audited)

Segment Revenue

Domestic 1,586.11 1,780.48 1,011.90 5,871.31

International 836.64 814.9 626.29 3,029.55

2,422.75 2,595.38 1,638.19 8,900.86

Sundry Debtors

Domestic 1,877.09 1,799.53 1,420.55 1,799.53

International 318.04 352.62 239.27 352.62

2,195.13 2,152.15 1,659.82 2,152.15

43

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. Due to unusual depreciation in the value of Indian Rupee (INR) against US Dollar (USD) during the period, 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 comparative periods.

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 ended June 2011, March 2012 and Year ended March 2012 include figures of Grabal Alok Impex Limited and EPS has been restated for such periods.

5. Figures for the quarter ended 31 March 2012 are the balancing figures between audited figures for the

full financial year and the published year to date figures up to the third quarter of the financial year ended 31 March 2012 and Grabal Alok Impex Ltd, the amalgamated company

6. The figures of previous periods have been reclassified/ regrouped wherever necessary to correspond

with those of the current period. 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 July 31, 2012:

Sr. No Particulars Amount

(` in crore)

A (i) Sales /Turnover (Net) 3,341.31 - Local Sales 2,213.39 - Export Sales 1,127.92

A (ii) Other income 9.94 A (iii) Total Income 3,351.25

B EBITDA 1,012.91 C Provision for interest and Financial charges 444.67 D EBTDA [Estimated Gross Profit (excluding Depreciation & Taxes)] 568.24

E (i) Provision for depreciation 287.87 E (ii) Profit from ordinary activities 280.37 E (iii) Exceptional Items 169.16 E (iv) Profit before tax 111.21 E (v) Provision for Taxes 36.09

F Net Profit 75.12 G Net Cash Accruals 390.32

44

ACCOUNTING RATIOS AND CAPITALISATION STATEMENT

The following table presents certain accounting and other ratios derived from our 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 38 of this Draft Letter of Offer. This table should be read in conjunction with “Financial Information” and “Risk Factors” beginning on pages 38 and xiii, respectively, of this Draft Letter of Offer.

Particulars

Consolidated Standalone

As on March 31,

2012

As on March

31, 2011

As on March

31, 2012

As on March

31, 2011

Weighted average number of Equity Shares outstanding during the period for basic EPS

81,11,87,390 78,77,84,357 81,11,87,390 78,77,84,357

Weighted average number of Equity Shares outstanding during the period for diluted EPS

81,12,33,676 78,77,84,357 81,12,33,676 78,77,84,357

Basic EPS (`) 1.15 3.95 4.69 5.13 Diluted EPS (`) 1.15 3.95 4.69 5.13 Return on Net Worth (%) 3.25 11.16 10.41 13.05 NAV per Equity Share 34.62 35.44 44.24 39.32 The ratios have been computed as below:

a. Basic Earnings per share :

b. Diluted Earnings per share:

c. Return on net worth (%):

d. Net asset value per share (`) :

e. Net worth = Equity share capital + all Reserves.

f. Equity = Equity share capital + all Reserves

The EPS calculation as above is in accordance with AS-20 issued by the ICAI. Notes to Accounting ratios:

1. The exceptional item of ` 41.45 Crore and `121.27 Crore has been deducted from Net Profit after tax for FY11 and FY12 on standalone basis and exceptional item of ` 39.87 Crore and ` 121.27 Crore been deducted from Net Profit after tax for FY11 and FY12 on consolidated basis.

2. On account of the merger with Grabal Alok Implex Limited, revaluation reserve of ` 3.86 Crore has resulted in the consolidated books of accounts for FY12. The net worth excluding revaluation reserve for FY12 on a consolidated basis is ` 2856.51 Crore and the RoNW is 3.26%.

45

Capitalisation Statement of our Company on a standalone and consolidated basis

Standalone basis Consolidated basis

As at March

31, 2012 As adjusted for

the Issue

As at March

31, 2012 As adjusted for

the Issue

Loan Funds: Long Term Debt 7,013.06 [●] 8,516.96 [●] Short Term Debt and Current Maturity of Long Term Debt 5,759.16 [●] 7,533.51 [●]

Total debt (A) 12,772.22 [●] 16,050.47 [●] Shareholders’ funds: Share capital 826.27 [●] 826.27 [●] Share Forfeiture Account 0.01 0.01 Securities premium 993.65 [●] 993.65 [●] Other reserves and surplus 1,835.57 [●] 1,040.44 [●] Total Shareholders’ funds (B) 3,655.5 [●] 2,860.37 [●] Total capitalisation (A+B) 16,427.72 [●] 18,910.84 [●]

Long term Debt/Equity* 1.92 [●] 2.98 [●] *Equity includes share capital and all reserves

46

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 Draft 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:

Sr. No Nature of Litigation No. of Pending Cases Approximate Monetary Liability (` in crore)

Alok Industries Limited 1. Civil 7 20.74 2. Taxation 9 1.80 3. Labour 13 Not ascertainable

Total 29 22.54*

* 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

47

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 Draft 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 October 20, 2011 for renewal of the factory license no.1766 under the Factories Act to the Chief Inspector Factories & Boilers, Silvassa, which has expired on December 31, 2011;

(b) Application dated October 20, 2011 for renewal of the factory license no.928 under the Factories Act to the Chief Inspector Factories & Boilers, Silvassa, which has expired on December 31, 2011;

(c) Application dated October 20, 2011 for renewal of the factory license no.2460 under the Factories Act to the Chief Inspector Factories & Boilers, Silvassa, which has expired on December 31, 2011;

(d) Application dated October 20, 2011 for renewal of the factory license no.2396 under the Factories Act to the Chief Inspector Factories & Boilers, Silvassa, which has expired on December 31, 2011;

(e) Application dated October 20, 2011 for renewal of the factory license no.2224 under the Factories Act to the Chief Inspector Factories & Boilers, Silvassa, which has expired on December 31, 2011;

(f) Application dated June 5, 2012 for renewal of certificate bearing no. DU56, to use a boiler u/s 5 of the Indian Boiler Act under the Factories Act to the Chief Inspector of Boiler, Administration of Dadra & Nagar Haveli, Silvassa, which has expired on June 27, 2012; and

(g) 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 24, 2011 for renewal of the factory license no.2256 under the Factories Act

to the Chief Inspector Factories Administration of Dadra Nagar & Haveli; and

(b) 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 June 22, 2012 for renewal of the registration certificate bearing no. LEO/License/CL(R&A)Act/67/2009, to the Labour Enforcement Officer/Registering Officer, Dadra & Nagar Haveli, Silvassa, which has expired on September 1, 2012; and

(b) Application dated June 22, 2012 for renewal of the registration certificate bearing no. LEO/Renewal/009/2011, to the Labour Enforcement Officer/Registering Officer, Dadra & Nagar Haveli, Silvassa, which has expired on August 12, 2012;

4. Bhiwandi Unit

48

Renewal of the registration of the employees and factories/establishments bearing no.37 under the Employees State Insurance Act, Which has expired on January 9, 2012;

5. 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;

(b) Application dated January 31, 2012 for registering the ESIC in the name of the Company, which was

originally in the name of APD Exports bearing registration no. 39000402860000199 to Deputy Director Employee State Insurance Corporation, SRO, Surat; and

(c) Application to Dakshin Gujarat VIJ Company Limited for change of name for power supply from

APD Exports to the Company. 6. Garment Unit at Daman

(a) Application dated August 1, 2012 for renewal of consent under section 21 of the Air Act to Pollution

Control Committee, Daman & Diu and Dadra Nagar Haveli, Daman bearing no. PCC/DDD/G-5139/WA/DB/10-11/144, which has expired on December 31, 2011; and

(b) Application dated August 1, 2012 for renewal of consent under section 21 of the Air Act to Pollution

Control Committee, Daman & Diu and Dadra Nagar Haveli, Daman bearing no. PCC/DDD/G-5139/WA/DB/10-11/143, which has expired on December 31, 2011;

7. Embroidery Division, Vasona

(a) Application dated September 11, 2012 for renewal of the factory license no.2077 under the Factories

Act to the Chief Inspector Factories & Boilers; and (b) 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 made but are yet to be received:

(i) Approval from Secretariat for Industrial Assistance, Ministry of Commerce & Industry for

embroidery;

(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/04-05/175;

(iii) 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;

(iv) No objection certificate regarding satisfactory maintenance of all the fire safety measures bearing no. DFES/SFO/NOC/ANNUALLY/2012/01;

(v) 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 Nagar Haveli;

(vi) Approval for release of additional HT Power connection bearing no. 1-1(186)/ELE/2006/465 of the Executive Engineer, Electricity Department of Dadra Nagar Haveli;

(vii) 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 Nagar Haveli; and

(viii) 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;

49

8. Packing Unit at Falandi

(a) Application dated October 20, 2011 for renewal of the factory license no.2453 under the Factories Act

to the Chief Inspector Factories & Boilers; and (b) Application dated September 12, 2012, consent to establish a unit by the Single Window, Directorate

of Industries, Dadra Nagar Haveli, Silvassa; 9. Hemming Unit at Rakholi

Renewal of no objection certificate for fire safety measures bearing no. DFES/SFO/NOC/ANNUALLY/2009/277 dated July 10, 2009;

10. Weaving Unit at Dadra

(a) Application dated October 20, 2011 for renewal of the factory license no.2105 under the Factories Act

to the Chief Inspector of Factories & Boilers, Dadra Nagar Haveli, Silvassa, which has expired on December 31, 2011; and

(b) Registration certificate bearing no. LEO/CL(R&A)/115/2011 granted u/s 7 of the Contract Labour

(Regulation & Abolition) Act, 1970 by the Labour Enforcement Officer/Registering Officer, Dadra Nagar Haveli, Silvassa;

11. Texturising Unit at Silvassa

Application dated January 17, 2012 for renewal of the factory license no.3285 under the Factories Act to the Chief Inspector of Factories & Boilers, Dadra Nagar Haveli, Silvassa, which has expired on December 31, 2011;

12. Knitting Unit at Saily

Application dated October 10, 2011 for renewal of the factory license no.2459 under the Factories Act to the Chief Inspector of Factories & Boilers, Dadra Nagar Haveli, Silvassa, which has expired on December 31, 2011;

13. Mahape Factory

Application dated September 24, 2012 for change of name and to adopt Company’s name for the approval from Secretariat for Industrial Assistance, Ministry of Commerce & Industry for embroidery work other than by hand

50

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 [●] have determined the Issue Price as ` [●] per Equity Shares and the Rights Entitlement as [●] Equity Share(s) for every [●] 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 Draft 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 this Draft Letter of Offer with SEBI;

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, CENTBANK FINANCIAL SERVICES LIMITED, EMKAY GLOBAL FINANCIAL

SERVICES LIMITED, ENAM SECURITIES PRIVATE 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 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, CENTBANK FINANCIAL SERVICES LIMITED,

51

EMKAY GLOBAL FINANCIAL SERVICES LIMITED, ENAM SECURITIES PRIVATE 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 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

52

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 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

53

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 Draft 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 manner whatsoever including at presentations, in research or sales reports etc. after filing of this Draft 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 Draft Letter of Offer. You must not rely on any unauthorized information or representations. This Draft 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 Draft 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 Draft 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

As required, a copy of this Draft Letter of Offer has been submitted to BSE. The Disclaimer Clause as intimated by BSE to us, post scrutiny of this Draft Letter of Offer, shall be included in the Letter of Offer prior to filing with the Stock Exchanges.

Disclaimer Clause of NSE

As required, a copy of this Draft Letter of Offer has been submitted to NSE. The Disclaimer Clause as intimated by NSE to us, post scrutiny of this Draft Letter of Offer, shall be included in the Letter of Offer prior to filing with the Stock Exchanges.

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 final 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 Draft 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 Draft 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

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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 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 Draft Letter of Offer may not be distributed in any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt of this Draft 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 Draft 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 Draft 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 Draft 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 Draft Letter of Offer. Neither the delivery of this Draft 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.

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 Draft 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 Draft 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;

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(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 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.

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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 Draft 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 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 are in the process of applying to BSE and NSE for obtaining in-principal approvals in respect of the Equity Shares to be offered in terms of the Letter of Offer. 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 70 days from the Issue Closing Date, where minimum subscription including devolvement obligations paid by the Underwriters is not received within 60 days of the Issue Closing 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, Company Secretary & Compliance Officer and M/s. Narendra Poddar & Co., Chartered Accountants, have been obtained and such consents have not been withdrawn up to the date of this Draft 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 consolidated and standalone financial statements in the form and context in which the reports will appear in this Draft 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 Draft Letter of Offer to SEBI. 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 Draft 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 Draft Letter of Offer to SEBI.

Issue Related Expenses

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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

[●] [●] [●]

Advertising, Printing and stationery (including courier and transportation charges)

[●] [●] [●]

Others (Underwriting commission, legal fees, listing charges, depositories’ fees, auditor fees, out of pocket reimbursements etc.)

[●] [●] [●]

Total [●] [●] [●]

* Will be incorporated at the time of filing the Letter of Offer with the Stock Exchanges.

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 Eligible 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 September 26, 2012, there was one outstanding investor complaint.

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 furnished.

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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: alok.rights@linkintime.co.in

E-mail: alok.rights@linkintime.co.in

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:

Mr. K.H. Gopal Company Secretary and Compliance Officer

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: alokrights@alokind.com Minimum Subscription If our Company does not receive minimum subscription of 90% of the Issue, including devolvement of the Underwriters, the entire subscription shall be refunded to the Applicants within 70 days from the Issue Closing Date, where minimum subscription including devolvement obligations paid by the Underwriters is not received within 60 days of 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.

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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 the 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 68.

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.

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 to be 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, 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., [●], you are entitled to the number of Equity Shares as set out in Part A of the CAF. The distribution of this Draft Letter of Offer, 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 this Draft Letter of Offer, Letter of Offer or CAF

may come are required to inform themselves about and observe such restrictions. We are making this

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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. 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 ` [●] for cash at a premium of ` [●] per Equity Share. The Issue Price has been arrived at by our Company in consultation with the Lead Managers.

Rights Entitlement Ratio The Equity Shares are being offered on a rights basis to the Eligible Equity Shareholders in the ratio of [●] Equity Shares for every [●] Equity Shares held on the Record Date.

Terms of Payment

The full amount of ` [●] per Equity Share is payable on application. Fractional Entitlements The Equity Shares are being offered on a rights basis to the Eligible Equity Shareholders in the ratio of [●] Equity Shares for every [●] 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 equal to or less than [●] Equity Shares or is not in multiple of [●], 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. For example, if an Eligible Equity Shareholders holds between [●] and [●] Equity Shares, such Eligible Equity Shareholder will be entitled to [●] Equity Shares on a rights basis and will be given preferential consideration for the Allotment of one additional Equity Share if he has applied for the same. Those Eligible Equity Shareholders holding less than [●] 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, they cannot renounce the same in favour of any third parties. A CAF with zero entitlement will be non-negotiable/ non-renounceable. For example, if an Eligible Equity Shareholders holds between one and [●] Equity Shares, he will be entitled to zero Equity Shares on a rights basis. He will be given a preference for Allotment of one additional Equity Share if he has applied for the same.

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.

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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 are in the process of applying to BSE and NSE for obtaining in-principal approvals in respect of the Equity Shares to be offered in terms of the Letter of Offer. 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 soon as practicable from the Issue Closing Date. 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

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 Shareholders holds Equity Shares in physical form, we would issue to the allottees one certificate for the Equity Shares allotted to each folio (“Consolidated Certificate”). 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

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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:

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 and/ or will be sent by ordinary post/ registered post/ 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 members of the Promoters / Promoter Group, in compliance with the Takeover Regulations.

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 76. 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; 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 or such extended time as may be specified by the Board of Directors in this regard. 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. 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 131. Additional Equity Shares

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 76.

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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.

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

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 will be making 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. If the RBI does not grant such approval, Investors may independently make an application to the RBI seeking such approval and Equity Shares will be Allotted to such Investors only if a copy of such approval is attached along with the CAF. Irrespective of whether our Company receives such approval from RBI, Investors may independently make an application to the RBI seeking such approval. 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

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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 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

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Option Available Action Required

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 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:

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 has been addressed. If used, this will render the application invalid. Request for Split Application Forms/ SAF should be made for a minimum of one Equity Share or, in either

case, in multiples thereof, and one SAF for the balance Equity Shares, if any. Request by the Eligible Equity Shareholder for the SAFs should reach the Registrar on or before [●]. 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, 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 within [●] days from the Issue Opening 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

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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 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 to enable the Eligible Equity Shareholder to apply for the Issue. The envelope should be superscribed “Alok Industries – Rights Issue - R” in case of resident shareholders and Non-resident shareholders applying on non-repatriable basis, and “Alok Industries – Rights Issue – NR” 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 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 ` [●] 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

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the United States at any time. I/ we understand that neither us, nor 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 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 [●]. The Board of Directors may extend the said date for such period as it may determine from time to time, subject to the Issue Period not exceeding 30 days. 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 or such date as may be extended by the Board or any authorised committee thereof, the invitation to offer contained in the 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 76.

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.

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.

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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. 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. 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; should not be Renouncees; should apply through blocking of funds in bank accounts maintained with SCSBs; and are eligible under applicable securities laws to subscribe for the Rights Entitlement and the Equity Shares

in the Issue.

CAF

The Registrar will dispatch the CAF 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

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Date or such extended time as may be specified by the Board of Directors or any committee thereof in this regard.

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 in an 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 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 Eligible Equity Shareholders applying under the ASBA Process would be required to give instructions to the respective SCSBs to block the entire amount payable on their application at the time of the submission of the CAF.

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.

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: 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

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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 76. 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 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. 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 ` [●] 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

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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

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 only 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

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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.

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” on page 66.

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.

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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 as the case may be applied for} X

{Issue Price of Equity Shares, as the case may be}) 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.

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 86, applications under the ABSA Process are liable to be rejected on the following grounds: Application on a SAF.

Application for allotment of Rights Entitlements or additional shares which are in physical form.

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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. 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.

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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.

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: [●] Last date for receiving requests for SAFs: [●] Issue Closing Date: [●]

The Board may however decide to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date. 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 of any shareholding other than in multiples of [●].

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

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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 members of the Promoters / Promoter Group, in compliance with the Takeover Regulations.

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

Our Company is currently contemplating entering into an underwriting agreement with the Underwriters for underwriting the Equity Shares offered through this Issue for a maximum of up to ` [●] crore. Our Board or a committee thereof shall ensure that the Underwriters appointed shall have sufficient resources to enable them to discharge their underwriting obligations in full. Details of the underwriting agreement shall be appropriately incorporated in the Letter of Offer. If our Company does not receive minimum subscription of 90% of the Issue, including devolvement of the Underwriters, the entire subscription shall be refunded to the Applicants within 70 days from the Issue Closing Date, where minimum subscription including devolvement obligations paid by the Underwriters is not received within 60 days of 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. 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 70 days from the Issue Closing Date, where minimum subscription including devolvement obligations paid by the Underwriters is not received within 60 days of the Issue Closing Date. If such money is not repaid within eight days from the day we become liable to repay it, we and every Director 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.

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. 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 70 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

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allotment, which would be exchanged later for the share certificates. For more information, please refer to the chapter “Terms of the Issue” on page 59. The letter of allotment/ refund order would be sent by registered post/ 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: 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. c) 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 Code 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.

d) 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.

e) 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.

f) For all other Investors the refund orders will be despatched through Speed Post/ Registered Post. Such

refunds will be made by cheques, pay orders or demand drafts drawn in favour of the sole/ first Investor and payable at par.

g) 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

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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 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 70 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” on page 66 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 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.

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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.

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

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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 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, as the case may be) 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.

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;

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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;

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, not applying through the non-ASBA process.

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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.

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.

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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

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”; 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” 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. 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: b. 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

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Tel: +91 22 2596 7878

Fax: +91 22 2596 0329

Investor Greivance E-mail: alok.rights@linkintime.co.in

E-mail: alok.rights@linkintime.co.in

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

c. 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.

d. 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.

e. 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.

f. 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 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.

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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

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

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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 70 days from the Issue Closing Date, where minimum subscription including devolvement obligations paid by the Underwriters is not received within 60 days of 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

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 70 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.

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(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, including devolvement of the Underwriters, the entire subscription shall be refunded to the Applicants within 70 days from the Issue Closing Date, where minimum subscription including devolvement obligations paid by the Underwriters is not received within 60 days of 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. 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 super scribed ‘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

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: alok.rights@linkintime.co.in

E-mail: alok.rights@linkintime.co.in

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 xiii. The Issue will remain open for a minimum 15 days. However, the Board will have the right to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date.

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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 Draft 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 Rights 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.

6) Underwriting agreement dated [●] amongst the Company and the Underwriters. 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 January 31, 2008 and the Executive Chairman’s Agreement dated

March 10, 2008 appointing the Executive Chairman of the Company.

6. Copy of the resolution dated January 31, 2008 and the Managing Director’s Agreement dated March 10, 2008 appointing the Managing Director of the Company.

7. Copy of the resolution dated January 31, 2008 and the Joint Managing Director’s Agreement dated

March 10, 2008 appointing the Joint Managing Director of the Company.

8. Copy of the resolutions dated April 29, 2004, April 25, 2005 and September 25, 2007 and the

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Executive Director’s Agreement dated May 1, 2009 appointing the Executive Director of the Company.

9. Consents of the Directors, Auditors, Lead Managers, Legal Advisors to the Issue, Company

Secretary and Compliance Officer, Registrar and M/s. Narendra Poddar & Co., Chartered Accountants, to include their names in this Draft Letter of Offer and to act in their respective capacities.

10. Appointment of Company Secretary and Compliance Officer for the Issue and consent thereto.

11. Statement of tax benefits dated September 25, 2012 received from M/s. Narendra Poddar & Co.,

Chartered Accountants, regarding the special tax benefits available to the Equity Shareholders.

12. Annual reports of the Company for the year ended March 31, 2012.

13. 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.

14. 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, 2012.

15. In-principle listing approvals for the Issue dated [●] and [●] from the BSE and NSE, respectively.

16. 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.

17. Due Diligence certificate dated September 26, 2012 by 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.

18. Observation letter no. [●] dated [●] received from SEBI.

19. Letter of offer dated March 19, 2009 for the Company’s last rights issue.

Any of the contracts or documents mentioned in this Draft 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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DECLARATION

We hereby certify that no statement made in this Draft Letter of Offer contravenes any of the provisions of the Companies Act and the rules made thereunder. We further certify that all the legal requirements connected with the Issue as also the guidelines, instructions, etc., issued by Securities and Exchange Board of India, the Government of India and any other competent authority in this behalf, have been duly complied with. We further certify that all disclosures made in this Draft Letter of Offer are true and correct.

Mr. Ashok Jiwrajka

Executive Chairman

Mr. Dilip Jiwrajka

Managing Director

Mr. Surendra Jiwrajka

Joint Managing Director

Mr. Chandra Kumar Bubna

Executive Director

Mr. Ashok Rajani

Independent Director

Mr. Kandarp Modi

Independent Director

Mr. Timothy Ingram

Independent Director

Mr. David Rasquinha

Independent Director

Mrs. Thankom Mathew

Independent Director

Mr. M. V. Muthu

Independent Director

Ms. Maya Chakravorty

Independent Director

Mr. Sunil Khandelwal

Chief Financial Officer

Mr. K. H. Gopal

Company Secretary & Compliance Officer

Place: Mumbai Date: September 26, 2012