Mahalaxmi Rubtech Ltd_Cover.pmd

275 Pages·2011·6.56 MB·English

Draft Letter of Offer
November 11, 2011
For Equity Shareholders of the Company only
Our Company was originally incorporated as Mahalaxmi Rubtech Limited under the Companies Act, 1956 vide Certificate of Incorporation
dated September 25, 1991 issued by the Registrar of Companies, Gujarat.
Registered Office: 47, New Cloth Market, Ahmedabad – 380 002, Gujarat. Tel: [phone]
Contact Person: Mr. Japan N. Shah, Company Secretary & Compliance officer
E-mail: [email protected] Website: www.mrtglobal.com
Promoters of our Company: Mr. Jeetmal B. Parekh, Mr. Rahul J. Parekh and Mr. Anand J. Parekh
FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF MAHALAXMI RUBTECH LIMITED
(“THE COMPANY”) ONLY
ISSUE OF [(cid:2)] EQUITY SHARES OF A FACE VALUE OF ` 1 EACH (“EQUITY SHARES”) OF MAHALAXMI RUBTECH
LIMITED FOR CASH AT A PRICE OF ` [(cid:2)] INCLUDING A SHARE PREMIUM OF ` [(cid:2)] PER EQUITY SHARE AGGREGATING
` 4500 LACS TO THE EXISTING EQUITY SHAREHOLDERS OF THE COMPANY ON A RIGHTS BASIS IN THE RATIO
OF [(cid:2)] EQUITY SHARE(S) FOR EVERY [(cid:2)] FULLY PAID-UP EQUITY SHARE(S) HELD ON THE RECORD DATE I.E. [(cid:2)]
(“RIGHTS ISSUE/THE ISSUE”).
THE ISSUE PRICE FOR THE EQUITY SHARE IS [(cid:2)] TIMES THE FACE VALUE OF THE EQUITY SHARE.
GENERAL RISK
Investments in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Rights
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 relation to this Issue. For taking an investment decision, investors must rely on their own examination
of the Issuer and the Rights Issue including the risks involved. The Equity Shares being offered in the Rights 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 document. Investors are advised to refer to the chapter titled “Risk Factors” on page nos. 10 to 22 of this Draft Letter of Offer
before making an investment in this Rights Issue.
ISSUER’S ABSOLUTE RESPONSIBILITY
The Issuer, 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 this 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 material 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 of the Company are listed on the Bombay Stock Exchange Limited (“BSE”). The Company has received in-
principle approval from BSE vide its letter dated [(cid:2)] for listing of the Equity Shares arising from this Rights Issue. For the purpose of
this Rights Issue, the Designated Stock Exchange shall be the Bombay Stock Exchange Limited.
LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE
SAFFRON CAPITAL ADVISORS PRIVATE LIMITED SHAREPRO SERVICES (INDIA) PRIVATE LIMITED
A – 102, Everest Grande, Mahakali Caves Road, 13AB, Samhita Warehousing Complex
Andheri (East), Mumbai - 400 093, Maharashtra, India. Sakinaka Telephone Exchange Lane,
Tel No.: [phone]/0906 ; Fax No.: [phone] Off Andheri Kurla Road, Sakinaka, Mumbai 400 072
Email: [email protected]; Tel No: [phone]; Fax No: [phone]
Website: www.saffronadvisor.com; Email: [email protected]
Investor grievance: [email protected] Website: www.shareproservices.com
Contact Person: Mr. Harshit Vora / Mr. Anup Varpe Contact Person: Mr. Subhash Dhingreja / Mr. Kumresan V
SEBI Registration Number: INM 000011211 SEBI Registration No: INR000001476
ISSUE PROGRAMME
LAST DATE FOR RECEIVING
ISSUE OPENS ON ISSUE CLOSES ON
REQUESTS FOR SPLIT FORMS
[(cid:2)] [(cid:2)] [(cid:2)]
TABLE OF CONTENTS
SECTION I–GENERAL...........................................................................................................................................2
DEFINITIONS AND ABBREVIATIONS.................................................................................................................2
NOTICETO OVERSEAS SHAREHOLDERS........................................................................................................6
CERTAIN CONVENTIONS,PRESENTATION OF FINANCIAL, INDUSTRY ANDMARKET
DATA............................................................................................................................................................................7
FORWARD LOOKING STATEMENTS.................................................................................................................9
SECTION II-RISK FACTORS..............................................................................................................................10
SECTION III–INTRODUCTION..........................................................................................................................23
SUMMARY INDUSTRYOVERVIEW...................................................................................................................23
SUMMARY OF OUR BUSINESS...........................................................................................................................27
SUMMARY OF FINANCIALINFORMATION...................................................................................................30
THE ISSUE................................................................................................................................................................33
GENERAL INFORMATION...................................................................................................................................34
CAPITAL STRUCTURE..........................................................................................................................................40
OBJECTS OF THE ISSUE.......................................................................................................................................51
BASIS FOR ISSUE PRICE......................................................................................................................................64
STATEMENT OF TAX BENEFITS........................................................................................................................66
SECTIONIV–ABOUT THE COMPANY............................................................................................................73
INDUSTRY OVERVIEW.........................................................................................................................................73
OUR BUSINESS........................................................................................................................................................83
KEY INDUSTRY REGULATIONS AND POLICIES...........................................................................................98
HISTORY AND CERTAINCORPORATE MATTERS.....................................................................................109
OUR MANAGEMENT...........................................................................................................................................114
OUR PROMOTERS AND PROMOTERS GROUP............................................................................................127
OUR GROUP ENTITIES.......................................................................................................................................132
DIVIDEND POLICY..............................................................................................................................................146
CURRENCY OF PRESENTATION.....................................................................................................................147
SECTION V–FINANCIAL INFORMATION....................................................................................................148
FINANCIAL INFORMATION..............................................................................................................................148
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS...............................................................................................................................174
STOCK MARKET DATA FOR EQUITY SHARES OF OUR COMPANY.....................................................189
MATERIAL DEVELOPMENT.............................................................................................................................191
SECTION VI–LEGAL AND OTHER INFORMATION..................................................................................192
OUTSTANDING LITIGATIONS..........................................................................................................................192
GOVERNMENT AND OTHERAPPROVALS...................................................................................................213
OTHER REGULATORY ANDSTATUTORY DISCLOSURES.......................................................................217
SECTION VII-ISSUE RELATED INFORMATION.........................................................................................225
TERMS OF THE ISSUE........................................................................................................................................225
SECTION VIII–MAIN PROVISIONS OF OUR ARTICLES OF ASSOCIATION.......................................252
SECTION IX–OTHER INFORMATION...........................................................................................................272
MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION............................................................272
DECLARATION.....................................................................................................................................................274
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SECTION I–GENERAL
DEFINITIONS AND ABBREVIATIONS
All terms defined have the meaning set forth below, unless otherwise specified in the context thereof.
GeneralTerms / Issue Related Terms
Term Definition
Abridged Letter of The abridged letter of offer to be sent to the Equity Shareholders with respect to this
Offer Issue in accordance with SEBI Regulations.
Allot/Allotted/Allotment Unless the context otherwise requires, the allotment of Equity Shares pursuant to the
Issue
Allotment Unless the context otherwise requires, the allotment of Equity Shares pursuant to the
Issue.
Allottees Persons to whom Equity Shares of our Company are issued pursuant to the Issue.
Applicant Any shareholder/renounces/otherinvestorswho makes an application in this Issue in
accordance with thisDraft Letter of Offer.
Application Money The aggregate amount payable in respect of the Equity Shares applied for in this
Issue at the Issue Price
Application Supported by An application, whether physical or electronic, used by an ASBA Applicant to apply
Blocked Amount / for the Equity Shares in the Issue, together with an authorization to an SCSB to
ASBA block the Application Money in the specified bank account maintained with such
SCSB
ASBA Applicants Eligible Equity Shareholders who intend to apply through ASBA and (a) are holding
Equity Shares in dematerialised form as on the Record Date and have applied for (i)
their Rights Entitlement or (ii) their Rights Entitlement and Equity Shares in
addition to their Rights Entitlement, in dematerialised form; (b) have not renounced
their Rights Entitlement in full or in part; (c) are not renouncees; and (d) are
applying through blocking of funds in bank accounts maintained with SCSBs
Bankers to the Issue [●]
Banker to our Company Bank of Baroda
Business Day/Working Day Any day, other than a Saturday or a Sunday, on which commercial banks in Mumbai
are open for business.
Composite The form used by anapplicantto make an application for allotment of Equity Shares
Application Form / in thisIssue.
CAF
Consolidated Certificate In case of holding of Equity Shares in physical form, our Company would issue one
certificate for the Equity Shares allotted to one folio.
Controlling Branches The branches of the SCSBs which shall co-ordinate with the Lead Manager, the
Registrar to the Issue, and the Stock Exchanges and a list which is available at
http://www.sebi.gov.in/pmd/scsb.html
Designated Such branches of the SCSBs which shall collect application forms used by ASBA
Branches Investors and a list of which is available onhttp://www.sebi.gov.in/pmd/scsb.html
Designated Stock Exchange The Bombay Stock Exchange Limited
Draft Letter of Offer Draft Letter of Offerdated [●] filed with SEBI for its observations
Equity Share(s) or Share(s) Equity Shares ofour Company of face value of(cid:96)1/-each
Equity Shareholders / Means a holder of Equity Shares of our Company
Shareholder
Investor(s) Equity Shareholders as onRecord Date and/or Renouncees applying in the
Issue.
Fiscal/Financial Year The period of 12 months ended March 31 of that particular year, unless otherwise
stated
Indian GAAP Generally Accepted Accounting Principles in India
Issue/ Rights Issue Issue of [●] equity shares of a face value of(cid:96)1 each (“equity shares”) of Mahalaxmi
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RubtechLimited for cash at a price of (cid:96)[●] including a share premium of (cid:96) [●] per
equity share aggregating to (cid:96) 4500 lacs to the existing equity shareholders of the
company ona rights basis in the ratio of [●]equity share(s)for every [●] fully paid-
up equity share(s)held on the record date i.e. [●] (“rights issue/the issue”).
Issue Closing Date [●]
Issue Opening Date [●]
Issue Price (cid:96)[●]per Equity Share
IT Act The Income Tax Act, 1961 and amendments thereto
Lead Manager Saffron Capital Advisors Private Limited
Letter of Offer Thefinalletter of offerto befiled with the Stock Exchanges after incorporating
observations received from SEBI on this Draft Letter of Offer
Listing Agreement The listing agreements entered into between our Company and the StockExchanges
Non-retail applicants All applicant whose application amount exceeds(cid:96)2,00,000.
Record Date [●]
Registrar to the Issue or Sharepro Services (India) Private Limited
Registrar / Transfer Agent
Renouncees The persons who have acquired Rights Entitlements from Equity Shareholders
Rights The number of Equity Shares that anInvestor is entitled to in proportion to the
Entitlement/Entitlement number of Equity Shares held by the Investor on the Record Date
Rights Issue The issue of Equity Shares on rights basis based on terms of this Draft Letter of
Offer
Retail Applicant All applicants whose application amount does not exceed(cid:96)2,00,000.
Self Certified The Self Certified Syndicate Banks which are registered with the SEBI under the
Syndicate Bank(s) SEBI (Bankers to the Issue) Regulations, 1994, and are recognized as such by the
/ SCSB(s) SEBI and offer services of ASBA, including blocking of funds in bank accounts. A
list of such banks are available athttp://www.sebi.gov.in/pmd/scsb.html
SEBI Act, 1992 Securities and Exchange Board of India Act, 1992 and amendments thereto
SEBI Regulations The Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009 issued by SEBI, as amended from time to time.
SEBI (SAST) Regulations / Securities and Exchange Board of India (Substantial Acquisition of Shares and
SAST / SEBI Takeover Takeovers) Regulations, 1997 and/or 2011 as applicable and subsequent
Code / Takeover Code amendments thereto
Stock Exchange(s) BSE, where the Equity Shares arepresentlylisted
Company Related Terms
Term Description
“Mahalaxmi” or “MRT” or Mahalaxmi Rubtech Limited, a public limited company incorporated under the
“the Company” or “our provisions of the Companies Act, 1956, unless the context otherwise requires
Company”
or “we” or “us”
AoA / Articles / Articles of Association of our Company
Articles of
Association
Auditors The statutory auditors of our Company, Bhanwar Jain & Co, Chartered Accountants
Board / Board of The Board of Directors of our Company or a committee authorized to act on its
Directors / behalf.
Committee of
Directors
Compliance Mr. JapanN.Shah
Officer
Corporate Office 507, Chanakya, near dinesh hall, Ashram Road, Ahmedabad–380 009
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Group Companies Includes those companies, firms and ventures disclosed in the section tiled “Group
Entities” on page 132, promoted by our Promoters, irrespective of whether such
entities are covered under section 370(1)(B) of the Companies Act
MOA / Memorandum of Associationof ourCompany.
Memorandum /
Memorandum of
Association
Our Company / Mahalaxmi Rubtech Limited, A Company Incorporated Under The Indian Companies
the Company / Act, 1956 having Registered Office at 47, New Cloth Market, Ahmedabad –380 002,
Issuer / MRT Gujarat, India
Promoters Mr. Jeetmal B. Parekh
Mr. Rahul J. Parekh
Mr. Anand J. Paekh
PromotersGroup Entities Unless the context otherwise requires, refers to those companies/entities mentioned in
the section titled “Group Entities” beginning on page132of this Draft Letter of Offer.
Registered Office 47, New Cloth Market, Ahmedabad–380 002
Industry Related Terms
Term Description
TUFS Technology Upgradation Fund Schemes
Grey fabric Greige fabric
Abbreviations
Abbreviation Full Form
AGM Annual General Meeting
AS Accounting Standards, as issuedby the ICAI
BSE TheBombay Stock Exchange Limited
CAGR Compounded Annual Growth Rate
CDSL Central Depository Services (India) Limited
CESTAT Central Excise and Services Tax Appellate Tribunal
CIT Commissioner of Income Tax
CrPC Code of Criminal Procedure, 1973
DIN Director’s Identification Number
DGFT Director General of Foreign Trade
DP Depository Participant
EGM Extraordinary General Meeting
EPS EarningsPer Share
FEMA Foreign Exchange Management Act, 1999
FDI Foreign Direct Investment
FII(s) Foreign Institutional Investors registered with SEBI under applicable laws
FIPB Foreign Investment Promotion Board, Ministry of Finance, Government of India
GDP Gross Domestic Product
GoI Government of India
HUF Hindu Undivided Family
ICAI Instituteof Chartered Accountants of India
IFSC Indian Financial System Code
ISIN International Securities Identification Number allotted by the Depository.
LIC Life Insurance Corporation of India
MD Managing Director
MICR Magnetic Ink Character Recognition
MoU Memorandum of Understanding
NAV Net Asset Value
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NECS NationalElectronic Clearing Service
NEFT National Electronic Fund Transfer
NOC No Objection Certificate
NR Non Resident
NRI(s) Non Resident Indian(s)
NSDL National Securities Depository Limited
PAN Permanent Account Number
RBI The Reserve Bank of India
Regulation S Regulation S of the Securities Act
Re./Rs./(cid:96)/Rupees/INR Indian Rupees
RoC Registrar of Companies
RTGS Real time gross settlement
SAF Split Application Form
SEBI Securitiesand Exchange Board of India constituted under the
SEBI Act, 1992
Securities Act U.S. Securities Act of 1933, as amended
STT Securities Transaction Tax
The words and expressions used but not defined herein shall have the same meaning as is assigned to such terms
under the Companies Act, the Securities Contracts (Regulation) Act, 1956, the Depositories Act, 1996 and the rules
and regulations made thereunder.
Notwithstanding the foregoing, terms in “Main Provisions of our Articles of Association Statement of Tax
Benefits , “Key Industry Regulations and Policies and “Financial Information on pages 252, 66, 98 and 148,
respectively, shall have the meanings given to such terms in these respective sections. , “
” ” ”
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NOTICE TO OVERSEAS SHAREHOLDERS
The rights and the securities of our Company have not been and will not be registered under the United States
Securities Act of 1933, as amended (the “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.”), except in a transaction exempt from the registration requirements of the Securities Act.
The rights referred to in the Draft Letter of Offer are being offered in India, but not in the United States. The
offering to which the 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. Accordingly, the Draft Letter of Offer or Letter of Offer and the enclosed CAF
should not be forwarded to or transmitted in or into the United States at any time.
Neither our Company nor any person acting on behalf of our Company will accept subscriptions or renunciation
from any person, or the agent of any person, who appears to be, or who our Company or any person acting on behalf
of our Company has reason to believe is 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 and wishing
to hold such Equity Shares in registered form must provide an address for registration of the Equity Shares in India.
Our Company is making the issue of Equity Shares on a rights basis to Equity Shareholders of our Companyon the
Record Date and the Letter of Offer and CAF will be dispatched only to Equity Shareholders who have an Indian
address. Any person who acquires rights and the Equity Shares will be deemed to have declared, represented,
warranted and agreed, (i) 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 when the buy order is made, (ii) it does not have a registered address
(and is not otherwise located) in the United States, and (iii) it is authorised to acquire the rights and the Equity
Shares in compliance with all applicable laws and regulations.
Our Company reserves the right to treat as invalid any CAF which: (i) does not include the certification set out in the
CAF tothe effect that the subscriber does not have a registered address (and is not otherwise located) in the United
States and is authorized to acquire the rights and the Equity Shares in compliance with all applicable laws and
regulations; (ii) appears to ourCompany or its agents to have been executed in or dispatched from the United States;
(iii) where a registered Indian address is not provided; or (iv) where our Company believes that CAF is incomplete
or acceptance of such CAF may infringe applicable legal or regulatory requirements; and our Company shall not be
bound to allot or issue any Equity Shares or Rights Entitlement in respect of any such CAF.
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CERTAIN CONVENTIONS,PRESENTATION OFFINANCIAL,INDUSTRYAND MARKET DATA
In this Draft Letter of Offer, unless the context otherwise requires, all references to gender also refer to the other
gender.
Certain Conventions
In this Draft Letter of Offer, unless otherwise specified or the context otherwise indicates or implies the terms all
references to “Company”, “our Company”, “we”, “us” and “our”, are toMahalaxmi RubtechLimited. All references
to “India” are to the Republic of India and all references to the “Government” are to the Government of India.
Financial Data
Unless stated otherwise, the financial information used in this Draft Letter of Offer is derived from our Company’s
restated financial statements as of and for the Financial Years ended March 31, 2007, 2008, 2009,2010 and2011 as
well as for the period ending June 2011, prepared in accordance with Indian GAAP and the Companies Act and
restated in accordance with SEBI ICDR Regulations, as stated in the report of our Auditor, Bhanwar Jain & Co.,
Chartered Accountants, in the chapter titled “Financial Information” beginning on page 148 of this Draft Letter of
Offer.
Our Fiscal Year commences on April 01 and ends on March 31 of a particular year. Unless stated otherwise,
references herein to a Fiscal Year (e.g., Fiscal 2011), are to Fiscal Year ended March 31 of that particular year. In
thisDraftLetter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due
to rounding off.
There are significant differences between Indian GAAP, IFRS and US GAAP. The Company has not attempted to
quantify their impact on the financial data included herein and urges you to consult your own advisors regarding
such differences and their impact on the Company’s financial data. Accordingly to what extent, the financial
statements included in this Draft Letter of Offer will provide meaningful information is entirely dependent on the
reader’s level of familiarity with Indian accounting practices / Indian GAAP. 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.
Any percentage amounts, as set forth in “Risk Factors”, “Our Business”, “Management’s Discussion and Analysis of
Financial Conditions and Results of Operations” and elsewhere in this Draft Letter to Offer unless otherwise
indicated, have been calculated on the basis of the Company’s restated financial statements prepared in accordance
with Indian GAAP.
Currency and units of Presentation
In this Draft Letter of Offer, all references to ‘Rupees’/ ‘(cid:96)’ (cid:47) ‘Rs.’ / ‘Re.’ / ‘INR’ are to Indian Rupees, the official
currency of the Republic of India. All references to ‘$’/ ‘US$’ / ‘USD’ / ‘U.S. Dollar(s)’ / ‘US Dollar(s)’ are to the
United States Dollars, the official currency of the United States of America.
All references to ‘million’ / ‘Million’ / ‘Mn’ refer to one million, which is equivalent to ‘ten lakhs’ or ‘ten lakhs’,
the word ‘Lakhs / Lacs / Lac’ means ‘one hundred thousand’ and ‘Crore’ means ‘ten million’ and ‘billion / bn. /
Billion’ means ‘one hundred crores’.
Exchange Rates
This Draft Letter of Offercontains translations of certain US Dollar and other currency amounts into Indian Rupees
that have been presented solely to comply with the requirements of Item (VIII) (G) of Part A of Schedule VIIIto the
SEBI Regulations. These translations should not be construed as a representation that those US Dollar or other
currency amounts could have been, or can be converted into Indian Rupees, at any particular rate.
7
Unless, otherwise stated, the Company has in this Draft Letter of Offer used a conversion rate as mentioned below.
Such translations should not be considered as a representation that such U.S Dollar amounts have been, could have
been or could be converted into Rupees at any particular rate, the rates stated above or at all.
The US Dollar to Indian Rupee exchange rate data:
For the previous five financial years ending on March 31, was as under:
1 USD =(cid:96)43.59 as on March 30, 2007
1 USD =(cid:96)39.97 as on March 31, 2008
1 USD =(cid:96)50.95 as on March 31, 2009
1 USD =(cid:96)45.14 as on March 31, 2010
1 USD=(cid:96)44.65 as on March 31, 2011
1 USD=(cid:96)48.87as onOctober 31, 2011
Source: www.rbi.org.in
Industry and Market Data
Unless stated otherwise, industry data/ market data used throughout this Draft Letter of Offer has been obtained
from industry publications and publicly available government documents. Industry publications generally state that
the information contained in those publications has been obtained from sources believed to be reliable but that their
accuracy and completeness are not guaranteed and their reliability cannot be assured. Similarly while information
contained in the publicly available government documents that is relied upon for the purposes of this Draft Letter of
Offeris believed to be complete and reliable, there can be no assurance of the same.
Although we believe that the industry data/ market data used in this Draft Letter of Offer is reliable, it has not been
verified by any independent source. Similarly, internal Company reports and data, while believed by us to be
reliable, have not been verified by any independent source. There are no standard data gathering methodologies in
the industry in which we conduct our business, and methodologies and assumptions may vary widely among
different industry sources.
Accordingly, no investment decisions should be made based on such information. The extent to which the market
and industry data presented in this Draft Letter of Offer is meaningful depends on the reader’s familiarity with and
understanding of the methodologies used in compiling such data.
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FORWARD LOOKING STATEMENTS
All statements contained in this Draft Letter of Offer that are not statements of historical fact constitute “forward-
looking statements”. All statements regarding our expected financial condition and results of operations, business,
plans and prospects are forward-looking statements. These forward-looking statements include statements as to our
business strategy, our revenue and profitability, planned projects and other matters discussed in this Draft Letter of
Offer regarding matters that are not historical facts. These forward looking statements and any other projections
contained in this Draft Letter of Offer (whether made by us or any third party) are predictions and involve known
and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements expressed or implied by such forward-
looking statements or other projections.
These forward-looking statements generally can be identified by words or phrases such as “aim”, “anticipate”,
“believe”, “expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “will continue”, “will
pursue” or other words or phrases of similar import. Similarly, statements that describe our strategies, objectives,
plans or goals are also forward-looking statements. All forward-looking statements are subject to risks, uncertainties
andassumptions about us that could cause actual results to differ materially from those contemplated by the relevant
forward-looking statement.
Important factors that could cause actual results to differ materially from our expectations include, but are not
limited to, among others:
(cid:61623) Disruptions in our Company;
(cid:61623) General economic and business conditions in the markets in which we operate and in the local, regional and
national economies;
(cid:61623) Significant changes in the exchange rate
(cid:61623) Changes in laws and regulationsrelating to the industry in which we operate;
(cid:61623) Increased competition in thetextileindustry;
(cid:61623) Our ability to successfully implement our growth strategy and expansion plans through the Issue;
(cid:61623) Our ability to meet our capital expenditure requirements;
(cid:61623) Competition from existing players;
(cid:61623) Changes in technology;
(cid:61623) Changes in political and social conditions in India or in countries that we may enter, the monetary and interest
rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity
prices or other rates or prices;
(cid:61623) Potential mergers, acquisitions or restructurings;
(cid:61623) Our ability to attract and retain qualified personnel;
(cid:61623) The performance of the financial markets in India and globally;
(cid:61623) Market fluctuations and industry dynamics beyond our control; Occurrence of natural disasters or calamities
affecting the areas in which we have operations; and
(cid:61623) 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 chapter titled “Risk
Factors” beginning on page 10 of this Draft Letter of Offer, and chapters titled “Industry Overview” and
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”beginning on pages73
and174respectively of thisDraftLetter of Offer.
By their nature, certain market risk disclosures are only estimates and could be materially different from what
actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have
been estimated. Neither our Company or the Lead Manager, or any of its affiliates 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
requirements, our Company and the Lead Manager will ensure that investors in India are informed of material
developments until the time of grant of listing and trading permissions by the Stock Exchanges.
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