MIRA INFORM REPORT

Report Date :

05.04.2013

IDENTIFICATION DETAILS

Name :	ALOK INDUSTRIES LIMITED

Registered Office :	17/5/1, 521/1, Village Rakholi, Saily, Silvassa – 396 230, Union Territory of Dadra and Nagar Haveli

Country :	India

Financials (as on) :	31.03.2012

Date of Incorporation :	12.03.1986

Com. Reg. No.:	54-000334

Capital Investment / Paid-up Capital :	Rs. 8262.800 Millions

CIN No.: [Company Identification No.]	L17110DN1986PLC000334

TAN No.: [Tax Deduction & Collection Account No.]	MUMA02206B / MUMA19032G

PAN No.: [Permanent Account No.]	AAACA0201C

Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.

Line of Business :	Manufacturing of cotton and viscose / blended grey and processed fabrics and 100% cotton knitted fabrics and intermingled yarn.

No. of Employees :	23031 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (58)

RATING

STATUS

PROPOSED CREDIT LINE

56-70

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

Maximum Credit Limit :	USD 146000000

Status :	Good

Payment Behaviour :	Regular

Litigation :	Clear

Comments :	Subject is a well established and reputed company having fine track record. Financial position of the company appears to be sound. There appears slight dip in the profitability of the company during 2012. However, trade relations are reported as trustworthy. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 30, 2012

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

India

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	Commercial Paper : A1
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	17.09.2012

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office :	17/5/1, 521/1, Village Rakholi, Saily, Silvassa – 396 230, Union Territory of Dadra and Nagar Haveli, India
Tel. No.:	91-260-3087000
Fax No.:	91-260-2645289
E-Mail :	premkumar@alokind.com info@alokind.com
Website :	http://www.aloktextile.com http://www.alokind.com

Corporate Office :	Peninsula Tower ‘A’ Wing, Peninsula Corporate Park, G.K. Marg, Lower Parel, Mumbai – 400 013, Maharashtra, India
Tel. No. :	91-22-24996200/ 6500
Fax No.:	91-22-24936078
E-Mail :	info@alokind.com

Factory 1 :	B-43, Mittal Tower, Nariman Point, Mumbai – 400 021, Maharashtra, India
Tel. No.:	91-22-22874865/ 22832923/ 24940129/ 22845233/ 22881279/ 22832923
Fax No.:	91-22-22874864/ 24936078
E-Mail :	aloknpt@bom7.vsnl.net.in info@aloktextile.com info@alokind.com sales@aloktextile.com sunil@alokind.com krishna@alokind.com premkumar@alokind.com

Works :	Spinning 412, Saily, Silvassa, Union Territory of Dadra and Nagar Haveli, India Weaving a) 17/5/1 and 521/1, Rakholi / Saily, Silvassa, Union Territory of Dadra and Nagar Haveli, India b) 209/1 and 209/4, Dadra, U. T. of Dadra and Nagar Haveli, India c) Babla Compound, Kalyan Road, Bhiwandi – District Thane, Maharashtra, India Processing a) 254, 261, 268, Balitha, Taluka Pardi, District Valsad, Gujarat, India b) C-16/2, Village Pawane, TTC Industrial Area, MIDC, Navi Mumbai District Thane, Maharashtra, India Knitting 412, Saily, Silvassa, Union Territory of Dadra and Nagar Haveli, India Hemming 103/2, Rakholi, Silvassa, Union Territory of Dadra and Nagar Haveli, India Polyester Yarn (POY and Texturised Yarn) 521/1, Village Saily, Silvassa, Union Territory of Dadra and Nagar Haveli, India Garments a) 374/2/2, Saily, Silvassa Khanvel Road, Union Territory of Dadra and Nagar Haveli, India b) 17/5/1, Rakholi, Silvassa, Union Territory of Dadra and Nagar Haveli, India c) 273/1/1, Hingraj Industrial Estate, Atiawad, Daman, India d) 50/P2, 52/P1, Morai, Taluka Pardi, Dist. Valsad, Gujarat, India Home Textiles Bed Linen a) 374/2/2, Saily, Silvassa, Union Territory of Dadra and Nagar Haveli, India b) 149/150, Morai Taluka, Pardi, District Valsad, Gujarat, India Terry Towel 263/P1 and 251/2P1 Balitha, Taluka Pardi, District Valsad, Gujarat, India

Branch Office :	177, Alok House, Sant Nagar, East of Kailash, New Delhi – 110 065, India

Marketing Offices (Domestic) :	Located at: · Delhi · Bangalore · Chennai

Marketing Offices (Overseas) :	Located at: · Sri Lanka · Bangladesh · China · U.S.A. - Czech Republic · United Kingdom · British Virgin Islands · Dubai · Store Twenty One

DIRECTORS

AS ON 31.03.2012

Name :	Mr. Ashok Bhagirathmal Jiwrajka
Designation :	Whole-time director
Address :	301, Krishan Kunj, Shivaji Park Road No.5, 3^rd Floor, Mahim, Mumbai-400016, Maharashtra, India
Date of Birth/Age :	07.10.1950
Qualification :	Commerce Graduate
Date of Appointment :	12.03.1986
DIN No :	00168350

Name :	Mr. Dilip Bhagirathmal Jiwrajka
Designation :	Managing Director
Address :	6, Bay View, Abdul Gafar Khan Road, Worli, Sea Face, Mumbai-400018, Maharashtra, India
Date of Birth/Age :	09.10.1956
Date of Appointment :	12.03.1986
DIN No :	00173476

Name :	Mr. Surendra Bhagirathmal Jiwrajka
Designation :	Whole-time director
Address :	Flat No.901, Palm Beach Apartments, 67-A, Pochkhanwala Road, Mumbai-400025, Maharashtra, India
Date of Birth/Age :	17.10.1958
Date of Appointment :	12.03.1986
DIN No :	00173525

Name :	Mr. Chandrakumar Govindram Bubna
Designation :	Executive Director
Address :	124/5, Krishna Kunj, Sainik Farm, Central Avenue, New Delhi – 110 062, India
Date of Birth/Age :	15.01.1953
Date of Appointment :	27.05.1993

Name :	Mr. Ashok Girdharidas Rajani
Designation :	Director
Address :	101/102, Read Rose Apartments, Pochkhanwala, Road, Mumbai-400018, Maharashtra, India
Date of Birth/Age :	15.01.1953
Qualification:	Graduate in Commerce
Date of Appointment :	27.05.1993
DIN No.:	00267748

Name :	Mr. Kandarp Ratanchand Modi
Designation :	Director
Address :	901, Pushpanjali Apartments, Old Prabhadevi Road, Mumbai-400025, Maharashtra, India
Date of Birth/Age :	18.05.1942
Date of Appointment :	10.11.1994
DIN No.:	00261506

Name :	Timothy Charles William Ingram Stanley
Designation :	Independent Director
Address :	6, Ranelagn Avenue, London, SW63PJ, United Kingdom
Date of Birth/Age :	18.06.1947
Date of Appointment :	29.07.2005
DIN No.:	01430613

Name :	Mr. David Rasquinha
Designation :	Independent Nominee Director

Name :	Mrs. Thankom T. Mathew
Designation :	Independent Nominee Director

Name :	Mr. M.V. Muthu
Designation :	Independent Nominee Director

Name :	Ms. Maya Chakravorty
Designation :	Independent Nominee Director

KEY EXECUTIVES

Name :	Mr. Sunil O. Khandelwal
Designation :	Chief Financial Officer

Name :	Mr. K.H. Gopal
Designation :	President Corporate Affairs and Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.12.2012

Category of Shareholders	No. of Shares	Percentage of holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	65746696	7.96
Bodies Corporate	197010440	23.84
Any Others (Specify)	19459382	2.36
Trusts	19459382	2.36
Sub Total	282216518	34.16
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	282216518	34.16
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	200	0.00
Financial Institutions / Banks	90237102	10.92
Foreign Institutional Investors	34133446	4.13
Sub Total	124370748	15.05
(2) Non-Institutions
Bodies Corporate	144097451	17.44
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	111794029	13.53
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	137845504	16.68
Any Others (Specify)	25945107	3.14
Clearing Members	5431587	0.66
Market Maker	3773259	0.46
Non Resident Indians	9995743	1.21
Overseas Corporate Bodies	3000	0.00
Foreign Corporate Bodies	6724068	0.81
Trusts	17450	0.00
Sub Total	419682091	50.79
Total Public shareholding (B)	544052839	65.84
Total (A)+(B)	826269357	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	826269357	0.00

BUSINESS DETAILS

Line of Business :

Manufacturing of cotton and viscose / blended grey and processed fabrics and 100% cotton knitted fabrics and intermingled yarn.

Products :

Item Code No. (ITC CODE)	Products Description
5208	Woven Fabrics of Cotton Mixture
5406	Man Made Filament Yarn (Other Than Sewing Thread)
6001	Pile Fabric Including Knitted or Crochetted
6002	Other Knitted or Crocheted Fabric

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Unit	Installed Capacity Per Annum+	Actual Production @
Woven Fabric Manufactured	Lacs	1754 looms and 19 Stenters	2733.98
Yarn Dyed	M.T.	-	87.23
Knitted Fabric	M.T.	184 Machines	8801.38
Cotton Yarn – Manufactured	M.T.	330528 Spindles and 3792 Rotors	15245.32
Chips	M.T.	2 Machines	24688.62
Texturised Yarn	M.T.	27600 Spindles	122171.96
Poy	M.T.	5808 Spindles	39086.83
FDY	M.T.	2304 Spindles	15484.72
Handkerchief	Pcs.	64 Machines	9947690
Garments	Pcs.	2587 Machines	5101577
Made-ups	Sets	1026 Machines	5690108
Made-ups	Pcs.	-	3979671
Made-ups	Pairs	-	2129586
Terry Towel	M.T.	48 looms and 1 Stenters	152.61
Terry Towel	Lacs	-	2.10
Terry Towel	Pcs.	-	14384375
PSF	M.T.	-	2242.72
PSF	Lacs	-	0.90

Note:

@ Production includes items produced on job work basis by outside parties.

+ As certified by the management

GENERAL INFORMATION

No. of Employees :

23031 (Approximately)

Bankers :

Ø Allahabad Bank

Ø Andhra Bank

Ø Axis Bank Limited

Ø Bank of Baroda

Ø Bank of India

Ø Bank of Maharashtra

Ø Canara Bank

Ø Central Bank of India

Ø Corporation Bank

Ø DBS Bank Limited

Ø Dena Bank

Ø Export Import Bank of India

Ø Indian Bank

Ø IDBI Bank Limited

Ø Indian Overseas Bank

Ø ING Vysya Bank Limited

Ø Oriental Bank of Commerce

Ø Punjab National Bank

Ø Standard Chartered Banks

Ø State Bank of Bikaner and Jaipur

Ø State Bank of Hyderabad

Ø State Bank of India

Ø State Bank of Mysore

Ø State Bank of Patiala

Ø State Bank of Travancore

Ø Syndicate Bank

Ø The Jammu and Kashmir Bank Limited

Ø The Federal Bank Limited

Ø The Karur Vysya Bank Limited

Ø UCO Bank

Ø United Bank of India

Ø Union Bank of India

Ø Vijaya Bank

Facilities :

Secured Loan

As on

31.03.2012

(Rs. in Millions)

Debentures

8000.000

From banks

Rupee Loans

55684.500

Foreign currency loans

3501.500

From Financial Institutions

Rupee Loans

585.900

Foreign currency loans

1452.200

Vehicle loan from Bank

40.300

8% Redeemable Non convertible Debentures

0.000

From Banks

(Includes Rs.7201.500 Millions (Previous year Rs.3803.400 Millions) loan in foreign currency)

26684.000

From Financial Institutions

(Includes Rs. Nil ( Previous year Rs.890.800 Millions)

loan in foreign currency)

1307.400

Rupee Loans

From Banks

6350.000

From Financial Institutions

850.000

Foreign currency loans

From Banks

0.000

Total

104455.800

Secured Loans	As on 31.03.2011 (Rs. in Millions)
Debentures
11.50% Redeemable Non Convertible Debenture	2000.000
12.50% Non Redeemable Non Convertible debentures	2000.000
11.00% Redeemable Non Convertible Debenture	0.000
10.75% Redeemable Non Convertible Debentures	1000.000
8.00% Redeemable Non Convertible Debentures	2500.000
7.30 % Redeemable Non Convertible Debentures	0.000
b. Term Loan
1) From Financials Institution
Rupee Loans	1589.100
Foreign Currency Loans	2486.500
2) From Banks
Rupee Loans	61464.700
Foreign Currency Loans	5455.400
c. From Banks on cash credit accounts, working Capital Demand Loans Etc.	8689.600
d. Loans under Hire/ Purchase/ Lease Arrangement	78.700

Total	87264.000

NOTES :

I. a) Debentures outstanding at the year end are redeemable as follows

Particulars	Nos	31.03.2012	Date of Redemption
12.00% Redeemable Non convertible Debentures	375	375.000	1-Feb-20
12.00% Redeemable Non convertible Debentures	375	375.000	1-Aug-19
12.00% Redeemable Non convertible Debentures	375	375.000	1-Feb-19
10.75% Redeemable Non convertible Debentures	334	333.400	18-Oct-18
12.00% Redeemable Non convertible Debentures	375	375.000	1-Aug-18
12.00% Redeemable Non convertible Debentures	375	375.000	1-Feb-18
10.75% Redeemable Non convertible Debentures	333	333.300	18-Oct-17
12.00% Redeemable Non convertible Debentures	375	375.000	1-Aug-17
12.50% Redeemable Non convertible Debentures	300	300.000	3-Mar-17
12.50% Redeemable Non convertible Debentures	366	366.600	2-Mar-17
12.00% Redeemable Non convertible Debentures	375	375.000	1-Feb-17
10.75% Redeemable Non convertible Debentures	333	333.300	18-Oct-16
12.00% Redeemable Non convertible Debentures	375	375.000	1-Aug-16
11.50% Redeemable Non convertible Debentures	600	600.000	29-Jun-16
12.50% Redeemable Non convertible Debentures	367	366.700	2-Mar-16
12.50% Redeemable Non convertible Debentures	300	300.000	2-Mar-16
11.50% Redeemable Non convertible Debentures	700	700.000	28-Jun-15
12.50% Redeemable Non convertible Debentures	367	366.700	3-Mar-15
12.50% Redeemable Non convertible Debentures	300	300.000	3-Mar-15
11.50% Redeemable Non convertible Debentures	700	700.000	28-Jun-14
Total		8000.000

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 Rs. 3000.000 Millions are secured by first pari passu charge to be created on fixed assets of the company and Debentures of Rs. 5000.000 Millions are secured by subservient charge on fixed and current assets of the Company (excluding Land and Building).

II. Disclosure of Security for term loans

Nature of security

Banks

Financial

Institutions

Total

Exclusive charge on Plant and Machinery and specific assets

financed*

10214.200

(6409.600)

10214.200

(6409.600)

Pari Passu first charge created / to be created on the entire

fixed assets of the company#

27532.800

(24876.900)

840.200

(1069.300)

28373.000

(25946.200)

Subservient charge on all movable and current assets of the

Company @

36204.800

(29754.900)

1538.800

(1418.600)

37743.600

(31173.500)

Total

73951.800

(61041.400)

2379.000

(2487.900)

76330.800

(63529.300)

* Includes loans aggregating to Rs. 2184.700 Millions (previous year Rs. 2188.900 Millions) which is further secured by personal guarantees of promoter directors / group Companies

# Includes Bank loans aggregating to Rs. 8601.700 Millions (previous year 9989.000 Millions) and Financial Institution loans aggregation to Rs. 304.700 Millions (previous year 385.900 Millions) which is further secured by personal guarantees of promoter directors / group Companies

@ Includes Banks loans aggregating to Rs. 2374.700 Millions (previous year 1598.000 Millions) which is further secured by personal guarantees of promoter directors / group Companies

III. Terms of Repayment of Secured Term Loan

Particulars

Rate of Interest*

1-2 Years

2-3 Years

3-4 Years

Beyond 4

Years

Total

Rupee Term Loan From

Bank

12% – 15.75%

(10.25% – 14.25%)

16427.500

(7056.200)

15680.500

(11969.000)

8203.100

(11791.700)

15373.400

(15804.800)

55684.500

(46621.700)

Foreign Currency Term

Loan From Banks

2.53% – 5.34%

(2.50% – 8.00%)

344.500

(4795.400)

468.100

(273.900)

627.900

(385.600)

2061.000

(263.300)

3501.500

(5718.200)

Rupee Term Loan From

Financial Institutions

9.00% – 12.50%

(9.00% – 12.00%)

137.400

(131.300)

156.300

(137.500)

139.100

(156.300)

153.100

(292.100)

585.900

(717.200)

Foreign Currency Term

Loan From Financial

Institutions

2.70% – 5.31%

(3.92% – 6.00%)

86.600

(186.300)

1365.600

(75.600)

–

(1183.600)

–

1452.200

(1445.500)

Total

16996.000

(12169.200)

17670.500

(12456.000)

8970.100

(13517.200)

17587.500

(16360.200)

61224.100

(54502.600)

* Rate of interest is whitout considering interest subsidy under TUF Scheme

IV. Terms of Repayment of Unsecured Term Loan

Particulars

Rate of Interest*

1-2 Years

2-3 Years

3-4 Years

Beyond 4

Years

Total

Foreign Currency Term

Loan From Banks

2.53% – 3.75%

(2.95% – 3.00%)

173.200

(173.200)

173.200

(173.200)

173.200

(173.200)

346.600

(433.800)

866.200

(953.400)

V Disclosure of security and terms of repayment of Other loans and advances

Nature of security

Banks

Vehicle loans are secured by vehicles under hypothecation with banks

64.600

(78.700)

Particulars

Rate of Interest*

1-2 Years

2-3 Years

3-4 Years

Beyond 4

Years

Total

Vehicle Loan

9.50% – 13.00%

(9.50% – 13.00%)

24.400

(24.300)

12.600

(24.400)

3.300

(9.300)

40.300

(58.000)

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

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.

2,324.47

(446.14)

40.35

(20.58)

2,364.82

(466.72)

(ii) Second charge created / to be created on all fixed assets (excluding land and building) of the company

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)

Total

2,668.40

(875.59)

130.74

(89.08)

2,799.14

(964.67)

Short Term Loans

Subservient 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.

98.00

Total

635.00

(621.63)

85.00

(75.00)

720.00

(696.63)

Previous year figures are given in brackets

Unsecured Loan	As on 31.03.2012 (Rs. in Millions)
From banks
Foreign currency loans	866.200
From Banks	1575.300
Commercial Paper
From Banks	1030.000
From Financial Institutions	3350.000
Inter Corporate Deposit	117.500
Rupee Loans
From Banks	0.000
Total	6939.000

UNSECURED LOANS	As on 31.03.2011 (Rs. in Millions)
a. Term Loan and Advances
1) From Banks Financials Institution
Rupee Loans	8149.500
Foreign Currency Loans	1122.200
b. Nil (previous year 475) 1% Foreign Currency Bonds (FCCBs)	0.000

Total	9271.700


Banking Relations :	--

Statutory Auditors :
Name 1 :	Gandhi and Parekh Chartered Accountants
Address :	6, Saraswati Darshan, 2^nd Floor, Opposite New Era Cinema, S. V. Road, Malad (West), Mumbai – 400 064, Maharashtra, India

Name 2 :	Deloitte Haskins and Sells Chartered Accountants

Internal Auditors :	Bhandarkar and Company Chartered Accountants Devdhar Joglekar and Srinivasan Chartered Accountants N.T. Jain and Company Chartered Accountants Shah Gupta and Company Chartered Accountants T.R. Chadha and Company Chartered Accountants

Legal Advisors and Statutory :	Kanga and Company

Associate companies:	Ø Alspun Infrastructure Limited Ø Next Creation Holdings LLC Ø Ashford Infotech Private Limited Ø Nirvan Builders Private Limited

Entities under common control:	Ø Alok Denims (India) Private Limited Ø Green Park Enterprises Ø Alok Finance Private Limited Ø Jiwrajka Associates Private Limited Ø Alok Knit Exports Limited Ø Jiwrajka Investment Private Limited Ø Alok Textile Traders Ø Niraj Realtors and Shares Private Limited Ø Ashok Realtors Private Limited Ø Nirvan Exports Ø Buds Clothing Company Ø Nirvan Holdings Private Limited Ø D. Surendra and Company Ø Pramatex Enterprises Ø Gogri Properties Private Limited Ø Pramita Creation Private Limited Ø Grabal Alok Impex Limited Ø Triumphant Victory Holdings Limited

Subsidiaries:	Ø Alok Inc. Ø Alok Industries International Limited Ø Alok Retail (India) Limited Ø Alok Land Holdings Private Limited Ø Alok Aurangabad Infratex Private Limited Ø Alok H and A Limited Ø Alok International, Inc Ø Alok European Retail, S.R.O. Ø Alok International Ø Alok Infrastructure Limited Ø Alok Apparels Private Limited Ø Alok New City Infratex Private Limited Ø Alok Realtors Private Limited Ø Alok HB Hotels Private Limited Ø Alok HB Properties Private Limited Ø Springdale Information and Technologies Private Limited Ø Kesham Developers and Infotech Private Limited Ø Alok Singapore Pte Limited Ø Grabal Alok (UK) Limited Ø Grabal Alok International Limited

Joint Venture:	Ø Aurangabad Textiles and Apparel Parks Limited Ø New City of Bombay Mfg. Mills Limited

CAPITAL STRUCTURE

AS ON 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
1000000000	Equity Shares	Rs.10/- each	Rs.10000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
826269357	Equity Shares	Rs.10/- each	Rs. 8262.700 Millions
	Add: Forfeited Shares (13921 shares of Rs.10/- each Rs.5/- paid up)		Rs. 0.100 Million
	Total		Rs. 8262.800 Millions

NOTES:

a) During the year 3,84,85,000 (previous year Nil) equity shares are issued as under:

i] 1,60,00,000 Equity shares of Rs.10/ – each at a permium of Rs.41/ – each alloted on conversion of warrants issued by Grabal Alok Impex Limited, the amalgmating company. Such warrants were sold by the original warrant holder to Jiwarajka Investment Private Limited, a promoter group company, which excercised such warrants.

ii] 2,24,85,000 Equity shares alloted to the Shareholders of Grabal Alok Impex Limited pursuant to the Scheme of Amalgamation (Refer Note No 36) for consideration other than cash.

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

Particulars	31.03.2012
No of shares outstanding at the beginning of the year	787784357
Add: Shares alloted during the year
Allotment of Equity shares on conversion of warrants	16000000
Allotment of Equity shares pursuant to the Scheme of Amalgamation	22485000
No of shares outstanding at the end of the year	826269357

d) Terms/right attached to equity shares

The company has only one class of equity shares having a par value of Rs.10/ – per share. Each holder of equity share is entitled to one vote per shares. 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.

e) Shares reserved for issue under options

f) Grabal Alok Impex Limited, the amalgamating company, (Refer note no 36) 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 Rs.0.30 per share (previous year Rs.0.25 per share) was recognised as proposed dividend to equity share holders.

h) Shareholder holding more than 5 percent of the share capital

Name of the Shareholder	As on 31.03.2012
	No of shares Held	% of Shares
Niraj Realtors and Shares Private Limited	71637204.00	8.67
Caledonia Investment PLC	36207135.00	4.38
Caledonia Investment PLC (FDI)	24211903.00	2.93

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		8262.800	7877.900	7877.900
2] Share Application Money		0.000	0.000	0.000
3] Share Warrants		0.000	0.000	0.000
4] Reserves & Surplus		28292.200	23098.000	19284.000
5] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		36555.000	30975.900	27161.900

LOAN FUNDS
1] Secured Loans		104455.800	87264.000	80866.600
2] Unsecured Loans		6939.000	9271.700	4230.200
TOTAL BORROWING		111394.800	96535.700	85096.800
DEFERRED TAX LIABILITIES		6267.700	5076.600	4069.800
FOREIGN CURRENCY MONITORY ITEM TRANSLATION DIFFERENCE ACCOUNT		0.000	2.200	0.000

TOTAL		154217.500	132590.400	116328.500

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		85520.900	74272.100	62058.600
Capital work-in-progress		9141.600	10612.000	9392.500

INVESTMENT		1797.300	1671.800	2296.900
DEFERREX TAX ASSETS		0.000	0.000	0.000
FOREIGN CURRENCY TRANSLATION MONETARY ACCOUNTS		0.000	0.000	1.700

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	33799.100	20026.200	14744.100
	Sundry Debtors	21521.500	17402.000	11012.300
	Cash & Bank Balances	12948.400	11412.100	13902.900
	Other Current Assets	1134.000	0.000	0.000
	Loans & Advances	16520.800	7275.200	8359.500
Total Current Assets		85923.800	57665.300	48018.800
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	5064.200	6228.400	3799.100
	Other Current Liabilities	20582.000	3070.000	1090.200
	Provisions	2519.900	782.600	550.700
Total Current Liabilities		28166.100	10081.000	5440.000
Net Current Assets		57757.700	46034.500	42578.800

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		154217.500	132590.400	116328.500

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	89008.600	63884.300	43111.700
		Other Income	656.000	64.400	640.200
		TOTAL (A)	89664.600	63948.700	43751.900

Less	EXPENSES
		Cost of Materials consumed	57483.400	--	--
		Purchase of Traded Goods	1614.500	3426.200	3984.600
		Changes in inventories of finished goods, work-in-progress and stock-in-trade	(15166.600)	(2225.500)	(3338.200)
		Employee benefits expenses	2672.800	--	--
		Other expenses	16813.000	--	--
		Manufacturing and other expenses	--	45184.500	30380.700
		TOTAL (B)	63417.100	46385.200	31027.100

Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		26247.500	17563.500	12724.800

Less	FINANCIAL EXPENSES (D)		11495.500	6543.700	5350.800

	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		14752.000	11019.800	7374.000

Less/ Add	DEPRECIATION/ AMORTISATION (F)		7134.300	5187.900	3626.100

	PROFIT BEFORE TAX (E-F) (G)		7617.700	5831.900	3747.900

Less	TAX (H)		3812.400	1788.300	1274.500

	PROFIT AFTER TAX (G-H) (I)		3805.300	4043.600	2473.400

Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		9216.100	1809.100	2766.300

Less	APPROPRIATIONS
		Transfer from/to Debenture Redemption Reserves	NA	(3843.000)	3001.000
		Transfer to General Reserve	NA	250.000	200.000
		Proposed Dividend – Equity Shares	NA	196.900	196.900
		Corporate Dividend Tax thereon	NA	32.700	32.700
	BALANCE CARRIED TO THE B/S		NA	9216.100	1809.100

	EARNINGS IN FOREIGN CURRENCY
		FOB Value of Exports	27679.800	20323.400	14370.600
		Interest Received on Fixed Deposits	1.800	0.600	74.500
	TOTAL EARNINGS		27681.600	20324.000	14445.100

	IMPORTS
		Raw Materials	7499.500	3993.300	5054.300
		Stores & Spares	683.300	473.100	772.500
		Capital Goods	12815.800	9395.500	3175.600
		Packing Materials Purchased	68.900	71.500	0.000
	TOTAL IMPORTS		21067.500	13933.400	9002.400

	Earnings Per Share (Rs.)		4.69	5.13	4.58

QUARTERLY RESULTS

PARTICULARS	30.06.2012	30.09.2012	31.12.2012
Type	1^st Quarter	2^nd Quarter	3^rd Quarter
Sales Turnover	24227.500	33247.700	35208.100
Total Expenditure	16735.200	24404.200	25652.600
PBIDT (Excl OI)	7492.300	8843.500	9555.500
Other Income	100.300	44.400	90.500
Operating Profit	7592.600	8887.900	9646.000
Interest	3284.100	3229.500	3705.200
Exceptional Items	(1729.600)	999.100	(302.800)
PBDT	2578.900	6657.500	5638.000
Depreciation	2133.700	2183.200	2286.100
Profit Before Tax	445.200	4474.300	3351.900
Tax	144.500	1578.100	953.700
Provisions and Contingencies	0.000	0.000	0.000
Reported PAT	300.700	2896.200	2398.200
Extraordinary Items	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000
Net Profit	300.700	2896.200	2398.200

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	4.24	6.32	5.65

Net Profit Margin (PBT/Sales)	(%)	8.56	9.12	8.69

Return on Total Assets (PBT/Total Assets}	(%)	8.87	4.47	3.40

Return on Investment (ROI) (PBT/Networth)		0.21	0.18	0.14

Debt Equity Ratio (Total Debt/Networth)		3.05	3.12	3.13

Current Ratio (Current Asset/Current Liability)		3.05	5.56	8.83

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	Yes
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	--
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	--
22]	Litigations that the firm / promoter involved in	--
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	--
26]	Buyer visit details	--
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

PERFORMANCE

During the financial year, the Company recorded sales of Rs.89008.600 Millions an increase of 39.33% over the previous year and exports (including incentives) increased by 36.62% to Rs.30295.500 Millions. The operating profit before tax during the year stood at Rs.7617.700 Millions an increase of 21.95% over the previous year.

All the divisions of the company recorded growth with lead being taken by Cotton Yarn, Polyester Yarn, Home Textiles and Apparel Fabrics.

Details of the Company's performance for the year are given in the 'Management Discussion and Analysis', which forms part of this Directors' Report.

CAPITAL

During the year the Company issued and allotted 1,60,00,000 Equity Shares to a Promoter Group Company, against the conversion of warrants. The said warrants were originally issued to Arum Investments Private Limited by M/s. Grabal Alok Impex Limited and the same were subsequently purchased by M/s. Jiwrajka Investments Private Limited.

Pursuant to the amalgamation of M/s Grabal Alok Impex Limited with the Company, the Company has issued and allotted 2,24,85,000 Equity Shares of Rs.10/ - each to the existing equity shareholders of M/s. Grabal Alok Impex Limited, whose names appeared in the register of members of the Company on the record date i.e. 14^thMarch,2012inthe ratio of 1:1.

The Company's equity share capital as on 31 March 2012 stands at Rs.8262.800 Millions divided into 82,62,69,357 fully paid equity shares of Rs.10/-each.

AMALGAMATION

During the year, the Hon'ble High Court, Bombay had vide its Order dated February 03, 2012 sanctioned the Scheme of Amalgamation (the "Scheme") of Grabal Alok Impex Limited with the Company with appointed date April 01, 2011 and the Scheme has become effective on 1st March, 2012.

Pursuant to the aforesaid merger, the Company have allotted 2,24,85,000 Equity Shares of Rs. 10/- each to the existing equity shareholders of M/s. Grabal Alok Impex Limited in the ratio of 1:1 and the said shares are listed with BSE and NSE.

AWARDS AND RECOGNITION

During the year, the Company has been given the following awards and recognitions by the Cotton Textile Exports Council of India (TEXPROCIL) in three categories:

GOLD Trophy for Global Exports of Bleached / Dyed / Yarn Dyed / Printed Fabrics in Fabrics Category
GOLD Trophy for Exports of Bed Linen / Bed Sheets /Quilts in Made-ups Category
SILVER Trophy for Highest Global Exports Category
SILVER Trophy for second best export performance for the year 2010-11 in the category of Polyester Yarn by SRTEPC

MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMIC OVERVIEW

WORLD

2011-12 has been a challenging year for the global economy. Growth in global output reduced from 5.3% in Calendar Year (CY) 2010 to 3.9% in CY 2011. The recovery in Advanced Economies (AEs) that seemed to be shaping well at the start of CY 2011 lost steam towards the fag-end of the year and output growth reduced from 3.2% in CY 2010 to 1.6% in CY 2011. Growth in emerging markets, especially China and India, is slowing beyond what was anticipated but these two economies are still likely to provide some support for global recovery. In fact, output growth in the developing and emerging economies reduced from 7.5% in CY 2010 to 6.2% in CY 2011.

Amongst the advanced economies, USA grew by 1.7%, while EU countries grew by 1.4%. While there was positive news from USA with improved activity in the second half of CY2011, economic activity took a sharp turn for the worse during the fourth quarter in the Euro area. The future of the Economic and Monetary Union (EMU) became clouded by uncertainty, as the sovereign debt crisis caused sharp increases in key government bond rates. Plummeting confidence and escalating financial stress were major factors in the - 1.3% (annualized) contraction of the euro area economy in Q4, 2011. In contrast, during the same period, the United States, witnessed acceleration in activity, as consumption and inventory investment strengthened. However, the overall subdued demand in the advanced economies resulted in reduction in global trade between advanced economies and emerging economies.

Chart B shows that import growth in advanced economies reduced from 11.5% in CY2010 to 4.3% in CY2011. In line with this reduction export growth from emerging economies also reduced from 15.3% in CY2010 to 8.8% in CY2011.

In the emerging and developing markets economic activity dampened also due to factors unrelated to the Euro area. In emerging Asia and in Latin America, cyclical factors, including recent policy tightening led to trade and production slowing down noticeably. In Middle East and North Africa (MENA), activity remained subdued amid social unrest and geopolitical uncertainty.

The demand slowdown has reduced non-oil commodity prices. However, as Chart C shows, non-oil commodity inflation has not reduced significantly - from 26.3% in CY 2010 to 17.8% in CY 2011. And, geo-political instability and speculative activities have contributed to oil price increase of 31.6% in CY 2011, which is even greater than the 27.9% increase in CY 2010. The widespread effect of high energy prices was evident in rising inflation for consumers. In the advanced economies, consumer prices inflation was 2.7% in CY 2011 against 1.5% in CY 2010 and in emerging and developing economies consumer price inflation increased from 6.1% in CY 2010 to 7.1% in CY 2011. This environment of low economic activity with higher price levels was a significant dampener for consumer confidence across the world.

On a positive note, many advanced economies have made good progress in designing and implementing strong medium term fiscal consolidation programmes. At the same time, emerging and developing economies continue to have the benefit of latent demand in their economies and need to continue with reforms to maintain growth.

However, problems could easily flare up again in the Euro area and fiscal policy could tighten very abruptly in the United States in 2013. Consequently, while there will be pockets of growth opportunities, there is also considerable uncertainty in the global economy going into 2012-13.

INDIA

Lower global demand, domestic policy uncertainties and the cumulative impact of monetary tightening contributed to growth slowing down considerably to the estimated level of 6.5% in 2011-12. All three sectors of the economy -agriculture, industry and services - slowed down. Even though there was moderation in agriculture growth, the year witnessed an all-time high food-grains output. The services sector moderated primarily due to the slowdown in construction, while the disappointing performance of mining and manufacturing sub-sectors contributed to slackening of industrial growth. Chart D shows the quarterly GDP growth rates where there has been a fall in 2011-12 compared to 2010-11.

The growth slowdown has been driven by a sharp fall in investment, some moderation in private consumption and fall in net external demand. These, along with a sense of policy ambiguity and legislative uncertainty, have led to significant dampening of business confidence in the country. Investor confidence, too, has ebbed and consequently there has been a slowdown in foreign investments into India.

The balance of payments (BOP) also came under significant stress during Q3 of 2011-12 as the current account deficit widened substantially. Under such conditions with capital inflows declining, there has been a drawing down of foreign exchange reserves. This has resulted in a mismatch in demand and supply in the foreign exchange market resulting in high volatility and sharp fall in the valuation of the rupee against the US dollar and the Euro, especially in the second half. Chart E plots the data.

The wider Current Account Deficit, increase in external debt, weakening net international investment position (NIIP) and deteriorating vulnerability indicators need to be addressed through policy measures to stabilise and renew the growth momentum.

Inflation has moderated in last quarter of 201112 to below 7 %. However, the path of inflation in 2012-13 could remain sticky with high oil prices, large suppressed inflation, and exchange rate pass-through, impact of tax hikes, wage pressure and structural impediments to supply response. The pricing power of companies has declined with moderation in demand as also lower non-oil commodity prices. This should help keep inflationary pressures under control in 2012-13.

Monetary policy was strongly anti-inflationary until October 2011 and interest rates were at very high levels. Subsequently, decelerating growth and declining inflation momentum has prompted monetary policy shift to a neutral stance since December 2011. Some easing in liquidity was effected through a total of 125 basis points reduction in the Cash Reserve Ratio (CRR) during January-March 2012. In addition, amidst increasing structural and frictional liquidity deficits during Q4 of 2011-12, the Reserve Bank injected large amounts of primary liquidity through Open Market Operations (OMOs).

Early indicators suggest that growth may have bottomed out in Q3 of2011-12 but recovery may be slow during 2012-13. With measures being taken to remove supply-side bottlenecks, progress on fiscal consolidation could create conditions for a more favourable growth - inflation dynamic.

TEXTILES, CLOTHING AND FIBRE INDUSTRY

GLOBAL TEXTILE AND APPAREL INDUSTRY

With slowing demand from developed economies, the global textile and apparel industry will see robust demand from developing economies that will witness higher economic growth. The global textile and apparel market is estimated to reach US$ 693 billion in 2012 and is projected to reach US$ 1,018 bn by 2020.

The current global textile and apparel industry has evolved as distinct consumption and production hubs. Production was earlier located in developed economies such as USA and UK but over the years the manufacturing has shifted to economies such as India, China, Bangladesh etc. due to the latter's cost advantage. Mature economies have now emerged as major consuming hubs while developing economies are still in the nascent stages of consumption.

By 2020, fibre is estimated to grow by CAGR of 2% to reach US$ 121 billion while yarn is expected to grow by a CAGR of 3% to reach US$ 293 billion. In volume terms, fibre is estimated to reach 62 million tons while yarn is expected to reach 88 million tons in the same period.

The global fabric production volume is projected to increase by CAGR of 3% to reach 475 billion sq mtrs and its value is projected to reach US$ 475 billion by 2020. The global garment production will reach 185 billion pieces by 2020 and its market is projected to reach US$ 650 billion by 2020.

GLOBAL FIBER DEMAND

With the rapid increase in world population, the demand of fiber is also on a rise. From the current levels, the estimated increase in the world population is 0.7 billion and the per capita fiber consumption for the world, is expected to touch 14kgs, in the next 10 years. This indicates a big jump in the fiber consumption and hence the existing supply capabilities will need to be pushed up. Following chart shows the trend of world population and the world average fiber consumption per capita.

On a continent level, the fiber consumption per capita for the developed world is much higher than the developing economies. Within Asia, there is a very large gap in the consumption per capita of India and China

Given a higher GDP growth and a larger population base, the demand in the coming decade is expected to be much higher from the emerging economies. And this higher demand will need to be addressed through additional investment capabilities.

Interestingly, the world share of cotton fiber consumption per capita has declined to 4 kg per capita (-33% of total consumption) and the share of non cotton has increased to 8 kgs per capita. Going forward, similar trend is expected with higher demand for the non cotton or polyester fibre.

GLOBAL SUPPLY DYNAMICS

In 2010, cotton witnessed volatility in prices which increased the cost of production of garments and pushed up retail prices. The main reason was the low stocks-to-use ratio. The in-transit stocks of cotton gin fell to 34% of consumption. However the roots of rising prices can be traced to the recession and global meltdown in 2009 when inventories throughout the value chain were drawn lower. However with the consumer sentiment rebounding in 2010, demand for cotton reached new heights putting upward pressure on prices. The demand was further stifled as few cotton producing nations decided to ban cotton exports in order to serve the domestic market demands.

A recent trend that is slowly emerging is the increased use man-made fibre (MMF) in garments. Unable to pass on the rising input cost of using higher cotton blend in apparel, manufacturers have increased the proportion of MMF in apparels. As seen in the following graphs, USA imports of apparel has increased by 9% in value although volume had negative growth by 4% indicating the price rise of imports. In 2011, cotton apparel imports by volume witnessed negative growth of 12% while value of such imports increased by 3%. On the other hand, both value and volume of MMF apparel imports increased by 19% and 8% respectively.

Apart from rising cost of raw material, the textile and apparel industry is facing upward cost pressure from other parameters as well. Major cost components like power and raw material have been increasing significantly and contributing to overall increase in production costs. For e.g. the increase in total cost of production of ring yarn has increased by a CAGR of 8% in the time period 2006-10.

Textile and apparel industry is a very labour intensive industry. The primary reason why manufacturing jobs in this industry shifted from developed to developing countries was the cost advantage offered by the latter. But rising standard of living and inflations has pushed up labour costs across the textile and apparel manufacturing countries. India saw an average increase of 10% to 15% in labour cost other countries like China and Cambodia saw increase in labour cost ranging from 15% to 35%.

ROLE OF CHINA IN GLOBAL TEXTILE AND APPAREL INDUSTRY

China is the world's second largest economy with annual GDP of US$ 5.8 trillion growing nearly by CAGR of 10%. The contribution of this country cannot be undermined as China is the largest exporter of textile and apparel products. In 2010, China accounted for 36% share in global textile and apparel trade. However as a result of natural transition towards a developed economy, China's concentration on high-end and value generation industries is increasing and diminishing towards the traditional textile and apparel industry.

The textile industry is an energy intensive industry. Due to the textile industry, China contributes nearly 25% of global carbon dioxide emissions and it reach 8.2 million tons last year, thereby curtailing the chances to grow the textile industry.

On the other hand, the domestic demand for Chinese products will increase due to surge in consumerism. With rising per capita income, the Chinese are willing to spend and consume more thus luring the exporters to focus on servicing the domestic demand. Rising per capita income hints at the fact that people have higher disposable income indicating higher wage levels.

China's policy of controlling population for the past many years has resulted in a very skewed demographic structure.

It is expected that 23% of Chinese population will be over 65 years of age by 2020, putting tremendous pressure on the government spending on the older population and income generating population of the country. A fast ageing population and one child policy would cause wage inflation to rise at an even brisker pace than the average rise of 17% in the period 2000-2011.

The combination of above factors is expected to severely limit China's capability to grow this industry and meet the global textile and apparel demand. This constraint will provide an opportunity for other textile and apparel nations to grow and meet the global demand. It is estimated that Chinese textile and apparel industry has the potential to reach US$ 850 billion by 2020 but due to above mentioned limitations, it can only reach about US$ 800 billion leaving open a deficit of US$ 50 billion that can be met by other countries.

EVOLVING GLOBAL INDUSTRY STRUCTURE

The US$ 664 billion textile and apparel industry is undergoing some structural changes to sustain itself in this dynamic environment. Till few years back companies were focusing through inorganic growth to increase sales but in the face of increased competition, companies have now started to focus on growth through acquisitions and mergers. Inorganic growth enables companies to access new markets, enhance product portfolio, value chain integration in a shorter span of time.

In developed economies value retailers, who provide products that represent value for money proposition, have grown in the period 2005-10 by an average CAGR of 17% while brands have barely grown by an average CAGR of 2% in the same period. It is expected that going forward, the trend will grow stronger as consumers will rationalize their spending helping the growth of such value retailers at the expense of brands.

A relatively newer trend that has attracted the attention of retailers and brands is multi-channel retailing. It was earlier perceived that consumers need to touch and feel products before they purchase but off late online retailing has emerged very strongly. In fact few retailers have developed and invested in online retail to aid overall sales. Thus it is not surprising that apparel is among the top 3 online categories that is purchased in USA and western Europe.

In a bid to increase their overall sales brands and retailers are reaching out to international markets as these newer markets have relatively lesser competition and increasing appetite for international brands. These newer markets are typically located in developing countries.

Textile and apparel industry is an energy and labour intensive industry. The production processes of textile and apparel impacts the environment and puts pressure on the natural resources of Earth. Globally buyers are becoming aware of the impact of their decisions related to manufacturing of apparel and textiles. Buyers have tied up with contract manufacturers and have implemented regulations requiring manufacturers to reduce dependence on natural sources and reduce wastage during the production process. Brands and retailers have adopted global change programs and incorporated the philosophy of sustainable production. At the consumer level too, the change has initiated as demand for apparel produced using sustainable practices has started to increase.

INDIAN TEXTILE AND APPAREL INDUSTRY OUTLOOK

Indian textiles and apparel sector has an overwhelming presence in the economic life of the country. It plays a pivotal role in contribution to industrial output, export earnings and employment generation.

The Indian textiles industry is extremely diverse encompassing hand-spun and hand woven sector at one end of the spectrum, and capital intensive, sophisticated mill sector at the other. Decentralized power looms / hosiery and knitting sector form the largest section of the Sector. Indian textile industry has the capacity to produce a diverse range of products suitable to the different market segments, catering both domestic and exports markets. The major sub-sectors of India textile and apparel sector are cotton/man-made fibre textiles mill industry, man-made fibre / filament yarn industry, wool and woolen textiles industry, sericulture and silk textiles industry, handlooms, handicrafts, jute and jute textiles industry, and textiles exports.

Indian economy in 2011 has witnessed moderation in growth. Turbulent global conditions, falling value of rupee, rising inflation coupled with a weak industrial sector have emerged as challenges for India economy. However, despite these challenges favourable demographic conditions and rising income level will help to keep growth story of India's domestic demand for apparels intact.

INDIAN TEXTILE AND APPAREL MARKET

India's total textile and apparel industry size (domestic + exports) is estimated to be INR 4180000.000 Millions ($ 89 bn) in 2011 and is projected to grow at 9.5% CAGR to reach INR 950,000 (US$ 221 bn) by 2020.

Out of INR 4180000.000 Millions exports accounts for INR 1450000.000 Millions and domestic industry accounts for INR 2730000.000 Millions. Domestic textile and apparel industry comprises of apparel, home textiles and technical textiles.

The following factors will act as growth drivers for Indian domestic textile and apparel market:

· India will add almost 140 million people in the consuming age group of 15-59 Years. Unlike any other top-10 economy (including China), India will have the lowest median age and the trend will be more distinctly pronounced by 2020 as average age of population of most other nations increases even more rapidly. India's population in the consuming age group of 15-59 years is more aspirational and aware. They have higher spending power and will consume more number of product categories than their parents. Increasing urbanization will also drive domestic demand in India.

· During the last fifty years the population of India has grown more than two and half times, from a figure of 439 million in 1961 to 1210 million in 2011. But urban India has grown by nearly five times. By 2020, almost 35% of the Indian population will be living in the urban areas and urban population will be more than the combined population of the US, UK and Germany. Increase in urban population will drive consumption in urban India.

· Literacy rate among the youth has already gone up by 25% in the last 20 years. As a consequence of better education these youths will get better jobs, and hence, will have a higher earning potential. Number of households with annual incomes of US $ 7000 and more is going to treble from about 30 million today to 100 million by 2020. There will be approximately 400 million individuals in the bracket of middle to high income group by 2020 and there will be around 70 million aspiring consumers who can afford and consume like a developed world's consumer.

· As a result of increasing consumption, minimum order quantity of Indian domestic retailers will increase. Previously, extremely small order quantity was a deterring force for domestic textile and apparel players to focus on Indian market. However, increase in order quantity will make domestic fashion market lucrative for players presently targeting export opportunities.

· With an anticipated US$ 50 billion fresh investment over next 10 years, organized retail will show impressive CAGR of more than 25% and will account for 25% of India's retail market by 2020. Organized apparel retail will derive momentum from fresh investments in retail.

· Emergence of new economic Hot Spots - areas of high economic activity will open up enormous opportunities for fashion retail. Currently the top 8-10 cities contribute disproportionate share of the markets in most of the consumer goods categories including apparels. However, going ahead growth in India would be far more exclusive as the new hot spots of consumption (primarily driven by investments in these regions) appear on the map. With investments in mega projects and development of infrastructure India will see the emergence of around 350 Hot Spots in near future. These new centers of consumption would present an opportunity for apparel and fashion retail companies to focus on and derive growth from the consumption potential. Also, conventional model of modern retail will not be able to offer all formats or cater to all customer groups in these hotspots and new models like e-tailing will sprout in coming years.

BUSINESS PERFORMANCE

Alok Industries ('Alok' or 'the Company') is primarily a textiles and apparels major with offerings across the entire value chain. The strength of the Company's business is its integrated textiles operations, both in cotton as well as in polyester. While the Company has acquired some facilities in Europe (through wholly owned subsidiary Mileta, a Czech Republic based integrated textiles company), the core manufacturing facilities are based in India (Silvassa, Vapi, Navi-Mumbai and Bhiwandi). Utilising its cost competitive integrated production base, the Company caters to markets in India and across the world. The stand-alone financial result, which is the major part of the Company's consolidated results, reflects the performance of the Company's textiles operations out of India.

The company has also invested into some other businesses. This includes its foray into the textile and apparel retail business both in India and in the United Kingdom (UK). In India, its retail business is carried out through its subsidiaries under the store brand 'H and A', while it operates the 'Store Twenty One' outlets through its overseas subsidiary Grabal Alok (UK) Limited.

To explore the opportunities in real estate sector, the Company had entered the real estate business through its real estate subsidiary Alok Infrastructure Limited. However, the company has in-principle decided to exit the real estate business.

MERGER WITH GRABAL ALOK IMPEX

During the year, the Honourable High Court, Bombay, sanctioned the scheme of amalgamation between Alok Industries Limited and Grabal Alok Impex Limited with appointed date of 1 April 2011.

The merger has resulted into operational synergies between the two companies and consolidates all textile operations under one entity. The swap ratio for the merger was 1:1 as determined by Ernst and Young (for every one share of Grabal, one share of Alok was allotted). The fairness opinion on the valuation was provided by Fortune Financials Services (India) Limited.

Consequent to the merger, the company issued 2,24,85,000 equity shares of X 10/ - each to the shareholders of Grabal Alok Impex Limited (of which 19,00,000 shares were issued to Alok Benefit Trust).

On amalgamation of the company with Grabal Alok Impex Limited., Grabal Alok (UK) Limited, an associate company of both companies, has now become a majority owned subsidiary of Alok Industries Limited.

Grabal Alok Impex Limited is in the business of manufacturing embroidered products and current year numbers of the company include sales of Rs.1609.600 Millions and Profit Before Tax of Rs.75.800 Millions of Grabal Alok Impex Limited and hence are not comparable with previous year.

FINANCIAL PERFORMANCE (STAND ALONE)

During FY 2011-12, Alok Industries achieved growth of 39.33% in sales, 39.64% growth in operating earnings before interest, depreciation, tax and amortisation (Operating EBITDA) and 21.95% growth in operating Profit before tax (Operating PBT). Due to volatility and depreciation in the Indian rupee against the US Dollar, the Company had to provide 'marked to market' on its foreign exchange transactions amounting to Rs.1212.700 Millions, as extra-ordinary provisioning. Consequently, Profits after tax, stood at Rs.3805.300 Millions in 2011-12. In terms of regular operations, the performance in 2011-12 reflects the Company's continuous endeavour to utilise its increased capacities and capital investments towards higher growth. Table 6 gives a summary of Alok's financial performance, as a stand-alone entity.

TEXTILES BUSINESS: OPERATIONS REVIEW

The strategy adopted by Alok Industries Limited. in its core textile operations is focus on integration both in cotton as well as in polyester. It has a presence across the entire textiles and apparel value chain. The cotton integrated operations begins with sourcing of cotton and converting it into cotton yarn followed by fabric production through knitting and weaving operations. Bulk of its sales happens at fabric stage (called apparel fabrics) and some part of the fabrics gets converted into garments. On the integrated cotton business, it also manufactures bed sheets and towels in its home textile division.

On the polyester integrated business, its raw material is PTA (Purified Terephthalic Acid) / MEG (Mono-Ethylene Glycol) and its manufacturing operations starts with converting PTA / MEG into Chips / POY (Partially Oriented Yarn) through CP (Continuous Polymerisation). Its strategy in polyester business is to produce more of finished products like DTY (Draw Texturised Yarn), FDY (Fully Drawn Yarn), PSF (Polyester Stable Fibre) and Cationic yarn with thrust on exports.

COTTON YARN

Alok set up its cotton spinning facility as a measure of backward integration to captively feed its weaving and knitting facilities. Almost, 85 - 90% of its cotton yarn production is consumed internally. Alok also does trading in cotton / cotton yarn and sells part of its manufactured yarn based on opportunities available in the market. The reported sales data of this division only accounts for external sales of raw cotton and yarn.

OVERVIEW OF COTTON SPINNING DIVISION

open end rotors (20,000 tons) to support in-house apparel fabric and home textiles segment

Alok's 85%-90% cotton yarn manufactured is utilized for captive consumption by the apparel fabric (woven and knit fabrics) and home textiles divisions (Bed Sheets and Towels).

Sales made externally by cotton Spinning business constituted about 3.62% of total revenue of the company in 2011-12

Procurement of raw cotton at right price and during harvest remains crucial; looking at the volatility in the prices of cotton in the recent past, the company is now holding inventory to the extent of 3-4 months requirements matching with its average sales order book which is also 3-4 months for apparel fabrics, home textiles and garments. Thus, it has in-built risk mitigation for cotton price fluctuation. Further, due to its integrated operations cotton constitutes about 27% - 28% of its fabric selling price, thus has limited impact on the overall operations

APPAREL FABRIC

Alok produces wide range of woven and knitted fabrics and enjoys a strong reputation for its quality products in the market. The high quality of its products is a result of its integrated operations, designing capabilities, product knowledge and state of the art manufacturing facilities. Besides in house manufacturing, it also outsources fabrics from power looms and other mills to meet its requirements. The unique selling proposition of Alok in this segment is its wide range of products which virtually covers the entire requirement of its diversified customers.

OVERVIEW OF APPAREL FABRIC DIVISION

· Alok has one of the largest woven and knitted fabrics capacities in the country —186 million meters p.a. for woven fabrics and -18200 tons p.a. for knitted fabrics

· Key business segment for the company contributing -46% of total revenue in 2011-12 with revenue of Rs. 41316.400 Millions

· Integrated operations, large scale, state of the art weaving , knitting and processing, in-house designing team, wide range of products, differentiates the company in this segment

· The company manufactures fabric primarily against orders which helps mitigate the risk of unsold inventory, while the pricing takes into account prevailing market price of raw material and foreign currency rate for exports

· Strong backward integration with in-house cotton and blended yarn production helps minimize the impact of any adverse fluctuations in yarn prices

· The apparel fabric division has a highly diversified and reputed customer base which includes garmenting exporters, garments brands, wholesalers, traders and retailers in domestic market, garmenting companies in international market and institutional sales to armed forces , government companies and corporates for work wear or technical textiles both in domestic and international markets

· Company has identified technical textile products and high-end yarn dyed fabric as its major growth areas

FASHION WEAR

In fashion wear fabrics, Alok produces a wide range in both knit and woven fabrics. Fabric types include twills, voiles, cambric, poplins, Lycra poplins, gabardines, jacquard, satins, matte, canvases, dobby, lawn, yarn dyed and many more. There are several distribution channels through which the Company caters to specified target customer groups. The direct customers include overseas brands and retailers, Indian garments exporters or converters in other countries, domestic garment manufacturers, brands, retailers and traders.

YARN DYED FABRICS

Within fashion-wear, the Company is focusing on yarn dyed fabrics, which are used for fashionable shirting and high end women's wear and command premium prices in the market. In this segment, Alok has benefited in terms of technology absorption for high-quality yarn-dyed fabrics, through its acquisition of Mileta. Alok has a capacity to produce 9,000 TPA of dyed yarn, which is being further expanded.

WORK-WEAR AND TECHNICAL TEXTILES

Technical textiles are specialty fabrics, such as Are retardant fabric, water repellent and soil release fabric and high visibility fabric. They require special functionality and are used in industrial and other high technology applications. Due to their specialised nature, they enjoy higher unit selling price and better margins than conventional textiles. It is an import substitute and is estimated to grow at a CAGR of 10% to reach Rs.1460000.000 Millions (US$ 31 bn) by 2020. Some of the technical fabrics manufactured by the company and their industry

HOME TEXTILES

Alok ventured into the bed sheet segment in 2003. With a strong thrust on exports, in a short span of time, the Company has emerged as market leaders in this segment. Within this segment, Alok added terry towels to its portfolio with the commissioning of a new plant in 2009-10.

There are different customer segments in home textiles. It is exported to overseas retailers and brands, sold in the domestic market to retailers and brands, and also distributed through the Indian retail venture 'HandA' stores and the UK based 'Store Twenty One' outlets. The Company has successfully created a large and prestigious customer base establishing relationships with global majors in the Home Textiles segment.

Alok's range in Home Textile segment today includes the entire range of bed linen, curtains, towels and includes wide variety of products such as sheets-sets, duvets, comforters, blankets, quilts, bed-in-a-bag, in prints, solids, embroidery, sateen's, flannel, Jacquards, Dobbies, yarn-dyed from 180 TCs to 1000 TCs. It has also added special finishes such as wrinkle free, anti-bacterial, fire-retardant, etc.

OVERVIEW OF HOME TEXTILES DIVISION

· Alok's capacity in this segment is 105 million meters p.a. for wider width fabric and 13,400 tons p.a. for terry towels

· It has emerged as the largest producer and exporter of bed linen in the country and has won several Gold trophies from Texprocil, Ministry of Textiles, Government of India

· With total sales of Rs.12504.100 Millions, home textiles division accounted for -14% of overall revenues in 2011-12

· Integrated operations with spinning / processing capabilities enables better control over product quality and give better margins

· Presence in the relatively high end home textiles (300 to 800 counts product category) enable higher price realisation and helps mitigate competition from other low cost manufacturing countries and domestic companies

· In home textile segment, Alok is mainly present in the exports markets (-97% exports) where it faces competition from Chinese, Pakistani and Turkish manufacturers

· Established and reputed multinational clientele results in strong customer profile; periodic pricing resets to protect margins in case of increase in input costs

During the year, Alok's home textile division recorded growth of about 25% and increased to Rs.12504.100 Millions compared to Rs.10001.100 Millions in 2010-11. While keeping its presence in the domestic market, its major focus is on export market majorly in USA. The terry towel division is about 12.75% of the total home textile division. The expanded capacities of sheeting fabric (22.5 mn meters p.a.) and terry towel (6700 tons p.a.) was added in the last quarter of the year and the full benefit of these capacities would come in 2012-13.

Alok's home textile business is primarily focused on developed markets whose sheer market size is very high. Even though there was a demand contraction in these markets due to the economic slowdown, Alok continues to register strong export growth. This bears testament to the fact that there is consolidation of sourcing in the global market where end customers are focusing on a few reliable good quality suppliers. And, the fact that Alok has built strong relationships with major international customers

GARMENTS

Alok produces wide range of garments in knitted and woven for ladies, gents and children for variety of applications such as sportswear, active wear, casual wear and sleepwear. The garments are made from different types of fabrics based on the requirement of the buyers and prevailing fashion cycle. Fabrics used for garments includes solid, melange, yarn dyed, auto stripes, jacquards, embroidered and variety of prints like transfer prints, and block prints.

Alok's major strength lies in manufacturing fabrics and garments are relatively a small business for Alok with major thrust on exports. Garment division's sales were Rs.2172.800 Millions in 2011-12 constituting 2.44% of company's total sales. Going forward, the Company would be focusing more on value added institutional sales for garment which includes product lines like work-wear and uniforms.

OVERVIEW OF GARMENTS DIVISION

· Company has an installed capacity of 22 million pieces spread over three locations

· Garment division accounted for -2.50% of total sales, almost 90% of which is exported

· Going forward higher focus on institutional segment

POLYESTER YARN

For Alok, polyester yarn is an important segment in its overall business and it has been steadily growing in terms of its contribution in the overall business. In polyester also, as a strategy, Alok is an integrated player. It procures PTA and MEG and converts the same into POY / Chips through Continuous Polymerization (CP) plant, which is further processed to make draw texturised yarn (DTY), fully drawn yarn (FDY), cationic yarn and polyester stable fibre (PSF).

What differentiates Alok in this segment is its focus on producing finished yarn. This positioning at the higher end of the polyester value chain enables the company to capture margins at each stage and make it more competitive and sustainable. To further consolidate its position in the industry and improve margins, it is also developing, its capability in higher value added products like master batch, technical textiles, etc.

Polyester Staple Fibre (PSF) and Partially Oriented Yarn (POY) demand is expected to grow at 7.5 % compounded average growth Rate (CAGR) over next 2 years, due to rising consumption of blended and non-cotton yarns. Demand is expected to grow to 8.5 % CAGR after 2012-13 due to limited availability of cotton and higher substitution by polyester. However, in the domestic market, there has been continuous increase in capacities which has made this business very competitive.

OVERVIEW OF POLYESTER DIVISION

· Polyester Yarn division is the second highest revenue generating segment for Alok after Apparel Fabric division, with sales of Rs.29792.200 Millions, which is -33% of total company's revenue in 2011-12

· Demand scenario likely to remain good due to increasing substitution of natural fibres

· Competition from Chinese manufacturers, large Indian peers and unorganised domestic texturisers; however Alok's large scale integrated operations and focus on finished products make it a sustainable player

· Relatively moderate EBDITA margins due to commodity nature of business; volatility in raw material (MEG and PTA) prices may affect profitability margins if not passed through adequately;

· The polyester commands higher ROCE of about 25%-26% due to higher asset turnover (about 2.25 times) and lower working capital intensity

INFORMATION TECHNOLOGY (IT)

Alok has always utilised IT as a business enabler to optimise its processes and build a competitive edge. Implementation of appropriate new technology and up-gradation of IT tools is an on-going process at Alok.

The developments on this front in 2011-12 include:

· The first phase of implementation of Profitability Analysis (CO-PA) of CO module has progressed well. There are some teething issues related mostly to the integration and related module's configuration requirements to support CO-PA has been completed. The Company partnered with PWC to implement CO across their business. The Project has been initiated and the 'As is' study is in progress.

· APO has been configured, completed and tested on development and quality before putting on production server. A few orders have been tested on production server. However, they go live has been postponed because of some product gaps which are being resolved by SAP. The management is reviewing the new set of recommendations by both the vendors.

· Integration testing of HCM is over and master data preparation is complete for all the locations and same is being uploaded on production server. HCM application configuration has been moved to production server. All the plants have run trial run for two months-Jan and Feb. 2012. After test running for Q1, 2012-13, one will go live with this.

· System is functioning well after ECC 6 upgrade. SAP has mandated upgrade of Oracle database from 10G to11G. This has been done on development and quality. Production server has been upgraded to11G.

· Since the transaction system has stabilised, the company has moved to evaluating of various Bl tools. Plan for Bl implementation shall be made after management review and approval.

· Alok is also exploring the techno/commercial feasibility of implementing a High-Performance Analytic Appliance (HANA), an in-memory computing appliance from SAP.HANA as a solution may need more time to mature and be feasible for business needs. Roll out may occur in the next fiscal.

· In addition to the online backup of their production database, Alok is evaluating a truly online fail-over SAP environment using a tool "Vision". Test results were found to be satisfactory. They have procured necessary hardware and "vision" software licenses for DR. Alok has also initiated discussion with service providers to co-locate the DR environment; this expected to be seamlessly operational by 2nd quarter of 2012-2013.

· IT tools are being utilised to build a strong back-end for their Indian retail subsidiary. HandA has signed up for SAP ISR implementation. Unit testing is complete and integration testing is in progress. They have also selected a new POS application LS Retail. Implementation is complete and HandA has gone live with ISR.

FUTURE OUTLOOK

EXPECTED GROWTH IN GLOBAL TEXTILE TRADE

Global trade in textiles and clothing increased to US$ 602 bn in FY2010 from US$ 355 bn. in FY2000. Trade is expected to grow to US$ 1,000 bn in 2020 from US$ 602 bn in 201 Oat a CAGR of 5%.

· Textile production has shifted from western countries to China and India and these countries have become production hubs

· China is a leader in textile production with total industry size of USD 351 bn. (domestic USD 135 bn. And exports USD 216 bn.)

· China's export of textile and clothing has increased from USD 28.3 bn. (13.3% of World trade) in 1990 to USD 216 bn. (35.9% of world trade) in 2010. It took over almost entire share that EU lost during this period

However, with the transition of Chinese economy to the world's second biggest economy, few challenges have come up which would restrict its further growth of market share. China is now facing issues relating to rising labour cost, power availability, rising domestic consumption, currency appreciation etc. These developments in China are an opportunity for India to cash on and gain market share even in difficult market conditions. As one of India's leading textiles players, Alok's growth is expected to be in line with that of the Indian Industry.

EXPECTED GROWTH IN INDIAN TEXTILE INDUSTRY

India's USD 78 Billion total Textile and Apparel industry has the potential to grow @ 11% CAGR to reach USD 220 Billion by 2020. The growth is expected from both export as well as domestic markets. The respective growth drivers in exports and domestic markets are given below:

EXPORT DEMAND DRIVERS:

· Production Shift - Textile manufacturing continues to shift to low cost Asian countries

· De-Risking from China - Overseas buyers are now looking at India as an alternative to de-risk their sourcing requirements from China

· Advantage India - Availability of raw materials , especially cotton, integrated operations and design skills in India

DOMESTIC DEMAND DRIVERS:

Higher disposable income - Rising per capita income would lead to increase in consumption of Textiles at 11% CAGR Increasing retail penetration - Textiles and clothing retail comprise 40% of organised retailing in India. Share of organised retailing to increase from about 5% currently to about 24% by FY 2020 Favourable demographic profile-The % of earning population (15-60 years) in the total population is rising and is around 60%.

STRATEGY FORMULATED BY ALOK INDUSTRIES LIMITED

Backed by the large scale integrated operations resulting in economies of scale and stable margins, wide products basket and diversified customer base, Company is optimistic about its prospects in 2012-13. Alok is well positioned to take up both challenges and opportunities in the present textile scenario. In the coming years, the company would focus on implementing following strategy to grow and generate higher returns for all its stakeholders:

Optimising the operations - Having set up the large integrated plants, the company would work on sweating all its assets and reducing cost.

Reduction in debt /equity and exiting non - core businesses - Company, would bring back its investments made in real estate by monetising them. The proceeds of the same would be used to retire debt at consolidated and standalone level. Moreover, Company is also contemplating equity infusion, which would improve its debt/ equity. It is also formulating strategies for its retail operations.

Improving the ROCE and Asset Turnover - With object of improving the overall ROCE of the company, it would be looking at increasing the asset turnover by concentrating on value added products on the cotton side and increasing the capacities on polyester side.

Free Cash Flow - The Company would be making all attempts to achieve free cash flow situation by reducing its working capital cycle and limiting its capital expenditure.

Setting up of research Development and Innovation - With the renewed thrust on innovation led growth, the Company would set up in next few years a state of the art Research Development and Innovation centre with the object of transforming the company in next few years into a specialised product company.

With focussed attention on: Core Operations, improvement in ROCE and Generation of Free Cash flow, they look forward to future with great optimism.

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31.12.2012

(Rs. in millions)

Particular	For the Quarter Ended		Nine Months Ended
	31.12.2012 (Unaudited)	30.09.2012 (Unaudited)	31.12.2012 (Unaudited)
Income from Operations
Net Sales/Income from Operations	35208.100	33247.700	92683.300
Total Income from operations (net)	35208.100	33247.700	92683.300

Expenses
(a) Cost of raw material	26471.000	15131.200	56244.700
(b) Purchase of stock in trade	145.300	207.800	553.200
(c) Changes in inventories of finished goods, work in progress and stock in trade	(5319.600)	2895.500	(6556.300)
(d) Employee benefit expenses	693.200	728.700	2153.700
(e) Depreciation and amortization expenses	2286.100	2183.200	6603.000
(f) Other Expenses	4162.700	5441.000	14396.700
Total Expenses	27938.700	26587.400	73395.000
Profit from Operations before Other Income, Finance costs and Exceptional item	7269.400	6660.300	19288.300
Other Income	90.500	44.400	235.200
Profit/ Loss from Ordinary Activities before Finance costs and Exceptional item	7359.900	6704.700	19523.500
Finance costs	3705.200	3229.500	10218.800
Profit/ Loss from Ordinary Activities after Finance costs but Exceptional item	3654.700	3475.200	9304.700
Exceptional item	302.800	(999.100)	1033.300
Profit/ Loss from Ordinary Activities before tax	3351.900	4474.300	8271.400
Tax Expenses	953.700	1578.100	2676.300
Net Profit/ Loss from Ordinary Activities after tax	2398.200	2896.200	5595.100
Paid- up Equity Share Capital (Face value of the share – Rs. 10)	8262.800	8262.800	8262.800
Reserves excluding revaluation reserves as per balance sheet of Previous Accounting Year
Earnings per share
Basic	2.90*	3.51*	6.77*
Diluted	2.90*	3.51*	6.77*

PARTICULARS OF SHAREHOLDING
1. Public shareholding
Number of Shares	544052839	544052839	544052839
Percentage of Shareholding	65.84%	65.85%	65.84%
2. Promoters and promoter group shareholding
a) Pledged/Encumbered
- Number of Shares	268840283	276411608	268840283
- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)	95.26%	97.94%	95.26%
- Percentage of Shares (as a % of the Total Share Capital of the Company)	32.54%	33.45%	32.54%

Non - encumbered
- Number of Shares	13376235	5804910	13376235
- Percentage of Shares (as a % of the total shareholding of promoter and promoter group)	4.74%	2.06%	4.74%
- Percentage of Shares (as a % of the total share capital of the company)	1.62%	0.70%	1.62%

	Particulars	Quarter Ended 31.12.2012
B	Investor complaints
	Pending at the beginning of the quarter	5
	Received during the quarter	28
	Disposed of during the quarter	33
	Remaining unresolved at the end of the quarter	-

Notes:

1. The above unaudited financial results of the Company for the quarter and nine months ended 31 December 2012, reviewed and recommended by the Audit Committee, were taken on record by the Board of Directors of the Company at its meeting held on 13 February 2013 and have been reviewed by the Statutory Auditors.

2. A] The company, considering its high level of international operations and present internal financial reporting based on geographical location of customer has identified geographical segment as its primary segment. The geographical segment consists of domestic sales and export sales. Revenue directly attributable to segments is reported based on items that are individually identifiable to that segment. The company believes that it is not practical to allocate segment expenses, assets except debtors, used in the company's business or liabilities contracted since the resources/services/assets are used interchangeably within the segments. Accordingly, no disclosure relating to same is made.

Particular	For the Quarter Ended		Nine Months Ended
	31.12.2012 (Unaudited)	30.09.2012 (Unaudited)	31.12.2012 (Unaudited)
Segment Revenue
Domestic	28114.300	24918.000	68893.400
International	7093.800	8329.700	23789.900
	35208.100	33247.700	92683.300
Trade Receivables
Domestic	41030.800	24788.500	41030.800
International	2096.300	2400.700	2096.300
	43127.100	27189.200	43127.100

B) The Company has identified business segment as its secondary segment. The company is operating in a single business segment i.e. Textile and as such all business activities revolve around the segment

3. Exceptional items include:

i) Exchange loss/ gain arising out of a) restatement of foreign currency liabilities/ assets and b) Mark to market (MTM) losses on foreign exchange derivatives taken by the Company, considering the volatility in the Indian Rupee (INR) against US Dollar (USD)

ii) Provision for diminution in the value of investments and impairment of loans to subsidiaries in the retail business (Rs. 73.500 Millions for quarter and Rs. 990.400 Millions for nine months ended 31 December 2012). Considering the business plan for retail operations such diminution/impairment is not regarded as temporary.

4. The amalgamation of Grabal Alok Impex Limited (GAIL) into the company was completed on 1 March 2012 with effect from 1 April 2011, as per the terms and conditions mentioned in the Scheme of Amalgamation. 2,24,85,000 equity shares were issued to the shareholders of Grabal Alok Impex Limited. Figures for the quarter/period ended 31 December 2011, include figures of Grabal Alok Impex Limited and EPS has been restated for such periods.

5. Subsequent to the period end, the Company has proposed a rights issue of equity shares upto Rs 5510.000 Millions, with issue price of Rs 10 per share, ratio of Rights entitlement of 2:3 and record date of 19 February 2013.

6. The company has decided to limit its capital expenditure upto Rs. 6000.000 Millions p.a. for the next few years beginning FY 2014

7. The figures of previous periods have been reclassified / regrouped wherever necessary to correspond with those of the current period.

CONTINGENT LIABILITIES IN RESPECT OF:

(Rs. In Millions)

Particulars	31.03.2012
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
Pending Litigation	0.500
Guarantees given by banks on behalf of the Company	734.800
Corporate Guarantees given to bank for loans taken by Subsidiary Companies	9776.200
Bills discounted	2147.900
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.	16.900
b) Income Tax demand during the previous years of Rs.59.100 Millions 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 has 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 Rs.2.300 Millions mainly pertaining to short deduction of taxes, the company is hopeful of favourable decision.	2.300
c) Demands of Works Contract Tax contested not acknowledged as debts as the company is hopeful of favourable decision.	5.900
d) Income tax amounting to Rs112.900 Millions, 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.	112.900

FIXED ASSETS:

Tangible Assets:

Ø Freehold Land

Ø Leasehold Land

Ø Buildings

Ø Office Premises

Ø Plant and Machinery

Ø Computer and Peripherals

Ø Office Equipment

Ø Furniture and Fittings

Ø Vehicles

Ø Tools and Equipment

Intangible Assets:

Ø Computer Software

Ø Trademarks/ Brands

WEBSITE DETAILS:

PROFILE

Alok was established in 1986 as a private limited company, with their first polyester texturising plant being set up in 1989. They became a public limited company in 1993. Over the years, they have expanded into weaving, knitting, processing, home textiles and garments. And to ensure quality and cost efficiencies they have integrated backward into cotton spinning and manufacturing partially oriented yarn through the continuous polymerisation route. They also provide embroidered products through Grabal Alok Impex Limited., their associate company.

That is how they have evolved into a diversified manufacturer of world-class home textiles, garments, apparel fabrics and polyester yarns, selling directly to manufacturers, exporters, importers, retailers and to some of the world’s top brands.

Alok has a strong foothold in the domestic retail segment through a wholly owned subsidiary, Alok HandA Limited, under the cash and carry model that offer garments and home textiles at attractive price points.

Alok also has an international presence in the retail segment through its associate concern, Grabal Alok (UK) Limited. This entity owns more than 200 outlets across England, Scotland and Whales vending value for money ranges for menswear, womenswear, childrenwear, footwear, homeware and accessories.

In addition, Alok has also invested in premium commercial/residential projects across Mumbai through its wholly owned subsidiaries.

BOARD OF DIRECTORS

Mr. Ashok B. Jiwrajka (61) is the Executive Chairman of the Company. Mr. Jiwrajka completed his schooling and college from Mumbai After a brief stint with two then leading textile companies, he joined the family partnership firm and went on to co-promote Alok Industries Limited in 1986 with his two brothers. Mr. Jiwrajka has a rich experience of over three decades in textiles. His functions as the Executive Chairman include participating in strategizing the company's growth trajectory besides overseeing the cotton yarn and home textile segment.

Mr. Dilip B. Jiwrajka (55) is the Managing Director of the Company. Mr. Jiwrajka did his schooling and college from Mumbai and subsequently his post-graduation in Business Entrepreneurship and Management. In the early 80s, he started the business of trading in textiles mainly for the readymade garment sector. Starting with a partnership firm, he gradually co-promoted Alok Industries Limited in 1986 along with his two brothers. His functions as the Managing Director include envisioning the company's growth strategy, responsibility for the apparel fabric and garment segments. He also oversees the Finance and Administration functions of the company, besides managing the operations of the overseas subsidiaries.

Mr. Surendra B. Jiwrajka (53) is the Joint Managing Director of the Company. Mr. Jiwrajka's schooling and college were completed in Mumbai. Immediately after his graduation, he joined the family partnership firm for trading in yarn and thereafter co-founded Alok Industries Limited in 1986 with his two brothers. Mr. Jiwrajka brings with him an invaluable experience of over 25 years in textiles. As the Joint Managing Director, he plays a critical role in charting the company's growth strategy, oversees the manufacturing and marketing functions of the polyester segment, domestic retail 'HandA' and is responsible for all capital expansion projects.

Mr. Chandra Kumar Bubna (59) is the Executive Director of the Company. He has been partnering with the promoters since 1982 and is associated with the company since May 1993 as a Board member in the capacity of an Additional Director and thereafter as Executive Director from May 1995. He is a graduate in commerce andassociated with the textile industry in the field of marketing for about four decades. He manages the Company’s marketing operations for the entire northern region and is also actively involved in the planning and execution of the Company's marketing strategies.

Mr. Ashok G. Rajani (63) is an Independent Director of the company since 27 May 1993. He is a graduate in commerce and the Founder Chairman of the Midas Touch Group and Midas Touch Apparel Private Limited, one of the leading garment export companies in the country. He has valuable experience in the field of garment manufacturing and exports. He 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. Till recently he was the President of The Clothing Manufacturers Association of India and was on the Board of Governors of The National Institute of Fashion Technology.

Mr. K.R. Modi (70) is an as Independent Director of the company since 10 November 1994. He 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 Messrs Kanga and Company, a reputed firm of Advocates and Solicitors in Mumbai, who act as the ompany's Legal Advisors. He is well versed with the matters relating to Company Law and other allied acts.

Mr. Timothy Ingram (65) is an Independent Director of the company since 29 July 2005. He has done his Masters in Arts and Economics from Cambridge University, an MBA from INSEAD Business School and is a Fellow of the Chartered Institute of Bankers. He spent most of his career in banking (Grindlays Bank, ANZ, Abbey National) and then in 2002 became CEO of Caledonia Investments plc, a UK listed Investment Company. He retired from Caledonia Investments in 2010 and is now Chairman of Collins Stewart Hawkpoint plc, a UK listed investment banking and wealth management business.

Mr. David Rasquinha (51) is an Independent Nominee Director of the company since October 2009, nominated by Export Import Bank of India. He holds a first class graduate degree in Economics from Bombay University. He also holds a Post Graduate qualification in Business Management from XLRI, Jamshedpur, where he was awarded a Gold Medal in Economics. He is with Export Import Bank of India since 1985, presently designated as Chief General Manager and heads the project and trade finance group. He has a wide range of exposure and experience in the fields of export credit, treasury, multilateral agency funded projects, planning and research, risk management, trade finance and project finance.

Mrs. Thankom T. Mathew (60) is an Independent Nominee Director of the company since October 2009, nominated by Life Insurance Corporation of India. She is M.Sc (Chemistry) and joined LIC of India as Assistant Administrative Officer (AAO). She is presently working as Executive Director (Underwriting and Re-Insurance) with LIC of India. She has over 30 years of experience and specialises in the fields of marketing, finance, underwriting, administration and audit.

Mr. M.V. Muthu (66) is an Independent Nominee Director of the company since April 2011, nominated by IFCI Limited. He has done his BSc, ANSI – Sugar Technology, Programme in Investment Appraisal and Management from Havard. Mr. Muthu has rich and varied experience in the manufacturing segment and also in Financial services for over three decades. He joined IFCI Limited as Asst. Technical Officer and served there in various capacities. He retired as CEO from IFCI Limited. He was Chairman of IFCI Venture Capital. He served on Boards of ITC and Andhra Pradesh Paper Mills Limited. He is also on the Expert Panel of the Technical Development Board of Government of India as a Finance Expert.

Ms. Maya Chakravorty (47) is an Independent Nominee Director of the company since June 2011, nominated by IDBI Bank Limited. She is B. E. (Chemical), MBA and CFA. She has rich and varied experience of over two decades. She joined SAIL as Management Trainee, worked with ONGC as Asst. Executive Engineer (Production) for 3 years. She joined IDBI Bank Limited as Manager and is presently the General Manager (Treasury), where she is in-charge of liquidity / fund management, resource mobilisation, statutory compliances like CRR / SLR, PD operation, etc.,

PRESS RELEASE:

ALOK INDUSTRIES CONSIDERS EXIT FROM RETAIL BIZ, STOCK UP 2%

JAN 10, 2013, 01.18 PM IST

Textile company Alok Industries gained more than 2 percent intraday in early trade on Thursday on reports that the company may exit from retail business.

Business Standard reported that the company is looking at exiting its retail ventures as it wants to focus on its ‘core businesses’ and shift from non-core businesses such as retail which have increased its debt burden.

“On a turnover of Rs 120000.000 Millions, there is no sanity of Rs 400.000 to 500.000 Millions revenues coming from the retail segment. Retail is a non-core segment for us,” sources told the newspaper.

The company had a debt burden of Rs 160000.000 Millions as of March 2012 and a debt equity of 4.6:1.

At 09:49 hours IST, the stock rose 2.06 percent to Rs 12.38 on Bombay Stock Exchange. Market capitalisation of the company currently stands at Rs 10229.200 Millions.

Q3 FY12-13 NET SALE UP BY 45.17% TO RS. 35208.100 MILLIONS EBIDTA INCREASED BY 42.20% AT RS. 9646.000 MILLIONS

Mumbai, 13 February, 2013:

Alok Industries Limited, one of the leading integrated textile companies in India, today reported net sales of Rs. 35208.100 Millions for the quarter ended December 31, 2012, as compared to Rs. 24252.500 Millions in the corresponding period of the last fiscal, registering a growth of 45.17%. The EBIDTA for the quarter was at Rs. 9646.000 Millions as against Rs.6783.200 Millions in the corresponding quarter of last fiscal year, registered a growth of 42.20%. The net profit after tax stood at Rs. 2398.200 Millions as compared to loss of Rs. 375.800 Millions in the same quarter of last fiscal year.

Net Sales for nine months ended 31 December, 2012 was at Rs. 92683.300 Millions, an increase of 48.03% as compared to Rs.62611.400 Millions in the corresponding period of the last fiscal. Export sales for the nine months ended 31 December, 2012 stood at Rs. 23789.900 Millions as compared to Rs. 22146.500 Millions in the corresponding period of the last fiscal, a growth of 7.42%. The net profit after tax for the nine months ended 31 December, 2012 stood at Rs. 5595.100 Millions, as compared to Rs. 969.900 Millions in the corresponding period of the last fiscal, registering a growth of 476.87%

Management Comment

Commenting on the results, Mr. Dilip Jiwrajka, Managing Director, said, “The third quarter results are in line with our expectations, thanks to growth in Apparel Fabrics. We are heartened by these results, especially in wake of the challenging economic situation. This speaks about the diversified nature of our business model in textiles. Our focus on exiting the non-core areas and enhancing our core strengths has intensified. Our order book position continues to be encouraging, while production efficiencies are gradually attaining their peak level.“

About Alok Industries Limited:

(BSE Code: 521070) (NSE Code: ALOKTEXT) (Reuters Code: ALOK.BO) (Bloomberg Code: ALOK@IN)

Established in 1986, Alok Industries Limited is amongst the fastest growing vertically integrated textiles solutions provider in India. A diversified manufacturer of world-class home textiles, apparel fabrics, garments and polyester yarns, Alok has capacities of 105 mn meters of sheeting fabric and 13,400 tons of terry towels for its home textiles business, 186.00 mn meters of apparel width woven fabrics, 18200 tons per annum of knitted fabrics and 22 million pieces per annum of garments. Alok has achieved complete integration. The company also has a strong presence in the polyester segment with a capacity of 2,00,000 tons per annum of polyester textured yarn, FDY of 60,000 tons per annuam supplemented by 2,40,000 tons per annum of POY / Chips / Fibre. The company has a blue chip international customer base comprising of world renowned retailers, importers and brands.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 54.65
UK Pound	1	Rs. 82.41
Euro	1	Rs. 70.08

INFORMATION DETAILS

Report Prepared by :

BVA

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	7
--CREDIT LINES	1~10	6
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		58

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.