Kemrock QIP PPD

Dated March 21, 2011
Not for circulation

The information in this Preliminary Placement Document is not complete and may be changed. This Preliminary Placement Document is not an offer to
Serial No.[●]
sell any NCD and Warrants and is not soliciting an offer to subscribe to NCD and Warrants. It is being issued for the sole purpose of information or
Kemrock Industries and Exports Limited

(Incorporated in the Republic of India with limited liability under the Companies Act, 1956 with
Corporate Identity Number (CIN): L36999GJ1991PLC016625)
Kemrock Industries and Exports Limited (the "Company" or the "Issuer") is issuing upto 2500 12.5 per cent
secured redeemable non-convertible debentures of the face value of Rs.3,00,000 each to be redeemed in 3 equal
yearly installments (the "NCDs") for cash aggregating to Rs. 75,00,00,000 along with 12,50,000 warrants at a
discussion relating to the NCD and Warrants that may be issued through this Placement Document.
Warrant Issue Price of Rs.30, each of which entitles the holder, upon payment of the Warrant Exercise Price, to
one (1) Equity Share (the "Warrants", together with the NCDs, the "Securities") (the "Issue"). The Issue of the
NCDs at NCD Issue Price and the Warrants at the Warrants Issue Price will aggregate to Rs.78,75,00,000
assuming no conversion of Warrants into Equity Shares and to Rs. 150,00,00,000 assuming full conversion of
Warrants into Equity Shares during the Warrant Exercise Period at the Warrant Exercise Price.
ISSUE IS IN RELIANCE UPON CHAPTER VIII OF THE SECURITIES AND EXCHANGE BOARD OF
INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, AS
AMENDED ("SEBI REGULATIONS") AND APPLICABLE TO US
THIS ISSUE AND THE DISTRIBUTION OF THIS PRELIMINARY PLACEMENT DOCUMENT IS

BEING MADE IN RELIANCE UPON CHAPTER VIII OF THE SEBI REGULATIONS. THIS
PRELIMINARY PLACEMENT DOCUMENT IS PERSONAL TO EACH PROSPECTIVE INVESTOR
AND DOES NOT CONSTITUTE AN OFFER OR INVITATION OR SOLICITATION OF AN OFFER
TO THE PUBLIC OR TO ANY OTHER PERSON OR CLASS OF INVESTORS WITHIN OR
OUTSIDE INDIA.
Invitations, offers and sales of Securities in this Issue shall only be made pursuant to this Preliminary Placement
Document, the Confirmation of Allocation Note and the Application Form. The distribution of this Preliminary
Placement Document or the disclosure of its contents without the Company's prior consent to any person, other
than Qualified Institutional Buyers ("QIBs") and persons retained by QIBs to advise them with respect to their
purchase of the Securities is unauthorized and prohibited. Each prospective investor, by accepting delivery of
this Preliminary Placement Document, agrees to observe the foregoing restrictions and to make no copies of this
Preliminary Placement Document or any documents referred to in this Preliminary Placement Document. See
also the section "Issue Procedure".
This Preliminary Placement Document has not been reviewed by the Securities and Exchange Board of India
(the "SEBI"), the Reserve Bank of India (the "RBI"), the Bombay Stock Exchange Limited (the "BSE") or the
National Stock Exchange of India Limited (the "NSE"), (the BSE and the NSE, together referred to as the
"Stock Exchanges") or any other regulatory or listing authority. This Preliminary Placement Document has not
been and will not be registered as a prospectus with the Registrar of Companies ("RoC") in India, and will not
be circulated or distributed to the public in India or any other jurisdiction and will not constitute a public offer in
India or any other jurisdiction. The placement of Securities proposed to be made pursuant to this Preliminary
Placement Document is meant solely for QIBs on a private placement basis and is not an offer to public or to
any other class of investors.
Investments in the Securities involve a degree of risk and prospective investors should not invest any
funds in this Issue unless they are prepared to take the risk of losing all or part of their investment.
Prospective investors are advised to carefully read the section titled "Risk Factors" beginning on page 35
of this Preliminary Placement Document before making an investment decision relating to this Issue.
Each prospective investor is advised to consult its advisors about the particular consequences of an
investment in the Securities.
The information on the Company's website or any website directly or indirectly linked to the Company's website
does not form part of this Preliminary Placement Document and prospective investors should not rely on such
Kemrock Industries- Preliminary Placement Document
information contained in, or available through, such websites.
All of the Company's outstanding Equity Shares are listed on the Stock Exchanges. The closing price of the
outstanding Equity Shares of the Company on the BSE and the NSE on March 18, 2011 was Rs. 502.60 and Rs.
503.15 per Equity Share respectively. Applications have been made to each of the Stock Exchanges for in-
principle approval for listing and admission of the NCDs and Warrants for trading on each of the Stock
Exchanges. The Stock Exchanges assume no responsibility for the correctness of any statements made, opinions
expressed or reports contained herein.
The NCDs being offered through this Preliminary Placement Document have been rated by CARE as BBB+
indicating adequate credit quality carrying average credit risk. The ratings are not a recommendation to buy, sell
or hold securities and investors should take their own decision. The ratings may be subject to revision or
withdrawal at any time by the rating agencies on the basis of new information.
YOU MAY NOT AND ARE NOT AUTHORIZED TO (1) DELIVER THIS PRELIMINARY
PLACEMENT DOCUMENT TO ANY OTHER PERSON; OR (2) REPRODUCE THIS PRELIMINARY
PLACEMENT DOCUMENT IN ANY MANNER WHATSOEVER. ANY DISTRIBUTION OR
REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN PART IS UNAUTHORIZED. FAILURE
TO COMPLY WITH THIS INSTRUCTION MAY RESULT IN A VIOLATION OF THE SEBI
REGULATIONS OR OTHER APPLICABLE LAWS OF INDIA AND OTHER JURISDICTIONS.
A copy of this Preliminary Placement Document has been delivered to the Stock Exchanges. A copy of the final
Placement Document will also be delivered to the Stock Exchanges. A copy of the Placement Document will
also be delivered to the Securities and Exchange Board of India (the "SEBI") for record purposes.
THIS PRELIMINARY PLACEMENT DOCUMENT HAS BEEN PREPARED BY THE COMPANY

SOLELY FOR PROVIDING INFORMATION IN CONNECTION WITH THE PROPOSED ISSUE OF
THE SECURITIES DESCRIBED IN THIS PRELIMINARY PLACEMENT DOCUMENT.
The Securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and may not be offered or sold within the United States (as defined in Regulation S
("Regulation S") under the Securities Act), except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act and applicable state securities laws. The Securities
are being offered and sold outside the United States in reliance on Regulation S. Further, the NCDs will only be
offered and sold to persons resident in India and will not be offered or sold to investors in any jurisdiction
outside India. See "Selling Restrictions" and "Transfer Restrictions".
This Preliminary Placement Document is dated March 21, 2011.
GLOBAL COORDINATOR AND BOOK RUNNING LEAD MANAGER
Networth Stock Broking Limited

D. C. Silk Mills Compound
Kondivita Road
Andheri (East)
Mumbai 400059
TABLE OF CONTENTS
NOTICE TO INVESTORS ...................................................................................................................................... 1

REPRESENTATIONS BY INVESTORS .............................................................................................................. 3
DISCLAIMER CLAUSE OF THE STOCK EXCHANGES ............................................................................... 8
PRESENTATION OF FINANCIAL AND OTHER INFORMATION .............................................................. 9
EXCHANGE RATES ............................................................................................................................................. 10
INDUSTRY AND MARKET DATA..................................................................................................................... 11
FORWARD-LOOKING STATEMENTS ............................................................................................................ 12
ENFORCEMENT OF CIVIL LIABILITIES ...................................................................................................... 13
DEFINITIONS AND ABBREVIATIONS............................................................................................................ 14
SUMMARY OF THE BUSINESS ......................................................................................................................... 22
SUMMARY OF THE ISSUE ................................................................................................................................. 24
SELECTED FINANCIAL DATA ......................................................................................................................... 28
RISK FACTORS ..................................................................................................................................................... 34
MARKET PRICE INFORMATION .................................................................................................................... 47
USE OF PROCEEDS.............................................................................................................................................. 49
CAPITALIZATION ............................................................................................................................................... 50
DIVIDENDS AND DIVIDEND POLICY ............................................................................................................ 51
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS......................................................................................................................................................... 52
INDUSTRY OVERVIEW ...................................................................................................................................... 64
BUSINESS ................................................................................................................................................................ 76
REGULATIONS AND POLICIES ....................................................................................................................... 89
CAPITAL STRUCTURE AND PRINCIPAL SHAREHOLDERS ................................................................... 93
BOARD OF DIRECTORS AND SENIOR MANAGEMENT ........................................................................... 96
ORGANIZATION STRUCTURE....................................................................................................................... 105
TERMS AND CONDITIONS OF THE NON-CONVERTIBLE DEBENTURES........................................ 106
TERMS AND CONDITIONS OF THE WARRANTS ..................................................................................... 117
ISSUE PROCEDURE ........................................................................................................................................... 131
PLACEMENT ....................................................................................................................................................... 140
SELLING RESTRICTIONS................................................................................................................................ 141
TRANSFER RESTRICTIONS ............................................................................................................................ 144
THE SECURITIES MARKET OF INDIA ........................................................................................................ 145
DESCRIPTION OF THE SECURITIES INCLUDING EQUITY SHARES ................................................ 154
TAXATION ........................................................................................................................................................... 161
LEGAL PROCEEDINGS .................................................................................................................................... 170
INDEPENDENT ACCOUNTANTS ................................................................................................................... 171
GENERAL INFORMATION .............................................................................................................................. 172
FINANCIAL STATEMENTS.............................................................................................................................. 174
DECLARATION ................................................................................................................................................... 207
DETAILS OF THE GLOBAL CO-ORDINATOR AND BOOK RUNNING LEAD MANAGER AND
OTHER ADVISORS TO THE ISSUE ............................................................................................................... 208
REGISTERED OFFICE OF THE COMPANY ................................................................................................ 209
NOTICE TO INVESTORS
The Company has furnished and accepted full responsibility for the information contained in this Preliminary
Placement Document and to the best of its knowledge and belief, having made all reasonable enquiries,
confirming that this Preliminary Placement Document contains all information with respect to the Company and
the Securities, which is material in the context of this Issue. The statements contained in this Preliminary
Placement Document relating to the Company and the Securities are in every material respect, true and accurate
and not misleading. The opinions and intentions expressed in this Preliminary Placement Document with regard
to the Company and the Securities are honestly held and have been reached after considering all relevant
circumstances based on information presently available to the Company and reasonable assumptions. There are
no other facts, in relation to the Company and the Securities, the omission of which would, in the context of the
Issue, make any statement in this Preliminary Placement Document misleading in any material respect. Further,
the Company has made all reasonable enquiries to ascertain such facts and to verify the accuracy of all such
information and statements.
Notwithstanding any investigation that the Global Coordinator and Book Running Lead Manager ("GC-
BRLM") may have conducted with respect to the information contained in the Preliminary Placement
Document (financial, legal or otherwise), neither the GC-BRLM or any of its members, employees, counsel,
officers, directors, representatives, agents or affiliates make any express or implied representation, warranty or
undertaking nor accept any liability in relation to the information contained in this Preliminary Placement
Document or its distribution or with regard to any other information supplied by or on behalf of the Company,
and assume no responsibility or liability for the accuracy or completeness of any such information or any other
information provided by the Company in connection with the issue of Securities or their distribution. Each
person receiving this Preliminary Placement Document acknowledges that such person has not relied on the GC-
BRLM nor on any person affiliated with them, in connection with its investigation of the accuracy of such
information or its investment decision, and each such person must rely on its own examination of the Company
and the merits and risks involved in investing in the Securities issued pursuant to this Issue.
No person is authorised to give any information or to make any representation not contained in this Preliminary
Placement Document and any information or representation not so contained must not be relied upon as having
been authorized by or on behalf of the Company or the GC-BRLM. The delivery of this Preliminary Placement
Document at any time does not imply that the information contained in it is correct as at any time subsequent to
its date.
The Securities have not been approved, disapproved or recommended by the United States Securities and
Exchange Commission, any state securities commission in the United States or the securities commission
of any non-United States jurisdiction or any other United States or non-United States regulatory
authority or any other regulatory authority in any jurisdiction. None of these authorities have passed on
or endorsed the merits of this Issue or the accuracy or adequacy of this Preliminary Placement
Document. Any representation to the contrary is a criminal offence in the United States and may be a
criminal offence in other jurisdiction.
The distribution of this Preliminary Placement Document and the issue of the Securities in certain jurisdictions
may be restricted by law. As such, this Preliminary Placement Document does not constitute, and may not be
used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or
solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. In
particular, no action has been taken by the Company or the GC-BRLM, which would permit such issue of
Securities or distribution of this Preliminary Placement Document in any jurisdiction, other than India, where
action for that purpose is required. Accordingly, the Securities may not be offered or sold, directly or indirectly,
and neither this Preliminary Placement Document nor any issue material in connection with the Securities may
be distributed or published in or from any country or jurisdiction except in compliance with any applicable rules
and regulations of any such country or jurisdiction. Please refer to the chapter "Placement" on page 134 of this
Preliminary Placement Document.
In making an investment decision, investors must rely on their own examination of the Company and the terms
of this Issue, including the merits and risks involved. Investors should not construe the contents of this
Preliminary Placement Document as legal, tax, accounting or investment advice. Investors should consult their
own counsel and advisors as to business, legal, tax, accounting and related matters concerning this Issue. In
|1|
addition, neither the Company nor the GC-BRLM are making any representation to any offeree or purchaser of
the Securities regarding the legality of an investment in the Securities by such offeree or purchaser under
applicable legal, investment or similar laws or regulations.
Each purchaser of the Securities in this Issue is deemed to have acknowledged, represented and agreed
that it is a QIB and is eligible to invest in India and in the Securities under Indian law, including Chapter
VIII of the SEBI (ICDR) Regulations and SEBI Debt Regulations and that it is not prohibited by the
Securities and Exchange Board of India ("SEBI") or any other statutory authority from buying, selling
or dealing in Securities.
Each purchaser of the Securities in this Issue also acknowledges that it has been afforded an opportunity to
request from the Company and review information relating to the Company and the Securities.
The information on the Company's website, www.kemrock.com, or on the website of the GC-BRLM does not
constitute nor form part of this Preliminary Placement Document.
This Preliminary Placement Document contains summaries of certain terms of certain documents, but reference
is made to the actual documents, copies of which will be made available upon request during the Issue period
for physical inspection at the registered office of the Company located at Village: Asoj, Vadodara-Halol Express
Way Taluka: Waghodia, District: Vadodara 391510 Gujarat, during usual business hours on any week day
between 10.00 am to 12.00 noon (except Saturdays, Sundays and public holidays as may be notified under the
Negotiable Instrument Act, 1881), subject to applicable confidentiality restrictions. All such summaries are
qualified in their entirety by this reference.
|2|
REPRESENTATIONS BY INVESTORS
All references to "you" in this section are to the prospective investors in the Issue. By purchasing and/or
subscribing to the Securities under this Issue, the Investors are deemed to have represented, warranted,
acknowledged and agreed to the Company and the GC-BRLM that:
• you are a QIB as defined in regulation 2(1)(zd) of the SEBI (ICDR) Regulations having a valid and
existing registration under applicable laws and regulations of India, and undertake to acquire, hold,
manage or dispose of the Securities that are allocated to you in accordance with the SEBI (ICDR)
Regulations and SEBI Debt Regulations. In addition, you are deemed to have acknowledged that you
are a person resident in India as defined in the FEMA and are eligible to invest in the Securities under
applicable law;
• you are aware that this Placement Document has not been verified or affirmed by SEBI or the Stock
Exchanges and will not be filed with the Registrar of Companies in India. The Preliminary Placement
Document will be filed with the Stock Exchanges and will be displayed on the websites of the
Company and the Stock Exchanges. You are aware that the Securities have not been, and will not be,
registered under the SEBI regulations or under any other law in force in India;
• you are permitted to subscribe for and/or purchase the Securities under the laws of all relevant
jurisdictions which apply to you and that you have fully observed such laws and obtained all such
governmental and other guarantees and other consents in either case which may be required thereunder
and complied with all necessary formalities;
• you are entitled to acquire the Securities under the laws of all relevant jurisdictions and that you have
all necessary capacity and have obtained all necessary consents and authorities to enable you to commit
to participation in this Issue and to perform your obligations in relation thereto (including, without
limitation, in the case of any person on whose behalf you are acting, all necessary consents and
authorities to agree to the terms set out or referred to in the Preliminary Placement Document) and will
honor such obligations;
• you confirm that: (i) you have not participated in or attended any investor meetings or presentations by
the Company or its agents ("Company Presentations") with regard to the Company or the Issue; or (ii)
if you have participated in or attended any Company Presentations: (a) you understand and
acknowledge that the GC-BRLM may not have knowledge of the statements that the Company or its
agents may have made at such Company Presentations and therefore unable to determine whether the
information provided to you at such Company presentations may have included any material
misstatements or omissions, and, accordingly you acknowledge that the GC-BRLM have advised you
not to rely in any way on any information that was provided to you at such Company Presentation, and
(b) confirm that, to the best of your knowledge, you have not been provided any material information
that was not publicly available;
• neither the Company nor the GC-BRLM are making any recommendations to you or advising you
regarding the suitability of any transactions it may enter into in connection with this Issue and that
participation in this Issue is on the basis that you are not and will not be a client of the GC-BRLM and
that the GC-BRLM have no duties or responsibilities to you for providing the protections afforded to
their clients or customers or for providing advice in relation to this Issue and are in no way acting in a
fiduciary capacity;
• you are aware and understand that the Securities are being offered only to QIBs and are not being
offered to the general public and the allotment of the same shall be on a discretionary basis;
• you have made, or been deemed to have made, as applicable, the representations set forth in the chapter
"Transfer Restrictions";
|3|
• you have been provided a serially numbered copy of the Preliminary Placement Document and have
read the Preliminary Placement Document in its entirety;
• that in making your investment decision, (i) you have relied on your own examination of the Company
and the terms of this Issue, including the merits and risks involved, (ii) you have made your own
assessment of the Company, the terms of this Issue based on such information as is publicly available,
(iii) you have consulted your own independent counsel and advisors or otherwise have satisfied
yourself concerning, without limitation, the effects of local laws, and (iv) you have received all
information that you believe is necessary or appropriate in order to make an investment decision in
respect of the Company and the Securities;
• the GC-BRLM has not provided you with tax advice or otherwise made any representations regarding
the tax consequences of the Securities (including but not limited to the Issue and the use of the
proceeds from the Securities). You will obtain your own independent tax advice from a reputable
service provider and will not rely on the GC-BRLM when evaluating tax consequences in relation to
the Securities (including but not limited to the Issue and the use of the proceeds from the Securities).
You waive and agree not to assert any claim against the GC-BRLM with respect to the tax aspects of
the Securities or as a result of any tax audits by tax authorities, wherever situated;
• you have such knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of the investment in the Securities and you and any accounts for which
you are subscribing the Securities (i) are each able to bear the economic risk of your investment in the
Securities, (ii) will not look to the GC-BRLM, the Company and/or their respective officers for all or
part of any such loss or losses that may be suffered, (iii) are able to sustain a complete loss on the
investment in the Securities (iv) have no need for liquidity with respect to the investment in the
Securities and (v) have no reason to anticipate any change in your or their circumstances, financial or
otherwise, which may cause or require any sale or distribution by you or them of all or any part of the
Securities;
• that where you are acquiring Securities for one or more managed accounts, you represent and warrant
that you are authorised in writing by each such managed account to acquire the Securities for each
managed account to make and you hereby make (the reference to "you" includes such accounts) the
representations, warranties, acknowledgements and agreements herein for and on behalf of each such
account;
• you are not a promoter of the Company and are not a person related to the promoter of the Company,
either directly or indirectly and your Bid does not directly or indirectly represent the promoters or
promoter group or person related to a promoter/ promoter group of the Company;
• you have no rights under a shareholders agreement or voting agreement with the promoters or persons
related to the promoters, no veto rights or right to appoint any nominee director on the Board of
Directors of the Company other than that acquired in the capacity of a lender which shall not be
deemed to be a person related to the promoters;
• you will have no right to withdraw your Bid after the Bid Closing Date;
• the Warrants (upon conversion into Equity Shares) will, when issued, be credited as fully paid and will
rank pari passu in all respects with the existing equity shares of the Issuer, including the right to receive
all dividends and other distributions declared, made or paid in respect of such equity shares after the
date of conversion of Warrants into Equity Shares;
• if allotted either of the Securities pursuant to this Issue, you shall, for a period of one year from
allotment, sell the either of the Securities so acquired only on the Stock Exchanges;
• you are eligible to Bid and hold the Securities so allotted and together with any Securities held by you
prior to this Issue. You further confirm that your holding upon the issue of any of the Securities shall
not exceed the level permissible as per any applicable regulations;
|4|
• the Bids made by you would not eventually (including upon exercise of the warrants that may be
allotted to you) result in triggering a tender offer under the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997, as amended ("Takeover Code");
• to the best of your knowledge and belief together with other QIBs in this Issue that belong to the same
group or are under common control as you, the allotment under the present Issue shall not exceed 50%
of the size of this Issue. For the purposes of this statement:
(a) the expression 'belongs to the same group' shall derive meaning from the concept of
'companies under the same group' as provided in sub-section (11) of Section 372 of the
Companies Act, 1956;
(b) "Control" shall have the same meaning as is assigned to it under Clause (c) of sub-regulation
(1) of Regulation 2 of the Takeover Code;
• you shall not undertake any trade in the Securities credited to your depository participant account until
such time that the final listing and trading approval for the Securities is issued by the Stock Exchanges;
• you are aware that applications have been made to the Stock Exchanges for in-principle approval for
listing and admission of the Securities to trading on the Stock Exchanges market for listed securities
and that the application for the final listing and trading approval will be made only after the Allotment
of the Securities in the Issue, and there can be no assurance that such final approval will be obtained on
time or at all;
• you are aware and understand that the GC-BRLM will enter into a Placement Agreement with the
Company whereby the GC-BRLM has subject to the satisfaction of certain conditions set out therein,
undertaken to use their reasonable endeavours to seek to procure purchasers for the Securities;
• the content of this Preliminary Placement Document is exclusively the responsibility of the Company
and that neither the GC-BRLM nor any person acting on its behalf has or in relation to this Issue shall
have any liability for any information, representation or statement contained in this Preliminary
Placement Document or any information previously published by or on behalf of the Company and will
not be liable for your decision to participate in this Issue based on any information, representation or
statement contained in this Preliminary Placement Document or otherwise. By accepting a participation
in this Issue, you agree to the same and confirm that you have neither received nor relied on any other
information, representation, warranty, or statement made by or on behalf of GC-BRLM or the
Company or any other person and that neither the GC-BRLM nor the Company nor any other person
will be liable for your decision to participate in this Issue based on any other information,
representation, warranty or statement which you may have obtained or received;
• the only information you are entitled to rely on and on which you have relied in committing yourself to
acquire either of the Securities is contained in this Preliminary Placement Document, such information
being all that you deem necessary to make an investment decision in respect of the Securities and that
you have neither received nor relied on any other information given or representations, warranties or
statements made by the GC-BRLM or the Company and neither the GC-BRLM nor the Company will
be liable for your decision to accept an invitation to participate in this Issue based on any other
information, representation, warranty or statement;
• all statements other than statements of historical fact included in this Preliminary Placement Document,
including, without limitation, those regarding the Company's financial position, business strategy, plans
and objectives of management for future operations (including development plans and objectives
relating to the Company's products), are forward-looking statements. Such forward-looking statements
involve known and unknown risks, uncertainties and other important factors that could cause actual
results to be materially different from future results, performance or achievements expressed or implied
by such forward-looking statements. Such forward-looking statements are based on numerous
assumptions regarding the Company's present and future business strategies and the environment in
which the Company will operate in the future. You should not place undue reliance on forward-looking
|5|
statements, which speak only as at the date of this Preliminary Placement Document. The Company
assumes no responsibility to update any of the forward-looking statements contained in this
Preliminary Placement Document;
• you are eligible to invest in India under applicable law, including the Foreign Exchange Management
(Transfer or Issue of Security by Person Resident Outside India) Regulations, 2000, as amended from
time to time, and have not been prohibited by SEBI from buying, selling or dealing in securities;
• you understand that the GC-BRLM has no obligation to purchase or acquire all or any part of the
Securities purchased by you in this Issue or to support any losses directly or indirectly sustained or
incurred by you for any reason whatsoever in connection with this Issue, including non-performance by
the Company of any of its respective obligations or any breach of any representations or warranties by
the Company, whether to you or otherwise;
• you are a reputed investor who is seeking to subscribe to the Securities in this Issue for your own
investment and not with a view to distribute. In particular, you acknowledge that (i) an investment in
the Securities involves a high degree of risk and that the Securities are, therefore, a speculative
investment, (ii) you have sufficient knowledge, sophistication and experience in financial and business
matters so as to be capable of evaluating the merits and risk of the purchase of the Securities, and (iii)
you are experienced in investing in private placement transactions of securities of companies in a
similar stage of development and in similar jurisdictions and have such knowledge and experience in
financial, business and investment matters that you are capable of evaluating the merits and risks of
your investment in the Securities;
• you agree to indemnify and hold us, the GC-BRLM harmless from any and all costs, claims, liabilities
and expenses (including legal fees and expenses) arising out of or in connection with any breach of
your representations and warranties as contained herein. You agree that the indemnity set forth in this
paragraph shall survive the resale either of the Securities, including by or on behalf of the managed
accounts;
• each of the representations, acknowledgments and agreements set forth above shall continue to be true
and accurate at all times up to and including the allotment of either the Securities;
• you understand that the Securities have not been and will not be registered under the Securities Act or
with any securities regulatory authority of any state of the United States and accordingly, may not be
offered or sold within the United States, except in reliance on an exemption from, or in a transaction,
not subject to, the registration requirements of the Securities Act. You understand that the securities are
being offered and sold only outside the United States in offshore transactions in reliance on Regulation
S;
• you are, at the time either the Securities are purchased pursuant to Regulation S, located outside the
United States (within the meaning of Regulation S) and you are not an affiliate of the Company or a
person acting on behalf of such an affiliate;
• the Company, GC-BRLM their respective affiliates and others will rely upon the truth and accuracy of
your foregoing representations, warranties, acknowledgements and undertakings, each of which is
given to (a) the GC-BRLM on your own behalf and on behalf of the Company, and (b) to the
Company, and each of which is irrevocable; and
• that each of the representations, warranties, acknowledgements and undertakings set out above shall
continue to be true and accurate at all times up to and including the Allotment of the Securities.
OFFSHORE DERIVATIVE INSTRUMENTS (P-NOTES)
Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of
Regulation 15A(1) of the SEBI (Foreign Institutional Investors) Regulations, 1995, as amended, ("FII
|6|
Regulations") an FII may issue or otherwise deal in offshore derivative instruments such as participatory notes,
equity-linked notes or any other similar instruments against underlying securities (all such offshore derivative
instruments are referred to herein as "P-Notes") listed or proposed to be listed on any stock exchange in India
subject, amongst other things, to the satisfaction of the following conditions:
(i) the P-Notes are issued only in favour of those entities which are regulated by an appropriate foreign
regulatory authority; and
(ii) the P-Notes are issued after compliance with applicable "know your client" requirements. In terms of
the FII Regulations, on and from 22 May 2008, no sub account of an FII is permitted, directly or
indirectly, to issue P-Notes. An FII shall also ensure that no further issue or transfer of any instrument
referred to above is made to any person other than a regulated entity.
P-Notes have not been and are not being offered or sold pursuant to this Preliminary Placement Document. This
Preliminary Placement Document does not contain any information concerning P-Notes, including, without
limitation, any information regarding any risk factors relating thereto.
Any P-Notes that may be issued are not securities of the Company and do not constitute any obligation of,
claims on or interests in the Company. The Company has not participated in any offer of any P-Notes, or in the
establishment of the terms of any P-Notes, or in the preparation of any disclosure related to the P-Notes. Any P-
Notes that may be offered are issued by, and are the sole obligations of third parties that are unrelated to the
Company. The Company does not make any recommendation as to any investment in P-Notes and does not
accept any responsibility whatsoever in connection with the P-Notes. Any P-Notes that may be issued are not
securities of the GC-BRLM and do not constitute any obligations or claims on the GC-BRLM. FII affiliates of
the GC-BRLM may purchase, to the extent permissible under law, Securities in the Issue, and may issue P-
Notes in respect thereof.
Prospective investors interested in purchasing any P-Notes have the responsibility to obtain adequate
disclosures as to the issuer(s) of such P-Notes and the terms and conditions of any such P-Notes. Neither
SEBI nor any other regulatory authority has reviewed or approved any P-Notes or any disclosure related
thereto.
Prospective investors are urged to consult with their own financial, legal, accounting and tax advisors
regarding any contemplated investment in P-Notes, including whether P-Notes are issued in compliance
with applicable laws and regulations.
|7|
DISCLAIMER CLAUSE OF THE STOCK EXCHANGES
As required by the SEBI (ICDR) Regulations and SEBI Debt Regulations, a copy of the Preliminary Placement
Document has been submitted to the Stock Exchanges. The Stock Exchanges do not in any manner:
1. warrant, certify or endorse the correctness or completeness of any of the contents of the Preliminary
Placement Document;
2. warrant that the Company's Securities will be listed or will continue to be listed on the Stock Exchange;
or
3. take any responsibility for the financial or other soundness of the Company, its management or any
business of the Company.
It should not for any reason be deemed or construed to mean that the Preliminary Placement Document has been
cleared or approved by the Stock Exchanges. Every person who desires to apply for or otherwise acquire any
Securities of the Company may do so pursuant to an independent inquiry, investigation and analysis and shall
not have any claim against the Stock Exchanges whatsoever by reason of any loss which may be suffered by
such person consequent to or in connection with such subscription/acquisition whether by reason of anything
stated or omitted to be stated herein or for any other reason whatsoever.
|8|
PRESENTATION OF FINANCIAL AND OTHER INFORMATION
The Company's financial statements included in this Preliminary Placement Document have been prepared in
accordance with Indian GAAP. Indian GAAP differs in certain significant respects from International Financial
Reporting Standards ("IFRS") and U.S. GAAP. The Company does not provide a reconciliation of its financial
statements to IFRS or U.S. GAAP. In this Preliminary Placement Document, certain monetary amounts have
been subject to rounding adjustments; accordingly, figures shown as totals in certain tables may not be an
arithmetic aggregation of figures which precede them.
For financial statement reporting purposes, the Company has reported audited financial statements as at and for
the years ended on March 31, 2008, March 31, 2009 and June 30, 2010 and un-audited financial statements as at
and for the period ended on December 31, 2010. The Company had extended its financial year 2009-10 by three
months, so as to end on June 30, 2010. The financial statements for the period ended on June 30, 2010 are,
therefore, not comparable with the financial statements for the period ended on March 31, 2008 and March 31,
2009.
All references to "us", "we", "our Company" are to Kemrock Industries and Exports Limited and its Subsidiaries
and do not include the Group, unless otherwise stated. Unless stated otherwise, the financial data in this
Preliminary Placement Document is derived from the Company's audited financial statements prepared in
accordance with Indian GAAP. The Company's fiscal year commences on 1st day of April of each year and ends
on 31st day of March of the succeeding year, so all references to a particular fiscal year of the Company are to
the twelve-month period ended on 31st day of March of that year except for the financial year 2009-10, which
has been extended by three months, so as to end on June 30, 2010. However, the financial results disclosed in
this document are for the un-audited period ended on December 31, 2010.
All references to "you" "offeree", "purchaser", "subscriber", "recipient", "investors" and "potential investor" are
to prospective investors in this Issue. References in this Preliminary Placement Document to "India" are to the
Republic of India and the "Government" is to the governments in India, central or state, as applicable.
The Company prepares and publishes its financial statements in Rupees. All references to "Rupees" and "Rs."
are to Indian Rupees and all references to "US Dollars" and "US$" are to United States Dollars.
|9|
EXCHANGE RATES
The Company prepares and publishes its financial statements in Rupees. All references to "Rupees" and "Rs"
are to Indian Rupees. All references to "U.S. Dollars" and "US$" are to United States Dollars.
Fluctuations in the exchange rate between the Rupee and the US$ will affect the currency equivalent of the
Rupee price of the Equity Shares on the Stock Exchanges. These fluctuations will also affect the conversion of
any cash dividends paid in Rupees on the Equity Shares. The following table sets forth, for the periods
indicated, information with respect to the exchange rate between the Rupee and the US$ based on the reference
rates released by the Reserve Bank of India. These translations should not be construed as representations that
the Rupee amounts represent such U.S. Dollar amounts or could be, or could have been, converted into U.S.
Dollars at the rates indicated, or at all. The exchange rate as at March 31, 2010 was Rs.45.14 = US$ 1.00 and the
exchange rate as at March 18, 2011 was Rs.45.09 = US$ 1.00.
USD
Exchange rate (Rs. Per US$ 1.00)
Year ended March 31, Period End Average High Low
Year ended 2007 43.59 45.29 46.95 43.14
Year ended 2008 39.97 40.24 43.15 39.27
Year ended 2009 50.95 45.91 52.06 39.89
January 31, 2010 46.37 45.96 46.65 45.36
February 28, 2010 46.23 46.33 46.81 46.02
March 31, 2010 45.14 45.50 46.02 44.94
April 30, 2010 44.44 44.49 44.73 44.33
May 31, 2010 46.45 45.80 47.57 44.56
June 30, 2010 46.60 46.56 47.28 45.64
July 31, 2010 46.46 46.84 47.33 46.46
August 31, 2010 47.08 46.57 47.08 46.02
September 30, 2010 44.92 46.06 46.87 44.92
October 31, 2010 44.54 44.41 44.72 44.03
November 30, 2010 46.04 45.01 46.04 44.25
December 31, 2010 44.81 45.15 45.70 44.81
January 31, 2011 45.95 45.39 45.95 44.67
February 28, 2011 45.18 45.43 45.81 45.11
March 18, 2011 45.09 45.11 45.27 44.96
Source: www.rbi.org.in
No representation is made that the Rupee amounts actually represent such amounts in the currency or could have
been or could be converted into any of the currency, at the rates indicated, any other rates or at all.
| 10 |
INDUSTRY AND MARKET DATA
Information regarding markets, market size, market share, market position, growth rates and other industry data
pertaining to the businesses contained in this Preliminary Placement Document consists of estimates based on
data reports compiled by governmental bodies, professional organisations and analysts, data from other external
sources, which the Company believes to be reliable, and the knowledge of the markets in which it competes.
The statistical information included in this Preliminary Placement Document relating to various industries in
which the Company operates has been reproduced from various trades, industry and government publications
and websites including The Planning Commission, Ministry of Urban Development, Eleventh Five Year Plan
amongst others. This data is subject to change and cannot be verified with complete certainty due to limits on
their availability, reliability and uncertainties inherent in any statistical survey. In many cases, there is no readily
available external information (whether from trade or industry associations, government bodies or other
organisations) to validate market-related analysis and estimates, so the Company relies on internally developed
estimates. While the Company has compiled, extracted and reproduced this data from external sources,
including third parties, trade, industry or general publications, neither we nor the GC-BRLM have independently
verified this data and neither we nor the GC-BRLM make any representation regarding the accuracy of such
data. Similarly, while the Company believes the internal estimates to be reasonable, such estimates have not
been verified by any independent sources and neither the Company nor the GC-BRLM can assure potential
investors as to their accuracy.
This data is subject to change and cannot be verified with complete certainty due to limits on the availability and
reliability of the raw data and other limitations and uncertainties inherent in any statistical survey. In many
cases, there is no readily available external information (whether from trade or industry associations,
Government bodies or other organisations) to validate market-related analysis and estimates, so the Company
has relied on internally developed estimates.
| 11 |
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Preliminary Placement Document that are not statements of historical facts
constitute "forward-looking statements". Investors can generally identify forward-looking statements by
terminology such as "aim", "anticipate", "believe", "continue", "could", "estimate", "expect", "intend", "may",
"objective", "plan", "potential", "project", "pursue", "shall", "should", "will", "would", or other words or phrases
of similar import.
All statements regarding the expected financial condition and results of operations and business plans and
prospects are forward-looking statements. These forward-looking statements include statements as to the
business strategy, the revenue and profitability, planned projects and other matters discussed in this Preliminary
Placement Document that are not historical facts. These forward-looking statements and any other projections
contained in this Preliminary Placement Document (whether made by the Company or any third party) are
predictions and involve known and unknown risks, uncertainties, assumptions and other factors that may cause
the actual results, performance or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements or other projections. Important
factors that could cause actual results to differ materially from the expectations include, among others:
• general political economic and business conditions in India and other countries;
• the ability to successfully implement the Company's strategy, its growth and expansion plans and
technological changes;
• costs and availability of equipment, materials and fuel;
• Increased competition or other factors affecting the industry segments in which the Company operates;
• Any adverse outcome in the legal proceedings in which the Company is involved;
• Change in Foreign Currency Rates;
• cost overruns, delays and disruptions in completion and commissioning of expansion projects;
• performance of industrial sectors in India;
• potential mergers, acquisitions or restructurings;
• performance of the Indian debt and equity markets;
• occurrence of natural calamities or natural disasters affecting the areas in which the Company has
operations;
• changes to laws and regulations that apply to companies in India;
• changes to laws, regulations and policies applicable to companies in businesses in which the Company
is involved;
• changes in the foreign exchange control regulations in India; and
• other factors discussed in this Preliminary Placement Document, including under "Risk Factors".
All forward-looking statements are subject to risks, uncertainties and assumptions about the Company that could
cause actual results to differ materially from those contemplated by the relevant statement. Additional factors
that could cause actual results, performance or achievements to differ materially include, but are not limited to,
those discussed under chapters "Management's Discussion and Analysis of Financial Condition and Results of
Operations", "Business" and "Industry Overview" of this Preliminary Placement Document.
The forward-looking statements contained in this Preliminary Placement Document are based on the beliefs of
the management, as well as the assumptions made by and information currently available to Company's
management. Although the Company believes that the expectations reflected in such forward-looking statements
are reasonable at this time, the Company cannot assure investors that such expectations will prove to be correct.
Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking
statements. If any of these risks and uncertainties materialise or if any of the Company's underlying assumptions
prove to be incorrect, the actual results of operations or financial condition could differ materially from that
described herein as anticipated, believed, estimated or expected. All subsequent forward looking statements
attributable to the Company are expressly qualified in their entirety by reference to these cautionary statements.
| 12 |
ENFORCEMENT OF CIVIL LIABILITIES
The Company is a limited liability company incorporated under the laws of India. A majority of the Company's
Directors and Senior Managerial Personnel named herein are residents of India and a substantial portion of
assets of such persons are located in India and all or substantial portion of the assets of the Company are located
in India. As a result, it may be difficult for investors to effect service of process upon the or such persons from
outside India or to enforce in India judgments obtained against such parties outside India.
India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments.
Recognition and enforcement of foreign judgments is provided for under Section 13 of the Code of Civil
Procedure, 1908 ("Code") on a statutory basis. Section 13 and Section 44A of the Code provide that a foreign
judgment shall be conclusive regarding any matter directly adjudicated upon except: (i) where the judgment has
not been pronounced by a court of competent jurisdiction, (ii) where the judgment has not been given on the
merits of the case, (iii) where it appears on the face of the proceedings that the judgment is founded on an
incorrect view of international law or a refusal to recognise the law of India in cases in which such law is
applicable, (iv) where the proceedings in which the judgment was obtained were opposed to natural justice, (v)
where the judgment has been obtained by fraud, and (vi) where the judgment sustains a claim founded on a
breach of any law in force in India.
However, Section 44A of the Code provides that where a foreign judgment has been rendered by a superior
court within the meaning of that section in any country or territory outside India which the Government has by
notification declared to be in a reciprocating territory, it may be enforced in India by proceedings in execution as
if the judgment had been rendered by the relevant court in India. However, Section 44A of the Code is
applicable only to monetary decrees not being in the nature of any amounts payable in respect of taxes or other
charges of a like nature or in respect of a fine or other penalty and does not include arbitration awards.
The United Kingdom, Singapore and Hong Kong have been declared by the Government to be a reciprocating
territory for the purposes of Section 44A but the United States has not been so declared. A judgment of a court
in a jurisdiction which is not a reciprocating territory may be enforced only by a fresh suit upon the judgment
and not by proceedings in execution. The suit must be brought in India within three years from the date of the
judgment in the same manner as any other suit filed to enforce a civil liability in India. It is unlikely that a court
in India would award damages on the same basis as a foreign court if an action is brought in India. Furthermore,
it is unlikely that an Indian court would enforce foreign judgments if it viewed the amount of damages awarded
as excessive or inconsistent with public policy. Further, any judgment or award in a foreign currency would be
converted into Rupee on the date of such judgment or award and not on the date of payment. A party seeking to
enforce a foreign judgment in India is required to obtain approval from the RBI to repatriate outside India any
amount recovered and any such amount may be subject to income tax in accordance with applicable laws.
| 13 |
DEFINITIONS AND ABBREVIATIONS
The following list of certain capitalised terms used in this Preliminary Placement Document is intended for the
convenience of the reader/ investor only and is not exhaustive.
Unless the context otherwise requires, the definitions of certain capitalised terms used in this Preliminary
Placement Document shall have the following meaning.
Term Description
"Company" or "our Company" or Kemrock Industries and Exports Limited
"the Issuer"or "KIEL"
"We", "Our" and "Us" Unless the context otherwise requires, refers to the Company
AGM Annual General Meeting
Allocated, Allocation The determination of QIBs and number of Securities to be allocated to

each QIB after receipt and consideration of the Application Forms, done
in consultation with the GC-BRLM and in compliance with Chapter
VIII of the SEBI (ICDR) Regulations and SEBI Debt Regulations
Allottees To whom the Securities of the Company are issued pursuant to this
Issue
Allotment Unless the context otherwise requires, the allotment of the Securities to
the successful investors pursuant to this Issue in compliance with
Chapter VIII of the SEBI (ICDR) Regulations and SEBI Debt
Regulations and FEMA where applicable
Application Form The form used by an applicant to apply for the Securities being issued
through the Preliminary Placement Document and the Placement
Document.
Articles/Articles of Association Articles of Association of the Company
AS Accounting Standards issued by the Institute of Chartered Accountants

of India
Auditors The Statutory Auditors of the Company, H.K. Shah & Co. Chartered
Accountants
Bid An indication of QIBs' interest, including all revisions and

modifications thereto, as provided in the Application Form, to subscribe
for Securities in this Issue
Bid Closing Date/ Issue Closing Date [●] the date on which the Company or GC-BRLM on behalf of the
Company shall cease acceptance of duly completed Application Forms
for the Issue from the QIBs
Bid Form The form used by an applicant to bid for securities pursuant to this Issue
Bid Opening Date/ Issue Opening April 18, 2011, the date on which the Company or GC-BRLM on behalf
Date of the Company shall commence acceptance of duly completed
Application Forms for the Issue from the QIBs
Bidding Period/ Issue Period The period between the Bid Opening Date and the Bid Closing Date
inclusive of both the dates during which QIBs may submit their bids
| 14 |
Term Description
Board of Directors/Board The Board of Directors of the Company or a committee constituted
thereof
BOLT Facility The BSE's Online Trading Facility
BSE Bombay Stock Exchange Limited
Business Day means a day (other than a Saturday, Sunday or a public holiday) on
which banks are open for general business in Vadodara, Gujarat and
Mumbai, Maharashtra.
CAGR Compounded Annual Growth Rate
CAN/Confirmation of Allocation Note or advice or intimation to not more than 49 QIBs confirming the
Note allocation of Securities to such QIBs after determination of the final
terms of NCDs and discovery of the Equity Issue Price and Warrant
Issue Price
CARE Credit Analysis & Research Limited
CBDT Central Board of Direct Taxes
CDSL Central Depository Services (India) Limited
Code Code of Civil Procedure, 1908 of India
Companies Act The (Indian) Companies Act, 1956 as amended from time to time
CST Central Sales Tax
Date of Allotment means the date of allotment of the NCDs, in accordance with the
Debenture Trust Deed, which shall be a date falling no later than 5
Business Days after the Pay-in Date.
Debenture Holders means the persons who are, for the time being and from time to time,
the holders of the Debentures and whose names appear in the Register
of Beneficial Owners (if the Debentures are in dematerialised form) or
the Register of NCD Holders (if the Debentures have been
rematerialised), and “Debenture Holder” means each such person.
Debenture Trust Deed The Debenture Trust Deed to be executed between the Company and
the Debenture Trustee in terms of which the Principal amount of NCDs,
and all other monies payable in respect of NCDs are secured in favour
of the Debenture Trustee as described in this PPD
Debenture Trustee IDBI Trusteeship Services Limited
Debt Listing Agreement Listing Agreement entered into by the issuer company with the stock
exchanges for the purpose of listing and issuance of debt securities in
accordance with SEBI (Issue and Listing of Debt Securities)
regulations, 2008
Depository Participant A depository participant as defined under the Depositories Act
DGFT Director General of Foreign Trade
| 15 |
Term Description
Director(s) Director(s) of the Company, unless otherwise specified
EBITDA Earnings Before Interest, Tax, Depreciation and Amortization
ECBs External Commercial Borrowings
EGM Extraordinary General Meeting
EPS Earnings Per Share
Equity Shares Equity shares of the Company of face value of Rs.10/- each
Escrow Bank The Lakshmi Vilas Bank Ltd, having its registered and administrative
address at Salem Road, Kathaparai, Karur 639006, Tamil Nadu and a
Branch office at No.64, V.B.Gandhi Marg, Kalaghoda, Fort, Mumbai
400001
Escrow Bank Account Special accounts into which payment of application money shall be
made by the QIBs
Exercise Right The right of the Warrant holder to subscribe, at the option of the
Warrant holder by way of exercise of the Warrant at any time during the
Warrant Exercise Period at the Warrant Exercise Price, in the manner
set forth in the "Terms and Conditions of the Warrants", to one (1) fully
paid Equity Share for each warrant
FDI Foreign Direct Investment
Exchange Act The U.S. Securities Exchange Act of 1934, as amended
FEMA The Foreign Exchange Management Act, 1999, as amended from time
to time, and the regulations framed thereunder
FII Foreign Institutional Investor (as defined under the Securities and
Exchange Board of India (Foreign Institutional Investors) Regulations,
1995) registered with SEBI under applicable laws in India
FIIA Foreign Investment Implementation Authority
FIPB Foreign Investment Promotion Board, Ministry of Finance, Government

of India
Fiscal year/Financial Year/ FY Period of twelve months ended March 31 of that particular year (except
for FY 2009-10, which has been extended to end on June 30, 2010)
Floor Price Rs. 536.20 which has been calculated in compliance with Regulation 85
of the SEBI ICDR Regulations
Foreign Institutional Investor SEBI (Foreign Institutional Investors) Regulations, 1995, as amended
Regulations from time to time
FSMA The Financial Services and Markets Act 2000
GAAP Generally Accepted Accounting Principles
GDP Gross Domestic Product
| 16 |
Term Description
GDR Global Depository Receipts
Global Coordinator and Book Networth Stock Broking Limited

Running Lead Manager
("GC-BRLM")
Government (GOI) Government of India
HUF Hindu Undivided Family
IAS International Accounting Standards
ICAI The Institute of Chartered Accountants of India
IFRS International Financial Reporting Standards
India The Republic of India
Indian GAAP Generally Accepted Accounting Principles in India
"Indian Rupees", "Rupees" or "Rs" Currency of India

"INR", "Re"
Insider Trading Regulations SEBI (Prohibition of Insider Trading) Regulations, 1992
IP Intellectual Property
IPO Initial Public Offering
ISIN International Securities Identification Number
Issue The Issue of 2500 NCDs and 12,50,000 Warrants, which will aggregate
to Rs.78,75,00,000 assuming no conversion of Warrants into Equity
Shares and to Rs.150,00,00,000 assuming full conversion of Warrants
into Equity Shares during the Warrant Exercise Period at the Warrant
Exercise Price.
I T Act The Income Tax Act, 1961, as amended from time to time
JV Joint Venture
KMP Key Managerial Personnel
LIBOR London Inter-bank Offered Rate
LuxSE Luxembourg Stock Exchange
Listing Agreement The agreement entered into between the Company and the Stock
Exchanges for Equity Shares
MT Million Tonnes
MTPA Million Tonnes Per Annum
Memorandum/ Memorandum of The Memorandum of Association of the Company

Association
| 17 |
Term Description
Million 1,000,000
mn/Mn Million
MNC Multi National Corporation
MOF Ministry of Finance, India
Mutual Fund A mutual fund registered with SEBI under the SEBI (Mutual Funds)
Regulation, 1996, as amended from time to time
NCDs Non-convertible Debentures offered through this Preliminary Placement

Document
NCD Application Form The form pursuant to which a QIB shall submit a Bid for NCDs in the
Issue
NCD Issue Price Rs.3,00,000 per NCD
NCD Issue Size Rs.750 million
NR Non-Resident as defined under FEMA
NRI/NRI's Non-Resident Indian(s)
Net Interest Income The difference between the interest earned and interest expended for a
given period
Net Proceeds [●]
NSDL National Securities Depository Limited
NSE The National Stock Exchange of India Limited
OTCEI Over the Counter Exchange of India
P.A. or p.a. per annum
PAN Permanent Account Number under the I T Act
PAT Profit After Tax
PBT Profit Before Tax
Pay-in Date Last date specified in the CAN sent to QIBs for payment of the NCD
Issue Price and/ or Warrant Issue Price (as applicable)
PML Prevention of Money Laundering Act, 2002
Placement Document The Placement Document to be issued in accordance with Chapter VIII
of the SEBI (ICDR) Regulations and SEBI Debt Regulations
Portfolio Investments Investments made by registered FIIs or NRIs through an Indian stock
exchange
| 18 |
Term Description
Preliminary Placement Document This Preliminary Placement Document dated March 21, 2011 issued in
accordance with Chapter VIII of the SEBI (ICDR) Regulations and
SEBI Debt Regulations
QIBs or Qualified Institutional A Qualified Institutional Buyer as defined under Regulation 2(1)(zd) of
Buyers the SEBI (ICDR) Regulations
QIP Qualified Institutions Placement
RBI Reserve Bank of India
Registered Office of the Company Village: Asoj, Vadodara-Halol Express Way Taluka: Waghodia,
District: Vadodara 391510 Gujarat
Regulation S Regulation S under the U.S. Securities Act of 1933, as amended and
supplemented
Relevant Date April 15, 2011 (i.e., the date of the meeting in which the Board of the
Company or the Committee of Directors duly authorised by the Board
of the Company decides to open the proposed issue.)
ROC/RoC/Registrar Registrar of Companies, Gujarat
SBI State Bank of India
SCRA Securities Contract (Regulation) Act, 1956
SCRR Securities Contracts (Regulation) Rules, 1957
SEBI Securities and Exchange Board of India
SEBI Act The Securities and Exchange Board of India Act, 1992, as amended
from time to time
SEBI Debt Regulations Securities and Exchange Board of India (Issue and Listing of Debt
Securities) Regulations, 2008
SEBI ICDR Regulations The Securities and Exchange Board of India (Issue of Capital and
Disclosure and Requirements) Regulations 2009 issued by SEBI, as
amended, including instructions and clarifications issued by the SEBI
from time to time
Securities NCDs and Warrants
Securities Act The U.S. Securities Act of 1933, as amended and supplemented
SICA Sick Industrial Companies (Special Provisions) Act, 1985
Stock Exchanges BSE, NSE
STT Securities Transaction Tax
| 19 |
Term Description
"Subsidiary" or "Our Subsidiary" Top Glass S.p.A., Italy; and
100% Owned Subsidiaries of the Company

1) Kemrock Infratech Ltd;
2) Kemrock Filament Windings Ltd;
3) Kemrock Advanced Composites Ltd;
4) Kemrock Advance Reinforcements Ltd;
5) Kemrock Speciality Polymers Ltd; and
6) Kemrock Renewable Energy Limited
SPV Special Purpose Vehicle
Takeover Code SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,

1997, as amended
U.S. dollar, US dollar, US $ or U.S.$ Currency of United States of America
Warrants Convertible instruments, which, unless specified otherwise, are

exchangeable for one Equity Share for every Warrant during the
Warrant Exercise Period on payment of the Warrants Exercise Price
Warrant Application Form The form pursuant to which a QIB shall submit a Bid for the Warrants
in the Issue
Warrant Exercise Form The form pursuant to which a warrant holder shall submit an exercise
notice to exercise the Exercise Right
Warrant Exercise Price Rs 600 per Warrant
Warrant Issue Price Rs.30 (Rupees thirty only) per Warrant
Warrants Issue Size 12,50,000 Warrants, having an aggregate Warrant Issue Price of
Rs.3,75,00,000, and on an assumption that all the Warrants shall be
converted into underlying equity shares, together with the Warrant
Exercise Price, shall aggregate to Rs.75,00,00,000
BUSINESS/ INDUSTRY RELATED TERMS
Term Description
CF Carbon Fiber
CFT Carbon Fiber Technology
FRP Fiberglass Re-inforced Plastics
MT Metric Tonnes
MW Mega Watts
DMC Dough Moulding Compound
SMC Sheet Moulding Compound
LCA Light Combat Aircraft
| 20 |
Term Description
ALH Advanced Light Helicopter
CFRP Carbon Fiber Re-enforced Technology
ISRO Indian Space Research Organisation
GRE Glass Reinforced Epoxy
GRP Glass Reinforced Plastic
RTM Resin Transfer Moulding
SMC Sheet Moulded Composites
DST Department of Science and Technology
DRDO Defence Research and Development Organisation
TIFAC Technology, Information, Forecasting and Assessment Council
CSIR Council of Scientific and Industrial Research
NAL National Aerospace Laboratories
WDM Wholesale Debt Market
VARIM Vacuum Assisted Resin Infusion Molding
| 21 |
SUMMARY OF THE BUSINESS
Overview
Kemrock is a leading player in the Indian composites industry and on path to be one of the main players in the
global composites industry. It has the widest range of products in the field of composites and resins. It has
developed and/or acquired technical competence to manufacture complex and new generation products.
Kemrock has the unique advantage of having almost all the processes with technical competence to manufacture
composites blended with backward integration to manufacture various types of resins, an important ingredient to
manufacture quality composites.
Background and History:
Kemrock was incorporated in the year 1991 as a public limited company. Over the years Kemrock has gradually
through a well-devised plan and strategy expanded its activities in the composites industry by way of strategic
alliances for obtaining technical know-how.
Kemrock entered the composite field undertaking production of gratings using the pultrusion process through a
technology alliance with Creative Pultrusions, Inc., USA. Having realized the importance of resins, a crucial
ingredient to manufacture composites, the company entered into strategic alliance and obtained technical know-
how from Georgia-Pacific Resins Inc., USA for manufacture of phenolic resins used for Fire Safe Composites.
Kemrock also acquired technology from Top Glass, Italy to produce lighting poles using centrifugal casting
technology. The Company also has a well-equipped and manned R&D centre, which continuously is on look out
for developing newer products in composites. It also developed and/or acquired know how of filament winding
process to manufacture GRP/GRE pipes. A considerable time and effort was invested by the team to develop
and acquire the process of SMC and SMC moulding which has enabled the Company to manufacture the
interiors for railway coaches and various components for windmill. It is one of the few companies to get
certification from IRIS (International Railways Industry Standard).
Kemrock is listed on the BSE, NSE and LuxSE. Its market capitalization as on March 11, 2011, stood at
Rs.8444.58 million.
Business Activities of the Company:
The plant of the Company is strategically located at Asoj, a well-developed industrial area on Vadodara-Halol
Express Way. All the current expansions are considered in the present location which has an area of about 200
acres (9.5 million sq. ft.). This whole area is trade marked as Global Composite village. It is well connected with
Kandla as well as Nhava Sheva Port.
Product Category Process Applications

Pultruded Products Pultrusion Gratings, walk ways, hand Rail System, Ladders,
Platforms, Cable Management Systems, Custom profiles,
Cooling Towers, Transmission Towers
Moulded Products Pultrusion Moulded Gratings, Heavy Load gratings
Custom Mouldings SMC Custom made products
Hand lay –up SMC-Moulding Nacelle covers for housing wind mill turbines for Suzlon
Wind Mills.
GRP/GRE Pipes Filament Winding Pipes
Poles Centrifugal casting Electrical Poles
| 22 |

VARIM/ VRTM SMC-Moulding Interiors of railway coach.
Windmill blades
Compression Moulding SMC Doors, windows, etc.
Resins – Phenolics Fire Safe Composites, Ablative materials, Automotive

Filters, Paper Saturation, Brake Lining Products, Thermal
Insulation, Foundry Chemicals, Bonding & laminating
Resins
Resins – Polyester Chemicals, Automotive, Construction, Marine, Building,

Electrical & Electronics, Customized products
Carbon Fiber Aerospace, defense, wind energy, automobile, sports

equipment and other industries
Corporate Information
The Company's registered office is situated at Village: Asoj, Vadodara-Halol Express Way Taluka: Waghodia,
District: Vadodara 391510 Gujarat, India. Kemrock is a 100% Export Oriented Unit and Trading house
registered with Kandla Free Trade Zone and DGFT. Kemrock was incorporated in the year 1991 as a public
limited company. The Corporate Identity Number (CIN) of the Company is: L36999GJ1991PLC016625.
The Company's website is www.kemrock.com. Information contained on the website is not a part of this
Preliminary Placement Document and potential investors should not rely on the information contained on the
website in making any investment decision relating to the Issue or otherwise.
| 23 |
SUMMARY OF THE ISSUE
The following is a general summary of the terms of the Issue. This summary should be read in conjunction with,
the more detailed information and financial statements appearing elsewhere in this Preliminary Placement
Document. In addition to this summary, the Company urges the investors to read the entire Preliminary
Placement Document carefully, especially the risks of investing in the Equity Shares discussed under the
sections "Risk Factors", "Use of Proceeds", "Placement and Lock-up", "Issue Procedure", and "Description of
Shares", respectively of this Preliminary Placement Document before deciding whether to buy the Equity
Shares.
Company / Issuer Kemrock Industries and Exports Limited
Issue 2500 NCDs along with 12,50,000 Warrants
NCD Issue Size Rs.750 million
Instrument or "NCD" 12.5 per cent Secured Redeemable Non Convertible Debentures ("NCDs") having
an initial face value of Rs.300,000 each, as redeemed from time to time, on each
Redemption Date.
NCD Issue Price At par
Tenor Forty-eight (48) months from the Date of Allotment
Mode of placement On private placement basis
Redemption Amount The mandatory redemption amount payable on each of the Redemption Dates is
Rs.100,000 and the voluntary redemption amount shall be as determined in terms of
Clause 4.2 of the Terms and Conditions of the NCDs.
Redemption Dates The NCDs shall be mandatorily redeemed in three equal tranches (i) first redemption
at the end of two years from the date of allotment (the “First Redemption Date”);
(ii) second redemption at the end of three years from the date of allotment (the
“Second Redemption Date”); and (iii) third and final redemption at the end of four
years from the date of allotment (the "Final Redemption Date"); and the NCDs
may be voluntarily redeemed in one or more tranches on the Voluntary Redemption
Dates. The First Redemption Date, the Second Redemption Date, the Final
Redemption Date and the Voluntary Redemption Date(s) are together the
“Redemption Dates”.
Coupon Rate 12.5% p.a.
Interest Payment monthly basis
Security/Asset Cover The principal amount of NCDs, interest and other monies payable by the Issuer in
respect of such NCDs and all other amounts payable under the transaction
documents relating to the Issue shall be secured by a mortgage and charge over
movable and immovable fixed assets of the Issuer as identified in the Debenture
Trust Deed.
The mortgage and charge will initially rank subservient to the existing mortgage and
charge created by the Issuer in favour of its Existing Lenders (as defined in the
Debenture Trust Deed). Thereafter, within 30 days from the Date of Allotment, the
Issuer shall procure no-objection certificates from all its Existing Lenders and make
appropriate filings with the RoC, upon which the mortgage and charge in respect of
the NCDs shall become a first ranking pari passu mortgage and charge with the
Existing Lenders.
| 24 |
The security/asset cover shall at all time be 1.25 times the outstanding amount of the
NCDs, and such security/asset cover shall be maintained up to the full redemption of
the NCDs.
Voluntary Redemption The Company has an option, on any date after the date of allotment, to redeem the
NCDs, in one or more tranches (on the Voluntary Redemption Dates), in whole or in
part, by delivery of voluntary redemption exercise notice, on terms set out in Clause
4.2 of the Terms and Conditions of the NCDs.
Mode of Issue and Trading Demat mode
Depositary NSDL and CDSL
Debenture Trustee IDBI Trusteeship Services Limited
Credit Rating BBB+ by CARE
Market Lot NCD - 1 NCD; and

Warrants - 5000 warrants
Trading On the WDM segment of the Stock Exchanges. As per SEBI circular
SEBI/CFD/SCRR/01/2009/03/09 dated September 3, 2009, pertaining to relaxation
of Rule 19(2)(b) under sub rule (7) of Rule 19 of the SCRR, the NCDs shall be
traded in a minimum trade lot of one (1) NCD in accordance with provisions under
the applicable laws.
Settlement RTGS/at par cheque/funds transfer
Transfer Restrictions The NCDs being Allotted pursuant to this Issue shall not be sold for a period of one
year from the date of Allotment except on the floor of the Stock Exchanges
Pay-in Date Last date specified in the CAN sent to QIBs for payment of subscription amounts
Closing The Allotment of the NCDs is expected to be made on or about [●] ("Closing
Date"), which shall be a date falling no later than 5 Business Days after the Pay-in
Date
Status and Ranking The NCDs constitute direct and secured obligations of the Company.
Security created in respect of the NCDs shall initially rank subservient to the first
charge and/or second charge over the moveable and immoveable fixed assets of the
Company in favour of its existing lenders by the Company. Thereafter, within 30
days of the Date of Allotment, rank pari passu with the holders of the first charge
over the moveable and immovable fixed assets of the Company
Eligible Investors QIBs as defined in clause 2(1)(zd) of the SEBI (ICDR) Regulations will be eligible
to subscribe to NCDs. See "Issue Procedure - Qualified Institutional Buyers"
Listing The Company shall make applications to the Stock Exchanges to obtain Listing and
Trading approvals on the WDM segment
Use of Proceeds The proceeds of the Issue are estimated to be approximately Rs. [●] million, before
deducting the Issue expenses
Subject to compliance with applicable laws and regulations, the Company intends to
use the net proceeds received from the Issue as provided in chapter "Use of
| 25 |
Proceeds" at page number 52.
Warrant Issue Size 12,50,000 Warrants.
Warrant Issue Price Rs.30 per Warrant. Investors note that the Warrant Issue Price will be adjusted
towards the Warrant Exercise Price, if a Warrant is exercised. The Warrants Issue
Price will stand forfeited, if a Warrant lapses.
Warrant Exercise Price Rs. 600
Warrant Exercise Ratio 1 Equity Share for each Warrant
Eligible investors for QIBs as defined in clause 2(1)(zd) of the SEBI (ICDR) Regulations will be eligible
Warrants to subscribe to Warrants. See "Issue Procedure - Qualified Institutional Buyers"
Minimum Subscription 5000 Warrants or in multiples thereof.
Warrant Exercise Period The Warrants may be exercised at any time during eight (8) window periods, each
consisting of 15 days as provided under clause 5.2 Warrant Exercise Period of the
chapter "Terms and Conditions of Warrants" of this document during normal
business hours on and after six (6) months from the date of allotment and upto forty
eight (48) months from the date of allotment.
Adjustments to Warrant Please see 'Terms and Conditions of the Warrants'

Exercise
Floor Price Rs.536.20, as determined in terms of the SEBI (ICDR) Regulations, the Warrant
Exercise Price cannot be lower than the Floor Price
Equity Shares issued and 16,753,466 Equity Shares of face value of Rs.10 each aggregating to Rs.167.53
paid up immediately prior million
to the Issue
Equity Shares to be issued Upto 12,50,000 Equity Shares of face value Rs. 10 each, with the amount in excess
on Exercise of Warrants* of face value of Rs.10 of the aggregate of the Warrant Issue Price.
Equity Shares issued and The Equity Shares to be issued upon exercise of Warrants shall be subject to the
paid up immediately provisions of the Company's Memorandum and Articles of Association and shall
pursuant to exercise of rank pari passu in all respects with the existing Equity Shares including rights in
Warrants during the respect of dividends
Warrant Exercise Period*
Ranking The Equity Shares to be issued upon exercise of Warrants shall be subject to the
provisions of the Company's Memorandum and Articles of Association and shall
rank pari passu in all respects with the existing Equity Shares including rights in
respect of dividends
Closing The Allotment of the Warrants offered pursuant to this Issue is expected to be made
on or about [●] ("Closing Date")
Mode of Issue and Trading Demat mode
Listing The Company shall make applications to the Stock Exchanges to obtain in-principle
approval for the listing of the Warrants on the Stock Exchanges
| 26 |
Trading The trading of the Warrants would be in dematerialized form only for all QIBs in the
cash segments of the Stock Exchanges. As per SEBI circular number
SEBI/CFD/SCRR/01/2009/03/09 dated September 3, 2009, pertaining to relaxation
of Rule 19(2)(b) under sub rule (7) of Rule 19 of the SCRR, the Warrants shall be
traded in a minimum trade lot of Rs.1,00,000
Governing Law Indian Law
Risk Factors Prior to making an investment decision in this Issue, please refer sections titled
"Risk Factors", "Financial Statements" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations"
Security Codes ISIN: INE990B01012

BSE Code: 526015
NSE Code: KEMROCK
LuxSE Code: 049798415 [ISIN: US4884721014]
*Assuming that all Warrants held by eligible investors have been exercised during the Warrant Exercise Period
at Warrant Exercise Price and no other Equity Shares are issued by the Company during the Warrant Exercise
Period
** At the time of allotment, Warrant Issue size will be equal to or less than the NCD Issue size
| 27 |
SELECTED FINANCIAL DATA
The table below contains extracts from, and should be read together with, the Company's audited financial
statements as of and for the years ended June 30, 2010, March 31st 2009 and March 31st 2008 and the selected
unaudited limited review standalone financial information for the period ended December 31, 2010 under Indian
GAAP and the Companies Act and the related notes thereto included in this Preliminary Placement Document.
The following information should also be read in conjunction with the chapter "Management's Discussion and
Analysis of Financial Condition and Results of Operations" of this Preliminary Placement Document.
BALANCE SHEET
(Rupees. in Million)
Particulars Schedule June 30, March 31, March 31,
2010 2009 2008
SOURCES OF FUNDS
Shareholders' Funds:
Share Capital 1 167.53 110.15 101.30
Equity Share Warrants 61.99 55.13 89.27
Reserves & Surplus 2 5479.30 2462.19 1841.54
Loan Funds
Secured Loans 3 9173.42 6177.91 2643.54
Unsecured Loans 4 2.87 5.89 7.71
Deferred Tax 202.91 147.38 86.36
Total 15088.02 8958.65 4769.72
APPLICATION OF FUNDS
Fixed Assets
Gross Block 5679.26 3279.37 2520.47
Less : Depreciation 751.40 464.79 278.98
Net Block 4927.86 2814.58 2241.49
Capital Work-In-Progress including 3293.14 1553.04 117.46
Advances for Capital Expenses
Sub-Total 8221.00 4367.62 2358.95
Investments 6 910.09 20.09 20.76
Current Assets, Loans & Advances

Current Assets
Inventories 7 2362.73 1965.09 1387.58
Sundry Debtors 8 3156.65 2629.09 951.95
Cash & Bank Balances 9 1751.35 868.74 445.42
Loans & Advances 10 847.77 142.82 209.28
Sub-total 8118.50 5605.74 2994.23
Less: Current Liabilities & Provisions 11 2161.57 1035.77 703.08
Net Current Assets 5956.93 4569.97 2291.15
Miscellaneous Expenditure 12 0.00 0.97 98.86

(To the extent not written off or adjusted)
Total 15088.02 8958.65 4769.72
| 28 |
PROFIT AND LOSS ACCOUNT

(Rupees in Million)
2010 2009 2008
INCOME
Sales & Operation 6293.82 3790.54 2311.45

Less: Excise Duty 215.57 148.48 106.76
Net Sales 6078.25 3642.06 2204.69
Other Income 13 22.64 97.55 29.16
Increase/ ( Decrease) in Stocks 14 110.06 554.40 600.74
TOTAL 6210.95 4294.01 2834.59
EXPENDITURE
Raw Materials Consumed 3364.82 2388.12 1554.58

Manufacturing Expenses 15 443.78 292.08 204.24
Provisions & Payments to Employees 16 360.31 216.31 107.56
Administration & General Expenses 17 169.74 74.44 57.94
Selling & Distribution Expenses 18 338.98 303.45 168.26
Financial Expenses 19 540.15 396.54 288.92
Depreciation 288.09 186.14 122.42
TOTAL 5505.87 3857.08 2503.92
Profit before Tax 705.08 436.93 330.67

Less : Provision for Current Tax 119.82 48.68 26.00
Less : Provision for Wealth Tax 0.07 0.01 -
Less : Provision for Fringe Benefit Tax 2.80 2.25
Less/( Add): Provision for Deferred Tax 55.52 61.03 23.35
Profit after Tax 529.67 324.41 279.07

Add/(Less) : Prior Period Income/ (Expenses) (2.78) (6.20) (29.00)
Profit for the year for appropriation 526.89 318.21 250.07
Less : Provision for Final Dividend 16.75 16.52 10.13

Less : Provision for Tax on Final Dividend 2.78 2.81 1.72
Less : Short Provision for Final Dividend 0.88 -
Less : Short Provision for Tax on Final 0.15 -
Dividend
Less: Corporate Dividend Tax on Proposed 1.87
Dividend
Less: Interim Dividend 11.01
Less : Prior year Tax Adjustment 0.06 -
Profit for the year after appropriation 494.48 297.79 238.22
Profit transferred from previous year 743.54 485.75 293.20

Transfer to General Reserve Account 50.00 40.00 -
Balance Carried to Balance Sheet 1188.02 743.54 531.42
EPS ( Basic) 45.05 29.43 29.96

EPS ( Diluted) 42.67 26.38 26.81
Significant Accounting Policies & Notes on
Accounts 20
| 29 |
CASH FLOW STATEMENT

(Rupees in Million)
Particulars June 30, 2010 March 31, 2009 March 31, 2008
A. Cash Flow from Operating Activities
Net profit before tax and Extraordinary Items 705.09 436.94 330.67
Add / (Deduct) : Adjustments for
Interest 540.16 396.54 288.91

Depreciation 288.07 186.13 122.42
Preliminary Expenses / Deferred Revenue 0.97 1.22 -
Written off
(Profit)/Loss on sale of assets 1.27 0.31 -
Prior Year adjustments (2.78) (6.19) (28.99)
Provision for Write Off / Diminution in value 0.00 0.66 -
of Current Investment
Income from Investment 0.00 (16.46) -
Operating Profit before working capital 1532.78 999.15 713.01
changes
Add / (Deduct) Adjustments for :
Trade and Other Receivables (527.56) (1677.14) (219.98)
Inventories (397.65) (577.51) (756.8)
Trade and Other Payables 1093.85 316.11 190.36
Loans and Advances and Other Current Assets (704.95) 55.49 (188.98)
Cash Generated from Operations 996.47 (883.90) (262.39)
Direct taxes (paid net of refunds) (90.06) (31.47) (28.25)
Cash flow before extraordinary items 906.41 (915.37) (290.64)
Extra ordinary items - - -
Net cash from operating activities 906.41 (915.37) (290.64)
B. Cash Flow from Investing Activities

Activities - Inflow / (outflow)
Purchase of fixed assets ( including CWIP and (4144.16) (2195.77) (947.39)
advances for CAPEX)
Proceeds from Sale of Fixed assets 1.40 0.65 1.98
Income from Investments - 16.46 (4.36)
(Increase)/Decrease in Value of Investment (889.93)
Net cash generated /(used) in investing (5032.69) (2178.66) (949.77)
activities
C. Cash Flow from Financing activities

Increase/(Decrease) in Long Term Borrowing 1877.46 2564.54 402.94
Increase/(Decrease) in Short Term Borrowings 1115.02 968.02 259.21
Issue of Share Capital 2586.90 394.22 1249.15
Interest Paid (540.16) (396.54) (288.91)
Dividend paid (30.33) (12.89) (11.85)
Net Cash used in Financing Activities 5008.89 3517.35 1610.54
Net Increase/(Decrease) in Cash Equivalents 882.61 423.32 370.13

(A+B+C)
Cash and Cash Equivalents at the beginning of 868.74 445.42 75.29
period
Cash and Cash Equivalents at the end of 1715.35 868.74 445.42
period
| 30 |
UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED

DECEMBER 31, 2010
(Rupees in Million)
No. Particulars Unaudited Results for Unaudited Results for the Audited
the Quarter ended Six months ended Results for
the
Accounting
year ended
December December December December June 30,
31, 2010 31, 2009 31, 2010 31, 2009 2010 (15
Months)
1 Gross Sales 2,135.31 1,102.56 3,866.86 2,191.31 6,293.82
Less: Excise Duty/Service
Tax 45.56 49.35 84.41 95.56 215.57
(a) Net Sales / Income from
Operations 2,089.75 1,053.21 3,782.45 2,095.75 6,078.265
(b) Other Operating Income -
Total [1] 2,089.75 1,053.21 3,782.45 2,095.75 6,078.26
2 Expenditure
(a) (Increase) / Decrease in
stock in trade and work in
progress (111.08) (118.62) (291.10) (233.41) (110.06)
(b) Consumption of Raw
Materials 1,216.42 473.01 2,277.26 904.24 2,798.24
(c) Purchase of traded goods - 189.66 382.42 566.58
(d) Employees cost 100.81 63.73 194.96 137.75 360.31
(e) Depreciation 114.77 56.63 210.03 111.32 288.09
(f) Other Expenditure 335.08 160.11 581.79 342.67 955.27
Total [2] 1,656.00 824.52 2,972.94 1,644.99 4,858.44
Profit from Operations before
3 Other Income, Interest and
Exceptional Items [1 - 2] 433.75 228.69 809.51 450.76 1,219.82
4 Other Income
43.40 7.74 46.93 11.42 22.65
Profit before Interest and
5
Exceptional Items [3 + 4] 477.15 236.43 856.44 462.18 1,242.47
6 Interest 262.34 101.76 449.80 202.51 540.16
Profit after Interest but before
7
Exceptional Items [5 - 6] 214.81 134.67 406.64 259.67 702.31
8 Exceptional items - -
Profit(+)/Loss(-)from
9 Ordinary Activities before
Tax [7+8] 214.81 134.67 406.64 259.67 702.31
10 Tax Expense 62.62 33.36 116.83 72.78 175.41
Net Profit(+)/Loss(-)from
11 Ordinary Activities after tax
[9-10] 152.19 101.31 289.81 186.89 526.90
Extraordinary Items (net of
12
tax expense Rs. Nil) -
Net Profit (+) / Loss (-) for
13
the period [11 – 12] 152.19 101.31 289.81 186.89 526.90
Paid up Equity Share Capital
14
(face value Rs.10/- per Share) 167.54 110.15 167.54 110.15 167.54
| 31 |
No. Particulars Unaudited Results for Unaudited Results for the Audited
the Quarter ended Six months ended Results for
the
Accounting
year ended
December December December December June 30,
31, 2010 31, 2009 31, 2010 31, 2009 2010 (15
Months)
Reserves excluding
Revaluation Reserves as per
15
balance sheet of previous
accounting year 5,479.30
16 Earning Per Share (EPS) - - - -
(a) Basic and diluted EPS
before Extraordinary items
for the year and for the
previous year (not
annualized)
- Basic EPS for the period 8.65 9.20 17.30 16.97 45.05
- Diluted EPS for the
period 8.31 9.07 16.62 16.72 42.67
(b) Basic and diluted EPS
after Extraordinary items for
the year and for the previous
year (not annualized)
period 8.31 9.07 16.62 16.72 42.67
17 Public Shareholding
- No. of Shares 12,243,318 7,176,050 12,243,318 7,176,050 12,391,418
- Percentage of Shareholding 73.08 65.15 73.08 65.15 73.96
Promoters and promoter
18
group Shareholding
(a) Pledged/Encumbered
- Number of shares 2,204,500 1,309,729 2,204,500 1,309,729 1,869,629
- Percentage of shares (as a
% of the total shareholding of
promoter and promoters
group) 48.88 34.12 48.88 34.12 42.86
% of the total share capital of
the Company) 13.16 11.89 13.16 11.89 11.16
(b) Non-encumbered
- Number of shares 2,305,648 2,529,219 2,305,648 2,529,219 2,492,419
group) 51.12 65.88 51.12 65.88 57.14
the Company) 13.76 22.96 13.76 22.96 14.88
| 32 |
STATEMENT OF ASSETS AND LIABILITIES

(Rupees in Million)
Particulars STANDALONE (UNAUDITED)
Six months ended Corresponding Six
December 31, 2010 months ended
December 31, 2009
SHAREHOLDERS' FUND:
(a) Share Capital 167.54 110.15
(b) Reserves and surplus 5,800.57 2,935.22
LOAN FUNDS 10,561.80 8,108.86
Deferred Tax Liability 250.88 179.76
Total 16,780.79 11,333.99
FIXED ASSETS 9,466.04 6,642.24
INVESTMENTS 912.59 20.10
Deferred tax assets - -
CURRENT ASSETS, LOANS AND ADVANCES - -
(a) Inventories 2,551.08 2,509.20
(b) Sundry Debtors 3,622.27 2,868.99
(c) Cash and Bank Balances 420.86 571.36
(d) Loans and Advances 1,195.63 185.32
Less : Current Liabilities and Provisions - -
(a) Current Liabilities 1,353.42 1,463.35
(b) Provisions 34.26 3.94
Net Current assets 6,402.16 4,667.58
MISCELLANEOUS EXPENDITURE (NOT
- 4.07
WRITTEN OFF OR ADJUSTED)
PROFIT AND LOSS ACCOUNT - -
TOTAL 16,780.79 11,333.99
| 33 |
RISK FACTORS
This offering involves a high degree of risk. Investors should carefully consider the risks described below before
making an investment decision. If any of the risks described below actually occurs, the Company's business,
prospects, financial condition and results of operation could be adversely affected, the trading price of the
Equity Shares could decline and the Investors may lose all or part of their investment. Unless specified or
quantified in the risk factors below, the Company is not in a position to quantify the financial implications of
any of the risks. Additional risks not described below or not currently known to the Company or that the
Company currently deems immaterial may also adversely affect the market price of the Securities.
Prospective investors should carefully consider the risks and uncertainties described below, in addition to the
other information contained in this Preliminary Placement document before making any investment decision
relating to the Securities.
The ordering of the risk factors is intended to facilitate ease of reading and reference and does not in any
manner indicate the importance of one risk factor over another.
A. INTERNAL RISK FACTORS AND RISKS RELATING TO THE BUSINESS
Contracts awarded to the Company by government-owned and government-controlled entities may

be terminated, which could affect the financial results of the Company.
Generally, one of the standard conditions in contracts awarded by Government-owned and controlled
entities is that the Government or the Government entity, as the customer, has the right to terminate the
contract, without specifying any reason. In the event any such contract is so terminated, the revenue of
Company may be adversely affected.
The business of the Company is dependent on continuing relationships with its customers.
The business of the Company is dependent on relations with existing and potential customers. The
results and operations of the Company may be adversely affected if the Company is not able to
maintain a continuing relationship with its existing customers or develop relations with potential
customers.
'The Company's business is substantially dependent on orders by the aforementioned customers. Any
detrimental change in such relationships with its customers can have a negative effect on the business
operations of the Company.
The Company may not be able to secure additional funding in the future.
The Company may need additional external financing to meet future funding requirements, which may
include commercial borrowings or issuance of further equity shares or other securities. The Company
cannot assure that it will be able to raise adequate funds for future requirements on acceptable terms.
Any failure to obtain sufficient funding could result in the delay or abandonment of future plans and
have a material adverse effect on the business and financial results of the Company.
If the Company decides to raise additional funds through debt, its interest obligations will increase, and
it may be subject to additional covenants which could limit its ability to access cash flows from its
operations. The consent of existing lenders may also be required to incur additional debt or issue
further equity. There can be no assurance that such consent will be granted. In addition, any adverse
credit ratings by the debt rating agencies for the debt availed by the Company may adversely impact its
ability to raise further financing. If the Company decides to raise additional funds through the issuance
of equity, the ownership interest of Shareholders will be diluted. The Company cannot guarantee that it
will be able to raise adequate financing on acceptable terms, in time, or at all. Failure to obtain
sufficient financing could result in the delay or abandonment of its development and expansion plans,
the failure to meet customer obligations or expectations and could have a material adverse effect on its
business and financial results.
| 34 |
The Company depends on the adequate and timely supply of raw materials at commercially
acceptable prices and the inability of the Company to receive the raw materials at such prices could
affect the profitability adversely.
The operations of the Company are significantly dependent on the availability, cost and quality of the
raw materials, which the Company needs for manufacturing its products. The price and supply of raw
materials depend on factors, which are not under the control of the Company, including domestic and
international general economic conditions, competition, availability of quality suppliers, production
levels, transportation costs and import duties. If, for any reason, the primary suppliers of raw materials
curtail or discontinue the delivery of such materials to the Company in the quantities that is required by
the Company, or at prices that are not competitive or not expected or as per the desired delivery
schedules or specified quality standards and technical specifications, it will adversely affect the
Company's production schedule and its ability to deliver orders on time and at the desired level of
quality. This may have negative impact on its reputation, profitability and results of operations. The
Company's ability to meet its material requirements for its operations could be impaired. Further, the
Company may not be able to pass on increased raw material costs to its customers, which could
adversely affect the Company's business and financial results.
The Company has made an application (Complete Specification) for registration of a patent for a
product called 'Bio-Digester's Non-Degradable Waste Removal Housing With Filter Arrangement'
In case the registration is not obtained, plans relating to commercial exploitation of this product may
be affected.
The Company has filed an application (Complete Specification) with the Patent Office, Mumbai for
patent registration of its product called 'Bio-Digester's Non-Degradable Waste Removal Housing With
Filter Arrangement' which is pending as on date of this Preliminary Placement Document. The
Company cannot assure provide any assurance that the application filed with the Patent Office will be
accepted and any refusal thereof may hinder the plans of the Company to commercially exploit this
product as envisaged.
The Company manufactures certain products through Joint Ventures, technology know-how
arrangements and any dispute with the joint venture/know-how partners, can affect the business
operations of the Company.
The Company has entered into joint ventures and/or technology know-how arrangements with Georgia
Pacific, DSM/CSIR/NAL, and the StonCor Group as part of its efforts to expand the Company's
product line. As with most arrangements, differences in views with the technology partner may result
in delayed decisions or disputes. The Company cannot provide any assurance that its relationships with
the technology partners can at all times be amicably maintained. The Company is also unable to control
the actions of its technology partners.
These existing and/or future joint ventures or technology know-how arrangements involve a number of
risks, including:
• Disputes with joint venture/know-how partners in connection with the performance of each
party's obligations under the relevant agreements;
• Financial difficulties encountered by a joint venture/know-how partners affecting its ability to
perform its obligations;
• Conflicts between the policies and objectives adopted by the joint venture/know-how partners
and the Company;
• joint venture/know-how partners having economic or business interests inconsistent with the
Company; and
• joint venture/ know-how partners that follow inconsistent business processes, internal controls
and internal control over financial reporting than the Company follows.
The occurrence of any of these risks and other factors may lead to disputes between the joint venture
partners and the Company and may affect the operations and the results of the Company.
| 35 |
The Company is dependent on third party transportation providers for smooth transportation and
delivery of products from the manufacturing facilities of the Company to the customers. This is
subject to various uncertainties and risks as any loss of goods in transit could impact delivery
schedule and profitability.
The Company delivers its products by way of rail, road and ship from its manufacturing facilities to its
domestic and overseas customers. The Company relies on third parties to provide such services. These
transportation facilities and services may not be adequate to support the existing and future operations.
Further, disruptions of transportation services due to weather-related problems, strikes, inadequacies in
the road infrastructure and port facilities, or other events could impair the ability of the Company to
supply its products to its customers. Any such disruptions could materially and adversely affect the
business and results of the Company.
Increase in crude oil prices may result in increase in transportation costs for the Company. These may
have an adverse impact on the Company's profitability. Increase in freight or unavailability of freight
for transportation of products to export markets may have an adverse effect on the business and results
of operations of the Company.
The Company's failure or inability to manage the growth could limit the business expansion and
profitability.
Over the past few years, the Company has expanded its capacities and has grown in terms of its sales
and profitability. Such continued growth will place significant demands on the Company and will
require the Company to continuously evolve and improve its operational, financial and internal controls
across the organisation. An inability to keep up pace with the demands of such growth could limit the
business expansion and profitability of the Company.
The insurance coverage may prove inadequate to satisfy future claims against the Company, and the
Company may be subject to losses that might not be covered in whole or in part by existing
insurance coverage.
The Company maintains insurance for a variety of risks, including risks relating to Stock of Raw
material, Semi finished goods, finished goods and consumables at its manufacturing facility, Building,
Plant and Machinery, Furniture, Fixtures and Fittings and other assets. However, in some cases, the
Company might not have obtained the required or contemplated insurance or such insurance policies
may have lapsed. There may be various other types of risks and losses for which the Company may not
be insured, such as loss of business and environmental liabilities, because they are either uninsurable or
not insurable on commercially acceptable terms. The Company has not obtained product liability
insurance for its products. Should an uninsured loss or a loss in excess of insured limits occur, or the
insurers decline to fully compensate the Company for the losses, the Company could incur liabilities,
lose capital invested in that property or lose the anticipated future income derived from that business or
property, while remaining obligated for any indebtedness or other financial obligations related to the
business. Any such loss could result in an adverse effect to the financial condition of the Company.
The Company may be subject to industrial unrest, slowdowns and increased labour costs.
As at January 31, 2011, the Company has approximately 1,345 full-time employees. In addition, the
Company hires contract labour. While the Company believes that it maintains good relationships with
the employees and contract labor, there can be no assurance that the Company will not experience
future disruptions to its operations due to disputes or other problems with its work force, which may
materially and adversely affect the business and operations of the Company.
India has stringent labour legislation that protects the interests of workers, including legislation that
sets forth detailed procedures for dispute resolution and employee removal and legislation that imposes
certain financial obligations on employers during employment and upon retrenchment. Under Indian
law, workers also have a right to establish trade unions. Although the employees are not currently
unionized, the Company cannot assure that they will not unionize in the future. If some or all of the
| 36 |
employees unionize or if the Company experience unrest or slowdowns, it may become difficult for the
Company to maintain flexible labour policies and the Company may experience increased wage costs
and employee numbers and may materially and adversely impact the operations and financial
condition.
The Company may be unable to obtain, renew or maintain its statutory and regulatory permits and
approvals required to operate the business. Any delay or failure in obtaining the required permits or
approvals may result in the interruption of its operations.
The Company requires certain statutory and regulatory permits and approvals for conducting its
business. For example, laws or regulations in some countries, including India, may require the
Company to obtain licenses or permits to conduct its operations. Some activities related to the projects
may be subject to the prior granting of environmental licenses or permits or to prior notification. In
future, the Company will be required to renew such permits and approvals and obtain new permits and
approvals for any proposed operations. There can be no assurance that the relevant authorities will
issue any of such permits or approvals in the time-frame anticipated by the Company. Failure by the
Company to renew, maintain or obtain the required permits or approvals may result in the interruption
of its operations and may have a material adverse effect on the business, financial condition and results
of the Company.
The Company is involved in various litigations filed against the Company and the Promoter Group,
the outcome of which could adversely affect the business and financial operations of the Company.
Summary of litigation are set out below:

(Rupees in Million)
No. Particulars No. of Amount involved
cases / where
disputes quantifiable
LITIGATION AGAINST THE COMPANY

Litigation against the Company
1. Summary suit 2 1.38
2. Labour Proceedings 7 1.1.0
3. DRT Proceedings 1 0.80
Direct & Indirect tax proceedings filed against the Company
4. Income tax proceedings 1 5.69*
LITIGATION BY AND AGAINST THE PROMOTER GROUP ENTITY
Sales tax proceedings against the Promoter Group Entity
5. Sales tax proceedings 1 2.45
*Against this amount, the Company has already deposited Rs.2.85 million with the income tax
authorities
| 37 |
The contingent liabilities, if crystallized could adversely affect the financial condition of the
Company since there is no provision made in the books of accounts of the Company.
The contingent liabilities as on January 31, 2011 are as follows:

(Rupees in Million)
Nature of Liability Amount
Letters of Credit issued by bank on behalf of the Company 114.96
Guarantees issued by bank on behalf of the Company 674.68
Estimated amounts of contracts remaining unpaid on capital 50.18
account
Disputed Income Tax Demands (not acknowledged) against 5.69
which proceedings are pending before Income Tax Authorities
Litigations against the Company *2.19
Total 847.70
* This figure indicates principal amount of the suits
If any of these contingent liabilities materialise, fully or partly, the financial condition of the Company
could be materially and adversely affected.
Proposed Projects may not be undertaken subject to project viability
The Company has entered into a memorandum of understanding with SAERTEX to explore the
possibilities in manufacturing of aeronautical components in India. The Company is required to incur
expenditure for conducting feasibility study. Pursuant to the feasibility study, if the Company decides
not to proceed with the proposed project, the expenditure incurred by the Company may not give any
returns.
The Company's indebtedness and the possible restrictive covenants in loan agreements for
borrowings may restrict the Company's ability to grow.
The Company has entered into loan agreements with certain banks and financial institutions for short-
term loans and long-term borrowings. These loan agreements contain certain restrictive covenants, such
as requiring consent of the lenders inter alia, for issuance of new shares, creating further encumbrances
on its assets, creating charge within stipulated time, disposing of its assets, declaring dividends or
incurring capital expenditures beyond certain limits. Some of these borrowings also contain covenants
that limit its ability to make any change or alteration in the Company's capital structure, make
investments and affect any scheme of amalgamation or restructuring. In addition, these borrowings
contain certain financial covenants, which require the Company to maintain, specified net worth to
asset ratio, debt service coverage ratio and maintenance of security coverage. There can be no
assurance that the Company will be able to comply with the financial or other covenants or that it will
be able to obtain the consents necessary to take the actions the Company believes are necessary to
operate and grow its business. Certain of the loans availed by the Company may be called at any time
by the lenders pursuant to terms of the relevant agreements. An event of default under any of these loan
arrangements, if not cured or waived, could have a material adverse effect on the Company.
The Company has entered into transactions with related parties.
The Company has entered into various transactions with related parties aggregating to Rs.346.47
million and Rs.1273.12 million for the financial years ended on March 31, 2009 and June 30, 2010
respectively. There can be no assurance that the Company's transactions with such related parties have
been, or will be, entered into on an arm's length basis, it is difficult to ascertain whether more favorable
terms would have been achieved had such transactions been entered with unrelated parties. Such
agreements give rise to current or potential conflicts of interest with respect to dealings between the
Company and such related parties. Furthermore, it is likely that the Company will enter into related
party transactions in the future. For details, please refer to section titled "Financial Statements" of this
| 38 |
Certain Equity Shares of the Company held by the Promoters is pledged as additional security under
various financing documents. In the event of defaults under the financing documents, the lenders
may sell the pledged Shares in the open market resulting in dilution of the Promoters' shareholding,
which may result in a change of control of the Company.
As on December 31, 2010, 2,204,500 Equity Shares constituting 13.16 % of the total paid-up equity
share capital of the Company, held by the Promoters have been pledged. Default in repayment of the
loans taken by the Promoters may invoke the pledge on these shares, which may result in dilution of
the Promoter's stake in the Company. For further details on pledge of Equity Shares, please refer to
section titled "Shareholding Pattern" of this Preliminary Placement Document.
In case of any default under the financing documents, the lender(s) may sell the Shares pledged to them
in the open market, thereby diluting the shareholding of the Promoters in the Company. Such sale of
Shares may also result in the Promoters losing control of the Company.
The Company is subject to risks arising from interest rate fluctuations, which could adversely affect
the financial results of the Company.
The Company has availed substantial term loans and working capital facilities from various banks and
financial institutions. The Company is exposed to market risk with respect to changes in interest rates
related to its borrowings. Interest rate risk exists with respect to its indebtedness that bears interest at
floating rates tied to certain benchmark rates as well as borrowings where the interest rate is reset
primarily based on changes in the short-term interest rates set by Indian banks, as well as due to
changes in interest rates set by the RBI. The Company has not entered into agreements to hedge risks
associated with changes in interest rates. Any increase in the interest rates could significantly raise the
costs of borrowing and will adversely affecting the results of the Company.
The senior management team and other key personnel in the business units are critical to the
sustained operations of the Company and the loss of, or the inability to attract and retain, such
personnel in the future could harm the business of the Company.
The sustained operations of the Company depend on the continued service and performance of the
members of the senior management team and other key personnel in the business for the management
and running of the daily operations and the planning and execution of the business strategy. The ability
to implement the business strategy will depend, in large part, on the Company's ability to attract and
retain/replace highly skilled personnel. Any shortage of skilled personnel or loss of services of the
senior management could adversely affect the business and results of the Company.
Increase in the price of oil and the unavailability of raw materials may adversely affect the results of
the Company.
Currently, majority of the raw materials for resins production is purchased from petrochemicals
companies. Any stoppage at these plants will lead to shortage of raw material availability which may
have an adverse impact on the operations of the Company In respect of the manufacturing operations of
resins, the prices of some of the raw materials used are linked to oil prices. The Company enters into
supply arrangements with the vendors periodically based on price negotiations. In the event that the
Company is unable to pass on the increase in the raw material cost to its customers, the results of the
Company may be adversely affected.
Technological advancements in steel and aluminum may have an adverse impact on the operations
of the Company.
The Company's products compete with conventional materials like steel and aluminum. Any
technological advancement in these sectors or in the Company's products may negatively affect the
prospects of the Company's products.
The Company has a wide variety of products which replace the conventional materials like steel and
aluminum. Further, the advancement in technology in these traditional materials or change in price
| 39 |
and/or quality could result in a reduced use of the products manufactured by the Company in some
segments. In addition to the above, development of a new technology or product, which may be better
than the Company's products in terms of price and quality, may adversely affect demand of the
Company's products and thus its results of operations.
Product liability claims could adversely affect Company's operations.
The Company supplies products to customers of various industries who use the products for their
activities and products. If the Company supplies products that do not meet the standards or
specifications of the order or the requirements of the application or applicable regulatory standards, this
may cause disruptions in their activities. Further, there could also be consequential damages resulting
from the use of such products for which the Company might become liable. Alternatively, the products
of the company may also be recalled in the event of the products not meeting the desired
quality/Specification which may occur at a huge cost to the Company. The Company does not have any
product liability insurance coverage and a major claim for damages related to products sold may
adversely affect the Company's financial condition and future operating results.
The Company has had negative operating cash flows for the previous financial years. Sustained
negative cash flow may have an adverse effect on the growth and business of the Company.
The Company had negative operating cash flows for period ending on March 31, 2009 and March 31,
2008 due to higher working capital requirements resulting in additional borrowings. For the financial
years ended on March 31, 2008 and 2009 the negative operating cash was at Rs.290.64 million and Rs
915.37 million respectively. Such Sustained negative cash flow may have an adverse effect on the
growth and business of the Company.
The ability of the Company to pay dividends will depend upon future earnings, financial condition,
cash flows, working capital requirements, capital expenditures, lender's approvals and other factors.
The Company has paid dividends only for the years ended on March 31, 2009 and March 31, 2008 and
interim and final dividend for the year ended on June 30, 2010 in the last five (5) years. The amount of
the future dividend payments, if any, will depend upon the Company's future earnings, financial
condition, cash flows, working capital requirements, capital expenditures, lender's approvals and other
factors. There can be no assurance that the Company shall have distributable funds or that the
Company will declare dividends in the future. Additionally, the terms of any financing that the
Company may obtain in the future, may contain restrictive covenants including the payment of the
dividend.
Risks Related to the Carbon Fiber Technology Business
The products manufactured through the Carbon fibre technology have yet not been commercially
manufactured in India.
The Company manufactures Carbon Fibre, which has application for use in manufacture of products
for defense and aerospace purposes. In India, such technology to manufacture aerospace and defense
products have not been commercially exploited which may impact the orders of carbon fibre from such
manufacturers.
Failure to receive adequate orders for Carbon fibre may adversely affect the business operations of
the Company.
Though Carbon fibre has various applications in sectors such as aerospace, defense, automobile, sports
equipment and other industries, in the event of downturn in these sectors, the Company may not receive
adequate orders, which may adversely affect the business operations of the Company.
The Company is in the process of converting certain portions of the agricultural land into non-
agricultural land part of which is proposed to be used for the Project. Any delay in receipt of the
| 40 |
approval or non-receipt of the approval could result in the delay in the implementation of the Project
affecting the profitability of the Company.
The Company is yet to convert 24,382 sq. mtrs (3.12% approximately of the total land) of its
agricultural land into non-agricultural land. The Company is currently in the process of applying for the
conversion of these lands for non-agricultural use. This land is to be used for the Projects of the
Company. There is no certainty that the Company will be able to obtain the change in status of land and
that the requisite approvals or permissions shall be issued by the relevant government authorities.
The business and future results of the Company may be adversely affected if there is any time or cost
overrun in the Project.
The Company proposes to utilise portion of the net proceeds of the Issue to part finance the Project.
Any delay in the implementation of the Project may lead to time and cost overruns which may
adversely affect the Company's financials and future growth.
The Company has appointed various contractors, suppliers and other third parties regarding the
civil work, supply of plant and machinery and other equipment for the Project and depends upon
them for timely supply of services and equipment. Any delay in delivering the service or equipment
may cause delays in implementation of the Project.
The Company has appointed contractors for civil work, suppliers for delivery of plant and machinery
and equipment and other materials for the Project. The Company may not be able to control the timing
or quality of services or supplies provided by these contractors or suppliers. Any delay in delivering the
service or equipment may cause delays in implementation of the Project.
The Company has been granted a non-exclusive license by Council of Scientific and Industrial
Research (CSIR)/ National Aerospace Laboratories (NAL) to use the know-how to manufacture
Carbon fibre on certain terms and conditions. Any non-compliance of the terms and conditions may
compel CSIR/NAL to take necessary action.
The Company is required to adhere to certain terms and conditions including but not limited to the
timeframe to work on the product on a commercial scale, restriction on sale of products to restricted
countries and ensure the supply of material produced to meet requirement in India, if any, as indicated
by the Government of India, without any constrain from the production on priority before meeting the
other countries required. Non-adherence to any of these terms and conditions may compel CSIR/NAL
to take necessary action, which may adversely affect the Company. Further, this technology has been
licensed to the Company on a non-exclusive basis and the Government may give similar licenses and
share the know-how with other companies which might result in increased competition thereby
adversely effecting the operations of the Company.
B. RISKS ASSOCIATED WITH THE NCDs
There is no existing market for the NCDs and an active market for the NCDs may not develop,
which may cause the price of the NCDs to fall
The NCDs are a new issue of securities for which there is currently no trading market and represent the
Company's first issuance of debt securities to QIBs under Chapter VIII of the SEBI ICDR Regulations.
No assurance can be given that an active trading market for the NCDs will develop, or as to the
liquidity or sustainability of any such market, the ability of holders to sell their NCDs or the price at
which holders of the NCDs will be able to sell their NCDs. If an active market for the NCDs fails to
develop or be sustained, the trading price of the NCDs could fall. If an active trading market were to
develop, the NCDs could trade at prices that may be lower than the initial offering price of the NCDs.
Whether or not the NCDs will trade at lower prices depends on many factors, including: (i) the market
for similar securities; (ii) general economic conditions; and (iii) financial condition, results of
operations and future prospects of the Company.
| 41 |
Changes in interest rates may affect the price of the NCDs
All securities where a fixed rate of interest is offered, such as the NCDs, are subject to price risk. The
price of such securities will vary inversely with changes in prevailing interest rates, i.e. when interest
rates rise, prices of fixed income securities fall and, when interest rates drop, the prices increase. The
extent of a fall or rise in the prices is a function of the existing coupon, days to maturity and the
increase or decrease in the level of prevailing interest rates.
Increased rates of interest, which frequently accompany inflation, are likely to have a negative effect on
the price of the NCDs.
Payments made on the NCDs are subordinated to certain tax and other liabilities preferred by law
The NCDs will be subordinated to certain liabilities preferred by law such as to claims of the
Government on account of taxes, and certain liabilities incurred in the ordinary course of the
Company's business. In particular, in the event of bankruptcy, liquidation or winding-up, the
Company's assets will be available to pay obligations on the NCDs only after all of those liabilities that
rank senior to these NCDs have been paid. In the event of bankruptcy, liquidation or winding up, there
may not be sufficient assets remaining, after paying amounts relating to these proceedings, to pay
amounts due on the NCDs.
Any downgrading in credit rating of the NCDs may affect the value of NCDs and thus the
Company's ability to raise further debts.
The NCDs have been rated by CARE as "BBB+" vide their letter dated July 13, 2010, which was
revalidated vide their letter dated March 4, 2011.The rating of BBB+ indicates moderate safety for
timely servicing of debt obligations and moderate credit risk.
The ratings provided by CARE may be suspended, withdrawn or revised at any time by the assigning
rating agency and each rating should be evaluated independently of any other rating. These ratings are
opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the
concerned bank facilities or to buy, sell or hold any security. The Company cannot guarantee that these
ratings will not be downgraded. Such a downgrade in the above credit ratings may lower the value of
the NCDs and may also affect the Company's ability to raise further debt.
In the event the ratings of the NCDs are downgraded, the Debenture Trustee on behalf of the Debenture
Holders shall be entitled to declare an Event of Default, requiring the Issuer to redeem the NCDs upon
receipt of such notice.
Investors may not be able to recover, on a timely basis or at all, the full value of the outstanding
amounts and/or the interest accrued thereon in connection with the NCDs.
The Company's ability to pay interest accrued on the NCDs and/or the principal amount outstanding
from time to time in connection therewith would be subject to various factors inter-alia including its
financial condition, profitability and the general economic conditions in India and in the global
financial markets. The Company cannot provide any surety that it would be able to repay the principal
amount outstanding from time to time on the NCDs and/or the interest accrued thereon in a timely
manner or at all.
The principal amount of the NCDs is initially secured by a mortgage and charge that will rank
subservient to the first ranking pari passu charge of the Existing Lenders over the movable and
immovable fixed assets of the Company. Thereafter, within 30 days from the Date of Allotment, the
Issuer shall procure no-objection certificates from all its Existing Lenders and make appropriate filings
with the RoC, upon which the mortgage and charge in respect of the NCDs shall become a first ranking
pari passu mortgage and charge. with the Existing Lenders.
If the mortgage and charge in respect of the NCDs does not take effect as a first ranking pari passu
mortgage within 30 days of the Date of Allotment, the Debenture Trustee on behalf of the Debenture
| 42 |
Holders shall be entitled to designate an Event of Default and direct the Issuer to redeem the NCDs in
full.
C. RISKS ASSOCIATED WITH THE WARRANTS
There is no existing market for the Warrants and an active market for the Warrants may not
develop, which may cause the price of the Warrants to fall.
The Warrants are a new issue of securities for which there is currently no trading market. No assurance
can be given that an active trading market for the Warrants will develop, or as to the liquidity or
sustainability of any such market. The price of the Warrants also depends on the supply and demand for
the Warrants in the market and the price at which the Warrants are trading at any time may differ from
the underlying valuation of the Warrants because of market inefficiencies. To the extent Warrants are
exercised, the number of Warrants of such issue outstanding will decrease, resulting in a diminished
liquidity for the remaining Warrants of such issue. A decrease in the liquidity of an issue of Warrants
may cause, in turn, an increase in the volatility associated with the price of such issue of Warrants. The
more limited the secondary market is for the Warrants, the more difficult it may be for the holders
thereof to realise value for such Warrants prior to the Expiry Date of the Warrants.
The Warrants can be volatile instruments and may expire worthless
The Warrants are subject to a number of risks, including: (i) sudden and large falls in value; (ii)
changes in the price or market value of the Collateral and/or changes in the circumstances of the
obligor under the Collateral; and (iii) a complete or partial loss of the investment in the Warrants. The
market for the Warrants may be limited and this may adversely impact their value or the ability of a
holder of the Warrants to dispose of them. Neither the Company nor the GC-BRLM gives any
assurance as to the merits or performance of the Warrants and makes no commitment to make a market
in or to repurchase the Warrants. Transactions in offer exchange Warrants may involve greater risks
than dealing in exchange-traded options. This Preliminary Placement Document cannot disclose all of
the risks and other significant aspects of the Warrants. No person should deal in the Warrants unless
that person understands the terms and conditions of the Warrants and the extent of that person's
exposure to potential loss. Each prospective purchaser of Warrants should consider carefully whether
the Warrants are suitable in the light of the circumstances and financial position. Prospective
purchasers of Warrants should consult their own professional advisers to assist them in determining the
suitability of the Warrants for them as an investment.
Future issues or sale of the Equity Shares may significantly affect the trading price of the Warrants.
Any future issue or sale of Equity Shares by the Company or the disposal of Equity Shares by any of
the major shareholders of the Company, or the perception that such issues or sales may occur, may
significantly affect the trading price of the Warrants or the Shares.
D. EXTERNAL RISK FACTORS
A downturn in economic and financial conditions in the markets in which the Company operates
may have an adverse effect on its business.
The Company's financial results are affected by external factors outside its control which influence the
demand for its products in India and overseas. Although the Company anticipates that India will remain
an important market for its products, it expects to become less dependent on the domestic market in the
future.
Demand for the Company's products may be adversely affected by factors such as changes in economic
policy, fiscal policy, export-import policy, reduction in import duties, political and financial instability,
declining economic growth rates and excess capacity. There can be no assurance that the
aforementioned factors, alone or in combination, will not have a material adverse effect on the
Company's financial condition and results of operations in the future.
| 43 |
The Company's growth is dependant on the Indian economy.
The performance and the growth of business is dependant on the performance of the Indian economy.
India's economy could be adversely affected by a general increase in interest rates, currency exchange
rates, adverse conditions affecting agriculture, commodity and electricity prices or various other
factors. A slow down in the Indian economy could adversely affect the business of the Company,
including the ability to implement its strategy. The Indian economy is currently in a state of transition
and it is difficult to predict the impact of certain fundamental economic changes upon the business.
Conditions outside India, such as slow downs in the economic growth of other countries or increases in
the price of oil, have an impact on the growth of the Indian economy, and government policy may
change in response to such conditions. While recent governments have been keen on encouraging
private participation in the industrial sector, any adverse change in policy could result in a slowdown of
the Indian economy. Additionally, these policies will need continued support from stable regulatory
regimes that stimulate and encourage the investment of private capital into industrial development. Any
downturn in the macroeconomic environment in India or in the steel sector could adversely affect the
price of the Company's equity shares and warrants, its business and results of operations.
Political instability or changes in the Government could delay the liberalisation of the Indian
economy and adversely affect conditions in India generally.
The Company generates substantially all of its income in India. The business, the market price and
liquidity of the Equity Shares and Warrants, are therefore directly affected by the Indian market, which
in turn may be affected by foreign exchange rates and controls, interest rates, changes in Government
policy, taxation, social and civil unrest and other political, economic or other developments in or
affecting India.
Since 1991, successive Indian Governments have pursued policies of economic liberalisation. The roles
of the Government of India and the state governments in the Indian economy as producers, consumers
and regulators have remained significant. The Company cannot provide any assurance that the
liberalisation policies announced by the Government in the past will continue in the future. The rate of
economic liberalisation could change, and specific laws and policies affecting the power sector, foreign
investment, currency exchange and other matters affecting investment in the Company's securities
could change as well. Any change in India's economic liberalisation and deregulation policies could
adversely affect business and economic conditions in India generally.
Any downgrading of India's debt rating by an international rating agency could negatively affect the
Company's business.
Any downward revisions to India's credit ratings for domestic and international debt by international
credit rating agencies may adversely affect the Company's ability to raise additional financing. Such
revisions could also affect the interest rates and other commercial terms on which such additional
financing is available. This could have an adverse effect on the business and future financial
performance, and the Company's ability to obtain financing for capital expenditures and the trading
price of the Equity Shares and Warrants.
Economic developments and volatility in securities markets in other countries may cause the price of
the Securities to decline.
The Indian economy and its securities markets are influenced by economic developments and volatility
in securities markets in other countries. Investors' reactions to developments in one country may have
adverse effects on the market price of securities of companies located in other countries, including
India. For instance, the economic downturn globally has adversely affected market prices in the world's
securities markets, including the Indian securities markets. Negative economic developments, such as
rising fiscal or trade deficits, or a default on sovereign debt, in other emerging market countries may
affect investor confidence and cause increased volatility in Indian securities markets and indirectly
affect the Indian economy in general.
| 44 |
Force majeure events, terrorist attacks or war or conflicts involving India, the United States or other
countries, which could adversely affect the financial markets.
Any major hostilities involving India, or other acts of violence including civil unrest or terrorist attacks,
or events that are beyond the Company's control, could have an adverse effect on the operations of
services provided in India. The terrorist attacks on New York and Washington, D.C. on September 11,
2001, and their aftermath had an adverse effect on worldwide financial markets. Incidents such as the
Jakarta terrorist attacks on July 17, 2009, Mumbai terrorist attacks in November 2008 and other acts of
violence may adversely affect global equity markets as well as the Indian economy and stock markets
where the Companies Securities and equity shares trade. Such acts will negatively affect business
sentiment as well as trade between countries, which could adversely affect the Companies business and
profitability.
Also, India may enter into armed conflict or war with other countries. The consequences of any armed
conflicts are unpredictable, and the Company may not be able to foresee events that could have an
adverse effect on the Company's business. South Asia has, from time to time, experienced instances of
civil unrest and hostilities among neighbouring countries.
Military activity or terrorist attacks could adversely affect the Indian economy by disrupting
communications and making travel more difficult. Such events could also create a perception that
investments in Indian companies involve a higher degree of risk. This, in turn, could have an adverse
effect on the market for securities of Indian companies, including the equity shares, warrants and other
securities, and on the market for the Company's products.
Natural calamities could have a negative effect on the Indian economy and cause the Company's
business to suffer.
India has experienced natural calamities such as earthquakes, a tsunami, floods and drought in the past
few years.
The extent and severity of these natural disasters determines their effect on the Indian economy.
Further prolonged spells of below normal rainfall or other natural calamities could have a negative
effect on the Indian economy, adversely affecting the Company's business and the price of its Equity
Shares and warrants.
The Indian economy has had sustained periods of high inflation.
The majority of the Company's direct costs are incurred in India. India has experienced very high levels
of inflation during the period between 2008 and 2009. In the event of a high rate of inflation, costs,
such as salaries, travel costs and related allowances, which are typically linked to general price level,
may increase. However, the Company may not be able to increase the tariffs that the Company charges
for its products and services sufficiently to preserve operating margins.
Accordingly, high rates of inflation in India could increase its employee costs and decrease its
operating margins, which could have an adverse effect on the Company's results of operations.
An outbreak of an infectious disease or any other serious public health concerns in Asia or
elsewhere could have an adverse effect on the Company's business and results of operations.
The outbreak of an infectious disease in Asia or elsewhere or any other serious public health concerns
could have a negative impact on the economies, financial markets and business activities, which could
have an adverse effect on the Company's business. The new H1N1 virus has caused hospitalizations
and deaths in countries all over the world. Despite the global effort in reducing the impact of the H1N1
influenza pandemic, its future evolution remains an uncertainty. The outbreak in 2003 of Severe Acute
Respiratory Syndrome in Asia and the outbreak of avian influenza and H1N1 influenza have adversely
affected a number of countries and companies. The Company can give no assurance that a future
outbreak of an infectious disease among humans or animals or any other serious public health concerns
will not have an adverse effect on its business.
| 45 |
The Investors ability to acquire and sell Securities is restricted by the distribution, solicitation and
transfer restrictions set forth in the Preliminary Placement Document.
No actions have been taken to permit a public offering of the Securities in the United States. As such,
the Securities have not and will not be registered under the U.S. Securities Act, any U.S. state securities
laws. Furthermore, the Securities are subject to restrictions on transferability and resale. Investors are
required to inform themselves about and observe these restrictions. For further details, please refer to
chapters titled "Selling Restrictions" and "Transfer Restrictions" in the Preliminary Placement
Document. The Company, its representatives and its agents will not be obligated to recognize any
acquisition, transfer or resale of the Securities made other than in compliance with applicable legal
restrictions.
An investor will not be able to sell any of the Securities subscribed in the Issue other than on a
recognised Indian stock exchange for a period of 12 months from the date of the Issue of the
Securities.
Pursuant to the SEBI (ICDR) Regulations, for a period of 12 months from the date of the issue of
Securities in the Issue, QIBs subscribing to Securities in the Issue may only sell their Securities on any
recognised stock exchange in India where the Securities of the Company are listed, and may not enter
into any off-market trading in respect of these Securities. The Company cannot be certain that these
restrictions will not have an impact on the price of the Securities.
| 46 |
MARKET PRICE INFORMATION
The Equity Shares of the Company were listed and started trading on BSE on September 27, 1993 and on the
NSE from June 16, 2009.
The tables set forth below are for the periods that indicate the high and low prices of the Equity Shares and also
the volume of trading activity.
(1) The high, low and average market prices of our Equity Shares during the preceding three years.
BSE
Open High Low Close No. of No. of Total Turnover * Spread(Rs.)
Year
Price Price Price Price Shares Trades (Rs.) H-L C-O
2008 970.00 999.85 106.25 135.40 24,50,771 40,789 1,11,58,41,602 893.60 -834.60
2009 135.80 432.30 95.00 334.65 26,06,050 55,587 68,74,78,478 337.30 198.85
2010 339.90 777.00 328.25 532.20 1,78,25,072 4,72,413 10,97,68,07,121 448.75 192.30
* Spread
H-L:High-Low C-O : Close-Open
*Average of daily closing prices
Source: www.bseindia.com
(Rupees in lakhs)
NSE**
Year Ending Date High Volume Date Low Volume Average
(Rs.) on date on date (Rs.)*
of High of Low
(No. of (No. of
shares) shares)
2010 [Mar 31] March 22, 485.10 27818 June 19, 231.10 1619 364.77
2010 2009
** Company's shares on NSE were listed on June 16, 2009
Source: www.nseindia.com
(2) Monthly high and low prices of our Equity Shares for the six months preceding the date of filing of the
(Rupees in lakhs)
BSE
Volume on Average
Month Volume on
Date High date of Date Low (Rs.)
date of Low
High
September, 2010 22.09.2010 665.00 161045 02.09.2010 580.00 19709 622.50
October, 2010 12.10.2010 728.30 104244 01.10.2010 597.10 33879 662.70
November, 2010 16.11.2010 742.10 258402 26.11.2010 525.10 150885 633.60
December, 2010 02.12.2010 637.70 15248 09.12.2010 475.55 85646 556.63
January, 2011 04.01.2011 581.60 19824 19.01.2011 496.10 29123 538.85
February, 2011 16.02.2011 524.90 12868 11.02.2011 490.00 24912 507.45
Avg. 586.95
| 47 |
(Rupees in lakhs)
Month NSE Average
(Rs.)
Volume on
Volume on
Date High date of Date Low
date of Low
High
September, 2010 22.09.2010 665.00 165889 02.09.2010 582.00 11809 623.50
October, 2010 12.10.2010 728.30 129940 01.10.2010 591.00 33105 659.65
November, 2010 16.11.2010 742.80 287391 26.11.2010 521.00 115529 631.90
December, 2010 02.12.2010 636.60 12862 09.12.2010 475.00 58117 555.80
January, 2011 04.01.2011 582.20 19770 19.01.2011 497.00 14561 539.60
February, 2011 16.02.2011 525.95 10361 21.02.2011 482.40 28546 504.18
Avg. 585.77
Notes
In the above data provided, High, Low and Average prices are of the daily closing prices.
In case of two days with same closing, the date with higher volume has been considered.
(3) Market Price on the first working day following the Board Meeting approving the Qualified Institution
Placement, in this case date being May 7, 2010 and after the approval of the Shareholders date June 3,
2010.
(Rupees in Lakhs)
Date BSE
Open High Low Close Traded Volume Turnover
May 10, 2010 700.30 777.00 700.30 723.85 801163 5977.16
June 4, 2010 585.00 587.80 564.10 571.50 32114 184.09
Source: www.bseindia.com
(Rupees in Lakh)
Date NSE
Open High Low Close Traded Turnover
Volume
May 5, 2010 704.00 777.00 702.00 726.80 1017440 7598.81
June 4, 2010 585.00 585.00 563.50 571.00 16818 96.33
(4) Volume of business transacted during the last six months on the Stock Exchanges.
Month BSE NSE
Total Volume of Securities Total Volume of Securities
Traded (No. of Shares) Traded (No. of Shares)
September, 2010 1240566 1056317
October, 2010 2109422 1954859
November, 2010 1383820 1128880
December, 2010 882829 551597
January, 2011 282592 181963
February, 2011 316123 385042
Total 6215352 5258658
Source: www.bseindia.com, www.nseindia.com
| 48 |
USE OF PROCEEDS
The total proceeds of the Issue will be Rs.[78,75,00,000], the net proceeds of the Issue, after deducting the
management fees, placement fees, selling commission, offer fees, discount and commission if any, but before
deduction of other expenses associated with the Issue, are estimated to be approximately Rs.[●] million. The
proceeds of the Issue will be used in compliance with applicable laws.
Subject to compliance with applicable laws and regulations, the Company intends to use the Net Proceeds
received from the Issue towards part financing the expansion, starting new projects either in the Company or its
associate companies or through joint ventures or subsidiaries and consolidation and optimization of the present
facilities of the Company. The issue proceeds may also be utilized as Company's margin for working capital and
to reduce and/or refinance high cost borrowings of the Company
The main objects clause and objects incidental or ancillary to the main objects clause of the Memorandum of
Association enables the Company to undertake its existing activities.
In accordance with the policies instituted by the Company's Board, its management will have the flexibility in
deploying the Issue proceeds for the purposes mentioned above. Further, the Issue proceeds may also be utilised
for general corporate purposes and meeting Issue expenses. Pending utilisation for the purposes described
above, The Company intends to temporarily invest the Issue proceeds in creditworthy instruments, including
money market, liquid mutual funds and deposits with banks. Such investments would be in accordance with the
investment policies as approved by the Board from time to time.
| 49 |
CAPITALIZATION
The following table sets forth the Company's capitalization and debt on a consolidated basis as of December 31,
2010 and as adjusted to give effect to the issuance of the Equity Shares under this Issue. This table should be
read in conjunction with the chapters "Selected Financial Information" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in this Preliminary Placement Document and the
Limited Review of the Consolidated Financial Statements for the period ending on December 31, 2010 and the
other financial information included in this Preliminary Placement Document.
The information set out below has been prepared in accordance with Indian GAAP.
Unaudited Consolidated Financial Statements for the period ending December 31, 2010
(Rupees in Million)
As at December As adjusted for As adjusted for
31, 2010 the Issue Warrants being
exercised
(assuming full
exercise*)
SHAREHOLDERS' FUNDS
Equity Share Capital 167.54 167.54 186.93
Equity Share Warrants-Existing * 61.98 61.98 -
Fresh Issue for QIP ( New Warrants)** - 37.50 -
Reserves and Surplus 5738.59 5738.59 5738.59
Share Premium on Existing Warrants - 241.06
Additional Share Premium on fresh issue - 737.50
for QIP
Total Shareholders' Funds (A) 5968.11 6005.61 6904.08
LOAN FUNDS
Secured Loans 10558.93 11308.93 11308.93
Unsecured Loans 2.87 2.87 2.87
Total Debt (B) 10561.80 11311.80 11311.80
Total Capitalisation (A) + (B) 16529.91 17317.41 18215.88
Total Debt / Equity Ratio 1.77 1.88 1.64
Note:
*As against 16,00,000 warrants issued in 2009, only 6,88,732 warrants are outstanding at present for
conversion. An amount of Rs.90 per warrant is received as application money towards these warrants.
**Assumed that against the new 12,50,000 Warrants, an amount of Rs.30 per warrant shall be received
towards application money.
*Assuming that all Warrants held by eligible investors have been exercised during the Warrant Exercise Period
and no other Equity Shares are issued by the Company during the Warrant Exercise Period.
Total Indebtedness
As of June 30, 2010, the Company had borrowings under credit facilities in the aggregate amount of Rs.9176.29
million.
As on date of the PPD, the Company is not in default and/or has not made any default of payments under any of
its financing arrangements.
| 50 |
DIVIDENDS AND DIVIDEND POLICY
The Company generally declares and pay dividends in the fiscal year following the year as to which they relate.
Under the Companies Act, 1956 an Indian company pays dividends upon a recommendation by its board of
directors and approval by a majority of the shareholders at the annual general meeting, who have the right to
decrease but not to increase the amount of the dividend recommended by the Board of Directors. Under the
Companies Act, dividends may be paid out of profits of a company in the year in which the dividend is declared
or out of the undistributed profits or reserves of previous fiscal years or out of both. The declaration and
payment of dividends will be recommended by the Board of Directors and approved by the Company's
shareholders at their discretion and will depend on a number of factors, including but not limited, to the profits
of the Company, capital requirements and overall financial condition. The Board may also from time to time pay
interim dividends. All dividend payments are made in cash to the Shareholders of the Company.
Warrant holders shall not be entitled to any dividend or any other corporate benefits, which may be
declared or announced by the Company from time to time, until such time that the Warrants are
exercised into the underlying Equity Shares of the Issuer.
The Company does not have any formal dividend policy for its Equity Shares. The declaration and payment of
dividend in respect of Equity Shares would be governed by the applicable provisions of the Companies Act and
the Articles of Association.
The table below sets forth the details of the dividends declared by the Company on its Equity Shares during the
last three fiscal years:
June 30, 2010 March 31, 2009 March 31, 2008

Particulars
Final Interim Final Final
face value of Equity Shares (Rs.per
10 10 10 10
Share)
Dividend (Rs.) 16,753,466 11,014,998 165,224,970 110,149,980
Dividend tax (Rs.) 2782541 1872000 2,808,000 1,871,999
Dividend per Equity Share (Rs.) 1 1 1.5 1
Dividend rate (%) 10% 10% 15% 10%
The amount paid as dividends in the past are not necessarily indicative of the Company's dividend policy or
dividend amounts, if any, in the future.
For information relating to taxes payable on dividends, see chapter "Taxation".
Future Dividends
There is no assurance that any future dividends will be declared or paid or that the amount thereof will not be
decreased. Holders of GDRs will be entitled to receive dividends paid on Shares represented by such GDRs.
Cash dividends on Shares represented by GDRs will be paid to the Depositary in Rupees, and, except as
otherwise described under "Terms and Conditions of the Global Depositary Receipts" and pursuant to the
limitations set forth in the Deposit Agreement will be converted by the Depositary into US dollars and
distributed, net of the Depositary fees, taxes, if any, and expenses, to the Holders of such GDRs.
| 51 |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS
The Investors should read the following discussion of the Company's financial condition and results of
operations together with the Companies audited consolidated financial statements for the fifteen month period
ended June 30, 2010 and the audited unconsolidated financial statements for the year ended March 31, 2009
and March 31, 2008, including the notes thereto and reports thereon, provided in this Preliminary Placement
Document, which have been extracted from the respective audited financial statements as stated above and the
unaudited unconsolidated financial statements for twelve month period ended March 31, 2010, each included in
this Placement Document. Investors should also read the sections titled "Risk Factors" and "Forward Looking
Statements" included in this Preliminary Placement Document which discuss a number of factors and
contingencies that could affect the Company's financial condition and results of operations. The financial
statements included in this Preliminary Placement Document are prepared in accordance with Indian GAAP,
which differ in certain material respects from IFRS.
Overview
Kemrock, incorporated on November 18, 1991 as a public limited company, is promoted by Mr. Kalpesh Patel,
a qualified Mechanical and Electrical Engineer and also a qualified Plastic Technologist. The Company is a
focused, organized and integrated reinforced polymer composites player in India and has a distinct first mover
advantage for its products. The Company captures the entire value chain- via backward integration (resins) and
forward integration (composites, products and solutions) and thus provides an integrated solution to its
customers.
global composites industry. It has wide range of products in the field of composites and resins. It has developed
and/or acquired technical competence to manufacture complex and new generation products. It has the unique
advantage of having almost all the processes with technical competence to manufacture composites blended
with backward integration to manufacture various types of resins, an important ingredient to manufacture
quality composites.
The Company is presently engaged in the manufacture of:

A. Fiberglass Reinforced Polymer Composites
B. Resins (As its Backward Integration Process)
C. Technical Fabrics (As its backward integration process)
The Company is strategically located near Vadodara, Gujarat-India, having proximity to airports, seaports and is
well connected by rail and road. As of March 31, 2010, we had two (2) manufacturing units situated at Village
Asoj, Vadodara-Halol Express Way, Taluka Waghodia, District Vadodara of which one is a 100% EOU. The
Company is recognized as Trading House and exports about seventy percent (70%) of its products. The plant of
the Company is spread over an area of about 200 acres, with modern facilities, including in-house
manufacturing of phenolic, vinyl ester, polyester and epoxy resins, as well as state-of-the-art composite
processes such as pultrusion, hand lay-up, sheet moulding, compression moulding, vacuum infusion and resin
transfer moulding.
Kemrock has multi fold processes-pultrusion, moulded, filament winding, centrifugal casting, pull winding,
Resin transfer moulding and hence can be a truly low cost solution provider for its partners/ customers. Major
applications of the products of the Company are in construction, pipes, cooling towers, railway interiors, wind
energy, electrical poles etc. The following table illustrates our item-wise production capacity as installed in MT:
Products Capacity
Centrifugal Casting 2700
Pultrusion 34000
Moulding SMC/RTM/GRATING 16500
Resins 82500
Technical Fabrics 8000
| 52 |
Products Capacity
SMC 8000
Filament Winding 14000
Carbon Fiber 300
The Equity Shares are now listed on the BSE and the NSE. The Company has recently acquired Top Glass Spa.
We had total income of Rs.3,739.62 million and Rs.2,233.86 million in fiscal 2009 and fiscal 2008, respectively.
Kemrock has mastered multi fold technology processes due to the ability of its technocrat promoter Mr. Kalpesh
Patel, experienced team developed over the years and strategic alliances. The Company has collaborations with
world class majors like (1) Fibergrate Composite Structure, Inc. (2) Georgia- Pacific Resins Inc. USA (3) Top
Glass s.p.a. Italy (4) Stoncor Group, USA (5) RPM International Inc, USA (6) Youngman Group, UK and (7)
National Aerospace Laboratories, India.
On May 9, 2010, Kemrock commissioned India's first Carbon Fibre plant. This project is an integrated project
inclusive of Polymerization, Wet spinning and Carbonization processes mainly to achieve targeted Aerospace
grade carbon fiber quality and also carbon fiber for commercial applications such as Wind Energy,
Automobiles, Infrastructure, Industrial, Marine and Sports sectors.
Certain Factors Affecting Our Results of Operations
Our results of operations are affected particularly by the following factors:
Volatility in price of key raw materials as well as finished products
The primary raw materials involved in the production of FRP products and resins includes phenol, resorcinol,
formaldehyde, Bisphenol, epichlorohydrin, phthalic anhydride (iso & ortho), styrene etc The prices of these raw
materials are linked with the prices of the crude oil which is subject to international supply and demand,
import/export tariffs and duties, domestic duties and various other factors beyond our Company's control. In
recent years there have been significant fluctuations in the prices of crude and thus lead to fluctuations in the
prices of these raw materials. We have qualified team of professionals for procurement of materials and we have
been so far substantially successful on passing of all risks associated to crude price to the customers, However,
our cash flows may be adversely affected because of a time lag between the date of the procurement of such raw
materials and date on which we can reset the component prices for our customers due to increase in its prices. In
addition, we do not have an express agreement with some of our customers to pass on the increase in raw
material prices and we have been able to do so, on the basis of industry practices. We cannot assure you that we
will be able to continue such policy in the future.
Further, the markets and prices for our Company's finished products may be influenced by the aggregate
demand for such products (which may fluctuate with changes in economic conditions, the price and availability
of equivalent products from competitors of our Company and the price and availability of substitute products),
among other factors.
Capacity expansion
Our revenue is likely to increase with our capacity expansions over the next several years, and we intend to
continue to expand our capacity to meet increased demand and our growth objectives. After the completion of
our expansion plans, we expect to benefit from increased economies of scale and improved efficiency, which we
believe will have a positive impact on our sales and margins. However, with these expansions, we expect that
our interest and depreciation expenses will increase, also. There are a number of risks associated with our
expansion plans.
See "Risk Factors — Risks Relating to our Business — Our expansion projects may require significant capital
expenditure and may not be completed in the timeframe or at cost levels originally anticipated, and may not
achieve the intended economic results".
| 53 |
Our ability to achieve operational efficiency and low cost of production
Our cost of production is dependent on the efficiency of the operations of our various units, independently as
well as jointly, which can improve specific consumption of raw materials, energy and manpower, each of which
is a significant factor influencing the cost of production, and thereby affecting our operational and financial
performance. Our production volume would also depend on operational efficiency, plant break down etc.
Our ability to create awareness amongst government departments and other customers about FRP products
as substitute to the steel
Our ability to expand our business and revenues will depend, in part, on our ability to create awareness amongst
government departments and other customers about FRP products as a substitute to the steel products. We
currently create this awareness by having meetings with heads and senior members of various government
heads, advertising campaigns among others. So far we believe that we have been able to successfully implement
our awareness strategy and thereby have been able to grow our business. We intend to continue to follow this
strategy for our future campaigns. Any difficulties or failure of execution of our awareness strategy could have a
negative impact on our ability to expand our client base, increase our revenue and continue our growth.
Fluctuations in exchange rate
Since a part of our sales is in foreign currency, the exchange rate between the US Dollar and Indian Rupee and
also the cross currency between US$ Vs Euro and Sterling pound, will affect our operating results to the extent
that these costs are not passed on to our customer. We also import glass rovings, chemicals like styrene and
therefore raw material prices gets affected based on the exchange rate between INR and US$. Our Company
also availed certain foreign currency loans with exchange rate between INR, Euro and US $ which would have
an impact on interest payment and cash outflow. Our Company mitigates the above risk by adopting a proper
hedging strategy.
General economic and business conditions
As a company operating in India, we are affected by the general economic condition in India and in particular
the factors affecting the steel industry. The Indian economy has grown 9.2% in fiscal 2007, 9.0% in fiscal 2008
and 6.7% in fiscal 2009. Growth in industrial and manufacturing activities and the services sector will further
lead to growth in demand for infrastructure facilities and consequently steel products, which will translate into
increased demand for our products. Global economic conditions, such as slow-downs in the economic growth of
other countries or increases in the price of oil, have an impact on the growth of the Indian economy, and
government policy may change in response to such conditions. The overall economic growth will therefore
affect our results of operations. The global credit markets and financial services industry have been experiencing
a period of upheaval characterised by the bankruptcy, failure, collapse or sale of various financial institutions,
severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic
growth, increases in unemployment rates, uncertainty about economic stability and an unprecedented
intervention by governments and monetary authorities. Although, these global matters were not particularly
linked to the Indian economy or Indian markets, the Indian economy and markets have been significantly
affected by the global situation. While the ultimate outcome of these events cannot be predicted, it may have an
adverse effect on our ability to borrow or raise additional funds in the capital markets on favourable terms.
Critical Accounting Policies
Basis of Preparation of Financial Statements
The company follows the accrual method of accounting. The financial statements have been prepared in
accordance with the historical cost convention as modified where required by Accounting Standards and as per
accounting principles generally accepted in India.
Expenditure on R&D, Trademark, development of markets, which are determined to have a useful life spanning
more than one year are amortized over its useful life.
| 54 |
Fixed Assets
Fixed assets are capitalized at cost i.e. direct cost and other expenses including interest and other finance cost
incurred in connection with acquisition of assets apportioned thereto and is net of MODVAT / CENVAT taken.
Assets related to R&D are capitalized as such.
Capital Work in Progress
Capital work in Progress includes advances for pre-production expenses and expenditure on project under
implementation including interest and other expenses to be capitalized.
Depreciation
Depreciation on Fixed assets has been provided on Straight Line Method at the rates prescribed in Schedule XIV
to the Companies Act, 1956 on pro rata basis with reference to the actual date of Purchase/Installation, on basis
of efflux of time.
Impairment
The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment
based on internal / external factors. An impairment loss is recognised wherever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value
in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the
weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of
the asset over its remaining useful life. During the financial period no such indication of impairment is found.
Revenue recognition
Revenue is recognised only when it can be reliably measured and it is reasonable to expect ultimate collection.
Sales include Excise duty, Service tax and Sales tax.
Excise Duty
The Excise Duty payable on finished goods is accounted for on the clearance of the goods from factory.
Employee Benefits
Gratuity benefits are accounted for on the basis of amount determined by actuarial valuation made by Life
Insurance Corporation of India (LIC) and are funded accordingly by the approved Trust. Any shortfall between
liabilities determined on actuarial basis and funds available is charged to Profit and Loss Account. Contribution
made to LIC is charged to Profit and Loss Account. In respect of certain employees who are not covered under
approved Gratuity Fund, the liability is determined on the basis of actuarial valuation and is charged to Profit
and Loss Account.
Retirement benefits in the form of provident fund and pension scheme are accounted on accrual basis and
charged to the Profit and Loss Account for the year.
The monetary value of leave encashment benefit is provided on the basis of actuarial valuation.
Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current
investments. All other investments are classified as long term investments. Current investments are carried at
lower of cost and fair value. Long term investments are carried at cost. However, provision for diminution in
value is made to recognize a decline other than temporary, if any in the value of the investments.
| 55 |
Foreign Currency Transactions
Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year
are translated at closing rates.
The difference in translation of monetary assets and liabilities and realised gains and losses on foreign
transactions are recognized in the Profit and Loss Account.
Borrowing Cost
Borrowing costs attributable to the acquisition, construction of assets are capitalized as part of such assets. All
other borrowing costs are recognized as expense in the period for which they are incurred.
Valuation of Inventories
Inventories relating to Raw Materials, Stores and Spares, Stock in Process and Finished Goods are valued at
lower of Cost or Net Realizable Value and after providing obsolescence.
Income Tax
Income Tax has been computed using the tax effect accounting method, where taxes are accrued in the same
period as the related revenue expenses. Deferred tax assets and liabilities are recognized for the expected future
tax consequences attributable to timing differences between the taxable income and the accounting income for a
period. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which the timing differences are expected to be recovered or settled. The effect of
changes in the tax rates on deferred tax assets and liabilities is recognized in the statement of income in the
period of change. Deferred tax assets are recognized based on management's judgment as to the sufficiency of
future taxable income against which the deferred tax asset can be realized.
Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present
obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent
liabilities are not recognised but are disclosed in notes. Contingent assets are neither recognised nor disclosed in
the financial statements.
Contingent liabilities not provided for are disclosed in accounts by way of notes explaining the nature and
quantum of such liabilities.
Prior period adjustments are accounted for in relation to all identified items of income and expenditure relating
to prior period.
Deferred Revenue Expense identified in accordance with AS – 26 is amortized over the period for which the
benefit is estimated to accrue. The management reviews the amortization period on a regular basis and if
expected future benefits from such expenditure are significantly lower from previous estimates, the amortization
period is accordingly changed.
Description of Income and Expenditure Items
Income
Our total income consists of the following items:

• net sales; and
• other income.
Net sales. Net sales comprises income, less excise duty, generated by the sale of our FRP and Resins products.
| 56 |
Other income. Other income comprises interest on fixed deposits with banks, and loans and advances, brokerage
and commission received, dividend income from long term non-trade investments, insurance claims settled,
liabilities no longer required to be written back, income on account of foreign exchange fluctuations and
miscellaneous income.
Expenditure
Our total expenditure consists of the following items:

• (increases) / decreases in stocks;
• raw materials consumed;
• purchases of trading goods;
• manufacturing expense;
• provision & payments to employees;
• administrative & general expense;
• selling & distribution expense;
• financial expense; and
• depreciation.
(Increases)/(decreases) in stocks. This line item is an adjustment to our income statement which reflects
decreases (or increases, if the case may be) in our process and finished goods inventory.
Raw materials consumed. Raw materials consumed includes costs of raw materials such as Resins, Glass Fiber,
chemicals among others.
Manufacturing expense. Manufacturing expense includes the consumption of stores and spares, labour charges,
loading and unloading charges, excise duty paid, power and fuel charges, repair and maintenance charges on
plant, factory and other expenses.
Provision & payments to employees. Provision & payments to employees includes salaries, wages and bonuses
to our employees, contributions we make to provident fund and other funds and expenses incurred for staff
welfare.
Admin & general expense. Admin & general expenses includes insurance expenses, rent, rates & taxes, legal &
professional charges, travelling expenses, vehicle expenses, general administration expense among others.
Selling and distribution expense. Selling and distribution expense includes primarily freight and transportation
charges for our raw materials and our finished goods, amount payable as royalty, commission payable,
advertising expense, sales tax, sales promotion expenses and other expenses.
Financial expense. Financial charges consist primarily of interest and finance charges on our indebtedness,
including debentures, fixed loans and other indebtedness and commission payable to banks.
Depreciation and amortisation. Depreciation expenses primarily consist of depreciation on our fixed assets,
including our plants, furniture and office equipments, vehicles and quality control assets.
Results of Operations:
The table below shows our consolidated profit and loss statement for the years ended at June 30, 2010, March
31, 2009 and March 31, 2008.
(Rupees in Million)
% of
% of Total % of Total
Particulars 2009-10 Total 2008-2009 2007-2008
Income Income
Income
Income
Sales & Operations 6293.82 3,790.55 2,311.45
Less: Excise Duty 215.57 148.48 106.76
| 57 |
% of
% of Total % of Total
Particulars 2009-10 Total 2008-2009 2007-2008
Income Income
Income
Net Sales 6078.25 99.63 3,642.07 98.19 2,204.69 98.69
Other Income 22.64 0.37 97.55 1.81 29.17 1.31
Total Income 6100.89 100.00 3,739.62 100.00 2,233.86 100.00
Expenditure
(Increase)/ Decrease (110.06) (1.80) (554.40) (14.83) (600.74) (26.89)
in Stocks
Raw Material 3364.82 55.15 2,388.13 63.86 1,554.58 69.59
Consumed
Manufacturing 443.78 7.27 292.09 7.81 204.24 9.14
Expenses
Provision & 360.31 5.91 216.31 5.78 107.56 4.82
Payments to
Employees
Admin & General 169.74 2.78 74.44 1.99 57.94 2.59
Expenses
Selling & 338.98 5.56 303.45 8.11 168.26 7.53
Distribution Expenses
Financial Expenses 540.15 8.85 396.54 10.60 288.92 12.93
Depreciation 288.09 4.72 186.14 4.98 122.42 5.48
Total Expenditure 5395.81 88.44 3,302.68 88.32 1,903.18 85.20
Profit Before Tax 705.08 11.56 436.94 11.68 330.67 14.80

Provision for Current 119.82 1.96 48.68 1.30 26.00 1.16
Tax
Provision for Wealth 0.07 0.00 0.02 0.00 - -
Tax
Provision for Fringe 0.00 2.80 0.07 2.25 0.10
Benefit Tax
Provision for 55.52 0.91 61.03 1.63 23.35 1.05
Deferred Tax
Profit After Tax 529.67 8.68 324.42 8.68 279.07 12.49
Fiscal 2010 Compared to Fiscal 2009
Income
Our total income increased to Rs.6100.91 million in fiscal 2010 from Rs.3,739.62 million in fiscal 2009, an
annualized increase of 30.51%. This was primarily due to increase in our net sales. Our net sales increased to
Rs.6078.26 million in fiscal 2010 from Rs.3,642.07 million in fiscal 2009, an annualized increase of 33.51% due
to an increase in sales of our products. The major contribution for increase in turnover is on account of higher
volume due to better utilization of manufacturing capacity, expansion in existing facility, contribution from new
segments- Transports (railways) & Wind Energy (Windmill blade) division .
The other income of Rs.22.65 million in fiscal 2010 against Rs.97.55 in fiscal 2009, a decrease of 76.78% was
primarily attributable to positive foreign exchange fluctuations of Rs.71.69 million and income of dividend of
Rs.16.46 million booked in fiscal 2009, which was not the case in 2010.
Expenditure
Our total expenditure increased to Rs.5395.81 million in fiscal 2010 from Rs.3,302.68 million in fiscal 2009, an
annualized increase of 30.70%. The increase was due principally to increases in raw materials consumed,
provision and payment to employees and selling and distribution expenses and financial expenses, all of which
related, directly or indirectly, to our higher capacity utilization.
| 58 |
Raw materials consumed. Raw materials consumed increased to Rs.3364.82 million for fiscal 2010 from
Rs.2,388.13 million for fiscal 2009, an annualized increase of 12.72%, primarily due to increased volume.
Manufacturing expense. Manufacturing expense increased to Rs.443.78 million for fiscal 2010 from Rs.292.09
million for fiscal 2009, an annualized increase of 21.55%, primarily due to an increase in loading and unloading
charges, power and fuel expenses, consumption of stores and spares and repairs and maintenance of plants and
machinery on account of higher capacity utilization.
Provision & Payments to Employees. Provision & Payments to Employees increased to Rs.360.31 million for
fiscal 2010 from Rs.216.31 million for fiscal 2009, an increase of 33.26%, primarily due to an increase in
salaries, wages and bonuses to our employees, which increased to Rs.310.31 million in fiscal 2010 from
Rs.182.08 million in fiscal 2009, primarily as a result of increases in employee head counts resulting from our
expansion of manufacturing capacity and due to same reason, on account of increase in staff welfare expenses to
Rs.43.72 million for fiscal 2010 from Rs.26.54 million for fiscal 2009.
Admin & General Expenses. Admin & General Expenses increased to Rs.169.74 million for fiscal 2010 from
Rs.74.44 million for fiscal 2009, an annualized increase of 82.42%, primarily due to increase in insurance, legal
and professional fees, travelling expenses and other general administrative expenses on account of expansion.
Further, the negative Foreign Exchange Fluctuation also contributed in increase of expenses under this head.
Selling and Distribution expenses. Though the Selling and Distribution expenses increased to Rs.338.98 million
for fiscal 2010 as compared to Rs.303.45 million for fiscal 2009, however, on annualized basis, there is a
decrease of 10.63%. This is primarily due to decrease in Freight Charges, Rebates and Discounts and reduced
Return, Rejection and Claims.
Financial Expenses. Financial expenses increased to Rs.540.15 million for fiscal 2010 from Rs.396.54 million
for fiscal 2009, an annualized increase of 8.97% , primarily due to increase in interest cost on account of project
loan & increased in working capital borrowings.
Depreciation. Depreciation increased to Rs.288.09 million for fiscal 2010 from Rs.186.14 million for fiscal
2009, an annualized increase of 23.82%, primarily due to depreciation of newly acquired assets for expansion of
our manufacturing capacity.
Profitability and Taxation
The financial results can be summarized as under:-

(Rupees in Million)
Particulars FY 2010 FY 2009
EBITDA 1533.32 1,019.62
Net Sales 6078.25 3,642.07
Net Profit 529.67 324.42
EBITDA Margin 25.23% 28.00%
Net Profit Margin 8.71% 8.91%
Our profit before tax increased to Rs.705.09 million for fiscal 2010 from Rs.436.94 million, an annualized
increase of 29.10% and our profit before tax margin (profit before tax as a percentage of total income) for the
same periods decreased to 11.56% from 11.68%.
Provision for taxation increased to Rs.175.41 million for fiscal 2010 from Rs.112.52 million for fiscal 2009, an
annualized increase of 24.71%%. The provision increased due to higher profit. Our net profit for the same
period increased to Rs.529.67 million for fiscal 2010 from Rs.324.42 million for fiscal 2009, an annualized
increase of 30.61%. Our net profit margin slightly decreased to 8.71% for fiscal 2010 from 8.91% for fiscal
2009.
| 59 |
Fiscal 2009 Compared to Fiscal 2008
Income
Our total income increased to Rs.3,739.62 million in fiscal 2009 from Rs.2,233.86 million n fiscal 2008, an
increase of 67.41%. This was primarily due to an increase in our net sales and other income. Our net sales
increased to Rs.3,642.07 million in fiscal 2009 from Rs.2,204.69 million in fiscal 2008, an increase of 65.20%
due to an increase in sales of our products. The major contribution for increase in turnover is on account of
higher volume due to additional manufacturing capacity utilization and some contribution from increase in sales
price also. Increases were particularly relevant to increased sales of filament windings, Pultrusion, Moulding
and grating products. The increase in other income to Rs.97.55 million in fiscal 2009 from Rs.29.17 in fiscal
2008, an increase of 234.4% was primarily attributable to incremental earnings of Rs.52.75 million from foreign
exchange fluctuations and income of dividend of Rs.16.46 million from long term trade investments.
Expenditure
Our total expenditure increased to Rs.3,302.68 million in fiscal 2009 from Rs.1,903.18 million in fiscal 2008, an
increase of 73.53%. The increase was due principally to increases in raw materials consumed, provision and
payment to employees and selling and distribution expenses and financial expenses, all of which related, directly
or indirectly, to our higher capacity utilization.
Raw materials consumed. Raw materials consumed increased to Rs.2,388.13 million for fiscal 2009 from
Rs.1,554.58 million for fiscal 2008, an increase of 53.62%, primarily due to increased production and raw
material cost.
Manufacturing expense. Manufacturing expense increased to Rs.292.09 million for fiscal 2009 from Rs.204.24
million for fiscal 2008, an increase of 43.01%, primarily due to an increase in loading and unloading charges,
power and fuel expenses, consumption of stores and spares and repairs and maintenance of plants and
machinery on account of higher capacity utilization.
Provision & Payments to Employees. Provision & Payments to Employees increased to Rs.216.31 million for
fiscal 2009 from Rs.107.56 million for fiscal 2008, an increase of 101.10%, primarily due to an increase in
salaries, wages and bonuses to our employees, which increased to Rs.182.08 million in fiscal 2009 from
Rs.89.61 million in fiscal 2008, primarily as a result of increases in employee head counts resulting from our
expansion of manufacturing capacity and due to increase in staff welfare expenses to Rs.26.54 million for fiscal
2009 from Rs.15.72 million for fiscal 2008.
Admin & General Expenses. Admin & General Expenses increased to Rs.74.44 million for fiscal 2009 from
Rs.57.94 million for fiscal 2008, an increase of 28.46%, primarily due to an increase in cost relating to
insurance, write-off of certain current investments and payment of Donations.
Selling and Distribution expenses. Selling and Distribution expenses increased to Rs.303.45 million for fiscal
2009 from Rs.168.26 million for fiscal 2008, an increase of 80.34%, primarily due to an increase in Freight
Charges, Royalty Expenditure, Sales Commission Expenses, Rebates and Discounts, Sales Tax, Sales Promotion
Expenses, Return, Rejection and Claims on account of higher volume of material to be transported.
Financial Expenses. Financial expenses increased to Rs.396.54 million for fiscal 2009 from Rs.288.92 million
for fiscal 2008, an increase of 37.25%, primarily due to an increase in borrowings to fund our expansion of
capacity.
Depreciation. Depreciation increased to Rs.186.14 million for fiscal 2009 from Rs.122.42 million for fiscal
2008, an increase of 52.05%, primarily due to depreciation of newly acquired assets for expansion of our
manufacturing capacity.
| 60 |
Profitability and Taxation
The financial results can be summarised as under:

(Rupees in Million)
Particulars FY 2009 FY 2008
EBITDA 1,019.62 742.01
Net Sales 3,642.07 2,204.69
Net Profit 324.42 279.07
EBITDA Margin 28.00% 33.66%
Net Profit Margin 8.91% 12.66%
Our profit before tax increased to Rs.436.94 million for fiscal 2009 from Rs.330.67 million, an increase of
32.14% and our profit before tax margin (profit before tax as a percentage of total income) for the same periods
decreased to 11.7% from 14.8% primarily on account of increase in the cost of raw materials and generally
economic slow down which affected the margins.
Provision for taxation increased to Rs.112.52 million for fiscal 2009 from Rs.51.60 million for fiscal 2008, an
increase of 118.06%. The provision increased more rapidly than our profit before tax due principally to higher
tax margins on account of increase in domestic sales and deferred tax expenses. Our net consolidated profit for
the same period increased to Rs.324.42 million for fiscal 2009 from Rs.279.07 million for fiscal 2008, an
increase of 16.2%. Our net profit margin decreased to 8.91% for fiscal 2009 from 12.66% for fiscal 2008.
Contingent Liabilities
Given below are our contingent liabilities on a consolidated basis as of June 30, 2010:
(Rupees in Million)
Particulars Amount
Letters of Credit issued by Bank on behalf of the Company 118.92
Guarantees issued by Bank on behalf of the Company 99.63
Estimated amounts of Contracts remaining unpaid on Capital Account 79.06
Disputed Income Tax Demands (not acknowledged) against which proceedings are pending 6.22
before Income Tax Authorities
Litigations against the Company 2.18
For further details, see our Financial Statements.
Cash Flows
The following table summarizes our cash flows for fiscal 2010, 2009 and 2008:
(Rupees in Million)
Fiscal Years
2010 2009 2008
Net cash generated from / (used in) operating activities 906.41 (915.37) (290.64)
Net cash used in investing activities (5032.69) (2,178.66) (949.78)
Net cash from financing activities 5008.89 3,517.35 1,610.55
Net change in cash and cash equivalents 882.61 423.32 370.13
Operating Activities
Net cash used in operating activities was Rs.906.41 million in fiscal 2010 and our operating profit before
working capital changes for that period was Rs.1532.78 million. The difference was attributable to decrease in
trade and other receivables of Rs.527.56 million, decrease in inventories of Rs.397.65 million, increase in trade
and other payables of Rs.1093.85 million and decreases in loans and advances of Rs.704.95 million.
working capital changes for that period was Rs.999.15 million. The difference was attributable to an increase in
trade and other receivables of Rs.1,677.14 million, increases in inventories of Rs.577.51 million, increase in
trade and other payables of Rs.316.11 million and decreases in loans and advances of Rs.55.49 million.
| 61 |
working capital changes for that period was Rs.713.01 million. The difference was attributable to an increase in
trade and other receivables of Rs.219.98 million, increases in inventories of Rs.756.81 million, increase in trade
and other payables of Rs.190.36 million, increases in loans and advances of Rs.93.49 million and increases in
other current assets of Rs.95.49 million.
Investing Activities
Net cash used in investing activities was Rs.5032.69 million for fiscal 2010 and consisted of purchases of fixed
assets of Rs.4144.16 million relating principally to Rs.453.45 million in Land & Building, Rs.1874.79 millions
in Plant & Machinery Rs.75.82 other fixed assets of the Company, Rs.1740.09 million in capital work in
progress , partially offset by proceeds from sales of fixed assets comprising principally obsolete machinery and
residual machinery, of Rs.1.40 million and investment in subsidiary to the tune of Rs.889.93 million.
Net cash used in investing activities was Rs.2,178.66 million for fiscal 2009 and consisted of purchases of fixed
assets of Rs.2,195.77 million relating principally to Rs.417.58 million in Land & Building, Rs.314.11 millions
in Plant & Machinery Rs.28.50 other fixed assets of the Company, Rs.1435.58 million in capital work in
progress , partially offset by proceeds from sales of fixed assets comprising principally obsolete machinery and
residual machinery, of Rs.0.65 million and dividend income of Rs.16.47 million from long term trade
investments.
Net cash used in investing activities was Rs.949.78 million for fiscal 2008 and consisted of purchases of fixed
assets of Rs.947.39 million relating principally to Rs.238.82 million in Land & Building, Rs.642.64 million in
Plant & Machinery and Rs.26.19 millions in other fixed assets of the company and Rs.39.73 million in capital
work in progress and purchase of non-trade investments of Rs.4.37 million, partially offset by proceeds from
sales of fixed assets comprising principally obsolete machinery and residual machinery.
Financing Activities
Net cash generated from financing activities for fiscal 2010 was Rs.5008.89 million, consisting of net proceeds
from long and short term borrowings of Rs.1877.46 million, increase in bank borrowings of Rs.1115.02 and
amounts received towards equity shares and warrants of Rs.2586.90 million through issue of GRDs and
investment by Foreign Body Corporates in Equity Shares on conversion of Warrants which was offset in part by
interest charges paid of Rs.540.16 million and dividend paid of Rs.30.33 million.
Net cash generated from financing activities for fiscal 2009 was Rs.3,517.35 million, consisting of proceeds
from long and short term borrowings of Rs.2,862.69 million, increase in bank borrowings of Rs.968.02 and
amounts received towards equity shares and warrants of Rs.393.22 million through investment by Foreign Body
Corporates in Equity Shares and Warrants and the NRI Shareholders on conversion of Warrants of the Company
which was offset in part by repayment of long term and short term borrowings of Rs.296.33 million, repayment
of unsecured loans of Rs.1.81 million, interest charges paid of Rs.396.54 million and dividend paid of Rs.12.89
million.
Net cash generated from financing activities for fiscal 2008 was Rs.1,610.55 million, consisting of proceeds
from long and short term borrowings of Rs.402.95 million, increase in bank borrowings of Rs.259.21 and
amounts received towards equity shares and warrants of Rs.1,249.16 million through investment by Clarita
International Ltd, a foreign body corporates in Equity Shares and the Promoters of the Company in Equity
Shares on conversion warrants and subscription of Equity Shares which was offset in part by interest charges
paid of Rs.288.92 million and dividend paid of Rs.11.85 million.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, derivative instruments or other relationships with
unconsolidated entities that were established for the purpose of facilitating off-balance sheet arrangements.
| 62 |
Historical and Planned Capital Expenditures
For fiscal 2010, 2009 and 2008, we paid Rs.4139.98, Rs.2194.49 million and Rs.944.49 million, respectively, on
capital expenditures. Our capital expenditure for fiscal 2010, 2009 and 2008 was used principally for our
expansion at our existing facilities and setting-up of new plants.
We expect our capital expenditure needs for fiscal 2011 to be approximately Rs.1350 million and to consist
principally for investments in our expansion plans, which we expect will be met from the proceeds of this Issue,
cash generated from operating activities, fresh issue of equities on conversion of existing outstanding warrants
and through other term loans.
Quantitative and Qualitative Disclosure about Market Risk
Commodity Price Risk
Our revenue is exposed to the market risk of price fluctuations related to the sale of our FRP and Resins
products. Market forces and the crude prices generally determine prices for the FRP and Resins products that we
sell. These prices may be influenced by factors such as supply and demand, production costs (including the costs
of raw material inputs) and global and Indian economic conditions and growth. Adverse changes in any of these
factors may reduce the revenue that we earn from the sale of our products. Our costs are currently exposed to
fluctuations in prices for the purchase of [resins] and other raw material inputs.
Interest Rate Risk
Interest rate risk arises when we are exposed to changes in the fair value of our interest rate sensitive financial
instruments and borrowings which arise from changes in market interest rates.
Inflation
Although India has experienced fluctuation in inflation rates in recent years, inflation has not had a material
impact on our business or results of operation. An increase in inflation rates may, however, adversely affect
growth in the Indian economy and as a result our results of operations.
| 63 |
INDUSTRY OVERVIEW
About Composites Industry
The composite industry is unique in that it does not typically manufacture products for direct consumption;
rather its products are used by other industries to manufacturing their own products. Today, it is hard to find any
industry which does not utilize composite materials in manufacturing products. Some of the major industries
that utilize composite materials are as follows:
• Aerospace Industry
• Alternative energy such as wind, solar, and fuel cell
• Automotive Industry
• Appliance Industry
• Bio-medical Industry
• Construction Industry
• Consumer Industry
• Corrosion Industry
• Defense and Space Industry
• Electrical and Electronic Industry
• Marine Industry
• Mass Transit Industry
Since its first major commercial application in the late 1940s, composites usage has grown rapidly. Growth in
composite usage has been driven by an increased awareness of its performance and the increased demand for
lightweight components in global markets. Of all available materials composites have the best potential to
replace widely used steel and aluminum, because they offer better performance in many instances. Composites
can save 60% to 80% of the weight in a product by replacing steel components. In replacing aluminum parts
composites can save 20% to 50% of the weight. Today it appears that composites are not just alternative
materials, but have become the material of choice for many engineering applications.
Future Outlook composites industry 2008-2013
Market forecasts for the global composites industry are shown in figure below. The North American composites
market is projected to be flat in 2008, and grow at an average annual rate of 1.8% (CAGR) until 2013. Growth
in Europe is forecast at 2.9% in 2008 with growth of 2.3% annually between 2008-2013. The Asian region will
be the largest growth area for the composites industry. Growth in Asia is forecast at 5.9% in 2008 and with
growth at 5.3% annually between 2008-2013. With these growth rates, Asia will have a market share of 39.2%
in 2013, an increase of 4.6% as compared to 2007. North America will rank second with a market share of
32.8% in 2013. In terms of $ shipment, North America would remain number one in 2013. On a global basis, the
composites market is forecast to grow at the rate of 2.9% in 2008 and at 3.3% thereafter between 2008-2013.
Global composites shipments are projected to grow to 18,609 million lbs in 2013 from 15,800 million lbs in
2008.
| 64 |
Global Composite Shipment (million lbs)
19000 18609
17994
18000 17407
16847
17000 16312
15800
16000
15000
14000
2008 2009 2010 2011 2012 2013
Global Composites by region (2013)
4.40%
32.80% 39.20%
23.60%
Asia Europe North America Rest of World
Growth in Global Composite Market by Market Segments
Average Annual Growth Forecast (2008 - 2013)
12.00% 10.70%
10.00% 7.60%
8.00%
6.00% 4.60% 3.70%
4.00% 2.80% 2.40% 2.70% 2.80%
2.00%
0.00%
Wind energy
Marine
Aerospace &
Pipe and tank

Electrical and
Others
Transportation
Construction
/ automotive
electronics
Defence
| 65 |
Global Composite Shipment Market (mn $) by market segments
6000 4869 4677

5000 3758 3657
4000 3001
3000 1848
2000 1096 636
1000
0
Wind energy
Marine
Aerospace &
Pipe and tank

Electrical and
Others
Transportation
Construction
/ automotive
electronics
Defence
A majority of global market segments will grow greater than 2% in 2008, a positive sign for the industry. The
pipe & tank, aerospace and wind energy markets are estimated to show growth above 5%. During 2008- 2013,
the wind market will grow at an average annual rate of 7.6%. The following markets will provide healthy
growth during 2008-2013.
• Aerospace (10.7% growth)

• Wind energy (7.6%)
• Pipe and tank (4.4%)
In terms of value of end products, aerospace market will become the second largest market for the composites
industry in 2013. In terms of materials shipment ($ million), aerospace market would be the 4th largest market
for the composite materials in 2013 as shown above.
Applications of FRP Products
Aerospace / Defense:
This sector includes materials usage in commercial and military aircrafts. It is one of the smallest segments of
the composites industry and mostly utilizes advanced composites.
Transportation:
The transportation market segment includes materials used in automotive (exterior and interior parts), trucks and
truck trailers, mass transits (buses, trains, and subways), farm equipment motorcycles, racing cars, etc.
Transportation is the second largest market segment for the composites industry
Construction:
The construction market can be divided into two major segments: residential and commercial as follows.
• Residential: Bathtubs, bathroom components and fixtures, decks, swimming pools, pre-manufactured
homes, etc.
• Commercial / Infrastructure: Utility poles, bridges and bridge components, structural framing systems,
pilings, gratings, railings, catwalks, and similar items.
Pipe and Tank:
Tanks (underground, above ground, and wrapping), fittings, pipes for sewer, and chemical plants, stacks, ducts
and hoods. Strong sub-segments of this market are those geared toward oil and gas recovery.
| 66 |
Marine:
The marine segment includes composite materials used for making all types of boats. Typically composites are
used in making of hulls, decks, bulkheads, railings, hatch covers, tools and other items.
Consumer Products:
The consumer and recreational sector includes composite materials used in making toys and sport items such as
golf clubs, bicycles and tricycles, fishing rods, skis, tennis rackets, snowmobiles, bowling equipment, mobile
campers, etc. Also included in this category are service trays, lampshades, totes and boxes, counter tops, seating,
furniture and household appliances.
Wind Energy:
The business of generating electricity from the wind - designing and making turbines, erecting and operating
them - is growing fast and is set to expand as Europe and the rest of the world look for cleaner and more
sustainable ways to generate electricity. Unlike conventional power plants, wind plants emit no air pollutants or
greenhouse gases. Use of wind energy safeguards the world's natural resources, lowers the extent of
environmental pollution, and also reduces the cost of electricity. Wind energy is, therefore, the fastest growing
energy technology in the world. The Wind energy market includes wind turbine blades, hubs, nacelles, and other
turbine components.
Electrical and Electronic (E&E) Segment:
The electrical / electronic segment includes printed circuit boards (PCB), rods, tubes, molded parts, electrical
housings, pole line hardware, substation equipment, electronic microwave antennas, electronic connections, and
lighting.
Evolution of Composites market in India
The Indian composites industry came into existence as early as 1960. Since then, the technological base of the
industry has grown to the extent that design, research, manufacture and quality control facilities are on a par
with those of developing countries. However the raw materials, process machinery and mechanized production
process still needs to improve. In terms of volume of composites produced, India is behind many other Asian
countries. There are well over 800 fabricators and more than 60% of them use hand lay-up for their production.
It is a good opportunity for industries abroad to utilize these facilities wherever hand lay-up is the fabrication
method. In 1960's, aerospace and defense emerged as new market for the composite industry. Railway GRP
components, electrical parts and composite tanks were started in India in 1970's. In 1980's industrial products
were targeted. A number of new composites applications were developed in 1990's such as automotive parts,
cooling towers, telecom products, pipes and wind turbine components. Tanks for reverse osmosis process were
started in early 2000 by Pentair India. Various consumer and sporting goods products such as surf board, and
water ski are expected to be made in 2010.
Indian Composites Industry
Even after 40 years of operation, knowledge base in India composite industry is very poor. A large part of the
industry operates in the small-scale or unorganized sector. In the absence of standardization of the composite
products, and lack of quality consciousness among the endusers, quality products get lost among the low quality
ones. India, perhaps, holds the maximum potential for growth in composites globally given its less than 5%
share of the Asian composites market, compared to its neighbour, China, with over 50% of the Asian market.
Composites industry in India is growing rapidly and is projected to grow at a rate of around 16.6% in the next 5
years. In the last 4 years, the growth rate in Indian composites market has been approximately 19% annually.
The present market-study reveals that there exist many small factories employing mostly manual (hand lay-up)
method as well as some large companies with the most advanced, and automated composite processing
equipment.
| 67 |
Further India has a mixture of medium, small and tiny composites manufacturers spread all over India. Total
composites production in India stood at around 308.4 million lbs. or 140,000 ton, in the beginning of 2008. The
industry caters mostly to the domestic market, only 10 % of total production is exported. The composites
industry in India is growing robustly with 20% growth during the past 5 years complementing the healthy
growth of Indian economy at more than 8%. Still it is 40 times smaller than Indian plastic industry. India's
composite market at the end of 2007 was estimated at $ 2 billion (INR 5,000 crore) against global composites
market of $ 61.32 billion (INR 27,5940 crore).
Trends in Indian Composites Market
Phase 1 (1971-1995): During this phase (1971-1995), market grew at the rate of 6%. Demand in 1971 was only
15.9 million lbs., which reached to 64.4 million lbs. by 1995.
Phase 2 (1996-2002): During this phase, market for composites grew at a rate of 11% annually and reached to
128.6 million lbs. by 2002 from 64.4 million lbs. in 1995. In 2003, the composites shipment rose to 153.3
million lbs. and the growth rate was about 20%.
Phase 3 (2003-2007): During this phase, market grew at a rate of 19.3% annually and reached to 309.7 million
lbs. (140,750 ton) at the end of 2007 from 153.3 million lbs. in 2003.
Forecast for Composites Production in India (2008 - 2013)
Composite Shipment (millions lbs)

794.2
800 676.2
700 580
600 499
429
500 367.8
400
300
200
100
0
2008 2009 2010 2011 2012 2013
Electrical
Com posite Market Breakdow n by type of Industry and
in 2013
electronics
4% 10%
10%
Transportation /
automotive
Wind energy
21%
Aerospace & Defence
Marine
30%
Pipe and tank
Construction
2% 19%
4%
Others
| 68 |
Highlights of composites industry forecast
• The Indian composites industry is expected to grow at 16.7% (CAGR) over the next 5 years
• The growth phase will be moderate during 2008-2010 and will pick up pace thereafter
• Industry to double to become USD 2 billion (INR 10,000 crore) by 2012
• The industry turnover will cross 1000 million lbs. by 2015
• Foreign investment in composites industry in India is likely to cross USD 200 million (INR 1000 crore)
from the present level of USD 140 million (INR 700 crore) in the next 4-5 years.
• The key drivers would be a burgeoning manufacturing sector, heavy investment in infrastructure,
sectoral - boom in telecom, automotive industry, greater usage in oil and gas segments, rising steel
prices, greater awareness among end-users
The growth in the composite materials market depends significantly on the performance of following industries.
• Anti-corrosion tanks, pipes, equipments (31%)

• Transportation (25%)
• Wind energy (14%)
• Electrical & Electronics (9%)
The above four application accounts for 79% of the total composites shipment in India, while corrosion and
transportation covers more than 50% of the market. Growth of composites industry depends on the growth
prospect in individual application sectors that again is linked to overall economic development in India. Growth
direction of the country's economy has important bearing on the different sectors of the economy including the
manufacturing and the industries. Again in a globalized economy, interpenetration of global capital and
integration of emerging economy like India with world economy, especially with developed economies like US
and Europe, have a deterministic role in shaping the country's economy. India in the past five years has
registered significant growth that was also reflected in the robust growth of the composites industry. Given the
present global slowdown and financial crisis, growth rate in composites industry in India is likely to moderate at
around 16% in the next five years. This is significantly higher than the composites industry growth rate in North
America and Europe forecasted at below 3% level. Much of the India's growth in composites industry is likely
to come from the domestic market where the penetration level is still low at around 0.2 lb per capita. Due to
rapid infrastructure development and increase in middle class family, pipe, tank, wind energy and automotive
industry is forecasted to grow in double digits. The growth prospects of the different sectors are discussed
below:
Application of FRP products
A. Tanks & Pipes
Anti-corrosion sector has the largest application of composites in India because of its excellent
corrosion resistance properties and rightly forms the backbone of Indian composites industry.
Applications in this sector include chemical storage tanks, ducts, and equipments. The major product
forms - tanks and pipes find application in chemical or petroleum storage, ducts, equipments, water
transportation through pipelines, sewer lines and others. FRP/GRP tanks are mainly used for chemical
storage, pressure vessels, large-sized overhead water storage tanks, underground petroleum storage
tanks and also for petroleum transportation.
The Indian Pipe Industry has presence across all categories of pipes like cement pipes, steel pipe,
ductile iron pipe & PVC pipe. India also ranks among the top three manufacturing hubs after Japan and
Europe with considerable amount of exports to countries like USA, Europe and Middle East. The major
application includes transporting fluids like oil, water and gases across the country. This sector
presently constitutes the largest component in composites application sector because of better
corrosion-resistance, strength-to-weight ratio, low maintenance and life-cycle cost of composite
materials compared to competing materials such as steel, plastics and concrete. One of the factors
contributing to the growth of this sector is increased investment in urban and rural infrastructure for
| 69 |
water transportation and rehabilitation of sewage lines. Composites consumption in this sector will
grow at 17% (CAGR) during 2008-13.
B. Wind Mill Blades
India presently is the fourth largest wind energy producer in the world after Germany, Spain and the
United States with a total installed capacity of 7844 MW. In terms of new capacity added in 2006 it
was third in the world. Some 6000 MW was added during the past 5 years. Wind energy saw
tremendous growth in India and is the fastest growing in the composites industry. Composites off-take
in wind energy sector in 2007 was 20,000 MT registering a growth rate of 30%. The growth in this
sector can be largely attributed to India's growing energy need and initiatives by the government to
meet a part of this demand through renewable energy sources. National and local legislation was
framed to promote private investments in renewable energy. The Indian government is targeting
additional wind power capacity of 10,500MW during 2007 – 2012 and has estimated the wind energy
potential of the country at 45,000 MW. Integrated Energy Policy has projected capacity addition of
30,000 MW from wind by the year 2032. Wind turbine blades are made mostly of composite materials
because of its excellent mechanical properties, corrosion resistance, lightweight construction and easy
designing. Considering the fact that largest wind turbine blades measures more than 60 meters in length
and weighs more than 15 tons, composites in wind turbine blades has become a generic use as it allows
scaling-up the size of the blades without much increasing the cost. Resin type used can be either
polyester or epoxy while reinforcement fibers are either glass fiber or carbon fibers. Thus this sector is
projected to be one of the prime mover of the composites industry in India in the next 5 years. Demand
for composites in wind energy in India will grow at 21% in future..
C. Transportation
India is in the middle of transportation boom be it automobile market or railways or urban rapid mass
transport systems like metro railways. Composites consumption in land transportation is expected to
grow at 14% in the next 4-5 years as composites materials are expected to make greater inroads in the
industry.
After a very high growth cycle of around 18% during 2003-07, the passenger car industry in India will
grow at around 10% to 12% over the medium term that is expected to pick-up speed with easier credit
availability, soft discounts and new launches. Composite material's high strength to weight ratio, the
ease in making mold and cost effectiveness makes it widely acceptable to the automobile industry. It
also helps in making light weight bodies for better fuel efficiency. This sector is projected to contribute
21% of composite shipments in 2013. The sub-sections under transportation include automobile,
railways, and brake-lining.
Automobiles
Composites used in automobiles in India are mostly of thermoplastic variety. In passenger cars they are
used in all compartments of the car, including external parts like car dumper, wind breaker, sill, and
internal parts like bottle holder. Compounds of polypropylene have the highest use in cars occupying
almost 8% of the weight of the vehicle. Other polymer materials used in cars are polyamide,
polycarbonate blend, poliacetal, the absolute value or the shares of each plastic, however depends and
varies with models of cars, and the automakers. Thermoset composites are mostly used in the brake
disks of cars and also have under bonnet application like engine devices, heating and cooling systems,
exhaust systems. Most cars in India have much below 10 kg use of composite materials unlike in
developed market of Europe and North America and the market needs to evolve both in volumes and
applications of composite usage. However, easy and cheap availability of metal and designer's
preference for metals make composite materials a distant second choice. Composite materials in car or
automotive industry are SMC (sheet molding compound) or composite molded into plate, or
manufactured through injection molding.
| 70 |
Railway
Composites have the highest penetration in Indian Railways. This can be attributed to the fact that
pioneering work in this field started in early 80's. In line with the global trend, composites are replacing
traditional materials in the transportation segment to make them lighter and therefore more fuel-
efficient. Indian Railways have been promoting reinforced composites due to their lightweight and
corrosion resistance and also to reduce pilferage that is very high in Indian Railways. Railways would
continue to drive the demand for composites. Indian Railway's USD 4.4 billion (INR 22,000) crore
dedicated freight corridor project connecting Delhi and Mumbai and Delhi and Howrah on the east can
provide great fillip to this industry. Several new metro railway projects are also in the anvil, prominent
being:
• Bangalore Metro rail: Project cost – USD 1.28 billion (INR 6400 crore); length – 33 km;
• Mumbai Metro rail: Project cost – USD 3.92 billion (INR 19,525 crore); total length (in 3
phases) – 146.5 km and
• Kolkata East-West metro corridor – USD 1 billion (INR 4676 crore); length – 13.77 km.
D. Marine
The use of composites for boat building applications started in early 1970s for replacing wood because
of the advantages of corrosion resistance, ease of fabrication, improved performance and low cost.
Applications include leisure boats, houseboats, and speedboats. The marine market for composites is
projected to contribute 4% of the composite market shipment.
E. Construction (Pultrusion Products)
Construction is generally the largest application area of composite materials in developed markets of
North America or Europe. For India, however usage of composites is mostly confined in the non-
residential and industrial projects and in offshore structural applications like gratings, handrails,
equipment covers or enclosures, doors and ladders. The other major application area is in the cooling
towers. The construction sector in India is presently consuming 28.7 million lbs. of composites that
translates to 9% of the total application pie
Cooling Tower
Cooling towers are generally made of either timber or fiber glass reinforced plastic (FRP), the latter
being more in demand in small and mid-sized segment. The compact light weight design, corrosion
resistant and weather-proof construction ensures long lasting life. India is in the middle of major
infrastructure built-up in recent times. Building work can be seen all over India be it the manufacturing
plants or commercial complexes or shopping malls or residential buildings, multiplexes, hotels and
hospitals. In almost all these areas cooling towers is a common feature. Consequently the industry has
recorded a growth of more than 200%, the highest amongst all composite application. The cooling
tower market in India is segmented between HVAC, chemical processing, process applications, steel
power, utilities, and other heavy industries. Cooling towers are made primarily of fiberglass reinforced
plastic or timber. Portable cooling towers are also leased for temporary and emergency use.
F. Electrical & Instrumentation Industry:
The electrical industry has good application of composites due to the materials' electrical insulation
properties. The industry has been a consistent user of Dough Molded Compounds (DMC), Sheet
Molded Compounds (SMC) (with 1000 ton presses) as well as epoxy based reinforced composites.
This application consumed 15.5 million lbs. of composites in 2007. Use of SMC, BMC (Bulk Molding
Compound) and DMC are not new in the electrical industry. On a global scale, everything started in the
early 1960s, when the electrical industry first applied BMC and SMC. Great experience has been
gained in the production of cabinets, outdoor lamps, switches and other electrical applications. The
material has been in use longer than most other plastics. Life spans of over 30 years for SMC electrical
cabinets are not unusual. Since SMC/BMC was first commercialized, new improved recipes have been
| 71 |
developed and manufacturing procedures have been optimized to enable the production of high-quality
electrical applications that fully exploit the many benefits of SMC.
G. Defence /Aerospace Industry
It is one of the niche areas where the high strength and low weight of polymer composites are
absolutely critical for aircrafts, rockets, and missile programs. Indian Space Research Organization
started research and development (R&D) activities in FRP at Thiruvananthapuram in 1967. Since then
extensive use of composites in applications such as rockets, satellites, missiles, light combat aircraft,
advanced light helicopter and trainer air craft has taken place putting India at par with the advanced
countries in the development and use of composites in this area.
Military aviation
Hindustan Aeronautics Ltd (HAL), the country's main manufacturing facility, has so far manufactured
12 types of aircraft including Advanced Light Helicopter, Light Combat Aircraft and Intermediate Jet
Trainer. It has also participated in India's space programs contributing in the manufacture of structures
for Satellite Launch Vehicles. Nevertheless India's military aircraft market holds major attraction for
major aircraft manufacturing companies worldwide. India plans to buy 126 fighter jets for its air force
in a contract worth USD12 billion as the number of Indian Air Force's operational fleet of fighter
planes plummeted to 576 aircraft in 2007 from about 750 in early 2000. It called for global bids for
outright purchase of 18 fighter jets by 2012 and also holds the option of buying another 64 fighters.
Civil aviation
The commercial aviation sector in India, again, is the fastest growing market – passenger numbers are
growing faster in India than anywhere else. The booming economy, disposable money, low fares and
numerous new budget airlines are driving this growth. Modernization of existing airports and opening
of several new including smaller airports is likely to further propel the growth. Against this backdrop,
many industries are getting into composites not only to meet Indian requirements but also for the global
market. Hundreds of new aircraft are being ordered (Boeing estimates that India will need over 850
aircraft worth USD 72.6 billion over the next 20 years), airports expanded, and new infrastructure built
H. Telecom Industry (Optical Fiber, Telecom Towers)
The telecom industry in India is currently consuming 13.9 million lbs. of composites. The telecom
industry has been using glass reinforcements as a central strengthening member (CSM) replacing costly
copper. The consumption has been consistently at a level of around 3.3 million lbs. of glass
reinforcements per annum of the single end rovings and specialty resins like MODAR to ensure that the
high capacity pultrusion manufacturing process is effective and efficient. This is the market which has
been yielding constantly more than USD 0.8 per lbs. for good quality single end rovings when all
across Asia the prices have been falling due to extensive competition by Chinese manufacturers. With
the telecom network yet to be established, unlike developed countries, this application is expected to be
alive for the next ten years.
Carbon Fiber project
This sector of the composites industry is characterized by the use of expensive, high-performance resin
systems and high-strength, high-stiffness fiber reinforcement. The aerospace industry, including
military and commercial aircraft of all types, is the major customer for advanced composites. These
materials have also been adopted for use in sporting goods, where high-performance equipment such as
golf clubs, tennis rackets, fishing poles, and archery equipment, benefits from the light weight – high
strength offered by advanced materials.
There are a number of exotic resins and fibers used in advanced composites, however, epoxy resin and
reinforcement fiber of aramid, carbon or graphite dominates this segment of the market. Reinforcement
of Plastic Material with Carbon Fiber gives better quality of FRP Products than Reinforcement made
with Glass Fiber.
| 72 |
About Carbon Fiber

• 21st Century High Technology material having wide applications in Aircraft, Recreational,
Industrial and Transport Industry.
• Carbon Fiber launched as product about 40 years ago.
• Use of Carbon Fiber in Cars, Aircrafts, Space Vehicles, Wind Turbine, Wind Mill Blades,
Industrial Rollers is well accepted and irreversible.
• Very few manufacturers world wide
• Capacities of all manufacturers – significantly insufficient.
• Currently carbon fiber is produced in only 5 countries – Major producers – Japan (35%), USA
(32%), Germany (22%), France (5%), Taiwan (5.5%)
• Demand of Carbon Fiber is more than its supply.
• Exponential Growth Potential.
Demand and Supply
Because of its properties, the demand has increased. Presently carbon fiber market is going through a phase of
huge gap in demand and supply. The shortage of carbon fiber is caused by a booming aerospace industry, and
the fact that new passenger aircraft being built by Boeing and Airbus contain far higher levels of carbon fiber
than was previously the case. In the industrial segment, the wind energy market is also causing demand for
carbon fiber.
(Source: E-Composites Report)
Major Players in Carbon Fiber Market
The major suppliers of carbon fiber materials in the world wide composites industry supplying different
combinations of materials in different width, thickness and architecture are Toray, Toho-Tenax, Mitsubishi
Rayon, Cytec Hexcel and Zoltek who are market leaders. The following figure shows the market share of
industry leaders in the global carbon fiber market in terms of million lbs shipment in 2005.
(Source: E-Composites Report)
| 73 |
End Market Analysis
The global end use market demand ($ million) for carbon fiber in 2005 was as under:
(*Source: Growth Opportunities In Carbon Fibre Market 2006-2011)
End –Use % of Share

Aerospace 52.3 %
Industrial 34.1 %
Sports Goods 13.6 %
Market Trend
• The revenue generated by the total carbon fiber industry was $984.8 million in 2005. It grew on an
average @ 4.6% annually in value terms (1995-2005) and 10.6% in volume.
• The carbon fiber market volume grew from 21.3 million lbs in 1995 to 58.2 million lbs in 2005 and
from 42 million lbs in 2002. This represents a growth of about 2.7 times in 10 years.
• The highest average growth in the last 10 years was found in the industrial market (about 14.1%
annually), lowest being in sporting goods (about 6.2% annually).
• The average annual growth rate in aerospace was 9.8% during 10 years (1995 to 2005).
The future of the Carbon Fiber market
The industrial and commercial aerospace applications are expected to drive the growth of carbon fiber.
Industrial applications segment has developed the most in the past and is likely to grow the most in the years to
come. Such strong growth can be explained by the fact that there are a number of areas like wind energy,
pressure vessels and rollers and industries like transportation, marine, civil engineering, offshore and more
would need high performing material for competitiveness.
It is estimated that:
• Worldwide total carbon fiber annual shipments is expected to grow at a rate of 10.3% for next 6 years
till 2011;
• The expected growth rates in industrial, aerospace and sporting goods are 9.4%, 13.2% and 2.8%
respectively;
Domestic Market:
The demand of Carbon Fiber in the domestic market is expected to increase in next five years in Aerospace,
Wind mill, Industrial, Automobile, Sports goods, etc.
Wind Energy:
India presently is the fourth largest wind energy producer in the world after Germany, Spain and the United
States with a total installed capacity of 7844 MW. In terms of new capacity added in 2006 it was third in the
world. Some 6000 MW was added during the past 5 years. Wind energy saw tremendous growth in India and is
the fastest growing sector in the composites industry. Composites off-take in wind energy sector in 2007 was
20,000 MT registering a growth rate of 30%. The growth in this sector can be largely attributed to India's
growing energy need and initiatives by the govt. to meet a part of this demand through renewable energy
sources. The Indian government is targeting additional wind power capacity of 10,500MW during 2007-12 and
has estimated the wind energy potential of the country at 45,000 MW. Integrated Energy Policy has projected
capacity addition of 30,000 MW from wind by the year 2032.
India is seen as a sourcing hub of key wind energy components for exports operations. Suzlon had orders worth
$4.3 billion as on January 2008, majority from the overseas buyers is 3.7 billion and $ 0.6 billion from the
domestic market. GE Wind energy, which has an assembling unit in Chennai, is exporting components
including blades to china and other European markets. Enercon India is exporting wind turbine generators to
| 74 |
Germany. NEG Micon and Vestas RRB – are also exporting components, generators and blades produced in
India for overseas markets. Main reason for the trend is lower costs in India and availability of skilled persons.
Aerospace and Defense:
• India's public-funded aerospace companies such as NAL, the Indian Space Research Organization
(ISRO) and Hindustan Aeronautics Ltd (HAL), use composites extensively in rockets, the Tejas light
combat aircraft, Dhruv advanced light helicopter and Saras multi-role passenger plane.
• The Tejas fighter has around 70% of composites for its weight, as against 30% for the F-22 Raptor and
around 50% in the Joint Strike Fighter of the US. Tejas is the only fighter that uses composites in the
centre fuselage. The lightweight composites in its workhorse rockets allow ISRO to launch heavier
satellites into orbit.
• Indian aerospace institutions have earned a reputation for mastering the carbon composite technology
for aerospace applications, but India currently produces only 20 tonnes at a NAL unit in Bangalore.
• The bulk of the demand for the material in India, estimated to be around 1,200 tonnes a year, is met
with imports from Japan and France, but the supplies have been irregular in recent times.
| 75 |
BUSINESS
Overview
Kemrock, incorporated on November 18, 1991 as a public limited company, is promoted by Mr. Kalpesh Patel,
a qualified Mechanical and Electrical Engineer and also a qualified Plastic Technologist. The Company is a
focused, organized and integrated reinforced polymer composites player in India and has a distinct first mover
advantage for its products. The Company captures the entire value chain- via backward integration (resins) and
forward integration (composites, products and solutions) and thus provides an integrated solution to its
customers.
global composites industry. It has the widest range of products in the field of composites and resins. It has
developed and/or acquired technical competence to manufacture complex and new generation products.
Kemrock has the unique advantage of having almost all the processes with technical competence to manufacture
composites blended with backward integration to manufacture various types of resins, an important ingredient to
manufacture quality composites.
The Company is presently engaged in the manufacture of:

A. Fiberglass Reinforced Polymer Composites
B. Resins (As its Backward Integration Process)
C. Technical Fabrics (As its backward integration process)
Kemrock has multi fold processes-pultrusion, moulded, filament winding, centrifugal casting, pull winding,
Resin transfer moulding and hence can be a truly low cost solution provider for its partners/ customers. Major
applications of the products of the Company are in construction, pipes, cooling towers, railway interiors, wind
energy, electrical poles etc.
Kemrock has mastered multi fold technology processes due to the ability of its technocrat promoter Mr. Kalpesh
Patel, experienced team developed over the years and strategic alliances. The Company has collaborations with
world class majors like (1) Fibergrate Composite Structure, Inc. (2) Georgia- Pacific Resins Inc. USA (3) Top
Glass s.p.a. Italy (4) Stoncor Group, USA (5) RPM International Inc, USA (6) Youngman Group, UK and (7)
National Aerospace Laboratories, India.
The Company had revenues of Rs.6078 million with EBITDA margin of 25% and a net margin of 9% in FY
2009-10. Exports comprised 70% of the revenues in FY 2009-10. The Company has achieved a CAGR of 52%
in revenues and 31% in PAT over the past three fiscal years. The Company is listed on the BSE and NSE. As on
March 11, 2011 the Company's market capitalization stood at Rs.8444.58 million.
Kemrock has a well-qualified and independent board with Mr. Kalpesh Patel representing the Promoters and
Mr. Navin Patel representing the Promoter Group. Mr. M.R. Patel, is an executive director in the whole-time
employment of the Company. The rest of the Directors are independent and experts in their own field and brings
their collective experience and knowledge in the management and affairs of the Company. The Board Members'
experience ranges in such diverse field like banking, finance, legal, international business, etc. Their collective
experience and strength has helped Kemrock in strategic business planning and taking decisions.
Kemrock has a well-defined organization structure with a qualified professional and functional head over
looking each important function. The main functions being composites, resins, marketing, finance, projects and
research and development.
Composites Market and Growth strategy of Kemrock
Composites have a well-developed and matured market in advanced countries while it is still in its nascent stage
in India. According to new Composite Insights' Market Report - 2009, the market for composite materials in
India is expected to grow to US$1,400 million by 2014 at a CAGR of 17.4%. India is the fastest growing market
for composite materials, registering double-digit growth during the past five years.
| 76 |
The Indian composites industry has a proven track record for its low cost manufacturing base with automated
processes, coupled with strong design and development expertise. Many markets with significant growth
potential have adopted composite solutions. India offers many opportunities in the composites industry for new
entrants as well as existing and expanding companies.
This is the ideal time for industry players to take part in the rapid and systematic growth that is expected in the
Indian composites Industry in the next few years.
The management of Kemrock had realized the potential of market much earlier and charted a well-devised plan
for expansion. The plan included various actions including strategic alliances, tie ups for acquiring technical
know how for various processes, putting together of a qualified team which can function independently,
acquiring of technical capabilities for developing newer products and processes, getting the requisite
certifications from various agencies regarding the technical specifications of the product, e.g. IRIS certification
for railway products etc. Once the Company had put together all the aforesaid things, it proceeded further for its
expansion plan to take the advantage of the huge potential, the Indian market offers in composites products like
cooling tower components, telecom towers, wind mill components, interiors of railway coaches, etc.
Besides, the huge potential the Indian market offers, Kemrock has carefully entered into strategic alliance for
acquiring the technical know-how in as much as that with all such technical alliances, Kemrock has also entered
into marketing alliances with them. The technical partners are marketing Kemrock products in their area and
region.
Today, Kemrock has an order book size of more than Rs.8,400 million (i.e., USD 182 million approx.) in hand,
to be executed in the next 2 -3 years.
Main Object Clause of the Company:
The Main Object of the Company, as per Clause IIIA of the Memorandum of Association is, "to manufacture,
process , buy, sell, fabricate and produce fibre glass roofing and north light channels, rain water channels, as
also FRP articles and equipment bodies and furnishing and decorative, FRP for building materials/ construction
articles, FRP industrial Products, FRP household and commercial products, FRP hospital products, FRP garden
products, FRP green rouses, FRP products for industrial flooring as well as articles for hotels and restaurants for
both domestic as well as exports."
Joint Ventures & Subsidiaries
The Company has one subsidiary company, Top Glass SpA, Italy, and three Joint Venture companies details of
which are as follows:-
Company Product Company's Scope

stake %
Georgia-Pacific Kemrock Phenolic and other 49 Sells Resins in India and M.East
International Private Resins
Limited
S K Polymers Epoxy Resins 50 Trading in Resins, Subsidiary of RPM -
Stoncor Group, INC
Saertex-Kemrock India Components of 50% To manufacture various components for
Private Limited. aeronautical industry Indian and global aeronautical industry.
The Company has six (6) wholly owned subsidiary companies, names of which are set out below. The business
generated by these subsidiaries are not substantial.
1) Kemrock Infratech Ltd
2) Kemrock Filament Windings Ltd
3) Kemrock Advanced Composites Ltd
4) Kemrock Advance Reinforcements Ltd
5) Kemrock Speciality Polymers Ltd
6) Kemrock Renewable Energy Limited (incorporated on Feb 17, 2011)
| 77 |
History and Background:
The Company, was incorporated under the Companies Act, 1956 in the name of Kemrock Industries and
Exports Limited on November 18, 1991.Over the years, the Company has gradually through a well-devised plan
and strategy expanded its activities in the composites industry by way of strategic alliances for obtaining
technical know-how.
Kemrock entered the composite field undertaking production of gratings using the pultrusion process through a
technology alliance with Creative Pultrusions, Inc., USA. Having realized the importance of resins, a crucial
ingredient to manufacture composites, the Company entered into strategic alliance and obtained technical know-
how from Georgia-Pacific Resins Inc., USA for manufacture of phenolic resins used for Fire Safe Composites.
It also acquired Technology from Top Glass, Italy to produce lighting poles using centrifugal casting
technology. The Company also has a well equipped and manned R & D centre which continuously is on look
out for developing newer products in composites. It also developed and/or acquired know how of filament
winding process to manufacture GRP/GRE pipes. A considerable time and effort was invested by the team to
develop and acquire the process of SMC and SMC moulding which has enabled the Company to manufacture
the interiors for railway coaches and various components for windmill. It is one of the few companies to get
certification from IRIS (International Railways Industry Standard).
The shares of Kemrock are listed both on the BSE and NSE and its GDRs are listed on LuxSE. Its market
capitalization as on June [30], 2010 stood at Rs.[10182.76] million.
Key Milestones achieved by the Company:
Year Particulars
1982 • Founded by Mr. Kalpesh Patel, an experienced entrepreneur and was
subsequently corporatized in 1991. Promoter family was engaged in the
business of agricultural chemicals for two decades prior to founding of
Kemrock.
• The Company started with hand lay process for manufacture of FRP
composites for various user industries.
1996 • Considering the limitation of Indian market for hand lay FRP products and
growth prospects in domestic and international markets for FRP due to its
inherent advantages, the company decided to diversify into pultrusion
technology
• Entered into seven-year license agreement with Creative Pultrusions Inc., USA
for acquiring state-of-the-art pultrusion technology. The collaborator also
purchased products from the Company.
2003 • Entered into a strategic alliance with StonCor Group Inc. along with their
subsidiary, Fibergrate Composite Structures Inc., for licensed manufacturing &
supply of gratings – moulded and pultruded shapes.
2004 • Obtained ISO 9000-2001 certification.
• Obtained technical know-how from Georgia-Pacific Resins Inc., USA for
manufacture of phenolic resins for Fire Retardant Composites
2005 • Commenced production and sale of all resins, which was the first step towards
backward integration.
2006 • Formed Joint Venture Company – Georgia-Pacific Kemrock International
Private Limited to market phenolic resins (GP Technology) and other resins
(own Technology)
• Obtained Technology from Top Glass S.p.A., Italy to produce lighting poles
using centrifugal casting technology
• Received Top Exporter Award from PLEX Council for two consecutive years
2004-05 and 2005-06 for the highest exports of FRP products
• Commenced manufacturing of Technical Fabrics, a further step towards
backward integration
| 78 |
Year Particulars
• Commenced shipping of resins overseas including USA
• Single order of ONGC worth more than $ 4.50 million, for supply of FRP
fencing systems executed.
2007 • Obtained know how of filament winding process and commenced manufacture
and supply of pipes
• Entered into a licensing agreement for Carbon Fiber Know-how with Council
of Scientific and Industrial Research represented through one of its constituent
laboratories – National Aerospace Laboratories, Bangalore which would enable
the Company to produce advanced high tech composite material like "Carbon
Fiber Reinforced Plastic."
• Obtained ISO 14001:2004
• Marketing Arrangement with Youngman Group of UK for scaffolding towers
and components
2008 • Agreement with Nordic Wind Power Inc. USA for supply of windmill blades
2009 • The Company entered into an MOU with SAERTEX to explore the possibility
of forming a Joint Venture to manufacture aeronautical component.
• The Company has commenced supply of windmill blades to Nordic.
2010 • The Company successfully accomplished on 29th April, 2010, GDR Issue of
4,827,200 GDRs, each representing one equity share of par value of Rs.10/-
each, at an issue price of USD 10.358 per GDR, GDR issue size being USD 50
million and got listed its 4,827,200 GDRs on Luxembourg Bourse on 30th
April, 2010.
• Hon'ble Dr. APJ Abdul Kalam, distinguished Former President of India,
inaugurated the Carbon Fiber facility in the presence of eminent scientists and
dignitaries on 9th May, 2010.
• On 26th May, 2010, the Company acquired 80% stake in Top Glass S.p.A., one
of the chief and highly qualified producers of Pultruded Composites Profiles,
situated 20 Kms north east of Milano, Italy.
• Company incorporated its 5 (five) wholly owned subsidiary companies on 24th
June, 2010, namely
1. Kemrock Advanced Composites Limited;
2. Kemrock Infratech Limited;
3. Kemrock Speciality Polymers Limited;
4. Kemrock Filament Windings Limited; and
5. Kemrock Advance Reinforcements Limited
all having respective objects of carrying on business relating to windmill
blades, pipes, resins, EPC, carbon fiber etc.
• Company formed a new JV Company (50:50) with SAERTEX
Beteiligungsgesellschaft mbH, Germany, namely SAERTEX-KEMROCK
INDIA PVT. LTD., in the State of Gujarat, on 14th July, 2010, to manufacture
aeronautical components.
| 79 |
Products development value chain
The Table below gives the breakdown of net turnover during the past three financial years by categories of
activity and into geographical markets:
Comparison of Sales for 2009-10, 2008-09 & 2007-08

(Rupees in Million)
Particulars 2009-10 2008-2009 2007-2008
FRP Sales
Export 3655.61 1,638.08 303.07
Domestic 1413.94 661.21 481.22
Resin Sales
Export 626.07 1,063.80 1,297.96
Domestic 598.20 427.46 229.20
TOTAL 6293.82 3,790.55 2,311.45
The Company has not faced any interruptions in its business, which may have a significant effect on its financial
position.
Business Activities of the Company
The plant of the Company is strategically located at Asoj, a well-developed industrial area on Vadodara-Halol
Express Way. All the current expansions are considered in the present location which has an area of about 200
acres (9.5 million sq.ft.). This whole area is trade marked as global composite village. It is well-connected with
Kandla as well as Nhava Sheva Port.
| 80 |

Pultruded Products Pultrusion Gratings, walk ways, hand Rail System, Ladders, Platforms,
Cable Management Systems, Custom profiles, Cooling
Towers, Transmission Towers
Moulded Products Pultrusion Moulded Gratings, Heavy Load gratings
Custom Mouldings SMC Custom made products
Hand lay –up SMC - Moulding Nacelle covers for housing wind mill turbines for Suzlon
Wind Mills.
GRP/GRE Pipes Filament Winding Pipes
Poles Centrifugal casting Electrical Poles
VARIM/ VRTM SMC - moulding Interiors of railway coach.
Windmill blades
Compression Moulding SMC Doors, windows, etc.
Resins – Phenolics Fire Safe Composites, Ablative materials, Automotive
Filters, Paper Saturation, Brake Lining Products, Thermal
Insulation, Foundry Chemicals, Bonding & laminating
Resins
Resins – Polyester Chemicals, Automotive, Construction, Marine, Building,
Electrical & Electronics, Customized products
Carbon Fiber Aerospace, defense, wind energy, automobile, sports
equipment and other industries
(a) Marketing Strategy
The Company has adopted the following strategy for its sales, marketing & distribution set up:
• Marketing through long term partnerships globally as well as domestic market. The Company
has adopted various technologies and processes from some of the World Leaders. The same
companies have also agreed to market Kemrock's product in their respective fields and
product ranges.
• Sales and marketing in the export markets is being handled by offices in Dubai and London
Alliances/ Technical collaboration
1. Fibergrate composites structures Inc., USA
Fibergrate Composite Structures Inc. is a global manufacturer of fiberglass reinforced plastic products
for industrial and recreational use with brands as Fibergrate® and Chemgrate® molded grating, Safe-T-
Span® pultruded grating, Rigidex® Moltruded® grating, Dynarail® handrail and ladder systems, and
Dynaform® structural shapes.
Fibergrate Composite Structures Inc. is a part of Stoncor Group, which is ultimately held by RPM
International Inc., USA. In 2003, Kemrock entered into a strategic alliance with Fibergrate Composite
Structures Inc., for licensed manufacturing & supply of gratings – moulded and pultruded, and
pultruded shapes. As per the arrangements they trained employees of the Company and also provided
technical support at the local level to stabilize the production. They also gave an undertaking to source
from the Company, moulded gratings to the extent of USD 21 million spread over a period of 7 years.
The arrangement has been revised in February 2006 to procure USD 50 million worth of moulded
gratings and pultruded profiles and gratings over a further period of 7 years.
2. Stoncor Group, USA
The Stoncor Group consists of Carboline, Fibergrate and Stonhard. Carboline Company is dedicated
to supplying corrosion resistant, high performance coatings, linings and fireproofing products around
| 81 |
the world through continuous technological improvements and first class service. Fibergrate Composite
Structures, Inc. is a global manufacturer of fiberglass reinforced plastic (FRP) products for industrial
and recreational use, as stated earlier. Stonhard is the unprecedented leader in manufacturing and
installing high performance polymer floor, wall and lining systems. Stonhard's seamless, chemical
resistant, longwearing and easy to clean floors are engineered to perform in both industrial and
commercial environments without sacrificing design and innovative vision. In 2007, Kemrock entered
into a 50:50 joint venture agreement with Stoncor Group, USA by forming a new entity known as S K
Polymers FZCO in DAFZA, Dubai, UAE with an object of distributing resins profitably through the
network of Stoncor Group.
3. RPM International Inc., USA
RPM International Inc. is a fortune 1000 multinational holding Company with subsidiaries that
manufacture and market high-performance coatings, sealants and specialty chemicals, primarily for
maintenance and improvement. Fiscal 2008 sales were $3.6 billion, with 35 percent to industry
worldwide and the remaining 65 percent to consumers mainly in USA. Shares of the Company's
common stock are traded on the New York Stock Exchange under the symbol RPM and are owned by
some 300 institutional investors and more than 96,000 individuals.
4. Georgia-Pacific LLC, USA
Georgia-Pacific Kemrock International Private Ltd., (GPK) is a joint venture company established in
2006 between Georgia-Pacific Chemicals, headquartered at Atlanta, Georgia, in the United States, and
Kemrock Industries and Exports Limited of Gujarat, India.
Georgia-Pacific Chemicals is a wholly-owned subsidiary of Georgia-Pacific LLC (GP). Georgia-

Pacific Chemicals is a global performance chemical manufacturer and marketer recognized as a leader
in building products, composites, paper, plant nutrition, mining, oilfield, pine chemical derivatives and
specialty applications. It has interests in chemical facilities in the United States, Argentina and Chile,
with other ventures in China and South Africa. Georgia-Pacific is one of the world's leading
manufacturers and marketers of building products, tissue, packaging, paper, cellulose and related
chemicals. The company employs more than 45,000 people at approximately 300 locations in North
America, South America and Europe.
Kemrock entered into a technical collaboration in 2004 with the then Georgia Pacific Resins Inc., USA
(now Georgia Pacific Chemicals LLC) for manufacture of Phenolic Resins (not available indigenously)
used for application in fire safe composites. Kemrock has set up a manufacturing plant with a capacity
of 3600 MT for manufacture of phenolic resins in technical collaboration with Georgia-Pacific. The
Company then on its own diversified into manufacture of other resins (Unsaturated Polyester Resins,
Vinyl Esters, Epoxy Resins). In 2006, the Company formed a joint venture company with Georgia
Pacific Inc., called Georgia-Pacific Kemrock International Private Ltd., to market phenolic resins (GP
Technology) and other resins (Own Technology). The JV Company also markets high-performance
thermosetting resins for a wide range of specialty industrial applications (composites, foundry, coated
abrasives) in certain specified markets (India, Bangladesh, Sri Lanka, Bahrain, Saudi Arabia, Kuwait
and the United Arab Emirates). These resins are manufactured by Kemrock at its facility in Vadodara.
5. Top Glass SPA, Italy
Top Glass SPA, is an ISO 9001 certified Company producing profiles in composites materials since
1963. During its 45 years history, they have developed an outstanding range of composites solutions
calling upon their professionalism and expertise to meet the challenges and opportunities offered by
their valued customers. Today Top Glass operates from two sites close to Milan (Italy), one in Osnago
(14,000 sqm) and the other in Pioltello (8,000 sqm). Top Glass has become one of the major and most
highly qualified producers of Pultruded Composite Profiles and Centrifugal Casting Products.
During 2006, Kemrock obtained Centrifugal Casting Technology from Top Glass S.P.A., Italy. Till this
collaboration, the Company was not having such technology for manufacturing these products.
| 82 |
On May 26, 2010, the Company acquired 80% stake in Top Glass, S.p.A., making it a wholly-owned
subsidiary of the Company.
6. Youngman Group, UK
Youngman Group based in Maldon - Essex (UK) has a range of products - work platforms, step ladders,
extension ladders, combination ladders, loft ladders, access platforms and scaffolding access towers.
The Company has a strong client base spread over 50 countries. Youngman well known product brands
are: Boss - mobile access towers, MiniMax - modular access system, Catwalk – ladders. In 2007
Kemrock entered into a marketing arrangement with Youngman Group, UK for its products viz.
scaffolding towers and its components.
7. National Aerospace Laboratories, India
In April, 2007, Kemrock signed a technical know-how agreement to produce and commercialize
Carbon Fiber Technology. This high end technology will enable the manufacture of strategic composite
materials for wide ranging applications. The range of Reinforced Polymer Composites will be further
extended with these high end product applications and have a positive impact on the growth and
business of the Company.
Kemrock has established strategic alliances with world class major companies. Thus Kemrock with its
vision to establish a Global Composites Village™ in India backed by the best technologies available
through strategic alliances from across the globe will change the Indian Reinforced Polymer
Composites industry by its path breaking efforts and will create a globally competitive business.
The Company generally enters into a contract/MOU with customers for supply of certain quantity
annually. Some times, instead of quantity, values are specified for yearly offtake. Such contracts have a
price variation clause also. It may be noted that Composites supply are normally tied-up for a particular
project and hence, in most of the cases, quantity/value are almost assured.
8. Joint Venture with DSM, Netherlands
Kemrock entered into a joint venture agreement in February, 2011, with DSM Composite Resins AG,
Netherlands, for the production of specialty composite resins in India through a manufacturing JV
Company to be established in Pune.
The JV will manufacture speciality and semi-speciality UP Resins & VE Resins for Kemrock's self
consumption and for marketing of such resins primarily in India. Such manufacturing is proposed to be
carried out by use of licenses (w.r.t., technological know-how) to be provided by DSM/DSM Affiliates.
Both partners shall utilize and leverage each other's strengths whereby DSM will focus on the supply of
innovative specialized composite resin solutions to the fast growing Indian market while Kemrock will
concentrate on the production of high end composite parts by using the speciality resins produced by
the JV.
Segments
(A) FRP Composites
The unit is manufacturing Glass fiber reinforced plastics which is part of fiber reinforced plastic (FRP)
where strength of fiber like glass, carbon, jute, nylon etc. is combined with properties- like corrosion
resistance, insulation, low weight etc. -of polymers (resins) to produce a new type of material , more
popularly known as FRP composites. At present the Company is engaged in manufacturing of Glass
Fiber Reinforced Plastic Composites. The main advantage of FRP is possibility of manipulating the
properties of composite material as required by using combination of various types / grades of fiber /
fabric and polymers in composite. This development of new composite materials has revolutionized
number of fields like aerospace, transport, building & construction, electrical industry, storage, packing
etc. in last 30 – 40 years. The disadvantage of FRP composite material is that it cannot be easily
| 83 |
recycled/ degraded. The Company is compounding the waste generated at the plant and using it as filler
in some of the products.
The Company is employing different types of technologies for manufacturing of various types of
composites. For a specific kind of product, suitable method of manufacturing is applied to ensure best
quality of product. The Company is producing various kinds of materials with most suitable kind of
technology, as per quality of finished product desired by the customer. Various manufacturing
processes are described below:-
A host of processes exist for the fabrication of composite components. The common fabrication
techniques are listed below:
(i) Hand Lay Up
(ii) Compression
(iii) Injection Moulding
(iv) Filament Winding
(v) Resin Transfer Moulding (RTM)
(vi) Pultrusion
Process Chart:
(i) Hand Lay-up:
This is low to medium moulding method in which catalyses resin is mixed and applied to the
fiberglass, which are placed over the mould. This laminate is then rolled with steel rollers. This process
is suitable for making tanks, boats and panels, etc.
(ii) Resin Transfer Moulding (RTM):
This is a low-pressure, closed mould semi-mechanized process. The process allows fabricating simple,
low-performance to complex, high-performance articles in varied sizes. The fiber reinforcement, which
may be preshaped, is placed in the required arrangement in the cavity of a closed mould and a liquid
resin of low viscosity is injected under pressure into the cavity, which is subsequently cured. The main
potential advantages of RTM can be summarized as the capability of rapid manufacture of large,
complex, high-performance structures with good surface finish on both sides. It also permits the use of
foam and other removable cores to yield three-dimensional parts and hollow components as well. Resin
transfer molding suffers from few limitations such as high glass ratios cannot be achieved and
improperly placed reinforcement can cause dry spots or resin pools. Thus, resin transfer moulding is
not recommended for part that will be highly stressed. This process is suitable for medium volume
production.
| 84 |
(iii) Filament Winding:
Filament winding was invented in the early days of fiber-reinforced production. Filament winding is a
semi-automatic manufacturing method for making fiber reinforced composite materials by precisely
laying down continuous resin impregnated roving or tows on a rotating mandrel that has the required
shape. The mandrel can be cylindrical, round or of any shape that does not have a reverse curvature.
The technique has the capacity to vary the winding tension, wide angle, or resin content in each layer of
reinforcement until the desired thickness or resin content of the composite are obtained with the
required direction of strength. A large array of products can be fabricated by this technique viz. storage
tanks, pipes, pressure vessels, rocket engine cases, nose cones of missiles and other aerospace parts.
This method is mainly used for rotary-symmetrical products like tubes or storage tanks.
(iv) Pultrusion:
Pultrusion process is a continuous process used to make profiles, tubular or solid shapes, such as
grating, pipe beams or rod. As a continuous process, it is cost effective for high volume production of
constant cross section parts. Pultrusion relies on reciprocating or caterpillar type puller /clamping
systems to pull fiber wet out with resin through a heated die. Roving and / or tow are pulled from
material racks or creels and are saturated with resin. In these processes, impregnated reinforcement
fibres are drawn through a heated nozzle serving as a mould. The product cures into its final shape and
the resin hardens in the mould. The optimised production methods allow the manufacture of very thin
walled products.
As Kemrock is a leader in the domestic market in production of pultruded FRP profiles, the pultrusion
process is described in a detailed step-wise manner.
| 85 |
Pultrusion Process – Key Elements:
(a) Reinforcement Handling
This consists of roving creels, mat and veil dispensers, and winders or braiders where other
than axial reinforcement is required.
(b) Resin Impregnation
This can consist of a simple resin bath or pressure/vacuum impregnation device.
(c) Performing Dies
These serve to guide the impregnated reinforcement into the correct position, remove excess
resin, provide pre-compaction to the approximate profile in order to assist air removal, wetting
and to reduce the pressure in the main die.
(d) Pultrusion Dies
This is a machined steel or ceramic die which is heated and produces the final profile. Dies
can be more than 1m in length. As the material passes though the die, heat transfer initiates the
cure reaction and the pulling speed is such that the resin has fully cured by the time it leaves
the die.
(e) Pulling Device
By allowing a suitable gap between the die exit and the pulling device, the product cools to a
stage where the resin is sufficiently hard to be gripped by the pulling device. This can be a
pinch roller or caterpillar type haul off mechanism. Pulling speeds depend upon the resin
system and the size and shape of the product. Typical values from industry are in the range
0.5m/min - 1.5m/min.
(f) Cut-off Device
This is a flying cut-off saw, which is programmed to cut the product to the desired length
(B) B. Phenolic Resins
Phenolic resins are produced through the reaction between phenol and formaldehyde. The Phenolic
Resins plant produces a range of acid and alkali catalysed resins in specialized reactors, which have the
requisite temperature control capabilities. These specialized reactors enable safe production of resins,
and permit coping with the heat produced through the reaction between phenol and formaldehyde.
The basic reaction involved in resin manufacture is polymerization. This is carried out in a reactor
under reflux at specific Temperature and PH. The basic block of polymer is called monomer, which is
normally manufactured by reaction of two chemicals in the first step under specified reaction
conditions. This is then polymerized (a large number of monomers join together to form a chain and
| 86 |
resulting group of molecules is known as a Polymer) in the same reactor at different condition and in
presence of catalyst. The polymer (many molecules of a chemical called Resin) is a long chain of
monomers (one molecule of a chemical called Resin is known as monomer) and by controlling length
of the Polymer chain properties of resin and hence the properties of FRP can be manipulated. The skill
of manufacturer lies in producing different type / grade of same polymer as per customer / application
requirement. The versatility of FRP is due to this property of resin (polymer) to change as per chain
length and constitution of its Molecules (monomers).
The details of manufacturing process of the various resins produced by the unit have been generally
explained/ discussed as there are limitations to provide the technical details in writing in terms of the
agreement with the technology partners. The Company has a technical collaboration with Georgia
Pacific for Manufacture of Resins. Technical personnel of Georgia Pacific Inc. USA regularly interact
with Company officials to discuss the problems if any faced in the manufacture of Resins. Moreover
staff of resin plant, have desired qualification and experience in polymer science. Hence, it is
concluded that the unit has necessary expertise in manufacturing process of various types of resins.
It has different plants for production of various resins, which have been designed as per process
parameters of the particular type of resin. So the Company has already started manufacturing for
captive consumption. This gives tremendous competitive advantage as Resin Composition for various
products remains proprietary. The Resins have become stand-alone products and revenue generating
products having 25.94 % of production being captive consumption and 74.06% being sold in export
markets for FY ending 2008-09.
(C) C. Carbon Fiber Business
The Company has inaugurated, of its only kind in India, the first ever Carbon Fiber Plant at its site at
Asoj.
Carbon Fiber is a light weight material having very high tensile strength and resistance against low and
high temperature. Carbon Fiber is used in Defense, Aerospace, Wind Energy, Automobile, Industrial,
Infrastructure, Offshore, Sports application.
Research Based Carbon Fiber manufacturing facilities were setup at National Aerospace Laboratories
(NAL), Bangalore having capacity of 20 MTA producing aerospace grade quality of Carbon Fiber.
Company decided to setup 1st commercial scale carbon fiber manufacturing plant in India with basic
process know-how available from NAL to produce aerospace grade quality carbon fiber to support
defense and aerospace sector and also to produce commercial grade carbon fiber for application in
wind energy, automobile and other sectors. Company entered into technical knowhow agreement with
NAL during April-2007 and decided to setup 400 MTA carbon fiber facilities on continuous
operational basis. This manufacturing facility includes polymerization, wet spinning and carbonization
as integrated facility mainly to produce targeted quality of precursor (Special Acrylic Fiber-SAF) to
achieve finally targeted quality of carbon fiber product. Environmental clearance was obtained from
Pollution Control Board for 1000 MTA carbon fiber manufacturing capacity.
Complete basic design, detail engineering for the carbon fiber manufacturing facility was carried out in
house and procurement of major equipment was completed and erection and commissioning was
carried out by April 2010. The required utilities including power and nitrogen are arranged. The
necessary safety and environmental related requirements such as incinerator, online emission
monitoring systems are installed. The entire manufacturing facility including, utilities are integrated
with Distributed Control System (DCS) to achieve manufacturing consistency and targeted quality of
product. The 400 MTA carbon fiber manufacturing facilities were formally dedicated to nation by the
hands of Hon'ble Former President of India Dr. APJ Abdul Kalam on 9th May 2010 at Company site.
| 87 |
TECHNOLOGY COMPETENCE
A. Technology Arrangement
Partner Relationship
Fibergrate Composite Structures, Inc. Moulded Grating.
Georgia - Pacific Resins, Inc. USA Phenolic Resins.
Top Glass s.p.a. Italy Centrifugal Casting Technology, Pultrusion
Technology.
Council of Scientific and Industrial Research Carbon Fiber.
(NAL)
• The Company has entered into a strategic marketing alliance with StonCor Group Inc., USA
(StonCor) in June 2003 for supply of both moulded gratings and pultrusion sections
/assemblies for a sales off-take of $21 million over next 7 years. StonCor thereafter enhanced
this requirement to USD 50 million in February 2006. StonCor has now finalized
arrangements to purchase Epoxy Resins from the Company.
• The Company has obtained technology from Georgia-Pacific Resins Inc., USA for producing
phenolic resins. The Company is using phenolic resins for production of fire resistant FRP
products, which command better prices in the market. The Company has commenced the
production of various polyester and epoxy resins with its own technology.
• The Company and Georgia-Pacific have established a Joint Venture Company to sell resins in
the domestic and global markets apart from captive consumption for production of fire
resistant pultruded and moulded products.
• The Company has through an Indian Company obtained filament winding technology and set
up the plant to produce FRP pipes with this technology in a record time of less than 2 months
and has already shipped FRP pipes in excess of $ 1.5 million in March 2007.
• NAL (National Aero space Laboratories) has signed a license agreement with the Company on
April 16, 2007 for production and commercialization of carbon fiber. Carbon fiber technology
is a strategic technology held by very few countries in the world. This is also high tech
material having wide ranging application, wherever component has to meet strength/ stiffness
along with lightweight property.
| 88 |
REGULATIONS AND POLICIES
The following description is a summary of the relevant regulations and policies as prescribed by the
Government. The information detailed in this chapter has been obtained from the various legislations that are
available in the public domain. The regulations set out below are not exhaustive, and are only intended to
provide general information to the investors and are neither designed nor intended to be a substitute for
professional legal advice.
The Factories Act, 1948
The Factories Act, 1948 ("Factories Act") seeks to regulate labour employed in factories and makes provisions
for the safety, health and welfare of the workers. The Factories Act defines a 'factory' to cover any premises,
which employs ten or more workers and in which manufacturing processes are carried on with the aid of power,
and to cover any premises, where there are at least 20 workers who may or may not be engaged in an electrically
aided manufacturing process. Each State Government has set out rules in respect of the prior submission of
plans and its approval for the establishment of factories and registration and licensing of factories.
The Industrial Disputes Act, 1947
The Industrial Disputes Act, 1947 was enacted to make provisions for investigation and settlement of industrial
disputes and for providing certain safeguards to the worker, and inter-alia deals with reference of disputes
relating to workmen to Labour Courts and Industrial Tribunals, provisions in connection with prohibition of
strikes and lock-outs, declaration of strikes and lock-outs as illegal, and provisions relating to lay-off and
retrenchment and closure.
The Payment of Minimum Wages Act, 1957
The Minimum Wages Act, 1948, as amended, provides a framework for State governments to stipulate the
minimum wage applicable to a particular industry. The minimum wage may consist of a basic rate of wages and
a special allowance; or a basic rate of wages and the cash value of the concessions in respect of supplies of
essential commodities; or an all-inclusive rate allowing for the basic rate, the cost of living allowance and the
cash value of the concessions, if any. Workmen are to be paid for overtime at overtime rates stipulated by the
appropriate government. Contravention of the provisions of this legislation may result in imprisonment for a
term up to six months or a fine up to Rs.500 or both.
Employees Provident Fund and Miscellaneous Provisions Act, 1952
The Employees Provident Fund and Miscellaneous Provisions Act, 1952 provides for the institution of
compulsory provident funds, pension funds and deposit linked insurance funds for the benefit of employees in
factories and other establishments. A liability is placed both on the employer and the employee to make certain
contributions to the funds mentioned above.
The Maternity Benefit Act, 1961
The purpose of the Maternity Benefit Act, 1961, is to regulate the employment of pregnant women and to ensure
that they get paid leave for a specified period during and after their pregnancy. It provides, inter-alia, for
payment of maternity benefits, medical bonus and enacts prohibitions on dismissal and reduction of wages paid
to pregnant women.
The Payment of Bonus Act, 1965
Under the Payment of Bonus Act, 1965, a minimum prescribed bonus has to be paid to eligible employees.
The minimum bonus to be paid to each employee must be paid irrespective of the existence of any allocable
surplus. If the allocable surplus exceeds minimum bonus payable, then the employer must pay bonus
proportionate to the salary or wage earned during that period, subject to a maximum of twenty percent of such
salary or wage. 'Allocable surplus' is defined as a specified percentage of the available surplus in the financial
year, before making arrangements for the payment of dividend out of profit of the Company.
| 89 |
Payment of Gratuity Act, 1972
Under the Payment of Gratuity Act, 1972, as amended (the "Gratuity Act"), an eligible employee who has been
in continuous service for a prescribed period is eligible for gratuity upon his retirement or resignation,
superannuation or death or disablement due to accident or disease, subject to a prescribed maximum amount.
The entitlement to gratuity in the event of death or disablement will not be contingent upon an employee having
completed the prescribed years of continuous service.
The Public Liability Insurance Act, 1991
The Public Liability Insurance Act, 1991, as amended (the "Public Liability Act") imposes liability on the owner
or controller of hazardous substances for any damage arising out of an accident involving such hazardous
substances. A list of 'hazardous substances' covered by the legislation has been enumerated by the Government
by way of a notification. The owner or handler is also required to take out an insurance policy insuring against
liability under the legislation. The rules made under the Public Liability Act mandate that the employer has to
contribute towards the Environment Relief Fund, a sum equal to the premium paid on the insurance policies.
This amount is payable to the insurer.
Contract Labour (Regulation and Abolition) Act, 1970
Pursuant to the Contract Labour (Regulation and Abolition) Act, 1970, contractors and principal employers as
defined therein, are subject to certain licensing and registration requirements.
Workmen's Compensation Act, 1923
The Workmen's Compensation Act, 1923 makes it obligatory on an employer to grant certain relief to an injured
workman and/or the dependents of a deceased workman in relation to any injury suffered out of and during the
course of employment.
The Industries and Development Regulation Act, 1951
Section 11 of the Industries Development and Regulation Act, 1951 (IDRA, 1951) provides that no person or
authority, other than the central government, may establish any new industrial undertaking, except under and in
accordance with a license issued by the central government. However, the IDRA, 1951 has been liberalized
under the New Industrial Policy dated July 24, 1991, and all industrial undertakings are exempt from licensing
except for certain industries such as distillation and brewing of alcoholic drinks, cigars and cigarettes of tobacco
and manufactured tobacco substitutes, all types of electronic aerospace and defense equipment, industrial
explosives including detonating fuses, safety fuses, gun powder, nitrocellulose and matches and hazardous
chemicals and those reserved for the small scale sector. An industrial undertaking, which is exempt from
licensing, is required to file an Industrial Entrepreneurs Memorandum ("IEM") with the Secretariat for Industrial
Assistance, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry, Government
of India, and no further approvals are required.
The Environment (Protection) Act, 1986
The Environment Protection Act, 1986 enacted with the purpose of protecting and improving the environment,
empowers the Central Government to, inter alia, take all such measures as it deems necessary or expedient for
the purpose of protecting and improving the quality of the environment and preventing, controlling and abating
environmental pollution, make rules for various purposes including prescribing the standards of quality of air,
water or soil for various areas and purposes and prescribing the maximum allowable limits of concentration of
various environmental pollutants for different areas; laying down standards for emission or discharge of
environmental pollutants from various sources; restriction of areas in which any industries, operations or
processes or class of industries, operations or processes shall not be carried out or shall be carried out subject to
certain safeguards; and inspection of any premises, plant, equipment, machinery, manufacturing or other
processes, materials or substances and giving, by order, of such directions to such authorities, officers or persons
as it may consider necessary to take steps for the prevention, control and abatement of environmental pollution.
| 90 |
Water (Prevention and Control of Pollution) Act, 1974
The Water (Prevention and Control of Pollution) Act, 1981 prohibits the use of any stream or well for the
disposal of polluting matter in violation of standards set down by the State Pollution Control Board. This Act
also provides that the consent of the State Pollution Control Board must be obtained before opening any new
outlets or discharges that are likely to discharge sewage or effluent. In addition, the Water (Prevention and
Control of Pollution) cess Act, 1977 (the "Water cess Act") requires a person carrying on any industry specified
in Schedule I of the Water Cess Act to pay a cess in this regard. The cess to be paid is to be calculated on the
basis of the amount of water consumed by such industry and the industrial purpose for which the water is
consumed. The rates to be charged in this regard are specified in Schedule II of the Water cess Act. The person
in charge must affix meters of prescribed standards to measure and record the quantity of water consumed. A
monthly return showing the amount of water consumed in the previous month must also be submitted.
Air (Prevention and Control of Pollution) Act, 1981
Under the Air (Prevention and Control of Pollution) Act, 1981 no person may establish or operate an industrial
plant in any area that has been notified as air pollution control area by the state government without the consent
of the State Pollution Control Board. The State Pollution Control Board is required to grant consent within four
months of receipt of an application to establish or operate an industrial plant in an air pollution area. The
consent may contain conditions relating to specifications of pollution control equipment to be installed.
Indian Boilers Act, 1923
The Act was enacted with the objective to provide mainly for the safety of life and property of persons from the
danger of explosions of steam boilers and for achieving uniformity in registration and inspection during
operation and maintenance of boilers in India. The Act regulates the manufacture, registration and use of steam
boilers.
The Indian Boilers Regulations, 1950, prescribe the detailed technical requirements for design, construction,
manufacture, registration, testing and examination of all types of boilers, steam piping and other accessories.
Central Excise
Excise duty imposes a liability on a manufacturer to pay excise duty on production or manufacture of goods in
India. The Central Excise Act, 1944 is the principal legislation in this respect, and it provides for the levy and
collection of excise and prescribes procedures for clearances from factory once the goods have been
manufactured.
Sales Tax
The tax on sale of moveable goods within India is governed by the provisions of the Central Sales Tax Act,
1956 or relevant State law depending upon the movement of goods pursuant to the relevant sale. If the goods
move interstate pursuant to a sale arrangement, then the taxability of such sale is determined by the Central
Sales Tax Act, 1956. On the other hand, the taxability of a sale of movable goods which does not contemplate
movement of goods outside the State where the sale is taking place is determined as per the local sales tax/VAT
legislation in place within such State.
Income Tax ("IT Act")
The IT Act is the law relating to taxes on income in India. The IT Act provides for the taxation of persons
resident in India on global income and persons not resident in India on income received, accruing or arising in
India or deemed to have been received, accrued or arising in India. In accordance with the IT Act, any income
earned by way of profits by a company incorporated in India is subject to tax levied on it in accordance with the
rates as declared as part of the annual Finance Bill. Companies can also avail certain benefits under the IT Act,
if eligible.
| 91 |
The Customs Act, 1972
All imports in the country are subject to duties under the Customs Act, 1962 at the rates specified under the
Customs Tariff Act, 1975. However, the Government has the power to exempt certain specified goods from
excise duty, by notification. The customs duty on iron and steel items falling under Chapter 72 of the Custom
Tariff Act, 1975 has been reduced sharply during the last five years. The current custom duty on non-alloy Steel
is 5%. The peak rate of custom duty on iron and steel items falling under Chapter 72 items was brought down
from 20% to 10% vide Sr. No. 330 of notification No 21 of 2007.
Value Added Tax (VAT)
VAT is a system of multi-point levies on each of the purchases in the supply chain with the facility of set-off
input tax on sales whereby tax is paid at the stage of purchase of goods by a trader and on purchase of raw
materials by a manufacturer. VAT is based on the value addition of goods, and the related VAT liability of the
dealer is calculated by deducting input tax credit for tax collected on the sales during a particular period. VAT is
a consumption tax applicable to all commercial activities involving the production and distribution of goods and
the provisions of services, and each State that has introduced VAT has its own VAT Act under which persons
liable to pay VAT must register and obtain a registration number from the Excise Tax Officer of the respective
State.
Central Sales Tax Act, 1956
The Central Sales Tax Act imposes the tax on inter state sales and states the principles and restrictions as per the
powers conferred by the government.
The Standard of Weights and Measures Act, 1976
The Standard of Weights and Measures Act, 1976 (the "Weights and Measures Act") aims at introducing
standard in relation to weights and measures used in trade and commerce. The Weights and Measures Act
stipulates that every unit of weight or measure shall be based on the units of the metric system. The Weights and
Measures Act provides to prescribe specification of measuring instruments used in commercial transaction,
industrial production and measurement affecting public health and human safety. The specifications are given in
the Standard of Weights and Measures (General) Rules 1987. The Weights and Measures Act contains penal
provisions for violating the provisions of the Weights and Measures Act. While the Weights and Measures Act
is a central legislation, its enforcement lies with the state governments through the Standards of Weights and
Measures (Enforcement) Act, 1985. The Weights and Measures Act also gives powers to inspectors to search,
seize and forfeit non-standard weight or measures. The Packaged Commodities Rules 1977 framed under the
Weights and Measures Act contains provisions laying down the norms to be followed, in the interests of
consumer safety, when commodities are sold or distributed in packaged form in the course of inter-state trade or
commerce.
The Foreign Exchange Management Act, 1999 and regulations, notifications and circulars issued
thereunder.
Foreign investment in India is governed primarily by the provisions of the Foreign Exchange Management Act,
1999 ("FEMA"), which relates to regulation primarily by the RBI and the rules, regulations, circulars and
notifications issued there under, and the policy prescribed by the Department of Industrial Policy and Promotion
("DIPP"), Government of India which is regulated by the Foreign Investment Promotion Board ("FIPB"). The
RBI, in exercise of its power under the FEMA, has notified the Foreign Exchange Management (Transfer or
Issue of Security by a Person Resident Outside India) Regulations, 2000 ("FEMA Regulations") to prohibit,
restrict or regulate, transfer by or issue security to a person resident outside India.
The Foreign Trade (Development & Regulation) Act, 1992
The Foreign Trade (Development & Regulation) Act, 1992, provides for the development and regulation of
foreign trade by facilitating imports into, and augmenting exports from, India.
| 92 |
CAPITAL STRUCTURE AND PRINCIPAL SHAREHOLDERS
Capital structure
As of March 18, 2011, the Company's capital structure is as indicated in the following table:
(Rs in Million)
Particulars Amount
Authorised Share Capital 350.00
35.00 Million Equity Shares of Rs.10 each
Issued, Subscribed and Paid-up Share Capital before this Issue 167.53
16.75 Million Equity Shares of Rs.10 each
Statement showing Shareholding Pattern as on March 18, 2011
Shares Pledged
No. of
Shareholding
No. Category of Shareholder Shares No. of
(%) Shareholding
Held Shares
(%)
held
Shareholding of Promoter and Promoter
(A)
Group
1 Indian
Individuals/ Hindu Undivided Family 4756733 28.39 2794500 58.75
Sub Total(A)(1) 4756733 28.39 2794500 58.75
2 Foreign
Individuals (NRI/ Foreign Individuals) 125150 0.75
Sub Total(A)(2) 125150 0.75 0 0
Total Shareholding of Promoter and Promoter

(A) 4881883 29.14 2794500 57.24
Group (A)= (A)(1)+(A)(2)
(B) Public shareholding
1 Institutions
Financia Institutions 630 0.00
Foreign Institutional Investors 77382 0.46
Sub-Total (B)(1) 78012 0.47
2 Non-institutions
Bodies Corporate 1823920 10.89
Individual 2113912 12.62
Clearing Members 63847 0.38
Non Resident Indian 121426 0.72
Foreign Companies 2841266 16.96
Trusts 2000 0.01
Sub-Total (B)(2) 6966371 41.57
Total Public Shareholding (B)= (B)(1) +
(B) 7044383 42.04 0 0
(B)(2)
TOTAL (A)+(B) 11926266 71.17 2794500 16.68
Shares held by Custodian and against which
(C)
Depository Receipts have been issued
(1) Promoter and Promoter Group - - - -
| 93 |
No. of Shareholding
No. Category of Shareholder Shares Pledged
Shares (%)
(2) Public 4827200 28.81
GRAND TOTAL (A)+(B)+(C) 16753466 99.99 2794500 16.68
Shareholding pattern of persons belonging to the category "Promoter and Promoter Group" and
"Pledged Shares" details are set forth in the table below as on March 18, 2011
As a % of Shares pledged
Name of the No. of Equity
No. total Share As a As a % of total
shareholder Shares held Number
Capital percentage Share Capital
Promoters
1 Mr. Kalpesh Patel 4462200 26.63 2794500 62.63 16.68
2 Mrs. Binita Patel 103474 0.62 0 0.00 0.00
Promoters Group
3 Mrs. Mrudula Patel 100 0.00 0 0.00 0.00
4 Mrs. Binita Shah 96939 0.58 0 0.00 0.00
5 Mr. Jayesh Shah 15780 0.09 0 0.00 0.00
6 Mr. Navin Patel 77940 0.47 0 0.00 0.00
7 Mrs. Jyoti Patel 82240 0.49 0 0.00 0.00
8 Mrs. Priti Patel 43210 0.26 0 0.00 0.00
Total 4881883 29.14 2794500 62.63 16.68
Shareholding of persons "Public" holding more than 1% as on March 18, 2011
We have perused the shareholding pattern filed by the Company with the Stock Exchanges as required under the
Listing Agreement. The details of persons in the category of "Public" holding more than 1% as on March 18,
2011 are set in Table
No. Name of the shareholder Number of Share held Shareholding %

1 The Bank of New York, Mellon 4,827,200 28.81
2 RPM International Inc. 2,496,266 14.90
3 Integrated Master Securities (P) Ltd. 614,434 3.67
4 Tindel Marketing Limited 345,000 2.06
TOTAL 8,282,900 49.44
Locked-in Shares as on March 18, 2011
As per the shareholding pattern provided for our perusal, following equity shares as provided have been locked-
in.
Locked-in shares as a
Number of locked-in
No. Name of the shareholder percentage of total number
shares
of shares
1 Kalpesh Mahendrabhai Patel 903210* 5.39
2 RPM International INC. 911268** 5.44
TOTAL 1814478 10.83
| 94 |
* Pursuant to the direction of the BSE, the Shareholders of the Company at their Extraordinary General
Meeting (EGM) held on the February 22, 2007 approved and ratified the re-issue of forfeited 9,03,210 Equity
Shares of the Company to Mr. Kalpesh Patel, These Equity Shares are subject to a lock-in till February 21,
2012.
**Pursuant to Regulation 78(2) of SEBI (ICDR) Regulations, 2009, these shares are under lock-in for a period
of one year from 24th June, 2010 to 23rd June, 2011.
| 95 |
BOARD OF DIRECTORS AND SENIOR MANAGEMENT
The overall management and supervision of the Company is undertaken by the Board of Directors and the
executive officers. The Company's Articles of Association provide for the increase or reduction in the number of
Directors subject to provisions of Sections 252, 255 and 259 of the Companies Act, 1956 (the "Companies
Act"), which provides for a Board of not less than 3 and not more than 12 Directors including the Nominated
Directors (the ex-officio Director) and the Debenture Director. The number of Directors of the Company can be
increased beyond twelve (12) by the passing of a special resolution in a general meeting of the Company and
subject to approval of Central Government. As at the date of this Preliminary Placement Document, the Board
of Directors of the Company comprises of 7 Directors, out of which 5 Directors are Non-Executive Independent
Directors. Not less than two-thirds of the total number of directors shall be elected directors who retire by
rotation. At each of the Company's annual general meeting, one-third of such of the directors for the time being
who are liable to retire by rotation, shall retire from office. A retiring director is eligible for re-election. The
Company's Articles of Association permit certain financial institutions which are its lenders to appoint as
executive or non-executive directors to the Board while any amount is outstanding to them from the Company.
As of March 18, 2011, the Company has not granted any loans to the members of its Board of Directors nor
given any guarantee for their benefit. The Company has not granted any loans to its directors. As on March 18,
2011 the Company has not given any loans to the key/ senior management.
Board of Directors
The following are the details of the Board of Directors of the Company:
Board of Directors, Residential Age (years) Nationality Other Directorships as on June 30,
Address & their designation 2010
Mr. Kalpesh Patel, Chairman & 50 Indian 1. Georgia-Pacific Kemrock
Managing Director International Private Limited
2. M/s Kemrock Infratech Limited
Residential Address: 202, 3. M/s Kemrock Filament Windings
Atlantic, IV, Near Natubhai Centre, Limited
Race Course, Vadodara 390007 4. M/s Kemrock Advanced Composites
Limited
5. M/s Kemrock Advance
Reinforcements Limited
6. M/s Kemrock Speciality Polymers
Limited
7. M/s Greenspace Enertech Private
Limited.
8. M/s Greenspace Infratech Private
Limited.
Mr. Navin Patel, 57 U.S --

Non-Executive Director
Residential Address: 401 Midwest

Club Pkwy Oak Brook
IIIinois 60523
United States of America
Mr. Kaushik Bhatt, 56 Indian --

Non-Executive & Independent
Director
Residential Address: 21/121,

Ellora Park, Race Course,
Vadodara 390023
| 96 |
Board of Directors, Residential Age (years) Nationality Other Directorships as on June 30,
Address & their designation 2010
Mahendra R. Patel 61 Indian ---

Whole-time Executive Director
Residential Address: 1, Milan

Park Society, Nizampura,
Vadodara 390002
Gujarat
Mr. Venugopal 47 Indian ---

Non-Executive Director
Residential Address:
Gayatri Krupa, 9, Manisha Society
Old Padra Road, Vadodara 390020
Gujarat, India
Mr. Tushar Patel 49 U.S Crystal Caschem India Ltd.
Residential Address: 8, Dayna

Lane, Lawrenceville, New Jersey
006431583
United States of America
Mr. K.K. Rai 66 Indian 1. UB Engineering Ltd

2. ISMT Ltd.
Residential Address: Sobha Astor 3. V.S.T.Tillers Tractors Ltd.
Flat No. 1053, 5th Main, SRS 4. Canara Bank Securities Ltd.
Nagar, Bilekahalli, B.G. Road 5. Techno Electric and Engineering
Bangalore 560076 Ltd.
Shareholding of Directors as at March 18, 2011
Board of Directors Designation Number of Shareholding

shares held (%)
Mr. Kalpesh Patel, Chairman & 44,62,200 26.63%
Managing
Director
Mr. Navin Patel Non-Executive 77,940 0.47%

Director, Non-
Independent
Mr. Kaushik Bhatt, Non-Executive & 8,000 0.05%

Independent
Director
Mr. Tushar Patel, Non-Executive & -- --
Independent
Director
Mr. K.K. Rai Non-Executive & -- --
Independent
Director
Mr. Mahendra R.Patel Whole-time 100 0.00
(with effect from June 3, 2010) Executive
| 97 |
Board of Directors Designation Number of Shareholding

shares held (%)
Director
Mr Venugopal. K. Shastri Non-Executive -- --
Director
Total 4199979 25.08
Biographies of Directors
Mr. Kalpesh Patel, 50 years, is the Chairman and Managing Director of the Company. Mr. Kalpesh Patel is the
founder of the Company and has been instrumental in formation of the Company as Promoter, technocrat and
leader. Mr. Patel holds Diploma in Mechanical Engineering, Electrical Engineering and Plastic Technology
from M.S. University, Baroda. He has over twenty five (25) years of experience in Fibre Reinforced Products
(FRP) and Composites. He has obtained expertise and experience in pultrusion technology, moulded granting
and manufacturing of Phenolic Resins at Collaborator's manufacturing facilities at USA, UK and at Netherlands.
He has played a vital role in the growth and development of the Company.
Mr. Navin Patel, 57 years of age, is the Non-Executive Director and non-independent Director of the
Company. He holds the degree of Masters in Mathematics and Computer Science from Sardar Patel University,
Vallabh Vidyanagar. He has been associated with the Company as Director since the year 2007. He has about
twenty five (25) years experience as a Financial Planner.
Mr. Kaushik Bhatt, 56 years, is the Independent Director of the Company. Mr. Bhatt is a practising lawyer
since 1979. Mr. Bhatt is a graduate of Arts and Law from Gujarat University. Mr. Bhatt has been associated
with the Company as director since the year 1996. He has about thirty (30) years of experience in the legal field.
He was Ex-member of VCCI, Ex-Vice President of Baroda Bar Association, Ex-Chairman of Defaulter
Committee Vadodara Stock Exchange and Ex-member Disciplinary Committee- Bar Council of Gujarat.
Mr. Tushar Patel, 49 years of age, is the Independent Director of the Company. He holds the degree of BE
(Mechanical) from Sardar Patel University, Vallabh Vidyanagar. He has been associated with the Company as
Director since the year 2007. He has been an entrepreneur with twenty five (25) years of experience and also
hold directorship in Crystal Caschem India Limited.
Mr. K.K.Rai, 66 years of age, is Independent Director of the Company. He holds the degree of B.A. from
Karnataka University, Dharwar and CAIIB from Indian Institute of Bankers, Mumbai. Mr. Rai has been
associated with the Company as a Director since the year 2008. Mr. Rai is a retired banking professional and
retired as the Executive Director of one of the leading public sector Banks. He has over forty (40) years of
experience in Banking and Finance. Mr. Rai has served as a Nominee Director of UTI in Viceroy Hotels
Limited, Hyderabad and Rama Industries Limited, Mumbai.
Mr. Mahendra R. Patel, 61 years, is an Executive Director in the Whole-time employment (CEO-Carbon Fiber
Plant) of the Company. Mr. M.R. Patel, holds a degree in B.E. (Chem.) from M.S. University of Baroda, Baroda
in 1971. He has been associated with the Company since December 18, 2007. He has over 37 years of varied
experience in the field of training, technical services, process operation/ maintenance, project execution and
HSE management amongst others. Mr. Mahendra R. Patel currently heads the Carbon Fiber plant of the
Company. Prior to joining the Company, he was associated with IPCL/RIL- Vadodara, as V.P. Operations.
Mr. Venugopal K. Shastri, 47 years, is a Chartered Accountant and has over 21 years of experience in the
fields of Income Tax; Accounting, Auditing – Internal & External for various Organizations, Banks, Company,
Trust etc.; Project Finance; Information System Audit; Management Consultancy; Bank Audits; and Company
Law matters. He holds degrees of B. com., M. com., L. L. B (Gen.) and I.S.A (Information System Audit). He
has also been associated with other three Chartered Accountant firms as partner/ proprietor.
Key Managerial Personnel
The following are the details of the Key Managerial Personnel. Each of these Key Managerial Personnel work
for the Company and have no activity outside the Company.
| 98 |
No. Name of KMP Date of Designation Business Address

Appointment
1 Mr. Kalpesh M. Patel January 1, CMD Kemrock Industries and
1992 Exports Ltd
Village Asoj
Vadodara Halol
Express Way
Taluka: Waghodia
District: Vadodara
Gujarat 391510
2 Mr. Umesh Nayak November 9, Group President ‐ Do -
2009
3 Mr. Mahendrabhai R. Patel December 18, Executive ‐ Do -
2007 Director
4 Mrs. Usha Moraes July 1, 2010 CFO ‐ Do -
5 Mr. Sandeep Shrimal December 1, President ‐ Do -
2009 Corporate
Affairs
6 Mr. Dinesh Patel March 15, CS & ‐ Do -
2007 Compliance
Officer
7 Mr. Dhaval Mehta October 27, President ‐ Do -
2006 Commercial
8 Dr. Satyanarayan November 11, VP-Technical ‐ Do -
2005
9 Mr. Rakesh V. Patel September 9, Sr. GM - HR ‐ Do -
2009
Brief Profiles of Key Managerial Personnel
Mr. Kalpesh Patel, 50 years, is the Chairman and Managing Director of the Company. Mr. Kalpesh Patel is the
founder of the Company and has been instrumental in formation of the Company as Promoter, technocrat and
leader. Mr. Patel holds Diploma in Mechanical Engineering, Electrical Engineering and Plastic Technology
from M.S. University, Baroda. He has more than twenty five (25) years of experience in Fibre Reinforced
Products (FRP) and Composites. He has obtained expertise and experience in manufacturing facilities at USA,
UK and at Netherlands. He has played a vital role in the growth and development of the Company.
Mr. Umesh Nayak, 45 years, is the Group President of the Company. Mr. Umesh holds a degree of B.E
(Chemical) and MBA (Finance) from Gujarat University. He has been associated with the Company since
November, 2009. He has over 20 years of varied experience in Manufacturing and Project implementation. Mr.
Umesh is responsible for various activities including timely project execution in the Company. Prior to joining
the Company he was associated with Reliance Industries Ltd., Welspun Gujarat Sthal Ltd., Nirma Ltd., and
Torrent Pharmaceuticals Ltd.
Mr. M. R. Patel, 61 years, is a CEO-Carbon Fiber of the Company. Mr. M.R. Patel holds a degree in B.E.
(Chem.) from M. S .University of Baroda, Baroda, June 1971. He has been associated with the Company since
18th December, 2007. He has over 37 years of varied experience in field of training, technical services, process
operation / Maintenance, Project execution, HSE management etc. Mr. M.R. Patel is heading the Carbon Fiber
Project of the Company. Prior to joining the Company, he was associated with IPCL / RIL-Vadodara., (VP-
Operations).
Mrs. Usha Moraes, 54 years is the Chief Financial Officer of the Company. She holds a degree in B.Com from
Madras University, Chennai and a Post Graduate Diploma in Business Management from the Indian Institute of
Management, Ahmedabad. She has been associated with the Company since 1st July 2010. She has over 30
years of varied experience in the field of Corporate Finance, Banking and Management Services. She has been
associated with several foreign and private sector banks, consulting majors, as well as industry financial services
| 99 |
in leadership roles. Prior to joining the Company she was associated with Gartner Inc., a US based consulting
firm in their banking and financial services vertical and Ackruti City Limited in their Venture Capital Fund in an
advisory capacity.
Mr. Sandeep Shrimal, 47 years, is President Corporate Affairs of the company. He holds a degree in B.Com
from Sukhadia University, Udaipur and is a member of ICAI, New Delhi. He has been associated with the
Company since December 1, 2009. He has over 23 years of varied experience in the field of Accounts and
Finance. Prior to joining the company, he was associated with Sun Capital Advisory Services Pvt. Ltd.,
Mumbai.
Mr. Dinesh Patel, 45 years, is a Company Secretary & Compliance Officer of the Company. Mr. Patel is a
Member of the Institute of Company Secretaries of India, New Delhi. He holds a degree from M. S. University
of Baroda in B.Com (Hons); LL.B (Special); PG Diplomas in: Labour Laws, Taxation Law & Practice,
Industrial Relations & Personnel Management and Human Resource Development. He has been associated with
the Company since 15th March, 2007. He has over 12 (twelve) years of experience in relevant field. Mr. Patel is
primarily responsible for the corporate, secretarial, legal and stock exchange related matters of the Company.
Prior to joining the Company he was associated with M/s. Gulbrandsen Chemicals Pvt. Ltd.
Mr. Dhaval Mehta, 49 years, is the Vice President - Commercial of the Company. Mr. Mehta holds a diploma
in Mechanical Engineering from Gujarat Technical Education Board, Ahmedabad. He has been associated with
the Company since October, 2006. He has over twenty five (25) years of experience in the field of materials
management. Mr. Mehta is responsible for Materials Management functions including dispatches and logistics
in the Company. Prior to joining the Company, he was associated with Torrent
Pharmaceuticals Ltd.
Dr. D. Satyanarayana, 47 years, is a Vice President-Technical of the Company. Dr. Satyanarayana holds a
degree in Polymer Chemistry with PhD from Indian Institute of Chemical Technology, Hyderabad. He has been
associated with the Company since November, 2005. He has over fifteen 15 years of experience in polymer
chemistry related filed of Fiber Reinforced Plastics (FRP). Dr. Satyanarayana is responsible for Research and
Development activities related to thermosetting resins and FRP in the Company. Prior to joining the Company
he was associated with Bakelite Hylam, Hyderabad, Jewel Polymers Pvt Ltd, Mumbai and Aisin Cosmos R&D
Company, Hyderabad, a group company of Toyota.
Mr. Rakesh V. Patel, 41 years, is a senior general manager - HR in the Company. Mr. Rakesh Patel holds a
degree in MBA HR from Symbiosis Pune, LL.B from Gujarat University and MCSE from Microsoft. He has
been associated with the Company since September 1, 2009. He has over 17 years of varied experience in the
field of HR, Factory Management & Administration. Mr. Rakesh Patel is heading the HR Department. Prior to
joining the Company, he was associated with Birla Century as Deputy General Manager-HR cum Factory
Manager.
Details of remuneration/sitting fees paid to the Functional/ Whole-Time Director of the Company for the
period ended June 30, 2010 (FY2009-10) are set out below:
(Rupees in Million)
Name and designation of Director Salary Perquisites
Mr. Kalpesh Patel, 15 per annum (basic salary) 1.78

Chairman and Managing Director
Mr. Mahendra R. Patel 00.275 per annum (inclusive of 00.00
perquisites and allowance)
| 100 |
Details of remuneration/sitting fees paid to the full time directors by the Company for the period ended
June, 30, 2010 (for FY 2009-10) are set out below:
(Rupees in Million)
Sitting fee Salaries and Commission (Rs.)
perquisites
(Rs.)
Mr. Kaushik Bhatt -- -- --
Mr. Navin Patel -- -- --
Mr. Tushar Patel -- -- --
Mr. K.K. Rai 00.290 -- --
No other remuneration or benefits in kind were granted to the Key Managerial Personnel, during the last
completed financial year.
No transaction undertaken by the Company with its administrative or management bodies is of unusual nature.
As on, January 31, 2011, the Company has not granted any loans to its directors. As on June 30, 2010 the
Company has not given any loans to its key/ senior management. Further, the Company has not given any
guarantee for the benefit of the directors or the management.
Apart from directors and management personnel who are real persons, the Company has not appointed any
artificial person as Company's administrative, management and supervisory bodies.
Committees of the Board
Audit Committee
Composition
Name of Director Position

Mr. Kaushik Bhatt Member
Mr. K.K. Rai Member
Mr. Venugopal Shastri Member
Mr. Mahendrakumar R. Patel Member
Terms of reference
The Audit committee was re-constituted on October 30, 2010 and comprises of four (4) members. The terms of
reference of the Audit Committee are as follows:
The Audit committee shall meet at least four times in a year and not more than four months shall elapse between
two meetings. The quorum shall be either two members or one third of the members of the audit committee
whichever is greater, but there should be a minimum of two independent members present.
The Audit committee shall have the following powers:

– to investigate any activity within its terms of reference
– to seek information from any employee
– to obtain outside legal or other professional advice
– to secure attendance of outsiders with relevant expertise, it is considers, necessary.
The role of the audit committee shall be as under:

– Oversight of the Company's financial reporting process and the disclosure of its financial information to
ensure that the financial statement is correct, sufficient and credible.
– Recommending the appointment and removal of external auditor, fixation of audit fee and also approval
for payment of any other services.
| 101 |
– reviewing with management the annual financial statements before submission to the board, focusing
primarily on :
• Any changes in accounting policies and practices
• Major accounting entries based on exercise of judgment by management.
• Qualifications in draft audit report;
• Significant adjustments arising out of audit;
• The going concern assumption;
• Compliance with accounting standards;
• Compliance with stock exchange and legal requirement concerning financial statements;
• Any related party transactions i.e. transactions of the Company of material nature, with
Promoters or the management, their subsidiaries or relatives etc. that may have potential
conflict with the interests of company at large.
– Reviewing with the management, external and internal auditors, the Adequacy of internal control
systems.
– Reviewing the adequacy of internal audit function, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure, coverage
and frequency of internal audit;
– Discussions with internal auditors, any significant findings and follow up thereon.
– Reviewing the findings of any internal investigations by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal control system of a material nature and reporting
the matter to the board.
– Discussion with external auditors before the audit commences, nature and scope of audit as well as have
post-audit discussion to ascertain any area of concern, reviewing the company's financial and risk
management policies.
– To look into the reasons for substantial defaults in the payment to the depositors, shareholders (in case
of non-payment of declared dividends) and creditor.
The audit committee shall invite such of the executives, as it considers appropriate (and particularly the head of
finance function) to be present at the meetings of the committee, but on occasions it may also meet with the
presence of any executives of the Company. The Chief Financial Officer, head of internal audit and when
required, a representative of the external auditor shall be present as invitees for the meetings of the audit
committee.
– Compliance with stock exchange and legal requirement concerning financial statements
– Any related party transactions i.e. transactions of the Company of material nature, with Promoters or
the management, their subsidiaries or relatives etc. that may have potential conflict with the interests of
company at large.
Reviewing with the management, external and internal auditors, the Adequacy of internal control systems.
– Reviewing the adequacy of internal audit function, including the structure of the internal audit
department, staffing and seniority of the official heading the department, reporting structure, coverage
and frequency of internal audit.
– Discussions with internal auditors, any significant findings and follow up thereon.
Remuneration (Compensation) Committee
Composition
Mr. Kaushik Bhatt Chairman
Mr. Navin Patel Member
Mr. K. K. Rai Member
The Remuneration committee was re-constituted on October 30, 2010 and comprises of three (3) members. The
terms of reference of the Committee are as follows:
| 102 |
Terms of reference
The Remuneration Committee determines the remuneration, if any, for the executive Directors/Managing
Director and also the Non-executive Directors in terms of the relevant provisions of the Companies Act, 1956.
Shareholders' Grievance Committee
Composition
The Shareholders Grievances Committee consists of the following members:

Mr. Kaushik Bhatt Chairman
Mr. K. K. Rai Member
The Shareholders Grievances Committee was last re-constituted on June 28, 2008 and constituted of three (3)
members, viz., Mr. Kaushik Bhatt as the Chairman and Mr. Mukund Bakshi and Mr. K.K. Rai as Members of
the Committee. Mr. Mukund Bakshi, ceased to be Director w.e.f. 28th August, 2010.
Terms of reference:
To oversee and review within its scope, all matters connected with the securities and look into the shareholder's
complaints related to transfer of shares, de-mat of shares, non receipt of annual report and non- -receipt of
declared dividend amongst others.
Share Transfer Committee
Composition
The Share Transfer Committee was re-constituted by the Board of Directors on 25.02.2004 and constituted of
the following Members

Mr. Kalpesh Patel Chairman
Mr. Kaushik Bhatt Member
The Share Transfer Committee was last re-constituted on February 25, 2004 and constituted of three (3)
members, viz., Mr. Kalpesh Patel as the Chairman and Mr. Mukund Bakshi and Mr. Kaushik Bhatt as Members
of the Committee. Mr. Mukund Bakshi, ceased to be Director w.e.f. 28th August, 2010.
Terms of Reference
The Share Transfer Committee of Directors has been constituted by the Board. The Board has also delegated the
power of share transfer, approvals for transmission, issue of duplicate certificates etc., to the Share Transfer
Committee of Directors. The delegated authority attends to share transfer formalities at least once in fortnight.
The Share transfers received in physical form are processed and the duly transferred share certificates are
returned within the prescribed time limit, subject to the documents being valid and complete in all respects.
Link Intime India Private Limited is the Share Transfer Agent for both physical and demat segment of Equity
Shares of the Company.
Interest of Directors of the Company
All the Directors, including independent Directors, may be deemed to be interested to the extent of fees, if any,
payable to them for attending meetings of the Board or a committee thereof as well as to the extent of other
remuneration and reimbursement of expenses payable to them. The Chairman and Managing Director and the
Executive Director of the Company are interested to the extent of remuneration paid to them for services
rendered as officers or employees of the Company. The Directors, including independent Directors, may also be
| 103 |
regarded as interested in the Equity Shares, if any, held by them and also to the extent of any dividend payable
to them and other distributions in respect of the Equity Shares. The Directors, including independent Directors,
may also be regarded as interested in the Equity Shares held by or that may be subscribed by and allotted to the
companies, firms and trust, in which they are interested as directors, members, partners, trustees. All of the
Directors may be deemed to be interested in the contracts, agreements/ arrangements entered into or to be
entered into by the Company with any company in which they hold directorships or any partnership firm in
which they are partners as declared in their respective capacity.
The Chairman and Managing Director, who is a Promoter of the Company, may be deemed to be interested to
the extent that he has promoted the Company.
Borrowing Powers of the Directors of the Company
Pursuant to resolution under Section 293(1)(d) of the Act, passed by the shareholders of the Company at the
Annual General Meeting held on August 28, 2009 and in accordance with provisions of the Companies Act, the
Board has been authorised to borrow sums of money for the purpose of the Company upon such terms and
conditions and with or without security as the Board of Directors may think fit, provided that money or monies
to be borrowed together with the monies already borrowed by the Company shall not exceed, at any time, a sum
of Rs.1500 Crores.
| 104 |
ORGANIZATION STRUCTURE
Chairman and Managing

Director
Group President
CS and Carbon Composites Composites

Compliance Fiber
Officer
General manager
Mktg. and Customers
Relationships CFO
ED
General President, Vice
President Commercial Managers Pipes President
Vice President (3) division Tech/ R&D
(Mkt)
General
President Managers
Product Procurement (3)
General Vice- President
Managers
Senior General Manager, Operations
Human Resources
| 105 |
TERMS AND CONDITIONS OF THE NON-CONVERTIBLE DEBENTURES
The following, other than the words in italics, constitutes the Terms and Conditions of the NCDs and will
appear on the reverse of each of the NCD Consolidated Certificate (as defined below):
Unless defined herein, all capitalised terms used in these Terms and Conditions have the meaning given to them
in the Debenture Trust Deed.
The issue of 12.5% secured redeemable non-convertible debentures of the face value of Rs.3,00,000 (Rupees
three lakhs) each aggregating to Rs.750 million (the "NCDs") of Kemrock Industries and Exports Limited (the
"Issuer") to qualified institutional buyers ("QIBs"), was authorized by a resolution of the Board of Directors of
the Issuer at meetings held on May 7, 2010 and March 20, 2011 and the meeting of its shareholders held on June
3, 2010 respectively. The NCDs are secured by security created under the Debenture Trust Deed and issued and
created pursuant to a trust deed (the "Debenture Trust Deed") dated April 11, 2011 between the Issuer and
IDBI Trusteeship Services Limited, having its office at Asian Building, 17 R. Kamani Marg, Ballard Estate,
Mumbai 400001 as trustee (who have given their consent to act as Debenture Trustee vide their letter dated
March 14, 2011), for the holders of the NCDs (the "Debenture Trustee"), which term shall, where the context
so permits, include all other persons for the time being acting as Debenture Trustee.
The NCDs have been rated as "BBB+" by CARE vide their letter dated March 4, 2011. The rating of "BBB+"
indicates moderate safety for timely servicing of debt obligations and moderate credit risk. The statements in
these terms and conditions (the "Conditions") include summaries of, and are subject to, the detailed provisions
of the Debenture Trust Deed.
The holders of the NCDs are entitled to the benefit of the Debenture Trust Deed and are bound by, and are
deemed to have notice of, all the provisions of the Debenture Trust Deed.
1. Status & Eligibility
The NCDs being offered as part of the Issue are subject to the provisions of the SEBI Debt Regulations,
the Act, the Memorandum and Articles of Association of the Issuer, the terms of the Preliminary
Placement Document, the Placement Document, the Application Form and the Bid Form, the terms and
conditions of the Debenture Trust Deed, other applicable statutory and/or regulatory requirements
including those issued from time to time by SEBI or the Government of India, the Stock Exchanges,
the RBI, and/or other authorities relating to the Issue and listing of securities and any other documents
that may be executed in connection with the NCDs.
The Issue is being made on the basis of a qualified institutions placement in terms of Chapter VIII of
the SEBI (ICDR) Regulations, and accordingly, only QIBs are eligible to apply for and be allotted the
NCDs. Applicants are instructed to carefully read through the Application Form and clearly mention
therein the category to which they belong.
1.1 Charge
The NCDs are secured by a mortgage and charge over the Secured Assets (as defined in the Debenture
Trust Deed).
The mortgage and charge will initially rank subservient to the existing mortgage and charge created by
the Issuer in favour of its Existing Lenders. Thereafter, within 30 days of the Date of Allotment, the
Issuer shall procure no-objection certificates from all its Existing Lenders and make appropriate filings
with the RoC, upon which the mortgage and charge in respect of the NCDs shall become a first ranking
pari passu mortgage and charge
The Issuer has covenanted that it shall at all times ensure that the value of the Secured Assets is greater
than 1.25 times the aggregate outstanding Nominal Value (as defined in the Debenture Trust Deed) of
the NCDs up to the Final Redemption Date of the NCDs.
| 106 |
2. Form, Denomination, Title and Listing
2.1 Form
2.1.1 The allotment of NCDs in this Issue shall only be in a dematerialized form (i.e., not in the form of
physical certificates but be fungible and be represented by the statement issued through the electronic
mode). The Issuer has made depository arrangements with National Securities Depository Limited
("NSDL") and has made necessary arrangements with Central Depository Services (India) Limited
("CDSL", and together with NSDL, the "Depositories") for the issue of NCDs in dematerialised form.
Subject to Condition 2.1.2, the Debenture Holders will hold the NCDs in dematerialised form and deal
with the same in accordance with the provisions of the Depositories Act, 1996 and/or rules as notified
by the Depositories from time to time.
2.1.2 The Debenture Holders may rematerialize the NCDs at any time after allotment, in accordance with the
provisions of the Depositories Act, 1996 and/or rules as notified by the Depositories from time to time.
In case of NCDs that are rematerialized and held in physical form, the Issuer will issue one certificate to
the Debenture Holders for the aggregate amount of NCDs that are rematerialized and held by such
Debenture Holders (each such certificate a "NCD Consolidated Certificate"). In respect of the NCD
Consolidated Certificates, the Issuer will, upon receipt of a request from the Debenture Holders within
7 Business Days of such request, split such NCD Consolidated Certificates into smaller denominations
in accordance with the Articles of Association, subject to a minimum denomination of one NCD
("Market Lot"). No fees would be charged for splitting any NCD Consolidated Certificates; however,
stamp duty payable, if any, would be borne by the Debenture Holders. The request for split of a NCD
Consolidated Certificate should be accompanied by the original NCD Consolidated Certificate which
will, upon issuance of the split NCD Consolidated Certificates, be cancelled by the Issuer.
2.2 Denomination
The denomination of each NCD is Rs.3,00,000 (Rupees three lakhs) (the “Nominal Value”). The
Nominal Value of each NCD shall be adjusted downwards following a redemption in part on the First
Redemption Date, the Second Redemption Date and/or a Voluntary Redemption Date.
2.3 Title
In case of: (i) NCDs held in the dematerialized form, the person for the time being appearing in the
Register of Beneficial Owners (as defined in the Debenture Trust Deed) as the holder of an NCD, and
(ii) NCDs held in physical form, the person for the time being appearing in the Register of Debenture
Holders as the holder of an NCD shall be treated for all purposes by the Issuer, the Debenture Trustee,
the Depositories and all other persons dealing with such person as the holder thereof and its absolute
owner for all purposes (whether or not it is overdue and regardless of any notice of ownership, trust or
any interest in it or any writing on, theft or loss of the NCD Consolidated Certificate issued in respect
of the NCDs and no person will be liable for so treating the holder). In these Conditions, "Debenture
Holders" and "holder" means the person in whose name an NCD is registered.
Title to the NCDs shall pass only by transfer and registration as described in Condition 3.
2.4 Debentures to rank pari passu
The NCDs, the Redemption Amounts, the interest amounts, Default Interest and all other monies
secured under the Transaction Documents and payable in respect of the NCDs shall, as between the
Debenture Holders inter se, rank pari passu without any preference or priority whatsoever of one over
the other, whether on account of date of issue or allotment or otherwise.
2.5 Debentures free from equities
The Debenture Holders shall be entitled to their Debentures free from equities or cross claims by the
Issuer against the original or any intermediate holders thereof.
| 107 |
2.6 Listing and Trading
The NCDs will be listed on the Wholesale Debt Market segments of the National Stock Exchange of
India Limited (the "NSE") and the Bombay Stock Exchange Limited (the "BSE", and together with the
BSE, the "Stock Exchanges"). As per SEBI circular number SEBI/CFD/SCRR/01/2009/03/09 dated
September 3, 2009, pertaining to relaxation of Rule 19 (2) (b) under sub rule (7) of Rule 19 of the
SCRR, the NCDs shall be traded in a minimum trade lot of one (1) NCD in accordance with provisions
under the applicable laws.
3. Transfers of NCDs; Issue of NCD Consolidated Certificates
3.1 Register
The Issuer shall maintain at its registered office (or such other place as permitted by law) a register of
Debenture Holders (the "Register of Debenture Holders") containing such particulars as required by
Section 152 of the Companies Act. In terms of Section 152A of the Companies Act, the Register of
Beneficial Owners maintained by a Depository for any NCDs in dematerialized form under Section 11
of the Depositories Act shall be deemed to be Register of Debenture Holders for the purposes of this
Condition 3.1.
3.2 Transfers
Subject to Conditions 3.3 and 3.4:
3.2.1 In case of NCDs held in the dematerialized form, transfers of NCDs may be effected only through the
Depository(ies) through which such NCDs to be transferred are held, in accordance with the provisions
of the Depositories Act, 1996 and/or rules as notified by the Depositories from time to time.
3.2.2 In case of NCDs held in physical form, transfers of NCDs may be effected only by delivery of the NCD
Consolidated Certificate issued in respect of that NCD, with the form of transfer duly completed,
stamped and signed by the holder or his duly authorized attorney and the transferee, to the specified
office of the Registrar and Transfer Agent or the Issuer. No transfer of title of an NCD will be valid
unless and until entered on the Register of Debenture Holders.
3.3 No transfer except on Stock Exchange for one year
The NCDs shall not be sold for a period of one year from the date of Allotment except on the floor of
the Stock Exchanges.
3.4 Transfer after any record date for interest payment or the NCDs Maturity Date
3.4.1 If a request for transfer of the NCDs is not received by the Registrar and Transfer Agent before any
Record Date for interest payment, the interest payable on such Interest Payment Date shall be paid to
the person whose name appears on the Register of Debenture Holders (including a Register of
Beneficial Owners, as applicable) as the holder and not to any proposed transferee or buyer mentioned
in the request for transfer.
3.4.2 If a request for transfer of the NCDs is not received by the Registrar and Transfer Agent before the
Maturity Date, the redemption proceeds of the NCDs shall be paid to the person whose name appears
on the Register of Debenture Holders (including a Register of Beneficial Owners, as applicable) as the
holder and not to any proposed transferee or buyer mentioned in the request for transfer. In such cases,
any claims shall be settled inter se between the parties and no claim or action shall lie against the
Issuer.
3.5 Formalities Free of Charge
Registration of a transfer of NCDs and issuance of new NCD Consolidated Certificates will be effected
without charge by or on behalf of the Issuer, but upon payment (or the giving of such indemnity as the
| 108 |
Issuer may require) in respect of any tax or other governmental charges which may be imposed in
relation to such transfer or issuance of new NCD Consolidated Certificates, and the Issuer being
satisfied that the regulations concerning transfers of NCDs and issuance of new NCD Consolidated
Certificates have been complied with.
4. Redemption and Cancellation
4.1 The Issuer will redeem each NCD in three equal tranches on the following dates: (i) first redemption on
the First Redemption Date by paying the First Redemption Amount; (ii) second redemption on the
Second Redemption Date by paying the Second Redemption Amount; and (iii) third and final
redemption on the Final Redemption Date by paying the Final Redemption Amount. The First
Redemption Date, the Second Redemption Date, the Final Redemption Date and the Optional
Redemption Date(s) are together the “Redemption Dates”.
4.2 The Issuer has the option to redeem the NCDs in whole or in part, by delivering a Voluntary
Redemption Exercise Notice in form set out in Schedule 5 (Form of Voluntary Redemption Exercise
Notice) of the Debenture Trust Deed to the Debenture Holders (with a copy to the Debenture Trustee)
and by paying the relevant Voluntary Redemption Amount.
The Voluntary Redemption Exercise Notice shall specify (i) if the NCDs are being redeemed in whole
or in part, (ii) if redeemed in part, the Nominal Value per NCD that is being redeemed, (iii) the relevant
Voluntary Redemption Amount per NCD and (iv) the date of redemption (the “Voluntary Redemption
Date”), which shall be a date falling not less than 5 Business Days after the date of the Voluntary
Redemption Exercise Notice.
Any redemption in part under this Condition shall be subject to a minimum amount of Rs. 250 million,
and in integral multiples of Rs. 100 million thereafter.
4.3 Notwithstanding anything contained in Conditions 4.1 and 4.2 above, upon the occurrence of an Early
Redemption Date, the Issuer shall redeem each NCD by paying the Early Redemption Amount on the
Early Redemption Date. The "Early Redemption Amount" in respect of each NCD will be its
outstanding Nominal Value on the Early Redemption Date together with all accrued but unpaid
interest.
4.4 No action is required on the part of any Debenture Holder(s) at the time of redemption of the NCDs.
On the relevant Redemption Date, the relevant amounts shall be paid by the Issuer, in accordance with
Condition 5 below, to those Debenture Holders whose names appear on the Register of Debenture
Holders as on the Record Date and, for these purposes, a statement issued by the Depository shall be
conclusive evidence in respect thereof.
4.5 The Nominal Value of all NCDs that are redeemed in part on the First Redemption Date, the Second
Redemption Date or any Voluntary Redemption Date will be adjusted downwards to reflect such
redemption in part. All NCDs that are redeemed in whole on the Early Redemption Date, any Voluntary
Redemption Date or the Final Redemption Date will forthwith be cancelled.
5. Interest and Default Interest
Each NCD will bear interest on the outstanding Nominal Value from (and including) the Date of
Allotment (the "Interest Commencement Date") at 12.5% per annum (the “Coupon Rate”) payable at
monthly rests.
Such interest will be payable on the last day of each month (each an "Interest Payment Date") with (a)
the first such payment being made on the last day of the month in which the Date of Allotment falls in
respect of the period from (and including) the Interest Commencement Date to (but excluding) the last
day of such month, and (b) the last such payment being made on the Final Redemption Date.
Where interest is required to be calculated in respect of a period of less than a full half year period, it
shall be calculated on the basis of 365 day year.
| 109 |
The NCDs will cease to bear interest on redemption or on the Final Redemption Date unless, after
surrender of the NCD, payment of principal or interest (if any) is improperly withheld or refused or
default is otherwise made in respect of such payment. Default Interest calculated at a rate equal to the
sum of the Coupon Rate and 2% (the “Default Interest Rate”) shall accrue on any amounts due but not
paid in respect of the Debentures or otherwise under a Transaction Document for the period from (and
including) the date on which such amounts first became due to (but excluding) the date of actual
payment of such amount (both before and after judgment). In case of any other event of Default, default
interest shall be levied at 2% over the Coupon Rate on the outstanding amounts under the Deed from
the date of Default till such time as the Default is cured.
6. Payments
6.1 Payments
6.1.1 Any payments to be made to a Debenture Holder pursuant to Clause 4 (Covenant to Pay and Use of
Proceeds) of the Debenture Trust Deed and/or these Conditions will be made to:
(i) in case of NCDs held in the dematerialized form, to the person appearing in the Register of
Beneficial Owners of a Depository as the beneficial owner of an NCD on Record Date relating
to the relevant Interest Payment Date, Redemption Date or Early Redemption Date, as the case
may be; and
(ii) in case of NCDs held in physical form, to the person appearing in the Register of Debenture
Holders on the Record Date relating to the relevant Interest Payment Date, Redemption Date
or Early Redemption Date, as the case may be.
6.1.2 Payment of principal, interest, Default Interest and all other amounts payable in respect of the NCDs
will be made to the sole holder of NCDs and in case of joint holders, to the one whose name stands first
in the register of beneficial holders or Register of Debenture Holders, as applicable. All such payments
will be made through the Electronic Clearing Service (ECS), Direct Credit, Real Time Gross
Settlement (RTGS) or National Electronic Funds Transfer (NEFT) as per the applicable norms
prescribed by the Reserve Bank of India on or before each Redemption Date.
6.2 Deductions
All payments to be made by the Issuer to a Debenture Holder pursuant to Clause 4 (Covenant to Pay
and Use of Proceeds) of the Debenture Trust Deed and/or these Conditions, including interest, all other
payments upon redemption of the Debentures and Default Interest (if any), shall be made free and clear
of and without any deduction or withholding for or on account of Tax unless the Issuer is required to
make a Tax Deduction under the Tax Act (as defined in the Debenture Trust Deed) or other Applicable
Law, in which case the Issuer shall make all Tax Deduction in accordance with and within the time
prescribed by the Tax Act or other Applicable Law and deliver to the relevant Debenture Holder a tax
deduction certificate in the format prescribed and within the time prescribed under the Income Tax
Rules, 1962. “Tax”, “Tax Deduction” and “Applicable Law” shall have the meanings given to them
in the Debenture Trust Deed.
6.3 Payments on Sundays and public holidays
If a Redemption Date or the Early Redemption Date falls on a Sunday or a public holiday or any other
holiday in Mumbai or Vadodara notified in terms of the Negotiable Instruments Act, 1881, then the
principal or interest, as the case may be, would be paid on the next working day.
If any Interest Payment Date would otherwise fall on a date which is not a Business Day, the payment
shall be brought forward to the immediately preceding Business Day.
6.4 Applicable laws
All payments are subject in all cases to any applicable laws and regulations, but without prejudice to
the provisions of Condition 6.2. No commissions or expenses shall be charged to the Debenture
| 110 |
Holders in respect of such payments.

7. Security
All the obligations of the Issuer under the NCDs and the Transaction Documents, including without
limitation the principal amount of the NCDs, interest and other monies payable by the Issuer in respect
of such NCDs shall be secured by a mortgage and a charge over the Secured Assets of the Issuer as
identified in the Debenture Trust Deed.
Under the Debenture Trust Deed, the issuer has covenanted that it shall at all times during the tenor of
the NCDs ensure that the value of the Secured Assets exceeds 1.25 times the aggregate outstanding
Nominal Value of the NCDs up to the Final Redemption Date.
The mortgage and charge over the Secured Assets shall rank:
(i) until the date of receipt of no-objection certificates or consents from all of the Existing
Lenders in whose favour a first or second ranking charge has been created over the Secured
Assets, subservient to the mortgage and charge created by the Company in favour of its
Existing Lenders; and
(ii) from and with effect from the date of receipt of no-objection certificates or consents from all
Existing Lenders and making of appropriate filings by the Company, and without the need for
any further action by the Debenture Trustee, pari passu with the first ranking mortgage and
charge created in favour of any of the Existing Lenders.
8. Events of Default
8.1 The Debenture Trustee at its discretion may, and if so required in writing by the holders of not less than
50 per cent. (50%) in aggregate Nominal Value of the NCDs then outstanding or if so directed by an
Extraordinary Resolution shall (subject to being indemnified and/or secured by the Debenture Holders
to its satisfaction), give notice to the Issuer that the NCDs are, and they shall accordingly thereby
become, due and repayable on the date specified in such notice (the “Early Redemption Date”) at
their Early Redemption Amount in accordance with Condition 4.3 if any of the events listed in
Condition 8.2 (each, an "Event of Default") has occurred.
8.2 Each of the following events shall be an Event of Default if such event has continued for a period of 10
days, provided that the 10 day cure period shall not be applicable to the events set out under (a), (h), (i),
(j), (k), (o), (p), (t) and (u) below:
(a) Non-payment
The Issuer does not pay on the due date any amount payable pursuant to any Transaction
Document at the place at and in the currency in which it is expressed to be payable.
(b) Financial covenants

(i) The ratio of Borrowings to EBIDTA for the Issuer calculated on a standalone basis exceeds
3.75 to 1.
(ii) The ratio of Borrowings to Adjusted Tangible Net Worth for the Issuer calculated on a
standalone basis exceeds 1.90 to 1.
(c) Other obligations
The Issuer does not comply with any provisions of the Transaction Documents and such non-
compliance has continued for a period of 10 days after the occurrence of such non-compliance.
(d) Misrepresentation
Any representation, covenant or statement made or deemed to be made by the Issuer in, or any
particulars of the Issuer as set out in, any Transaction Document to which it is a party or any other
document delivered by or on behalf of the Issuer under or in connection with any Transaction
Document is determined by the Debenture Trustee in its absolute discretion to be incorrect or
misleading in any material respect when made or deemed to be made.
| 111 |
(e) Non-listing
The Debentures have not been listed on the Wholesale Debt Market segment of the Bombay Stock
Exchange and the National Stock Exchange within 15 (fiteen) days after the Date of Allotment or
cease to be listed on any of the NSE or the BSE at any time thereafter.
(f) Cessation of Business
The Issuer ceases, or decides or threatens to cease, to carry on any part of the business it carries on
or proposes to carry on as at the date of this Deed or gives notice of its intention to do so or if all
or any party of its assets required or essential for its business or operations are damaged or
destroyed or in the opinion of the Debenture Trustee, there occurs any change from the date of this
Deed in the general nature or scope of the business operation, management or ownership of the
Issuer, which, in the opinion of the Debenture Trustee, could have a Material Adverse Effect.
(g) Cross default

(i) Any Financial Indebtedness of the Issuer or its Subsidiary companies (as defined in the
Debenture Trust Deed) is not paid when due nor within any originally applicable grace period.
(ii) Any Financial Indebtedness of the Issuer or its Subsidiary companies is declared to be or
otherwise becomes due and payable prior to its specified maturity as a result of any actual or
potential default, event of default, credit review event or any similar event (however
described).
(iii) Any commitment for any Financial Indebtedness of the Issuer or its Subsidiary companies is
cancelled or suspended by a creditor of such Issuer or its Subsidiary companies as a result of
any actual or potential default, event of default, credit review event or any similar event
(however described).
(iv) Any creditor of the Issuer or its Subsidiary companies becomes entitled to declare any
Financial Indebtedness of the Issuer due and payable prior to its specified maturity as a result
of any actual or potential default, event of default, credit review event or any similar event
(however described).
(v) Any person is in breach of, or does not comply with any term or condition (whether, financial
performance or otherwise) of any Transaction Documents including any security document or
Undertaking.
For the purposes of this Condition, any non-payment or other default in respect of any Financial
Indebtedness will be subject to a threshold amount of INR 200 million in aggregate.
(h) Insolvency
(i) The Issuer is unable to, is presumed or deemed by law to be unable to or admits its inability
to, pay its debts as they fall due, suspends making payments on any of its debts or, by reason
of actual or anticipated financial difficulties, commences negotiations with one or more of its
creditors with a view to rescheduling any of its indebtedness.
(ii) The value of the assets of the Issuer is less than its liabilities (taking into account contingent
and prospective liabilities).
(iii) A moratorium is declared in respect of any indebtedness of the Issuer.
(iv) The Issuer has, at the end of any financial year, accumulated losses equal to or exceeding the
sum total of its paid-up capital and free reserves.
(v) The Issuer is a “sick industrial Issuer” as that term is defined in the Sick Industrial Companies
(Special Provisions) Act, 1985.
(i) Insolvency proceedings

(i) Any corporate action, legal proceedings or other procedure or step is taken in relation to:
(ii) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution,
administration, provisional supervision or reorganisation (by way of voluntary
arrangement, scheme of arrangement or otherwise) of the Issuer;
(iii) making of a reference in relation to the Issuer under the Sick Industrial Companies
(Special Provisions) Act, 1985;
| 112 |
(iv) the Issuer in respect of the corporate debt restructuring mechanism of the Reserve Bank
of India;
(v) a composition, compromise, assignment or arrangement with any creditor of the Issuer;
(vi) the appointment of a liquidator, receiver, administrative receiver, administrator,
compulsory manager, provisional supervisor or other similar officer in respect of the
Issuer or any of its assets; or
(vii) enforcement of any Security over any assets of the Issuer or any analogous procedure or
step is taken in any jurisdiction.
(j) Judgments, creditors' process

(i) The Issuer fails to comply with or pay any sum due from it under any final judgment or any
final order made or given by a court of competent jurisdiction.
(ii) Any expropriation, attachment, sequestration, distress or execution affects any asset or assets
of any the Issuer.
(k) Moratorium
The government of India or any other relevant Governmental Authority declares a general
moratorium or "standstill" (or makes or passes any order or regulation having a similar effect) in
respect of the payment or repayment of any Financial Indebtedness (whether in the nature of
principal, interest or otherwise) (or any indebtedness which includes Financial Indebtedness) owed
by the Issuer (and whether or not such declaration, order or regulation is of general application,
applies to a class of persons which includes the Issuer or to the Issuer alone)
(l) Unlawfulness
It is or becomes unlawful for the Issuer to perform any of its obligations under any Transaction
Document.
(m) Management Control
Any person acting singularly or with any other person (directly or indirectly) acquires control of
the Issuer or of any other person who controls the Issuer, without the approval of the Debenture
Trustee.
(n) Expropriation
Any government (including any political or administrative sub-division thereof), governmental

authority, agency, official or entity takes or threatens any action:
(i) for the dissolution of the Issuer, or any action which deprives or threatens to deprive the
Issuer: (a) from conducting any of its business or carrying out its operations in the manner
it is being conducted or carried out, or (b) of the use of any of its assets;
(ii) to revoke or terminate or to refuse to provide or renew any authorisation or to impose
onerous conditions on or on the grant or renewal of any authorisation; or
(iii) with a view to regulate, administer, or limit, or assert any form of administrative control
over the rates applied, price charges or rates of return achievable, by the Issuer in
connection with its business;
(iv) which, in each case, in the opinion of the Debenture Trustee, could have a Material
Adverse Effect.
(o) Security
(i) This Deed is not (once entered into) in full force and effect or any Security Document does
not (once entered into) create in favour of the Debenture Trustee the Security which it is
expressed to create fully perfected with the ranking and priority it is expressed to have.
(ii) The value of the Secured Assets is less than 1.25 times the Debt at any time prior to the Final
Redemption Date.
(iii) Except for the Security created over the Secured Assets for the benefit of the Secured Parties
to secure the Debt and the security created in favour of Existing Lenders of the Issuer over the
| 113 |
Secured Assets on a first ranking or second ranking basis, as the case may be, on or prior to
the date of this Deed, the Issuer creates or has outstanding any Encumbrance over all or any
part of any of the Secured Assets without the prior written consent of the Debenture Trustee.
(iv) Except as expressly permitted under the Transaction Documents, the Issuer enters into a single
transaction or a series of transactions (whether related or not and whether voluntary or
involuntary) to transfer, assign or otherwise dispose of all or any part of any of the Secured
Assets without the prior written consent of the Debenture Trustee.
(v) If, in the opinion of the Debenture Trustee, the Security created under the Security Documents
is in jeopardy or ceases to have effect or if any Transaction Document including any security
document executed or furnished by or on behalf of the Issuer becomes illegal, invalid,
unenforceable or otherwise fails or ceases to be in effect or fails or ceases to provide the
benefit of the liens, rights, powers, privileges or security interests purported or sought to be
created thereby or if any such Transaction Document shall be assigned or otherwise
transferred, amended or terminated, repudiated or revoked without the approval of the
Debenture Trustee.
(p) Material adverse effect
The Debenture Trustee determines that a Material Adverse Effect exists, has occurred or could
reasonably be expected to occur.
(q) Repudiation
The Issuer repudiates a Transaction Document to which it is a party or evidences an intention to

repudiate any Transaction Document to which it is a party.
(r) Material Litigation
Any litigation, arbitration, investigative or administrative proceeding is current, pending or

threatened:
(i) to restrain the Issuer entry into, the exercise of any of the Issuer rights under, or compliance by
the Issuer with any of its obligations under, the Transaction Documents; or
(ii) which the Debenture Trustee otherwise determines has or if, adversely determined, could
reasonably be expected to have a Material Adverse Effect.
(s) Consents, approvals and licenses

(i) The Issuer breaches any obligation with respect to obtaining or maintaining, or fails to obtain
or, all relevant consents, approvals and authorisations as specified by relevant regulatory
authorities from time to time.
(ii) The Issuer breaches any obligation with respect to complying with, or fails to comply with, all
applicable regulatory and other requirements as specified by relevant regulatory authorities
from time to time.
(iii) A license of the Issuer is revoked, terminated or suspended which prejudices the Issuer’s
ability to perform its obligations under the Transaction Documents and/or to discharge the
Debt and/or its ability to carry on its business.
(t) Illegality
(i) It is or becomes unlawful for the Issuer or any person (including the Debenture Trustee) to
perform any of their respective obligations under the Deed or any Transaction Document;
(ii) The Deed or any Transaction Document or any provision thereof are required by any law to be
amended, waived or repudiated; or
(iii) Any obligation under the Deed or any Transaction Document is not or cases to be a valid and
binding obligation of any person party to it or becomes void, illegal, unenforceable or is
repudiated by such person (other that the Debenture Trustee).
| 114 |
(u) Inadequate Security and Insurance

(i) If the Issuer’s assets have not been kept insured by the Issuer or depreciate in value to such
extent that such depreciation value could in the opinion of the Debenture Trustee, have a
Material Adverse Effect;
(ii) Any insurance contracted or taken by the Issuer is not, or ceases to be, in full force and effect
at any time when it is required to be in effect or any insurance is avoided, or any insurer or
any insurer or re-insurer avoids or suspends or becomes entitled to avoid or suspend, any
insurance or any claim under it or otherwise reduce its liability under any insurance or any
insurer of any insurance is not bound, or ceases to be bound, to meet its obligation in full or in
part under any insurance.
(v) Use of proceeds
The Company does not utilise the funds raised by the Issue in the manner set out in Clause 4.4 of
the Debenture Trust Deed.
(w) Rating downgrade
The rating of the Debentures is downgraded below BBB+.
Any event occurs which under the laws of any relevant jurisdiction has an analogous effect to any of
the events referred to in any of the foregoing paragraphs (a) to (w).
8.3 If any Event of Default or any event which, after the notice, or lapse of time, or both, would constitute
an Event of Default has happened, the Issuer shall, forthwith give notice thereof to the Debenture
Trustee in writing specifying the nature of such event of default or of such event.
8.4 The security created in favour of the Debenture Trustee under the Debenture Trust Deed shall become
enforceable by the Debenture Trustee upon the occurrence of an Event of Default.
9. Meetings of Debenture Holders, modification, waiver and substitution
9.1 The provisions with regard to meetings of Debenture Holders will be as set out in Schedule 2
(Provisions for the meetings of Debenture Holders) of the Debenture Trust Deed.
9.2 The terms and conditions attached to the NCDs, including these Conditions, may be varied, modified
or abrogated in accordance with the Articles and the Act and by an Extraordinary Resolution of the
Debenture Holders as specified in the Debenture Trust Deed or by the Debenture Trustee where any
such variation, modification or abrogation is, in the opinion of the Debenture Trustee, of a formal
minor or technical nature or to correct a manifest error, provided that nothing in such consent or
resolution shall be operative against the Issuer where such consent or resolution modifies or varies the
terms and conditions of the NCDs which are not acceptable to the Issuer. The Issuer shall promptly
notify the Debenture Holders of any such variation, modification or abrogation.
10. Future Borrowings
The Issuer shall be entitled, from time to time, with the prior written approval of the Debenture Holders
and the Debenture Trustee, to make further issue of NCDs and/or other debenture and /or such other
instruments to the public, shareholders of the Issuer and/or avail of further financial and/or guarantee
facilities from financial institutions, banks and/or any other person on the security or otherwise of its
properties.
However, until the Debentures are fully redeemed, the Company shall not create any mortgage or
charge or other security or encumbrances on any of its properties or assets without obtaining prior
written approval of the Debenture Trustee and the Debenture Holders.
| 115 |
11. Notices
The notices to the Debenture Holders required to be given by the Issuer or the Debenture Trustee shall
be deemed to have been given on the third day following the day on which it is posted if sent by post in
prepaid letter addressed to the sole/first allottee or sole/first registered holder of the NCD, as the case
may be at their registered office address. In proving such service it shall be sufficient to prove that the
letter containing the notice was properly addressed and put into post box. All notices to be given by
Debenture Holders shall be sent by registered post or by hand delivery to the Issuer at its Registered
Office.
12. Replacement of NCDs
If any rematerialized NCD is mutilated, defaced, destroyed, stolen or lost, it may be replaced at the
specified office of the Registrar and Transfer Agent upon payment by the claimant of such costs as may
be incurred in connection therewith and on such terms as to evidence and indemnity as the Issuer or the
Registrar and Transfer Agent may require. Mutilated or defaced NCDs must be surrendered before
replacements will be issued.
13. Buy back of NCDs
The Issuer may from time to time, subject to applicable law and necessary approvals, buyback NCDs
on terms and conditions to be mutually decided between the Issuer and the Debenture Holders.
14. Governing Law and Jurisdiction
The NCDs and the Deed are governed by, and shall be construed in accordance with, the laws of India
and any dispute arising out of or in connection with the NCDs, as regards to the Issuer, shall be subject
to the exclusive jurisdiction of courts at Mumbai, Maharashtra. The Debenture Trustee and the
Debenture Holders may however in their absolute discretion commence any legal action or proceedings
arising out of the Transaction Documents in any other court, tribunal or other appropriate forum and the
Issuer hereby consents to that exclusive jurisdiction.
| 116 |
TERMS AND CONDITIONS OF THE WARRANTS
The following, other than the words in italics, are the Terms and Conditions of the Warrants and will appear on
the reverse of each Warrant Consolidated Certificate (as defined below).
The issue of 12,50,000 Warrants (the "Warrants") of Kemrock Industries and Exports Limited (the "Issuer"),
was authorized by a resolution of the Board of Directors of the Issuer on May 7, 2010 and a resolution of the
shareholders of the Issuer on June 3, 2010. The Warrants are subscribed at an issue price of Rs.30 each and
would be issued on or around [●].
1. Status
The Warrants constitute direct, unsubordinated, unconditional and unsecured obligations of the Issuer
and shall at all times rank pari passu and without any preference or priority among themselves and shall
also rank pari passu with all other present and future direct and unsubordinated, unconditional and
unsecured obligations of the Issuer (subject to any obligations preferred by mandatory provisions of the
law prevailing from time to time).
2. Form, Denomination, Title and Listing
2.1. Form
The allotment of Warrants in this Issue shall only be in a dematerialized form (i.e., not in the form of
physical certificates but be fungible and be represented by the statement issued through the electronic
mode). The Issuer has made depository arrangements with National Securities Depository Limited
("NSDL") and Central Depository Services (India) Limited ("CDSL", and together with NSDL, the
"Depositories") for the issue of Warrants in dematerialised form. Subject to Condition mentioned
herein, the Warrant holders will hold the Warrants in dematerialised form and deal with the same in
accordance with the provisions of the Depositories Act, 1996 /rules as notified by the Depositories from
time to time.
The Warrant holders may rematerialize the Warrants at any time after allotment, in accordance with the
provisions of the Depositories Act, 1996 /rules as notified by the Depositories from time to time.
The Warrants are subject to the provisions of the Companies Act and the Memorandum of Association
and Articles of Association of the Company. In addition, the Warrants shall also be subject to
applicable laws, guidelines, notifications and regulations relating to the issue of capital and listing of
securities issued from time to time by the Government of India, SEBI, RBI and/or other authorities
2.2. Denomination
Each Warrant is exchangeable for 1 (one) Equity Share only at the Warrant Exercise Price.
In case of Warrants that are rematerialized and held in physical form, the Issuer will issue one
certificate to the Warrants holder for the aggregate amount of Warrants that are rematerialized and held
by such Warrantholder (each such certificate, a "Warrant Consolidated Certificate"). In respect of the
Warrant Consolidated Certificates, the Issuer will, upon receipt of a request from the Warrantholder
within 7 business days of such request, split such Warrant Consolidated Certificates into smaller
denominations in accordance with the Articles of Association, subject to a minimum denomination of
5000 Warrants ("Market Lot"). No fees would be charged for splitting any Warrant Consolidated
Certificate; however, stamp duty payable, if any, would be borne by the Warrantholder. The request for
split of a Warrant Consolidated Certificate should be accompanied by the original Warrant
Consolidated Certificate which will, upon issuance of the split Warrant Consolidated Certificates, be
cancelled by the Issuer.
| 117 |
2.3. Title
In case of: (i) Warrants held in the dematerialized form, the person for the time being appearing in the
register of beneficial owners of a Depository as the holder of a Warrant, and (ii) Warrants held in
physical form, the person for the time being appearing in the Register of Warrantholders as the holder
of a Warrant shall be treated for all purposes by the Issuer, the Depositories and all other persons
dealing with such person as the holder thereof and as its absolute owner for all purposes (whether or not
it is overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, theft
or loss of the Warrant Consolidated Certificate issued in respect of the Warrant) and no person will be
liable for so treating the holder. In these Conditions, "Warrantholder" and "holder" means the person in
whose name a Warrant is registered.
Title to the Warrants shall pass only by transfer and registration as described in Condition 3.
2.4. Listing and Trading
The Warrants are to be listed on the Bombay Stock Exchange Limited (the "BSE") and the National
Stock Exchange of India Limited (the "NSE", and together with the BSE, the "Stock Exchanges"). As
per SEBI circular number SEBI/CFD/SCRR/01/2009/03/09 dated September 3, 2009, pertaining to
relaxation of Rule 19 (2) (b) under sub rule (7) of Rule 19 of the SCRR, the warrants shall be traded in
a minimum trade lot of Rs.1,00,000.
3. Transfers of Warrants; Issue of Warrant Consolidated Certificates
3.1. Register
The Issuer shall maintain at its registered office (or such other place as permitted by law) a register of
Warrantholders (the "Register of Warrantholders"). The Register of Warrantholders maintained by a
Depository for any Warrants in dematerialised form shall be deemed to be a Register of Warrantholders
for the purposes of this Condition 3.1.
3.2. Transfers
Subject to Conditions 3.3 and 3.4:
In case of Warrants held in the dematerialized form, transfers of Warrants may be effected only through
the Depository(ies) through which such Warrants to be transferred are held, in accordance with the
provisions f the Depositories Act, 1996 and/or rules as notified by the Depositories from time to time.
In case of Warrants held in physical form, transfers of Warrants may be effected only by delivery of the
Warrant Consolidated Certificate issued in respect of that Warrant, with the form of transfer duly
completed and signed by the Warrantholder or his duly authorized attorney, to the specified office of
the Registrar. No transfer of title of a Warrant will be valid unless and until entered on the Register of
Warrantholders. The form of transfer shall be the same as prescribed for equity shares.
Transfers of interests in the Warrants in the dematerialized form will be effected in accordance with the
rules of the relevant Depositories.
3.3. No transfer except on Stock Exchange for one year
The Warrants shall not be sold for a period of one year from the date of Allotment except on the floor
of the Stock Exchanges.
3.4. Restricted Transfer Period
No Warrantholder may require the transfer of a Warrant to be registered after any Exercise Notice has
been delivered in respect of the Warrant.
| 118 |
3.5. Formalities Free of Charge
Registration of a transfer of Warrants and issuance of new Warrant Consolidated Certificates will be
effected without charge by or on behalf of the Issuer, but upon payment (or the giving of such
indemnity as the Issuer may require) in respect of any duty, tax or other governmental charges which
may be imposed in relation to such transfer, and the Issuer being satisfied that the regulations
concerning transfers of Warrants have been complied with.
4. Rights of Warrantholders
4.1. Subject to Conditions 3.2, 3.3 and 3.4, the Warrants shall be transferable and transmittable in the same
manner and to the same extent and be subject to the same restrictions and limitations and other related
matters as in the case of Equity Shares.
4.2. The Warrantholders shall have no other rights or privileges except as expressly provided in these
Conditions.
4.3. On exercise and subsequent allotment of Equity Shares, the Warrantholders shall enjoy the rights and
privileges of equity shareholders of the Issuer and not of Warrantholders.
4.4. The Warrants shall not confer upon the holders thereof any right to receive any notice of the meeting of
the Shareholders of the Issuer or Annual Report of the Issuer and/or to attend or vote at any of the
general meetings of the shareholders of the Issuer.
4.5. The Warrantholders shall not be entitled to any dividend or any other corporate benefits, which may be
declared or announced by the Issuer from time to time until such time that the Warrants are converted
into the underlying Equity Shares in accordance with these Conditions.
5. Exercise Right and Exercise Period
Exercise Right
5.1. Each Warrant entitles the Warrantholder to subscribe, at the option of the Warrantholder by way of
exercise of the Warrant at any time during the Warrant Exercise Period (as defined below) at the
Warrant Exercise Price (as adjusted in accordance with Condition 6), in the manner set forth in
Condition 5.4 and otherwise on the terms and subject to this Condition 5, to one (1) fully paid Equity
Share (the "Exercise Right").
5.1.1. The Exercise Right shall be available: (i) in case of Warrants held in the dematerialized form, to the
person for the time being appearing in the register of beneficial owners of a Depository as the holder of
a Warrant, and (ii) in case of Warrants held in physical form, to the person for the time being appearing
in the Register of Warrantholders, at the time of exercise of the Exercise Right.
5.1.2. An Exercise Right may only be exercised in respect of one or in multiples of one Warrants, no
fractional entitlements will be allowed. Upon exercise of Exercise Rights in relation to any Warrant and
the fulfillment by the Issuer of all its obligations in respect thereof, the relevant Warrantholder shall
have no further rights in respect of such Warrant and the obligations of the Issuer in respect of the
Warrant shall be extinguished
5.2. Warrant Exercise Period
5.2.1. The Exercise Right may be exercised, at the option of the Warrantholder thereof, at any time during
eight (8) window periods, each consisting of 15 days, as set out in table below during normal business
hours on and after six (6) months from date of allotment and up to forty-eight months from the date of
allotment and in no event thereafter) (the "Warrant Exercise Period"). Any Warrants, which have not
been exercised during any of these eight (8) window periods shall lapse and cease to be valid and any
amounts paid thereon will stand forfeited.
| 119 |
Warrant Exercise Period (15 days)

Month Year Start Date Close Date
7th 2011-12 01-Oct-11 15-Oct-11
13th 2012-13 01-Apr-12 15-Apr-12
19th 2012-13 01-Oct-12 15-Oct-12
25th 2013-14 01-Apr-13 15-Apr-13
31st 2013-14 01-Oct-13 15-Oct-13
th
37 2014-15 01-Apr-14 15-Apr-14
43rd 2014-15 01-Oct-14 15-Oct-14
th
48 2014-15 01-Mar-15 15-Mar-15
5.3. Warrant Exercise Price
The holder for the time being of each Warrant will have the right, by way of exercise of the Exercise
Right attaching to such Warrant, at any time during the Warrant Exercise Period, to subscribe for fully-
paid Equity Shares at a price per Equity Share (the "Warrant Exercise Price") equal to Rs. 600 or such
adjusted amount as, in accordance with Condition 6, is applicable (disregarding any retroactive
adjustment not then reflected in the Warrant Exercise Price, but without prejudice to the Issuer's
obligations in respect thereof) on the Warrant Exercise Date (as defined in Condition 5.4.1 (iv)).
An Exercise Right may only be exercised in respect of one or more Warrants. If more than one Warrant
held by the same holder is exercised at any one time by the same holder, the number of Equity Shares to
be issued upon such exercise will be calculated on the basis of the aggregate number of Warrants to be
exercised.
5.4. Procedure for Exercise of Warrants
5.4.1. Exercise Notice
(i) To exercise the Exercise Right, the Warrantholder thereof must complete, execute and deposit
at his own expense during normal business hours at the specified office of the Registrar a
notice of Exercise (a "Exercise Notice") in the form obtainable during the Warrant Exercise
Period from the registered office of the Issuer or the website of the Issuer at
www.kemrock.com. The form of the Exercise Notice may be obtained from any of the
aforesaid locations during the period from the date of Allotment of Warrants until the
termination of the Warrant Exercise Period. The duly completed Exercise Notice must be
accompanied with: (i) a cheque/demand draft drawn in favour of the designated account of the
Company opened for this purpose for the aggregate amount of the Warrant Exercise Price in
respect of all the Warrants sought to be converted pursuant to the Exercise Notice and the
amounts specified in Condition 5.4.1 (ii) (the "Other Costs" and together with the Warrant
Exercise Price, the "Exercise Amount"); and (ii)(a) in case of Warrants held in the
dematerialized form, a photocopy of the delivery instruction referred to in Condition 5.4.2,
duly authenticated by the depository participant; or (b) in case of Warrants held in physical
form, the Warrant Consolidated Certificate issued in respect of that Warrant, with the form of
transfer thereof duly completed and signed by the Warrant holder or his duly authorized
attorney.
(ii) On the Warrant Exercise Date, the Warrantholder is also required to make the payment of:
(a) all (if any) such stamp, issue, registration or other similar taxes or duties arising on
exercise of the relevant Warrants in the place in which such Warrants is or are
deposited for exercise thereof or in consequence of the delivery of Warrant
Consolidated Certificates for the Equity Shares to be issued on such exercise to or to
the order of a person other than the exercising Warrantholder or the person specified
| 120 |
in the Exercise Notice as his standing proxy or other nominee as the Issuer may
request at the time of the said deposit of the relevant Warrants; the expenses of, and
the submission of any necessary documents required in order to effect, dispatch of
certificates for Equity Shares and any other securities, property or cash to be
delivered upon exercise to a place other than the corporate Office of the Issuer;
(b) If the amount received by the Issuer in respect of an exercising Warrantholder's

purported payment of the Exercise Amount relating to all of the relevant Warrants is
less than the full amount of the Exercise Amount, the Issuer shall not treat the
amount so received or any part thereof as payment of the Exercise Amount, or any
part thereof and, accordingly, the whole of such amount shall remain in the
designated account opened by the Issuer for this purpose to be maintained by the
Issuer unless and until a further payment is made in an amount sufficient to cover the
deficiency. If the Issuer does not receive the payment of the Exercise Amount
relating to the exercise of particular Warrants within 14 days after the Exercise Date
in respect of such Warrants, the Issuer may (but is not obliged to), in its discretion
and without liability to itself return such Warrants and the relevant Exercise Notice to
the exercising Warrantholder at the risk and expense of such Warrantholder. Further,
the amount paid on issue of warrants will stand forfeited, if a Warrant lapses.
(iii) An Exercise Notice deposited outside the normal business hours or on a day which is not a
business day at the place of the specified office of the Registrar of the Issuer as per details in
the Exercise notice shall for all purposes be deemed to have been deposited with the Registrar
during the normal business hours on the next business day following such day.
(iv) The exercise date in respect of a Warrant (the "Warrant Exercise Date") must fall at a time
when the Exercise Right attaching to that Warrant is expressed in these Conditions to be
exercisable and will be deemed to be the date of the surrender of the Warrant Consolidated
Certificate in respect of such Warrant and delivery of such Exercise Notice. An Exercise
Notice once delivered shall be irrevocable and may not be withdrawn unless the Issuer
consents to such withdrawal.
5.4.2. Delivery of Equity Shares
(i) Upon exercise by a Warrantholder of its Exercise Right, the Issuer will, within 15 days from
the end of Warrant Exercise Period, cause the relevant securities account of the Warrant
holder exercising his Exercise Right or of his/their nominee, to be credited with such number
of relevant Equity Shares to be issued upon exercise and shall further cause the name of the
concerned Warrant holder or its nominee to be registered accordingly, in the record of the
beneficial holders of Equity Shares, maintained by the depository.
(ii) The allotment of Equity Shares pursuant to exercise of Warrants in this Issue shall only be in a
dematerialized form (i.e., not in the form of physical certificates but be fungible and be
represented by the statement issued through the electronic mode). The holders thereof will
hold the Equity Shares so allotted in dematerialised form and deal with the same in
accordance with the provisions of the Depositories Act, 1996 and/or rules as notified by the
Depositories from time to time.
(iii) The Equity Shareholders may rematerialize the Equity Shares at any time after allotment, in
accordance with the provisions of the Depositories Act, 1996 and/or rules as notified by the
Depositories from time to time.
(iv) All Equity Shares issued upon exercise of Warrants shall be fully-paid up and rank pari passu
with the Equity Shares of the Issuer existing on the relevant Exercise Date. The Equity Shares
to be issued upon the exercise of the Exercise Right shall also be listed on the Stock
Exchanges.
| 121 |
(v) If the Warrant Exercise Date in relation to any Warrant shall be on or after the record date for
any issue, distribution, grant, offer or other event as gives rise to the adjustment of the
Warrant Exercise Price pursuant to Condition 6, but before the relevant adjustment becomes
effective under the relevant Condition, upon the relevant adjustment becoming effective, the
Issuer shall allot to the exercising Warrant holder or in accordance with the instructions
contained in the Exercise Notice (subject to applicable exchange control or other laws or other
regulations), such additional number of Equity Shares (in addition to the Equity Shares issued
on exercise of the relevant Warrants) as is equal to the number of Equity Shares which would
have been required to be issued on exercise of such Warrant if the relevant adjustment to the
Warrant Exercise Price had been made and become effective on or immediately after the
relevant record date.
(vi) If the Exercise Right in respect of more than one Warrant is exercised at any one time such
that Equity Shares to be issued on exercise are to be registered in the same name, the number
of such Equity Shares to be issued in respect thereof shall be calculated on the basis of the
aggregate number of such Warrants being so exercised and rounded down to the nearest whole
number of Equity Shares. By reason of the adjustment as per (v) above, fractions of Equity
Shares will not be allotted on exercise but the Issuer will, including without limitation in the
event of a consolidation or re-classification of Equity Shares by operation of law or otherwise
occurring after three years from date of allotment which reduces the number of Equity Shares
outstanding, the Issuer will upon exercise of the Warrants pay in cash (in INR by means of a
INR cheque drawn on a bank in Vadodara) the sum equal to such portion of the Warrant
Exercise Price of the Warrant or Warrants evidenced by the Warrant Consolidated Certificate
deposited in connection with the exercise of Exercise Rights, as corresponds to any fraction of
an Equity Share not issued if such sum exceeds INR [●]. Any such sum shall be paid not later
than three business days after the relevant Warrant Exercise
6. Adjustments to Warrant Exercise Price
The Warrant Exercise Price will be subject to adjustment in the following events (each an "Adjustment
Event"):
6.1. Consolidation, Subdivision or Reclassification
Adjustment: If and whenever there shall be an alteration to the nominal value of the Equity Shares as a
result of consolidation, subdivision or reclassification, the Warrant Exercise Price shall be adjusted by
multiplying the Warrant Exercise Price in force immediately before such alteration by the following
fraction:
A/B
Where:
A is the nominal amount of one Equity Share immediately after such alteration; and B is the nominal
amount of one Equity Share immediately before such alteration. Effective Date of Adjustment: Such
adjustment shall become effective on the date the alteration takes effect or, in the case of an alteration
to the nominal value of the Equity Shares as a result of consolidation, if a record date is fixed therefor
immediately after such record date.
6.2. Capitalisation of Profits or Reserves
6.2.1. Adjustment: If and whenever the Issuer shall issue any Equity Shares credited as fully paid to the
holders of Equity Shares ("Shareholders") by way of capitalisation of profits or reserves(including
any securities premium account) including, Equity Shares paid up out of distributable profits or reserves
and/or share premium account, the Warrant Exercise Price shall be adjusted by multiplying the Warrant
Exercise Price in force immediately before such issue by the following fraction:
A/B
| 122 |
Where:
A is the aggregate nominal amount of the issued Equity Shares immediately before such issue;
and
B is the aggregate nominal amount of the issued Equity Shares immediately after such issue.
Effective Date of Adjustment: Such adjustment shall become effective on the date of issue of such
Equity Shares or if a record date is fixed therefor, immediately after such record date.
6.3. Rights Issues of Equity Shares or Options over Equity Shares
Adjustment: If and whenever the Issuer shall issue Equity Shares to all or substantially all Shareholders
as a class by way of rights, or issue or grant to all or substantially all Shareholders as a class by way of
rights, of options, warrants or other rights to subscribe for or purchase or otherwise acquire any Equity
Shares , the Warrant Exercise Price shall be adjusted by multiplying the Warrant Exercise Price in force
immediately before such issue or grant by the following fraction:
A+B / A+C
Where:
A is the number of Equity Shares in issue immediately before such announcement;

B is the number of Equity Shares which the aggregate amount (if any) payable for the Equity S
hares issued by way of rights or for the options or warrants or other rights issued by way of
rights and for the total number of Equity Shares comprised therein would subscribe for or
purchase or otherwise acquire at such Current Market Price per Equity Share; and
C is the aggregate number of Equity Shares issued or, as the case may be, comprised in the issue
or grant.
Equity Shares or issue or grant of such options, warrants or other rights (as the case may be) or where a
record date is set, the first date on which the Equity Shares are traded ex-rights, ex-options or ex-
warrants (as the case may be).
6.4. Rights Issues of Other Securities
Adjustment: If and whenever the Issuer shall issue any securities (other than Equity Shares or options,
warrants or other rights to subscribe for or purchase or otherwise acquire any Equity Shares) to all or
substantially all Shareholders as a class by way of rights or grant to all or substantially all Shareholders
as a class by way of rights, of options, warrants or other rights to subscribe for or purchase any
securities (other than Equity Shares or options, warrants or other rights to subscribe or purchase or
otherwise acquire Equity Shares) which in the opinion of the Stock Exchanges require adjustment in the
Warrant Exercise Price, the Warrant Exercise Price shall be adjusted by multiplying the Warrant
Exercise Price in force immediately before such issue or grant by the following fraction:
A-B
A
Where:
A is the Current Market Price of one Equity Share on the last Trading Day preceding the date on
which such issue or grant is publicly announced; and
B is the Fair Market Value on the date of such announcement of the portion of the rights
attributable to one Equity Share.
Equity Shares or issue or grant of such options, warrants or other rights (as the case may be) or where a
| 123 |
record date is set, the first date on which the Equity Shares are traded ex-rights, ex-options or ex-
warrants, as the case may be.
6.5. Issues at less than Current Market Price
Adjustment: If and whenever the Issuer shall issue (otherwise than as mentioned in Condition 6.4
(Rights Issues of Equity Shares or Options over Equity Shares) above) wholly for cash any Equity
Shares (other than Equity Shares issued upon the exercise of the Exercise Rights or on the exercise of
any other rights of conversion into, or exchange or subscription for, Equity Shares) or shall issue or
grant (otherwise than as mentioned in Condition 6.4 (Rights Issues of Equity Shares or Options over
Equity Shares) above) wholly for cash any options, warrants or other rights to subscribe or purchase or
otherwise acquire Equity Shares in each case at a price per Equity Share which is less than the Current
Market Price on the last Trading Day preceding the date of announcement of the terms of such issue or
grant, which in the opinion of the Stock Exchanges require adjustment in the Warrant Exercise Price,
the Warrant Exercise Price shall be adjusted by multiplying the Warrant Exercise Price in force
immediately before such issue by the following fraction:
A +B / C
Where:
A is the number of Equity Shares in issue immediately before the issue of such additional Equity
Shares or the grant of such options, warrants or other rights to subscribe for or purchase or
otherwise acquire any Equity Shares;
B is the number of Equity Shares which the aggregate consideration receivable (if any) for the
issue of such additional Equity Shares would purchase at such Current Market Price per
Equity Share; and
C is the number of Equity Shares in issue immediately after the issue of such additional
Equity Shares.
References to additional Equity Shares in the above formula shall, in the case of an issue or grant by
the Issuer of options, warrants or other rights to subscribe or purchase or otherwise acquire Equity
Shares, mean such Equity Shares to be issued, or otherwise made available, assuming that such options,
warrants or other rights are exercised in full at the initial exercise price (if applicable) on the date of
issue or grant of such options, warrants or other rights.
additional Equity Shares or, as the case may be, the issue or grant of such options, warrants or other
rights.
6.6. Other Issues at less than Current Market Price
Adjustment: Save in the case of an issue of securities arising from a conversion or exchange of other
securities in accordance with the terms applicable to such securities themselves falling within this
Condition
6.7. (Other Issues at less than Current Market Price), if and whenever the Issuer (otherwise than as
mentioned in Conditions 6.4 (Rights Issues of Equity Shares or Options over Equity Shares), 6.5
(Rights Issues of Other Securities) or 6.6 (Issues at less than Current Market Price)), or (at the direction
or request of or pursuant to any arrangements with the Issuer) any other company, person or entity shall
issue any securities (other than the Warrants) which by their terms of issue carry rights of conversion
into, or exchange or subscription for, Equity Shares to be issued by the Issuer on conversion, exchange
or subscription at a consideration per Equity Share which is less than the Current Market Price on the
last Trading Day preceding the date of announcement of the terms of issue of such securities, which in
the opinion of the Stock Exchanges require adjustment in the Warrant Exercise Price, the Warrant
| 124 |
Exercise Price shall be adjusted by multiplying the Warrant Exercise Price in force immediately before
such issue by the following fraction:
A+B
A+C
Where:
A is the number of Equity Shares in issue immediately before such issue;

B is the number of Equity Shares which the aggregate consideration (if any) receivable by the
Issuer for the Equity Shares to be issued, or otherwise made available, on conversion or
exchange or on exercise of the right of subscription attached to such securities would purchase
at such Current Market Price per Equity Share; and
C is the maximum number of Equity Shares to be issued on conversion or exchange of such
securities or on the exercise of such rights of subscription attached thereto at the initial
conversion, exchange or subscription price or rate.
securities.
6.8. Modification of Rights of Conversion etc.
Adjustment: If and whenever there shall be any modification of the rights of conversion, exchange or
subscription attaching to any such securities as are mentioned in Condition 6.7 (Other Issues at less
than Current Market Price) (other than in accordance with the terms of such securities) so that the
consideration per Equity Share (for the number of Equity Shares available on conversion, exchange or
subscription following the modification) is reduced and is less than the Current Market Price on the last
Trading Day preceding the date of announcement of the proposals for such modification, which in the
opinion of the Stock Exchanges require adjustment in the Warrant Exercise Price, the Warrant Exercise
Price shall be adjusted by multiplying the Warrant Exercise Price in force immediately before such
modification by the following fraction:
A+B /A+C
Where:
A is the number of Equity Shares in issue immediately before such modification;
B is the number of Equity Shares which the aggregate consideration (if any) receivable by the
Issuer for the Equity Shares to be issued, or otherwise made available, on conversion or
exchange or on exercise of the right of subscription attached to the securities, in each case so
modified, would purchase at such Current Market Price per Equity Share or, if lower, the
existing conversion, exchange or subscription price of such securities; and
C is the maximum number of Equity Shares to be issued, or otherwise made available, on

conversion or exchange of such securities or on the exercise of such rights of subscription
attached thereto at the modified conversion, exchange or subscription price or rate but giving
credit in such manner as an Independent Investment Bank, consider appropriate (if at all) for
any previous adjustment under this Condition 6.8 (Modification of Rights of Conversion etc.)
or Condition 6.7 (Other Issues at less than Current Market Price).
Effective Date of Adjustment: Such adjustment shall become effective on the date of modification of
the rights of conversion, exchange or subscription attaching to such securities.
6.9. Other Offers to Shareholders
Adjustment: If and whenever the Issuer or (at the direction or request of or pursuant to any
arrangements with the Issuer) any other company, person or entity issues, sells or distributes any
| 125 |
securities in connection with which offer the Equity Shareholders generally (meaning for the purposes
of these presents the holders of at least 60 per cent. of Equity Shares outstanding at the time such offer
is made) are entitled to participate in arrangements whereby such securities may be acquired by them
(except where the Warrant Exercise Price falls to be adjusted under Condition 6.4 (Rights Issues of
Equity Shares or Options over Equity Shares), Condition 6.5 (Rights Issues of Other Securities),
Condition 6.6 (Issues at less than Current Market Price) or Condition 6.7 (Other Issues at less than
Current Market Price)), which in the opinion of the Stock Exchanges require adjustment in the Warrant
Exercise Price, the Warrant Exercise Price shall be adjusted by multiplying the Warrant Exercise Price
in force immediately before such issue by the following
fraction:
A-B
A
Where:
A is the Current Market Price of one Equity Share on the last Trading Day preceding the date on
which such issue is publicly announced; and
B is the Fair Market Value on the date of such announcement of the portion of the rights
attributable to one Equity Share.
Effective Date of Adjustment: Such adjustment shall become effective on the date of issue, sale or
distribution of the securities.
6.10. Delisting
In the event the Equity Shares are no longer listed or admitted to trading on both of the Stock
Exchanges (a "Delisting") or if either of the Stock Exchanges is notified of a proposed open offer in
relation to a Delisting, which in the opinion of the Stock Exchanges require adjustment in the Warrant
Exercise Price, the Warrant Exercise Price shall be adjusted to the amount representing the Floor Price.
6.11. Other Events
If the Issuer determines that an adjustment should be made to the Warrant Exercise Price as a result of
one or more events or circumstances not referred to in this Condition 6 (Adjustments to Warrant
Exercise Price), the Issuer shall, at its own expense, consult an Independent Investment Bank, to
determine as soon as practicable what adjustment (if any) to the Warrant Exercise Price is fair and
reasonable to take account thereof, if the adjustment would result in a reduction in the Warrant Exercise
Price, and the date on which such adjustment should take effect and upon such determination by the
Independent Investment Bank such adjustment (if any) shall be made and shall take effect in
accordance with such determination, provided that where the circumstances giving rise to any
adjustment pursuant to this Condition 6 (Adjustments to Warrant Exercise Price) have already resulted
or will result in an adjustment to the Warrant Exercise Price or where the circumstances giving rise to
any adjustment arise by virtue of circumstances which have already given rise or will give rise to an
adjustment to the Warrant Exercise Price, such modification (if any) shall be made to the operation of
the provisions of this Condition 6 (Adjustments to Warrant Exercise Price) as may be advised by the
Independent Investment Bank to be in their opinion appropriate to give the intended result.
For the purposes of these Conditions:
"Closing Price" for the Equity Shares for any Trading Day shall be the last reported transaction price
on the NSE or, as the case may be, BSE for such day.
"Current Market Price" means, in respect of an Equity Share at a particular date, the arithmetic
average of the Closing Prices for one Equity Share (being an Equity Share carrying full entitlement to
dividend) for the five consecutive Trading Days ending on the Trading Day immediately preceding
such date; provided that if at any time during the said five Trading Day period the Equity Shares shall
have been quoted ex-dividend and during some other part of that period the Equity Shares shall have
been quoted cum-dividend then:
| 126 |
(i) if the Equity Shares to be issued in such circumstances do not rank for the dividend in
question, the quotations on the dates on which the Equity Shares shall have been quoted cum-
dividend shall for the purpose of this definition be deemed to be the amount thereof reduced
by an amount equal to the Fair Market Value of the amount of that dividend per Equity Share;
or
(ii) if the Equity Shares to be issued in such circumstances rank for the dividend in question, the
quotations on the dates on which the Equity Shares shall have been quoted ex-dividend shall
for the purpose of this definition be deemed to be the amount thereof increased by the Fair
Market Value of the amount of that dividend per Equity Share; and provided further that if the
Equity Shares on each of the said five Trading Days have been quoted cum-dividend in
respect of a dividend which has been declared or announced but the Equity Shares to be issued
do not rank for that dividend, the quotations on each of such dates shall for the purpose of this
definition be deemed to be the amount thereof reduced by an amount equal to the Fair Market
Value of that dividend per Equity Share.
"Fair Market Value" means, with respect to any assets, security, option, warrants or other right on
any date, the fair market value of that asset, security, option, warrant or other right as determined by an
Independent Investment Bank provided that (i) the fair market value of a cash dividend paid or to be
paid per Equity Share shall be the amount of such cash dividend per Equity Share determined as at the
date of announcement of such dividend; (ii) where options, warrants or other rights are publicly traded
in a market of adequate liquidity (as determined by such Independent Investment Bank) the fair market
value of such options, warrants or other rights shall equal the arithmetic mean of the daily closing
prices of such options, warrants or other rights during the period of five trading days on the relevant
market commencing on the first such trading day such options, warrants or other rights are publicly
traded.
"Independent Investment Bank" means an independent investment bank of international repute

(acting as expert) selected by the Issuer and notified to the Warrantholders in accordance with
Condition 10.
"Relevant Cash Dividend" means any cash dividend specifically declared by the Issuer.
"Trading Day" means a day when the Stock Exchanges are open for trading business, provided that if
no Closing Price is reported for one or more consecutive dealing days such day or days will be
disregarded in any relevant calculation and shall be deemed not to have been dealing days when
ascertaining any period of trading days.
6.12. The Warrant Exercise Price may not be reduced so that, on exercise of Warrants, Equity Shares would
fall to be issued at a discount to their par value.
6.13. Minor Adjustments
On any adjustment, the relevant Warrant Exercise Price, if not an integral multiple of one Rupee, shall
be rounded down to the nearest Rupee. No adjustment shall be made to the Warrant Exercise Price
where such adjustment (rounded down if applicable) would be less than one per cent. of the Warrant
Exercise Price then in effect. Any adjustment not required to be made, and any amount by which the
Warrant Exercise Price has not been rounded down, shall be carried forward and taken into account in
any subsequent adjustment. Notice of any adjustment shall be given to Warrantholders in accordance
with Condition 9 (Notices) as soon as practicable after the determination thereof.
6.14. Cumulative Adjustments
Where more than one event which gives or may give rise to an adjustment to the Warrant Exercise
Price occurs within such a short period of time that in the opinion of an Independent Investment Bank,
the foregoing provisions would need to be operated subject to some modification in order to give the
intended result, such modification shall be made to the operation of the foregoing provisions as may be
| 127 |
advised by such Independent Investment Bank to be in their opinion appropriate in order to give such
intended result.
6.15. Employee Stock Option
No adjustment will be made to the Warrant Exercise Price when Equity Shares or other securities
(including rights or options) are issued, offered or granted to employees (including directors) of the
Issuer or any subsidiary of the Issuer or any other eligible persons pursuant to any Employee Stock
Option Scheme (and which Employee Stock Option Scheme is in compliance with the listing rules of
the Stock Exchanges).
6.16. Notice of Change in Exercise Price
The Issuer shall give notice to the Warrantholders in accordance with Condition 9 of any change in the
Warrant Exercise Price. Any such notice relating to a change in the Warrant Exercise Price shall set
forth the event giving rise to the adjustment, the Warrant Exercise Price prior to such adjustment, the
adjusted Warrant Exercise Price and the effective date of such adjustment.
For the avoidance of doubt, nothing in this Condition 6 shall obligate the Issuer to disclose any
information which is not public information to the Warrantholders or where it is not legally permissible
to disclose such information.
6.17. Minimum Warrant Exercise Price
Notwithstanding the provisions of this Condition, the Warrant Exercise Price shall not be reduced to an
amount such that adjusted Warrant Exercise Price is less than the Floor Price as a result of any
adjustment made hereunder, and in such case the reduction shall be limited to the Floor Price.
6.18. Reference to "fixed"
Any reference in these Conditions to the date on which a consideration is "fixed" shall, where the
consideration is originally expressed by reference to a formula which cannot be expressed as an actual
cash amount until a later date, be construed as a reference to the first day on which such actual cash
amount can be ascertained.
6.19. Miscellaneous
6.19.1. No adjustment will be made to the Warrant Exercise Price when any Equity Shares are issued following
the exercise of the Warrants.
6.19.2. No adjustment involving an increase in the Warrant Exercise Price in this Condition 6 (Adjustments to
Warrant Exercise Price) will be made, except in the case of a consolidation of the Equity Shares as
referred to in Condition 6.1 (Consolidation, Subdivision or Reclassification) above.
6.20. Consolidation, Amalgamation or Merger of the Issuer
In the case of any consolidation, amalgamation or merger of the Issuer with any other corporation
(other than a consolidation, amalgamation or merger in which the Issuer is the continuing corporation),
or in the case of any sale or transfer of all, or substantially all, of the assets of the Issuer, or in the case
of any creation of a holding company owning all shares of the Issuer by way of exchange for all issued
and paid up shares of the Issuer or transfer of all the issued and paid up shares of the Issuer into the
holding Issuer, the Issuer shall forthwith notify the Warrantholders of such event in accordance with
Condition 9 (Notices) and (so far as legally possible) cause the corporation or the holding company
resulting from such consolidation, amalgamation, merger, share exchange or share transfer or the
corporation which shall have acquired such assets, as the case may be, to execute such instruments or
other documents or assurances as may be necessary legally to ensure that the holder of each Warrant
then remaining unexercised shall have the right (during the period such Warrant shall remain
unexercised) by exercising such Warrant to be issued the class and amount of shares and other
| 128 |
securities and property receivable upon such consolidation, amalgamation, merger, sale, transfer, share
exchange or share transfer by a holder of the number of Equity Shares which would have become liable
to be issued upon exercise of such Warrant immediately prior to such consolidation, amalgamation,
merger, sale, transfer, share exchange or share transfer (such instruments or other documents or
assurances to provide for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in the foregoing provisions of this Condition 6 (Adjustments to Warrant
Exercise Price)) and the above provisions of this Condition 6 (Adjustments to Warrant Exercise Price)
shall apply in the same way to any subsequent consolidations, amalgamations, mergers, sales, transfers,
share exchanges or share transfers. If the Issuer is a party to any transaction referred to above in which
it is not the continuing corporation, it shall use its best endeavours to obtain all consents that may be
necessary or appropriate under law to enable the continuing corporation to give effect to the Warrants.
7. Undertakings
7.1. The Issuer undertakes that, so long as any Warrant remains unexercised:
7.1.1. it will use its best endeavours (a) to obtain and maintain a listing of the Warrants on the Stock
Exchanges, (b) to maintain a listing for all the issued Equity Shares on the Stock Exchanges, and (c) to
obtain and maintain a listing for all the Equity Shares issued on the exercise of the Exercise Rights
attaching to the Warrants on the Stock Exchanges;
7.1.2. it will reserve, free from any other encumbrances, pre-emptive or other similar rights, out of its
authorized but unissued ordinary share capital the full number of Equity Shares liable to be issued on
exercise of the Warrants and will ensure that all such Equity Shares will be duly and validly issued as
fully-paid;
7.1.3. it will pay the expenses of the issue or delivery of, and all expenses of obtaining listing for, Equity
Shares arising on exercise of the Warrants, including but not limited to stamp duties, issue expenses,
registration fees and taxes;
7.1.4. it will not make any reduction of its ordinary share capital or any uncalled liability in respect thereof or
of any share premium account or capital redemption reserve fund (except, in each case, as permitted by
law);
7.1.5. it will not make any offer, issue or distribute or take any action the effect of which would be to reduce
the Warrant Exercise Price below the face value of the Equity Shares, provided always that the Issuer
shall not be prohibited from purchasing its Equity Shares to the extent permitted by law; and
7.1.6. it will not take any corporate or other action described in Condition 6 unless, the total aggregate
decrease in the Warrant Exercise Price that would result from all corporate actions or other actions
provided in Condition 6 would not result in the sum of the Warrant Issue Price and the Warrant
Exercise Price being lower than the Regulatory Floor Price.
8. Further Issues
The Issuer may from time to time without the consent of the Warrantholders create and issue new
further securities either having the same terms and conditions as the Warrants in all respects so that
such further issue shall be consolidated and form a single series with the outstanding securities of any
series (including the Warrants) or upon such terms as the Issuer may determine at the time of their
issue.
9. Notices
9.1. If, at any time prior to the expiration of the Warrants and prior to their exercise, any of the following
events shall occur:
9.1.1. any action which would require an adjustment pursuant to Condition 6, or
| 129 |
9.1.2. a dissolution, liquidation or winding up of the Issuer (other than in connection with a consolidation,
merger, or sale of all or substantially all of its property, assets, and business as an entirety) shall be
proposed then in any one or more of said events, the Issuer shall give notice in writing of such event to
the Warrantholders in accordance with Condition 9.2. Failure to publish or mail such notice or any
defect therein or in the publication or mailing thereof shall not affect the validity of any action taken in
connection with such dividend, distribution, or subscription rights, or proposed dissolution, liquidation
or winding up.
9.2. The notices to the Warrantholders required to be given by the Issuer or the Debenture Trustee shall be
deemed to have been given if sent by ordinary post to the sole/first allottee or sole/first registered holder
of the Warrant, as the case may be. All notices to be given by Warrantholders shall be sent by registered
post or by hand delivery to the Issuer at its Corporate Office.
10. Replacement of Warrants
If any rematerialized Warrant is mutilated, defaced, destroyed, stolen or lost, it may be replaced at the
specified office of the Registrar upon payment by the claimant of such costs as may be incurred in
connection therewith and on such terms as to evidence and indemnity as the Issuer or the Registrar may
require. Mutilated or defaced Warrant must be surrendered before replacements will be issued.
11. Governing Law and Jurisdiction
The Warrants are governed by, and shall be construed in accordance with, the laws of India and any
dispute arising out of or in connection with the Warrants shall be subject to the exclusive jurisdiction of
courts at Gujarat.
| 130 |
ISSUE PROCEDURE
Below is a summary intended to present a general outline of the procedure relating to the application,
bidding, payment, allocation and allotment of the Securities. The procedure followed in this Issue may differ
from the one mentioned below and prospective investors are assumed to have apprised themselves of the same
from the Company, the Global Coordinator and Book Running Lead Manager. Prospective investors are
advised to inform themselves of any restrictions or limitations that may be applicable to them. For further
details, see the chapters "Selling Restrictions" and "Transfer Restrictions" of this Preliminary Placement
Document.
Qualified Institutions Placements
The Issue is being made to QIBs in reliance upon Chapter VIII of the SEBI ICDR Regulations through the
mechanism of Qualified Institutions Placements ("QIP"), pursuant to which an Indian listed company may issue
and allot equity shares or non-convertible debt instruments along with warrants and convertible securities (other
than warrants) to QIBs as defined in Regulation 2(1)(zd) of the SEBI ICDR Regulations on private placement
basis, provided that:
• a special resolution approving the qualified institutions placement has been passed by its shareholders;
• equity shares of the same class, which are proposed to be allotted through qualified institutions
placement or pursuant to conversion or exchange of eligible securities offered through qualified
institutions placement, have been listed on a recognised stock exchange having nation wide trading
terminal for a period of at least one year prior to the date of issuance of notice to its shareholders for
convening the meeting to pass the special resolution and
• such company complies with the minimum public shareholding requirements set out in the listing
agreement with the stock exchanges referred to above.
Additionally, there is a minimum pricing requirement for the Warrants under the SEBI (ICDR) Regulations. The
Warrant Exercise Price shall not be less than the average of the weekly high and low of the closing prices of the
related Equity Shares quoted on the stock exchange during the two weeks preceding the relevant date. In case of
warrants, the 'relevant date', at the option of the Company can be the date of the meeting in which the board of
the Company or the committee of directors duly authorised by the board of directors of the Company decides to
open the Issue or the date on which the holders of such warrants become entitled to apply for the Equity Shares.
"Stock Exchange" means any of the recognised stock exchanges in which the equity shares of the Issuer are
listed and on which the highest trading volume in such shares has been recorded during the two weeks
immediately preceding the relevant date.
As per the SEBI (ICDR) Regulations, in a Qualified Institutions Placement of non-convertible debt instrument
along with warrants, an investor can subscribe to the combined offering of non- convertible debt instruments
with warrants or to the individual securities, that is, either non- convertible debt instruments or warrants.
Securities must be allotted within twelve months from the date of the shareholders resolution approving the QIP.
The Securities issued pursuant to the QIP must be issued on the basis of a placement document that shall contain
all material information including the information specified in Schedule XVIII of the SEBI Regulations. The
Placement Document is a private document provided to less than 49 investors through serially numbered copies
and is required to be placed on the website of the concerned Stock Exchange and of the Issuer with a disclaimer
to the effect that it is in connection with an issue to QIBs and no offer is being made to the public or to any other
category of investors. A copy of the Placement Document is required to be filed with the SEBI for record
purposes within 30 days of the allotment of the Securities.
Investors are not allowed to withdraw their Bids after the closure of the Issue.
The Company has applied for and received the in-principle approval of the Stock Exchanges under Clause 24 (a)
of its Listing Agreements for the listing of the Securities on the Stock Exchanges. The Company shall also file a
copy of the Preliminary Placement Document with the Stock Exchanges.
| 131 |
Issue Procedure
1. The Company and the GC-BRLM shall identify prospective Investors and circulate serially numbered
copies of the Preliminary Placement Document and Bid Forms through which the Bids from the
investors would be received.
2. The GC-BRLM shall deliver to such QIBs Bid Form (each, a "Bid Form"). The list of QIBs to whom
the Bid Form is delivered shall be determined by the GC-BRLM, in consultation with the Company.
Unless the Preliminary Placement Document and Bid Form is pre-numbered serially and
addressed to a particular QIB, no invitation to subscribe shall be deemed to have been made to
such QIBs. Even if such documentation were to come into the possession of any person other than the
intended recipient, no offer or invitation to offer shall be deemed to have been made to such person.
3. QIBs may submit the Bid Form during the bidding period to the GC-BRLM.
4. A duly filled Bid Form is submitted by a QIB, such Bid Form constitutes an irrevocable offer and
cannot be withdrawn after the Bid Closing Date. The Bid Closing Date shall be notified to the Stock
Exchanges and the QIBs shall be deemed to have been given notice of such date after the receipt of the
Bid Form.
5. The Company and the GC-BRLM shall on the basis of the Bid Forms identify Prospective Investors
and circulate Application Forms to the identified Investors either in electronic form.
6. Application Form
6A. Application Form for Warrants: QIBs will be required to indicate the following in the Application
Form:
(a) Name of the QIB to whom Warrants are to be Allotted;

(b) Number of Warrants Bid for;
(c) Price at which they are agreeable to subscribe for the Warrants, and
(d) The details of the depository account(s) to which the Warrants should be credited.
6B. Application Form for NCDs: QIBs will be required to indicate the following in the Application Form:
(a) Name of the QIB to whom NCDs are to be Alloted;

(b) Number of NCDs Bid for; and
(c) The details of the depository account(s) to which the NCDs should be credited.
Note:
Each sub-account of an FII (where each such sub-account is duly registered with SEBI) will be
considered as an individual QIB and separate Bid-cum-Application Forms would be required
from each sub-account for submitting Bids. FIIs or sub-accounts of FIIs are required to indicate
the SEBI FIIs/ sub-account registration number in the Application Forms. It may be noted that a
sub-account which is a foreign corporate or a foreign individual is not a "QIB" in terms of SEBI
(ICDR) Regulations.
7. Upon the receipt of the Application Form, the Company shall determine the final price of Warrant Issue
Price, and the number of Securities to be issued in consultation with the GC-BRLM . On determination
of the Warrant Issue Price, the GC-BRLM will send the CAN to the QIBs who have been allocated
Securities. The dispatch of the CAN shall be deemed a valid, binding and irrevocable contract for the
QIBs to pay the entire NCD Issue Price or Warrant Issue Price (as applicable) for all the Securities
allocated to such QIB. The CAN shall contain details such as the number of Securities allocated to the
QIB and payment instructions including the details of the amounts payable by the QIB for allotment of
the Securities in its name and the Pay-In Date as applicable to the respective QIB.
| 132 |
Pursuant to receiving a CAN, each QIB shall be required to make the payment of the entire application
monies for the Securities indicated in the CAN at the applicable NCD Issue Price or Warrant Issue
Price (as applicable), through electronic transfer to the Escrow Bank Account of the Company by the
Pay- In Date as specified in the CAN sent to the respective QIBs.
Upon receipt of the application monies from the QIBs, the Company shall allot Securities as per the
details in the CAN to the QIBs. The Company shall not allot Securities to more than 49 QIBs. The
Company will intimate to the Stock Exchanges the details of the allotment.
8. After adopting the Allotment resolution and prior to crediting the Securities into the Depository
Participant accounts of the QIBs, the Company shall apply for in-principle approval of BSE and NSE
for listing of the Securities.
9. After receipt of the in-principle approval of the BSE and the NSE, the Company shall credit the
Securities into the Depository Participant accounts of the respective QIBs in accordance with the details
submitted by the QIBs in the Bid-cum-Application Form.
10. The Company shall then apply for the final trading and listing permissions from the Stock Exchanges.
11. The Securities that have been credited to the Depository Participant accounts of the QIBs shall be
eligible for trading on the Stock Exchanges only upon the receipt of final trading and listing
permissions from both the Stock Exchanges.
12. The Stock Exchanges shall notify the final trading and listing permissions, which are ordinarily
available on their websites, and the Company shall communicate the receipt of the final trading and
listing permissions from the Stock Exchanges to those QIBs to whom the related Securities have been
allotted.
13. The Company and the GC-BRLM shall not be responsible for any delay or non-receipt of the
communication of the final trading and listing permissions from the Stock Exchanges or any loss
arising from such delay or non-receipt. The final listing and trading approvals granted by the Stock
Exchanges are also placed on their respective websites. QIBs are advised to apprise themselves of the
status of the receipt of the permissions from the Stock Exchanges or the Company.
Common Form of Transfer
The NCDs would be issued and traded in dematerialised form. Therefore no physical certificates shall be issued.
Should there be any holding of NCDs in the physical form due to the depository giving the re-materialisation
option to any investor, the form of transfer thereof shall be the same as prescribed for Equity Shares.
Qualified Institutional Buyers
Only QIBs as defined in Regulation 2(1)(zd) of the SEBI ICDR Regulations are eligible to invest. Currently,
under Regulation 2(1)(zd) of the SEBI ICDR Regulations, a QIB means:
• a public financial institution as defined in Section 4A of the Companies Act;

• a scheduled commercial bank;
• a mutual fund registered with Board;
• a foreign institutional investor and sub-account registered with SEBI, other than a sub-account which is
a foreign corporate or foreign individual;
• a multilateral and bilateral development financial institution;
• a venture capital fund registered with SEBI;
• a foreign venture capital investor registered with SEBI;
• a state industrial development corporation;
• an insurance company registered with Insurance Regulatory and Development Authority (IRDA);
• a provident fund with minimum corpus of Rs.250 million;
| 133 |
• a pension fund with minimum corpus of Rs.250 million; and

• National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated 23 November 2005 of
the Government of India published in the Gazette of India.
• Insurance Funds setup by Armed forces such as Army group Insurance Fund Under Regulation 86 of
Chapter VIII of the SEBI ICDR Regulations, no allotment shall be made, either directly or indirectly,
to any QIB who is a promoter or any person related to the promoter(s) of the Company. For this
purpose, any QIB who has all or any of the following rights shall be deemed to be a person related to
the promoters:
• rights under a shareholders' agreement or voting agreement entered into with promoters of the
Company or persons related to the promoters of the Company;
• veto rights; or
• the right to appoint a nominee director on the Board of the Company, unless a QIB has acquired any of
these rights in its capacity as a lender to the Company and such QIB does not hold any shares in the
Company.
The Company and the GC-BRLM are not liable for the summary of the legal provisions as stated herein
and for any amendments or modification or changes in applicable laws or regulations, which may occur
after the Preliminary Placement Document is filed with the Stock Exchanges. QIBs are advised to make
their independent investigations and satisfy themselves that they are eligible to Bid. QIBs are advised to
ensure that any single Bid from them does not exceed the investment limits or maximum number of
Securities that can be held by them under applicable law or regulation or as specified in the Preliminary
Placement Document. Further, QIBs are required to satisfy themselves that their Bids would not
eventually result in triggering a tender offer under the Takeover Code and the QIB shall be solely
responsible for compliance with the provisions of the Takeover Code, SEBI (Prohibition of Insider
Trading) Regulations, 1992 and other applicable laws, rules, regulations, guidelines and circulars.
A minimum of 10 per cent of each of the Securities in this issue shall be offered to mutual funds. If no mutual
fund is agreeable to take up the minimum portion as specified above, such minimum portion or part thereof may
be allotted to other QIBs by the Company.
Note: Affiliates or associates of the GC-BRLM, who are QIBs may participate in the Issue in compliance
with applicable laws.
Application and Bidding
Bid Form
QIBs shall only use the serially numbered Bid Form supplied by the GC-BRLM in either electronic form or by
physical delivery for the purpose of making a bid in accordance with the terms of the Preliminary Placement
Document and the Placement Document.
By making a Bid for related Securities pursuant to the terms of the Preliminary Placement Document, each QIB
will be deemed to have made the following representations and warranties and the representations, warranties
and agreements made under the sections and paragraphs "Notice to Investors", "Selling Restrictions" and
"Transfer Restrictions":
(a) the QIB confirms that it is a Qualified Institutional Buyer ("QIB") in terms of Regulation 2(1)(zd) of
the SEBI (ICDR) Regulations, have a valid and existing registration under the applicable laws in India
(as applicable) and is eligible to participate in this Issue;
(b) the QIB confirms that it is not a promoter and is not a person related to the promoters, either directly or
indirectly, and its Bid does not directly or indirectly represent the promoter or promoter group or
persons related to the promoters of the Company;
(c) The QIB confirms that it has no rights under a shareholders agreement or voting agreement with the
promoters or persons related to the promoters, no veto rights or right to appoint any nominee director
| 134 |
on the Board of the Company other than that acquired in the capacity of a lender not holding any
Securities which shall not be deemed to be a person related to the promoters;
(d) the QIB has no right to withdraw its Bid after the Bid Closing Date;
(e) the QIB confirms that if Securities are allotted pursuant to this Issue, it shall not, for a period of one
year from allotment, sell such Securities otherwise than on the Stock Exchanges;
(f) the QIB confirms that the QIB is eligible to Bid and hold Securities so allotted and together with any
Securities held by the QIB prior to the Issue and the QIB further confirms that the holdings of the QIB,
do not and shall not, exceed the level permissible as per any regulations applicable to the QIB;
(g) the QIB confirms that the application would not eventually result in triggering an open offer under the
Takeover Code;
(h) the QIB confirms that to the best of its knowledge and belief together with other QIBs in the Issue that
belong to the same group or are under common control, the allotment to the QIB shall not exceed
50%of the aggregate amount of the Issue. For the purposes of this statement:
(i) the expression "belongs to the same group" shall derive meaning from the concept of
"companies under the same group" as provided in sub-section (11) of Section 372 of the
Companies Act, 1956; and
(ii) "Control" shall have the same meaning as is assigned to it by under Clause (c) of sub-
regulation (1) of Regulation 2 of the Takeover Code.
(i) The QIB shall not undertake any trade in the Securities credited to its Depository Participant account
until such time that the final listing and trading approvals for the Securities are issued by the Stock
Exchanges.
QIBS WOULD NEED TO PROVIDE THEIR DEPOSITORY ACCOUNT DETAILS, THEIR

DEPOSITORY PARTICIPANT'S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION
NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE APPLICATION FORM. QIBS MUST
ENSURE THAT THE NAME GIVEN IN THE APPLICATION FORM IS EXACTLY THE SAME AS
THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD.
Demographic details such as address and bank account will be obtained from the Depositories as per the
Depository Participant account details given above.
The submission of an Bid Form by the QIBs shall be deemed a valid, binding and irrevocable offer for the QIB
to pay the entire Warrants Issue Price and /or NCD Issue Price, pursuant to which the Company in consultation
with the GC-BRLM and GC-BRLM will provide an Application Form, as applicable for its share of Allotment
(as indicated by the CAN) and becomes a binding contract on the QIB, upon issuance of the CAN by the
Company in favour of the QIB.
By submitting the Bid Form, the QIB will be deemed to have made the representations and warranties as
specified under the section, "Notice to Investors-Representation by Investors" and further that such QIB shall
not undertake any trade in the Securities credited to its depository participant account until such time
that the final listing and trading approval for the Securities is issued by the Stock Exchanges.
Bids by Mutual Funds ("MF")
The Bids made by the asset management companies or custodian of MFs shall specifically state the names of the
concerned schemes for which the Bids are made.
Demographic details like address, bank account etc. will be obtained from the Depositories as per the demat
account details given above.
As per the current regulations, the following restrictions are applicable for investments by MFs:
| 135 |
No MF scheme shall invest more than 10% of its net asset value in Equity Shares or equity related instruments
of any company provided that the limit of 10% shall not be applicable for investments in index funds or sector
or industry specific funds. No MF under all its schemes should own more than 10% of any company's paid-up
capital carrying voting rights.
The above information is given for the benefit of the Bidders. The GC-BRLM is not liable for any amendments
or modification or changes in applicable laws or regulations, which may happen after the date of the Preliminary
Placement Document. Bidders are advised to make their independent investigations and ensure that the number
of Securities Bid for do not exceed the applicable limits under the applicable laws and regulations.
Submission of Bid Form
All Bid Forms shall be duly completed including price and the number of related Securities bid. All Bid Forms
duly completed along with copy of the PAN card shall be submitted to the GC-BRLM. The Bid-cum-
Application Form shall be submitted within the bidding Period to the GC-BRLM either in electronic form or
through physical delivery at the following address:
Name: Networth Stock Broking Limited

Address: 2nd Floor, D. C. Silk Mills Compound,
Kondivita Road, Andheri (East)
Mumbai – 400 059
Email: sc.ib@networthdirect.com
Phone: 022 – 30641600
The GC-BRLM shall not be required to provide any written acknowledgement of the same.
Pricing and Allocation
Building of the Book
The QIBs subscribing either to NCDs and/or Warrants shall submit their Bids separately for the NCDs or the
Warrants, as applicable, within the Bidding Period to the GC-BRLM.
Price discovery and allocation
The Company, in consultation with the GC-BRLM shall finalise the Warrant Exercise Price which shall be at or
above the Floor Price.
After finalisation of Warrant Exercise Price, Warrant Issue Price, the Company shall have updated the
Preliminary Placement Document with the Issue details and shall file the final Placement Document with the
Stock Exchanges.
Method of Allocation
The Company shall determine the allocation in consultation with the GC-BRLM in compliance with Chapter
VIII of the SEBI (ICDR) Regulations.
Bids received from QIBs at or above the Warrant Issue Price and the NCD Issue Price shall be grouped together
to determine the total demand. Any allocation to all such QIBs will be made at the Warrant Issue Price and the
NCD Issue price. Allocation shall be decided by the Company in consultation with the GC-BRLM to whom an
Application Form shall be provided on a discretionary basis for a maximum of 49 investors. Allocation to
Mutual Funds for up to a minimum of 10% of the aggregate amount of the Issue shall be undertaken subject to
valid bids being received at or above the Warrant Issue Price and the NCD Issue Price.
| 136 |
THE DECISION OF THE COMPANY AND THE GC-BRLM IN RESPECT OF ALLOCATION

SHALL BE BINDING ON ALL QIBS. QIBS MAY NOTE THAT ALLOCATION OF SECURITIES IS
AT THE SOLE AND ABSOLUTE DISCRETION OF THE COMPANY AND QIBS MAY NOT
RECEIVE ANY ALLOCATION, EVEN IF THEY HAVE SUBMITTED VALID BIDS AT OR ABOVE
THE NCD ISSUE PRICE/ WARRANT ISSUE PRICE (AS APPLICABLE). NEITHER THE
COMPANY NOR THE GC-BRLM IS OBLIGED TO ASSIGN ANY REASONS FOR SUCH
NONALLOCATION.
All Application Forms duly completed along with payment and a copy of the PAN card or PAN allotment letter
shall be submitted to the GC-BRLM as per the details provided in the respective CAN.
Number of Allottees
The minimum number of allottees for each placement of eligible securities made under qualified institutions
placement shall not be less than:
• two, where the Issue Size is less than or equal to Rs.2,500 million; or
• five, where the Issue Size is greater than Rs.2,500 million, provided that no single allottee shall be
allotted more than 50% of the aggregate amount of the Issue.
Provided further that QIBs belonging to the same group or those who are under common control shall be
deemed to be a single allottee for the purpose of this paragraph. THE DECISION OF THE COMPANY AND
THE GC-BRLM IN RESPECT OF ALLOTMENT SHALL BE FINAL AND BINDING ON ALL QIBS.
The maximum number of allottees of Securities shall not be greater than 49 allottees. Further the Allotment of
the Securities shall be completed within 12 months from the date of the shareholders resolution approving the
Issue.
Confirmation of Allocation Note
Based on the Application Forms received, the Company, the GC-BRLM will decide the list of QIBs to whom
the serially numbered CAN shall be sent, pursuant to which the details of the Securities allocated to them and
the details of the amounts payable for Allotment of the same in their respective names shall be notified to such
Investors. Additionally, the CAN would include details of the bank account(s) for transfer of funds if done
electronically, address where the application money needs to be sent, Pay-In Date as well as the probable
designated date ("Designated Date"), being the date of credit of the related Securities to the investor's account,
as applicable to the respective QIBs.
The eligible QIBs would also be sent a serially numbered Preliminary Placement Document either in electronic
form or by physical delivery and the serially numbered CAN.
The dispatch of the serially numbered Preliminary Placement Document and/or the CAN by the QIB shall be
deemed a valid, binding and irrevocable contract for the QIB to furnish all details that may be required by the
GC-BRLM and to pay the entire Warrant Issue Price and the NCD Issue Price (as applicable) for all the
Securities allocated to such QIB.
QIBs are advised to instruct their Depository Participant to accept the Securities that may be allocated /
allotted to them pursuant to this Issue.
Bank Account for Payment of Application Money
The Company has opened a special bank account ("Account") with The Lakshmi Vilas Bank Ltd in terms of the
arrangement between the Company and the GC-BRLM and The Lakshmi Vilas Bank Ltd (acting as an escrow
bank).
Each QIB will be required to deposit the entire amount payable for the Securities allocated to it by the Pay-in-
Date as mentioned in the CAN.
| 137 |
If the payment is not made in favour of the Account within the time stipulated in the CAN, the CAN of the
concerned QIBs is liable to be cancelled. In the case of cancellations or default by the QIBs, the Company and
the GC-BRLM have the right to reallocate the Securities at the Warrant Issue Price and the NCD Issue Price
among existing or new QIBs at their sole and absolute discretion.
Payment Instructions
The payment of application money shall be made by the QIBs in the name of "Kemrock QIP Escrow Account"
as per the payment instructions provided in the CAN. QIBs may make payment through high value cheques or
electronic fund transfer or Real Time Gross Settlement (RTGS).
Note: Payment of the amounts through outstation cheques are liable to be rejected. Payments through cheques
should be only through high value cheques payable at Mumbai.
Designated Date and Allotment of Securities
(a) The Securities will not be allotted unless the QIBs pay the Warrant Issue Price and the NCD Issue Price
(as applicable) to the Escrow Bank Account as stated above.
(b) In accordance with the SEBI (ICDR) Regulations, Securities will be issued and allotment shall be made
only in dematerialised form to QIBs. Allottees will have the option to re-materialise the Securities, if
they so desire, as per the provisions of the Companies Act and the Depositories Act, 1996.
(c) The Company reserves the right to cancel the Issue at any time up to allotment without assigning any
reasons whatsoever.
(d) Post allotment and credit of Securities into the QIBs' depositories accounts, the Company will apply for
trading/listing approvals from the Stock Exchanges.
(e) The Escrow Bank shall not release the monies lying to the credit of the Escrow Bank Account to the
Company till such time that the Company delivers to the Escrow Bank the approval of the Stock
Exchanges for the final listing and trading of the Securities offered in this Issue.
(f) In the unlikely event of any delay in the allotment or credit of the Securities, or receipt of trading or
listing approvals or cancellation of the Issue, no interest or penalty will be payable by the Company or
the GC-BRLM.
Submissions to SEBI
The Company shall submit the Placement Document to SEBI within 30 days of the date of allotment for record
purposes.
Other Instructions
Permanent Account Number
Each QIB should mention its PAN allotted under the I.T. Act. Applications without this information will be
considered incomplete and are liable to be rejected. It is to be specifically noted that applicants should not
submit the GIR number instead of the PAN as the Application Form is liable to be rejected on this ground.
Company's Right to Reject Bids
The Company in consultation with the GC-BRLM may reject bids, in part or in full, without assigning any
reasons whatsoever. The decisions of the Company and the GC-BRLM in relation to a bid shall be final and
binding.
| 138 |
Securities in dematerialised form with NSDL or CDSL
As per the provisions of Section 68B of the Companies Act, the allotment of Securities pursuant to the Issue
shall be only in a dematerialised form (i.e., not in the form of physical certificates but to be fungible and to be
represented by the statement issued through the electronic mode).
(a) A QIB applying for Securities must have at least one beneficiary account with the depository
participants of either NSDL or CDSL prior to making the bid.
(b) Securities allotted to a successful QIB will be credited in electronic form directly to the beneficiary
account (with the depository participant) of the QIB.
(c) Securities in electronic form can only be traded on those stock exchanges which have electronic
connectivity with NSDL and CDSL. All the stock exchanges where the Company's related Securities
are proposed to be listed have electronic connectivity with NSDL and CDSL.
(d) The trading of the Securities of the Company will be in dematerialised form only for all QIBs in the
demat segment of the respective exchanges.
The Company will not be responsible or liable for the delay in the credit of Securities due to errors in the
Application Form, or otherwise on part of the QIBs.
Procedure for Exercise of Warrants
Warrant holders shall have the Exercise Right to convert their Warrants into Equity Shares at any time during
the Warrants Exercise Period at Warrant Exercise Price. For further details, see chapter titled "Terms and
Conditions of the Warrants" of this Preliminary Placement Document.
| 139 |
PLACEMENT
The GC-BRLM has entered into a placement agreement on February 18, 2011 with the Company, ("Placement
Agreement") pursuant to which the GC-BRLM has agreed to place, on a best effort basis, up to such number of
the Company's Non-Convertible Debentures and Warrants pursuant to Chapter VIII of the SEBI (ICDR)
Regulations and SEBI Debt Regulations and all other applicable laws. The Securities will be offered and sold
only outside the United States in Offshore transactions in reliance on Regulation S under the Securities Act.
The Placement Agreement contains customary representations and warranties, as well as indemnities from the
Company and is subject to termination in accordance with the terms contained therein. Applications will be
made to list the Non-Convertible Debentures and Warrants and admit them to trading on the Stock Exchanges.
No assurance can be given as to the liquidity or sustainability of the trading market for the Securities, the ability
of holders of the Securities to sell their Securities or the price at which holders of the Securities will be able to
sell their Securities.
This Preliminary Placement Document has not been, and will not be, registered as a prospectus with the
Registrar of Companies in India. No Securities will be offered in India or overseas to the public or any members
of the public in India or any other class of investors other than QIBs.
In connection with the Issue, the GC-BRLM (or their affiliates) may, for their own accounts, enter into asset
swaps, credit derivatives or other derivative transactions relating to the Securities at the same time as the offer
and sale of the Securities, or in secondary market transactions. As a result of such transactions, the GC-BRLM
may hold long or short positions in such Securities. These transactions may comprise a substantial portion of the
Issue and no specific disclosure will be made of such positions. Affiliates of the GC-BRLM may purchase
Securities and be Allocated Securities for proprietary purposes and not with a view to distribution or in
connection with the issuance of P-Notes.
| 140 |
SELLING RESTRICTIONS
The distribution of this Preliminary Placement Document and the offer, sale or delivery of the Securities is
restricted by law in certain jurisdictions. Persons who come into possession of this Preliminary Placement
Document are advised to take legal advice with regard to any restrictions that may be applicable to them and to
observe such restrictions. This Preliminary Placement Document may not be used for the purpose of an offer or
sale in any circumstances in which such offer or sale is not authorized or permitted.
General
No action has been or will be taken in any jurisdiction that would permit a public offering of the Securities or
the possession, circulation or distribution of this Preliminary Placement Document or any other material relating
to us or the Securities in any jurisdiction where action for the purpose is required. Accordingly, the Securities
may not be offered or sold, directly or indirectly and neither this Preliminary Placement Document nor any other
offering material or advertisements in connection with the Securities may be distributed or published, in or from
any country or jurisdiction except under circumstances that will result in compliance with any applicable rules
and regulations of any such country or jurisdiction. The Issue will be made in compliance with the SEBI (ICDR)
Regulations, the SEBI Debt Regulations and all other applicable laws. Each subscriber of the Securities in this
Issue will be required to make, or to be deemed to have made, as applicable, the acknowledgments and
agreements as described under the chapter titled "Transfer Restrictions" in this Preliminary Placement
Document.
European Economic Area
In relation to each Member State of the European Economic Area which has implemented the Prospectus
Directive (each, a "Relevant Member State"), an offer of the Securities to the public may not be made in that
Relevant Member State prior to the publication of a prospectus in relation to the Securities which has been
approved by the competent authority in that Relevant Member State or, where appropriate, approved in another
Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance
with the Prospectus Directive, except that an offer of Securities to the public in that Relevant Member State at
any time may be made:
(a) to legal entities which are authorized or regulated to operate in the financial markets or, if not so
authorized or regulated, whose corporate purpose is solely to invest in securities;
(b) to fewer than 100 natural or legal persons (other than qualified investors as defined below); or
(c) to any legal entity which has two or more of (1) an average of at least 250 employees during the last
financial year; (2) a total balance sheet of more than Euro 43,000,000 and (3) an annual net turnover of
more than Euro 50,000,000, as shown in its last annual or consolidated accounts; or
(d) in any other circumstances which do not require the publication by us of a prospectus pursuant to
Article 3 of the Prospectus Directive.
Provided that no such offer of Securities shall result in the requirement for the publication by the Company or
the GC-BRLM of a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an "offer of Securities to the public" in relation to any
Securities in any Relevant Member State means the communication in any form and by any means of sufficient
information on the terms of the offer and the Securities to be offered so as to enable an investor to decide to
purchase or subscribe the Securities, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State and the expression "Prospectus Directive" means
Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State.
Hong Kong
The Securities may only be offered or sold in Hong Kong (i) to 'professional investors' as defined in the SFO
and any rules made under the SFO, or (ii) in other circumstances which do not result in the document being a
'prospectus' as defined in the Companies Ordinance (Cap. 32) or which do not constitute an offer to the public
within the meaning of that Ordinance; and GC-BRLM have not issued, or had in their possession for the
purposes of issue, and will not issue, or have in their possession for the purposes of issue, whether in Hong
Kong or elsewhere, any advertisement, invitation or document relating to the Securities, which is directed at, or
| 141 |
the contents of which are likely to be accessed or read by, the public in Hong Kong(except if permitted to do so
under the securities laws of Hong Kong) other than with respect to Securities which are or are intended to be
disposed of only to persons outside Hong Kong or only to 'professional investors' as defined in the SFO and any
rules made under the SFO.
Singapore
This Preliminary Placement Document has not been registered as a prospectus with the Monetary Authority of
Singapore under the Securities and Futures Act, Chapter 289 of Singapore (the "Securities and Futures Act").
The Securities may not be offered or sold or made the subject of an invitation for subscription or purchase nor
may this Preliminary Placement Document or any other document or material in connection with the offer or
sale or invitation for subscription or purchase of any Securities be circulated or distributed, whether directly or
indirectly, to the public or any member of the public in Singapore other than (a) to an institutional investor or
other person falling within Section 274 of the Securities and Futures Act, (b) to a relevant person, or any person
pursuant to Section 275(1A) of the Securities and Futures Act, and in accordance with the conditions specified
in Section 275 of the Securities and Futures Act, or (c) otherwise than pursuant to, and in accordance with the
conditions of, any other applicable provision of the Securities and Futures Act.
Each of the following relevant persons specified in Section 275 of the Securities and Futures Act which has
subscribed or purchased Securities, namely a person who is: (a) a corporate (which is not an accredited investor)
the sole business of which is to hold investments and the entire share capital of which is owned by one or more
individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited
investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, should note
that shares, debentures and units of shares and debentures of that corporation or the beneficiaries' rights and
interest in that trust shall not be transferable for six months after that corporation or that trust has acquired the
Securities under Section 275 of the Securities and Futures Act except: (1) to an institutional investor under
Section 274 of the Securities and Futures Act or to a relevant person, or any person pursuant to Section 275(1A)
of the Securities and Futures Act, and in accordance with the conditions, specified in Section 275 of the
Securities and Futures Act; (2) where no consideration is given for the transfer; or (3) by operation of law.
United Kingdom
The GC-BRLM:
(a) have not offered or sold, and prior to the expiry of a period of six months from the issue date of any
Securities, will not offer or sell any securities of the Company to persons in the United Kingdom
except to 'qualified investors' as defined in section 86(7) of the FSMA or otherwise in circumstances
which have not resulted in an offer to the public in the United Kingdom;
(b) have complied and will comply with all applicable provisions of FSMA with respect to anything done
by it in relation to the Securities in, from or otherwise involving the United Kingdom; and
(c) in the United Kingdom, will only communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning of section 21 of the FSMA) to
persons that are 'qualified investors' and who are (a) 'investment professionals' falling within Article
19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order")
or (b) high net worth entities and/or other persons to whom it may lawfully be communicated falling
within Article 49(2)(a) to (d) of the Order in circumstances in which section 21(1) of the FSMA does
not apply to the Company.
United States
The Securities have not been and will not be registered under the Securities Act, and may not be offered or sold
within the United States except in certain transactions exempt from the registration requirements of the
Securities Act. Terms used in this paragraph have the meanings given to them by Regulation S.
The Securities are being offered and sold outside of the United States in reliance on Regulation S under the
Securities Act. Each purchaser of the Securities offered by the Preliminary Placement Document will be deemed
to have made the representations, agreements and acknowledgements as described under the chapter titled
"Transfer Restrictions" of the Preliminary Placement Document.
| 142 |
India
The Preliminary Placement Document has not been and will not be registered as a prospectus with the Registrar
of Companies in India and the Securities will not be offered or sold directly or indirectly, to the public or any
members of the public in India or any other class of investors other than QIBs.
United Arab Emirates
This Preliminary Placement Document is strictly private and confidential and is being distributed to a limited
number of investors and must not be provided to any person other than the original recipient, and may not be
reproduced or used for any other purpose.
By receiving this Preliminary Placement Document, the person or entity to whom it has been issued
understands, acknowledges and agrees that this Preliminary Placement Document has not been approved by the
U.A.E. Central Bank, the U.A.E. Ministry of Economy and Planning or any other authorities in the U.A.E., nor
has the placement agent, if any, received authorization or licensing from the U.A.E. Central Bank, the U.A.E.
Ministry of Economy and Planning or any other authorities in the United Arab Emirates to market or sell
securities within the United Arab Emirates. No marketing of any financial products or services has been or will
be made from within the United Arab Emirates and no subscription to any securities, products or financial
services may or will be consummated within the United Arab Emirates. It should not be assumed that the
placement agent, if any, is a licensed broker, dealer or investment advisor under the laws applicable in the
United Arab Emirates, or that it advises individuals resident in the United Arab Emirates as to the
appropriateness of investing in or purchasing or selling securities or other financial products.
The interests in the Securities may not be offered or sold directly or indirectly to the public in the United Arab
Emirates. This does not constitute a public offer of securities in the United Arab Emirates in accordance with the
Commercial Companies Law, Federal Law No. 8 of 1984 (as amended) or otherwise.
By receiving this Preliminary Placement Document, the person or entity to whom it has been issued
understands, acknowledges and agrees that the Securities have not been and will not be offered, sold or publicly
promoted or advertised in the Dubai International Financial Centre other than in compliance with laws
applicable in the Dubai International Financial Centre, governing the issue, offering or sale of securities. The
Dubai Financial Services Authority has not approved this Preliminary Placement Document nor taken steps to
verify the information set out in it, and has no responsibility for it.
Nothing contained in this Preliminary Placement Document is intended to constitute investment, legal, tax,
accounting or other professional advice. This Preliminary Placement Document is for the Investor's information
only and nothing in this Preliminary Placement Document is intended to endorse or recommend a particular
course of action. The Investor should consult with an appropriate professional for specific advice rendered on
the basis of the Investor situation.
| 143 |
TRANSFER RESTRICTIONS
Purchasers of the Securities in this Issue are not permitted to sell the Securities for a period of one year from the
date of allotment except through the Stock Exchanges.
Subject to the foregoing:
Each purchaser of the Securities outside the United States pursuant to Regulation S will be deemed to have
represented and agreed as follows:
• It is authorized to consummate the purchase of the Securities in compliance with all applicable laws
and regulations.
• It acknowledges (or if it is a broker-dealer acting on behalf of a customer, its customer has confirmed
to it that such customer acknowledges) that such Securities have not been and will not be registered
under the Securities Act.
• It certifies that either (A) it is, or at the time the Securities are purchased will be, the beneficial owner
of the Securities and is located outside the United States (within the meaning of Regulation S) or (B) it
is a broker dealer acting on behalf of its customer and its customer has confirmed to it that (i) such
customer is, or at the time the Securities are purchased will be, the beneficial owner of the Securities,
and (ii) such customer is located outside the United States (within the meaning of Regulation S).
• It agrees that it will not offer, sell, pledge or otherwise transfer such Securities except in an offshore
transaction complying with Rule 903 or Rule 904 of Regulation S or pursuant to any other available
exemption from registration under the Securities Act and in accordance with all applicable securities
laws of the States of the United States and any other jurisdiction, including India.
• It acknowledges that the Company, the GC-BRLM and their respective affiliates, and others will rely
upon the truth and accuracy of the foregoing acknowledgements, representations and agreements and
agrees that, if any of such acknowledgements, representations or agreements deemed to have been
made by virtue of its purchase of the Securities are no longer accurate, it will promptly notify us.
Any resale or other transfer or attempted resale or other transfer, made other than in compliance with the above
stated restrictions will not be recognized by the Company.
| 144 |
THE SECURITIES MARKET OF INDIA
The information in this section has been extracted from publicly available documents, including officially
prepared materials from SEBI, the BSE and the NSE and has not been prepared or independently verified by the
Company, the GC-BRLM, or any of their respective affiliates or advisers.
The Indian Securities Market
India has a long history of organised securities trading. In 1875, the first stock exchange was established in
Mumbai. The Securities and Exchange Board of India Act, 1992 granted powers to SEBI to regulate the Indian
securities markets, including stock exchanges and other intermediaries in the capital markets, to promote and
monitor self-regulatory organisations, to prohibit fraudulent and unfair trade practices and insider trading and to
regulate substantial acquisitions of shares and takeovers of companies. SEBI has also issued guidelines and
regulations concerning minimum disclosure requirements by public companies, rules and regulations concerning
investor protection, insider trading, substantial acquisitions of shares and takeovers of companies, buy-backs of
securities, delisting of securities, employee stock option schemes, stockbrokers, merchant bankers, underwriters,
mutual funds, foreign institutional investors, credit rating agencies and other capital markets participants.
Stock Exchange Regulation
India's stock exchanges are regulated primarily by SEBI, as well as by the Government acting through the
Ministry of Finance, Stock Exchange Division under the Securities Contracts (Regulation) Act, 1956 ("SCRA")
and the Securities Contracts (Regulation) Rules, 1957 ("SCRR"), which along with the rules, by-laws and
regulations of the respective stock exchanges, regulate the recognition of stock exchanges, the qualifications for
membership thereof and the manner in which contracts are entered into and enforced between members of the
stock exchanges.
Listing
The listing of securities on recognised Stock Exchanges is regulated by the Companies Act, SCRA, the SCRR,
various guidelines issued by SEBI and the listing agreement of the respective stock exchanges. Further, under
the SCRR, the governing body of each stock exchange is empowered to suspend trading of or dealing in a listed
security for breach of the Company's obligations under such agreement, subject to the Company receiving prior
notice of the intent of the stock exchange and upon granting of a hearing in the matter. In the event that a
suspension of a company's securities continues for a period in excess of three months, the company may appeal
to the Securities Appellate Tribunal, ("SAT"), established under the SEBI Act to set aside the suspension. SEBI
has the power to veto stock exchange decisions in this regard. SEBI also has the power to amend such listing
agreements and the bylaws of the stock exchanges in India.
The provisions of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, as
amended ("Delisting Regulations") and the SCRR govern voluntary and compulsory delisting of equity shares
of listed Indian companies from any of the recognised stock exchanges. A company may voluntarily delist from
a stock exchange provided that (a) the securities of the company have been listed for a minimum period of three
years on any recognised stock exchange, (b) the delisting has been approved by two-thirds of the public
shareholders, and (c) the company, the promoter and/or the director of the company provide an exit opportunity
and purchase the outstanding securities from those holders who wish to sell them at a price determined in
accordance with the Delisting Regulations, provided further that the condition in (c) above may be dispensed
with by SEBI if the securities remain listed on the NSE or the BSE.
In the event a company seeks to voluntarily delist from a stock exchange, it is required to provide an exit
opportunity to the other shareholders ("Delisting Offer") and seek the in-principle approval of the stock
exchange.
This exit opportunity involves a price discovery process known as the "reverse book building process". A
Delisting Offer can be launched by any promoter seeking to delist the securities of the company. The Delisting
Offer needs to be supported by a resolution approved by the board of directors and a resolution approved by
three-fourths of the shareholders of the listed company through a postal ballot. In addition, the special resolution
of the shareholders can be acted upon if, and only if, the votes cast by public shareholders in favour of the
| 145 |
proposal amount are at least two times the number of votes cast by public shareholders against it (non-promoters
and holders of depository receipts are considered non-public shareholders). Following the approval of the
shareholders, the promoter would issue a public announcement (i.e. a public notice) in relation to the Delisting
Offer. The offer price shall have a floor pricewhich shall be determined in the manner provided in the Delisting
Regulations.
The Delisting Regulations and the SCRR also provide the stock exchanges the power to delist the securities of
companies on certain grounds, any order for compulsory delisting can be made only after considering
representations received from aggrieved persons.
These Regulations also provide that in the event that the securities of a company are delisted by a stock
exchange, the fair value of securities shall be determined by an independent valuer appointed by the stock
exchange from a panel of experts selected by the stock exchange. If a listed company is delisted by the stock
exchange, the listed company can file an appeal before the Securities Appellate Tribunal. The Delisting
Regulations do not permit the listing of equity shares once delisted for a period of 5 years (in a voluntary
delisting) and 10 years (if the stock exchanges initiate the delisting).
The Company has entered into Listing Agreements with the Stock Exchanges. These agreements require, inter
alia, that the Company adhere to certain corporate governance requirements, including ensuring the minimum
number of independent Directors on the Board, and composition of various committees such as audit committee
and remuneration committee and are subject to continuing disclosure requirements.
Any non-compliance with the terms and conditions of the Listing Agreements with the Stock Exchanges may
entail the delisting of the Equity Shares from such stock exchanges, which will affect future trading of those
Equity Shares.
Public Issuances of Securities and Disclosures under the Companies Act and SEBI Regulations
Under the Companies Act, a public issue of securities in India must be made by means of a prospectus, which
must contain information specified in the Companies Act and the SEBI (ICDR) Regulations, as amended. The
prospectus must be filed with the Registrar of Companies having jurisdiction over the place where a company's
registered office is situated, which in the case of the Company is the Registrar of Companies located at CGO
Complex, Opp Rupal Flats Near Ankur Char Rasta ,Ahmedabad-380 013, Gujarat. A company's directors are
subject to civil and criminal liability for misstatements/ misrepresentations in a prospectus. The Companies Act
also sets forth procedures for the acceptance of subscriptions and the allotment of securities among subscribers
and establishes maximum commission rates for the sale of securities. SEBI has issued detailed guidelines
through the SEBI (ICDR) Regulations concerning disclosures by public companies and investor protection.
Public limited companies are required under the Companies Act and SEBI guidelines to prepare, file with the
Registrar of Companies and circulate to their shareholders audited annual accounts which comply with the
Companies Act's disclosure requirements and regulations governing their manner of presentation and which
include sections pertaining to corporate governance, related party transactions and the management's discussion
and analysis as required under the respective Listing Agreements. In addition, a listed company is subject to
continuing disclosure requirements pursuant to the terms of its Listing Agreements with the relevant stock
exchange.
Accordingly, listed companies are now required to publish unaudited financial statements (subject to a limited
review by the Company's auditors) on a quarterly basis and are required to inform stock exchanges immediately
regarding any stock price-sensitive information.
The Companies Act further requires mandatory compliance with accounting standards issued by the ICAI. The
ICAI and SEBI have implemented changes which require Indian companies to account for deferred taxation,
consolidate their accounts (subsidiaries only), and provide segment-wise reporting and disclosure of related
party transactions from 1 April 2001 and accounting for investments in affiliated companies and joint ventures
in accounts from 1 April 2002.
As of 1 April 2003, accounting of intangible assets is also regulated by accounting standards set by the ICAI and
as of 1 April 2004 accounting standards set by the ICAI will regulate accounting for impairment of assets. The
| 146 |
ICAI has recently announced that all listed companies and public interest entities have to comply with
International Financial Reporting Standards from 1 April 2011.
Qualified Institutions Placement under SEBI (ICDR) Regulations
In order to make Indian markets more competitive and efficient, an additional mode for listed companies to raise
funds from the domestic market in the form of "Qualified Institutions Placement" ("QIP") was introduced.
Eligible companies are those companies whose equity shares are listed on a stock exchange having nation wide
trading terminals and which comply with the prescribed shareholding requirements under the listing agreement.
The securities will be offered and placed with Qualified Institutional Buyers ("QIBs") as defined in the SEBI
(ICDR) Regulations.
Stock Exchanges
There are currently 19 recognised stock exchanges in India [Source: SEBI website – Nov 2009]. Most of the
stock exchanges have their own governing board for self-regulation. A number of these exchanges have been
directed by SEBI to file schemes for demutualisation as a measure of moving towards greater investor
protection.
The BSE and the NSE together hold a dominant position among the stock exchanges in terms of the number of
listed companies, market capitalisation and trading activity.
With effect from 1 April 2003, the stock exchanges in India operate on a trading day plus two, or T+2, rolling
settlement system. At the end of the T+2 period, obligations are settled with buyers of securities paying for and
receiving securities, while sellers transfer and receive payment for securities. For example, trades executed on a
Monday would typically be settled on a Wednesday. In order to contain the risk arising out of the transactions
entered into by the members of various stock exchanges either on their own account or on behalf of their clients,
the stock exchanges have designed risk management procedures, which include compulsory prescribed margins
on the individual broker members, based on their outstanding exposure in the market, as well as stock-specific
margins from the members.
To restrict abnormal price volatility, SEBI has instructed stock exchanges to apply the fol1owing price bands
calculated at the previous day's closing price (there are no restrictions on price movements of index stocks):
Market Wide Circuit Breakers. In order to restrict abnormal price volatility in any particular stock, SEBI has
instructed the stock exchanges to apply daily circuit breakers, which do not allow transactions beyond certain
price volatility. An index based market-wide (equity and equity derivatives) circuit breaker system has been
implemented and the circuit breakers are applied to the market for movement by 10%, 15% and 20% for two
prescribed market indices: the BSE SENSEX for the BSE and the Nifty for the NSE ("NSE Nifty"), whichever
is breached earlier. If any of these circuit breaker thresholds are reached, trading in al1 equity and equity
derivatives markets nationwide is halted.
Price Bands. In addition to the market-wide index based circuit breakers, there are currently in place varying
individual scrip wise bands (except for scrips on which derivative products are available or scrips included in
indices on which derivative products are available) of 20% either ways for all other scrips.
NSE
The NSE was established by financial institutions and banks to provide nationwide on-line satellite-linked
screen based trading facilities with market makers and electronic clearing and settlement for securities including
Government securities, debentures, public sector notes and units. Deliveries for trades executed "on-market" are
exchanged through the National Securities Clearing Corporation Limited. The NSE does not categorise shares
into groups as in the case of the BSE, except in respect of the trade-to-trade category.
On its recognition as a stock exchange under the SCRA in April 1993, the NSE commenced operations in the
wholesale debt market segment in June 1994. The capital market (equities) segment commenced operations in
November 1994 and operations in the derivatives segment commenced in June 2000. The NSE launched the
| 147 |
NSE 50 Index, now known as S&P CNX NIFTY, on 22 April 1996 and the Mid-cap Index on 1 January 1996.
The securities in the NSE 50 Index are highly liquid.
As of 31 August 2009, there were 1,431 companies listed whose securities were trading on the NSE, the average
daily turnover of the NSE in August 2009 was Rs.173.79 billion and the market capitalization of the NSE as of
31 August 2009 stood at Rs.49,758.00 billion. (Source: NSE)
BSE
The BSE, established in 1875, is the oldest stock exchange in India. The BSE switched over to an online trading
network in May 1995 and has expanded this network to over 346 cities in India. Only a member of the BSE has
the right to trade in the stocks listed on the BSE.
Derivatives trading commenced on the BSE in 2000. The BSE also has wholesale and retail debt trading
segments. The retail trading in Government securities commenced in June 2003.
As of 30 September 2009, there were 7,792 companies listed whose securities were trading on the BSE, the
average daily turnover of the BSE in September 2009 was Rs.62.11 billion and the market capitalization of the
BSE as of September 30, 2009 stood at Rs.57,083.38 billion. (Source: BSE)
Trading Hours
Trading on both the BSE and the NSE normally occurs Monday through Friday, between 9:00 a.m. and 3:30
p.m. The BSE and the NSE are closed on public holidays.
Stock Market Indices
S&P CNX Nifty is a diversified 50 stock index accounting for 21 sectors of the economy. It is used for a variety
of purposes such as benchmarking fund portfolios, index based derivatives and index funds. S&P CNX Nifty is
owned and managed by India Index Services and Products Limited (IISL), which is a joint venture between the
NSE and CRISIL.
The two indices which are generally used in tracking the aggregate price movements on the BSE are SENSEX
and BSE 100 Index. The BSE Sensitive Index, or the Sensex, consists of listed shares of 30 large market
capitalization companies. The companies are selected on the basis of market capitalisation, liquidity and
industry representation.
Sensex was first compiled in 1986 with the fiscal year ended 31 March 1979. The BSE 100 Index (formerly the
BSE National Index) contains listed shares of 100 companies including the 30 in Sensex with 1983-1984 as the
base year.
Internet-Based Securities Trading and Services
SEBI approved internet trading in January 2000. Internet trading takes place through order routing systems,
which route client orders to exchange trading systems for execution. This permits clients to trade using brokers'
Internet trading systems. Stock brokers interested in providing this service are required to apply for permission
to the relevant stock exchange and also have to comply with certain minimum conditions stipulated by SEBI.
Takeover Code
Disclosure and mandatory bid obligations for listed Indian companies under Indian law are governed by the
Takeover Code, which prescribes certain thresholds or trigger points that give rise to these obligations, as
applicable.
Since the Company is an Indian listed company, the provisions of the Takeover Code will apply to acquisition
of its equity shares.
| 148 |
The principal features of the Takeover Code are set forth below:
• Any acquirer (meaning a person who, directly or indirectly, acquires or agrees to acquire equity shares
or voting rights in a company, either by himself or with any person acting in concert) who acquires
equity shares or voting rights that would entitle him to more than 5%, 10%, 14%, 54% or 74% of the
equity shares or voting rights in a company (together with the company's equity shares or voting rights,
if any, already held by such acquirer) is required to disclose the aggregate of his equity shareholding or
voting rights in that company to the company (which in turn is required to disclose such shareholding
to each of the stock exchanges on which the company's equity shares are listed) and to each of the stock
exchanges on which the company's equity shares are listed within two days of (a) the receipt of
allotment information; or (b) the acquisition of equity shares or voting rights, as the case may be. The
term "shares" has been defined under the Takeover Code to mean equity shares carrying voting rights
and includes any other security which entitles a person to acquire shares with voting rights but does not
include preference shares.
• A person who, together with persons acting in concert with him, holds 15% or more but less than 55%
of the equity shares or voting rights in any company is required to disclose any purchase or sale
representing 2% or more of the equity shares or voting rights of that company (together with the
aggregate shareholding after such acquisition or sale) to that company and the stock exchanges on
which the company's equity shares are listed within two days of the purchase or sale and is also
required to make annual disclosure of his holdings to that company (which in turn is required to
disclose such shareholding to each of the stock exchanges on which the company's equity shares are
listed).
• Promoters or persons in control of a company are also required to make annual disclosure of their
holding in a specified manner. The company is also required to make annual disclosure of holdings of
its promoters or persons in control as on March 31 of the respective year to each of the stock exchanges
on which its equity shares are listed. SEBI has recently amended the Takeover Code to make it
mandatory for the promoters and promoter group of listed companies to disclose the creation and
enforcement of a pledge on the equity shares held by such persons.
• An acquirer cannot acquire equity shares or voting rights which (taken together with the existing equity
shares or voting rights, if any, held by him or by persons acting in concert with him) would entitle such
acquirer to exercise 15% or more of the voting rights in a company, unless such acquirer makes a
public announcement offering to acquire a further minimum of 20% of the equity shares of the
company at a price not lower than the price determined in accordance with the Takeover Code. A copy
of the public announcement is required to be delivered, on the date on which such announcement is
published, to SEBI, the company and the stock exchanges on which the company's equity shares are
listed.
• No acquirer who, together with persons acting in concert with him, has acquired, in accordance with
law, 15% or more but less than 55% of the shares or voting rights in a company, shall acquire, either by
himself or through or with persons acting in concert with him, additional shares or voting rights that
would entitle him to exercise more than 5% of the voting rights in any financial year ending 31 March,
unless such acquirer makes a public announcement offering to acquire a further minimum of 20% of
the equity shares of the target company at a price not lower than the price determined in accordance
with the Takeover Code.
• An acquirer who, together with persons acting in concert with him, has acquired, in accordance with
law, 55% or more but less than 75% of the equity shares or voting rights in a company (or, where the
company concerned had obtained the initial listing of its shares by making an offer of at least 10% of
the issue size to the public pursuant to Rule 19(2)(b) of the SCRR, less than 90% of the shares or
voting rights in the company) may not, either by itself or through persons acting in concert with it,
acquire any additional equity shares or voting rights in the company, unless such acquirer makes an
open offer to acquire a minimum of 20% of the shares or voting rights which it does not already own in
the company, provided that an acquirer together with persons acting in concert may acquire additional
| 149 |
shares or voting rights entitling him to up to 5% voting rights in a company without making a public
announcement if (i) the acquisition is made through open market purchase on the stock exchanges or
the increase in the shares or voting rights is pursuant to a buy-back of shares by the target company and
(ii) the post acquisition shareholding of the acquirer and persons acting in concert does not exceed
75%.
• Where an acquirer who (together with persons acting in concert) holds 55% or more, but less than 75%
of the shares or voting rights in a target company (or, where the concerned company had obtained the
initial listing of its shares by making an offer of at least 10% of the issue size to the public pursuant to
Rule 19(2)(b) of the SCRR, less than 90% of the shares or voting rights in the company), intends to
consolidate its holdings while ensuring that the public shareholding in the target company does not fall
below the minimum level permitted by the listing agreement with the stock exchanges, the acquirer
may do so by making an open offer in accordance with the Takeover Code. Such open offer would be
required to be made for the lesser of (i) 20% of the voting capital of the company, or (ii) such other
lesser percentage of the voting capital of the company as would, assuming full subscription to the open
offer, enable the acquirer (together with persons acting in concert), to increase the holding to the
maximum level possible, which is consistent with the target company meeting the requirements of
minimum public shareholding specified in the listing agreement with the stock exchanges.
• In addition, regardless of whether there has been any acquisition of equity shares or voting rights in a
company, an acquirer cannot directly or indirectly acquire control over a company (for example, by
way of acquiring the right to appoint a majority of the directors or to control the management or the
policy decisions of the company) unless such acquirer makes a public announcement offering to
acquire a minimum of 20% of the voting equity shares of the company. In addition, the Takeover Code
introduces the "chain principle" by which the acquisition of a holding company will obligate the
acquirer to make a public offer to the shareholders of each subsidiary company which is listed.
• Further, if an acquisition made pursuant to an open offer results in the public shareholding in the target
company being reduced below the minimum level required under the listing agreement with the stock
exchanges, the acquirer would be required to take steps to facilitate compliance by the target company
with the relevant provisions of the listing agreement with the stock exchanges, within the time period
prescribed therein.
• The Takeover Code sets out the contents of the required public announcements as well as the minimum
offer price. The minimum offer price depends on whether the shares of the company are "frequently" or
"infrequently" traded (as defined in the Takeover Code). In case the shares of the company are
frequently traded, the offer price shall be the higher of:
9 the negotiated price under the agreement for the acquisition of shares in the company;
9 the highest price paid by the acquirer or persons acting in concert with him for any
acquisitions, including through an allotment in a public, preferential or rights issue, during the
26-week period prior to the date of public announcement; and
9 the average of the weekly high and low of the closing prices of the shares of the company
quoted on the stock exchange where the shares of the company are most frequently traded
during the 26-week period prior to the date of public announcement, or the average of the
daily high and low of the prices of the shares as quoted on the stock exchange where the
shares of the company are most frequently traded during the two weeks preceding the date of
public announcement, whichever is higher.
• The Takeover Code permits conditional offers as well as an acquisition and consequent delisting of the
shares of a company and provides specific guidelines for the gradual acquisition of shares or voting
rights. Specific obligations of the acquirer and the board of directors of the target company in the offer
process have also been specified. Acquirers making a public offer are also required to deposit in an
escrow account a percentage of the total consideration which amount will be forfeited in the event that
the acquirer does not fulfil his obligations.
| 150 |
• The general requirements to make such a public announcement do not, however, apply entirely to
bailout takeovers when a promoter (i.e. a person or persons in control of the company, persons named
in any offer document as promoters and certain specified corporate bodies and individuals) is taking
over a financially weak company but not a "sick industrial company" pursuant to a rehabilitation
scheme approved by a public financial institution or a scheduled bank. A "financially weak company"
is a company which has at the end of the previous financial year accumulated losses which have
resulted in the erosion of more than 50% but less than 100% of the total sum of its paid up capital and
free reserves as at the beginning of the previous financial year. A "sick industrial company" is a
company registered for more than five years which has at the end of any financial year accumulated
losses equal to or exceeding its entire net worth.
• The Takeover Code, subject to certain conditions specified in the Takeover Code, exempts certain
specified acquisitions from the requirement of making a public offer, including, among others, the
acquisition of shares (1) by allotment in a public issue or a rights issue, (2) pursuant to an underwriting
agreement, (3) by registered stockbrokers in the ordinary course of business on behalf of clients, (4) in
unlisted companies, (5) pursuant to a scheme of reconstruction or amalgamation, (6) pursuant to a
scheme under Section 18 of the SICA, (7) resulting from transfers between companies belonging to the
same group of companies or between promoters of a publicly listed company and relatives, (8) by way
of transmission through inheritance or succession, (9) resulting from transfers by Indian venture capital
funds or foreign venture capital investors registered with SEBI, to promoters of a venture capital
undertaking or venture capital undertaking pursuant to an agreement between such venture capital
funds or foreign venture capital investors with such promoters or venture capital undertaking, (10) by
the Government of India controlled companies, unless such acquisition is made pursuant to a
disinvestment process undertaken by the Government of India or a State Government, (11) change in
control by takeover/restoration of the management of the borrower company by the secured creditor in
terms of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002, (12) acquisition of shares by a person in exchange of equity shares received under a public
offer made under the Takeover Code and (13) in terms of guidelines and regulations relating to
delisting of securities as specified by SEBI. The Takeover Code does not apply to acquisitions in the
ordinary course of business by public financial institutions either on their own account or as a pledgee.
An application may also be filed with the takeover panel seeking exemption from the open offer
requirements of the Takeover Code. Pursuant to a recent amendment, a listed company can apply to
SEBI to waive requirements under the Takeover Code in relation to an acquisition of a listed company
in circumstances where the board of the listed company has been taken over by the Government of
India and there is a plan for a transparent and competitive process for the operations of the listed
company.
• In addition, Chapter III of the Takeover Code, including the requirement to make a tender offer, does
not apply to the acquisition of GDRs or ADRs so long as they are not converted into equity shares
carrying voting rights.
Minimum Level of Public Shareholding
In order to ensure availability of floating stock of listed companies, SEBI has recently notified amendments to
the listing agreement. All listed companies are required to ensure that their minimum level of public
shareholding remains at or above 25%. The Ministry of Finance on June 04, 2010 has introduced certain
amendments to the SCRR by a Gazette Notification through the Department of Economic Affairs (the
"Amendment"). The Amendment to Rule 19(2) (b) states that existing listed companies having less than 25%
public holding must reach the minimum 25% level by an annual addition of not less than 5% to public holding.
For new listings, if the post issue capital of the company calculated at offer price is more than Rs.4000 crore, the
company may be allowed to go public with 10% public shareholding and comply with the 25% public
shareholding requirement by increasing its public shareholding by at least 5% per annum. A company may
increase its public shareholding by less than 5% in a year if such increase brings its public shareholding to the
level of 25% in that year. Failure to comply with this Clause in the Listing Agreement requires the listed
company to delist its shares pursuant to the terms of the SEBI Delisting Regulations and may result in penal
action being taken against the listed company pursuant to the Securities and Exchange Board of India Act, 1992.
| 151 |
Insider Trading Regulations
The SEBI (Prohibition of Insider Trading) Regulations, 1992, as amended ("Insider Trading Regulations")
have been notified by SEBI to prevent insider trading in India by prohibiting and penalising insider trading in
India. The Insider Trader Regulations prohibit an "insider" from dealing, either on his own behalf or on behalf
of any other person, in the securities of a company listed on any stock exchange when in possession of
unpublished price sensitive information. The terms "unpublished" and "price-sensitive information" are defined
in the Insider Trading Regulations. The Insider Trading Regulations define an "insider" to mean any person who
(i) is or was connected with the company or is deemed to have been connected with the company and who is
reasonably expected to have access to unpublished price sensitive information in respect of securities of a
company or (ii) has received or has had access to such unpublished price sensitive information.
The insider is prohibited from communicating, counseling or procuring, directly or indirectly, any unpublished
price sensitive information to any other person while in possession of such information. The prohibition under
Regulation 3A of the Insider Trading Regulations also extends to a company dealing, while in the possession of
unpublished price sensitive information, in securities of another company or its associate listed on any stock
exchange and is not restricted to insiders alone. It is to be noted that recently SEBI has amended the Insider
Trading Regulations to provide certain defenses to the prohibition on companies in possession of unpublished
price sensitive information dealing in securities.
Unpublished means information which is not published by the Company or its agents and is not specific in
nature. The Insider Trading Regulations clarify that speculative reports in print or electronic media shall not be
considered as published information. Price sensitive information means any information which relates directly
or indirectly to a company and which if published is likely to materially affect the price of securities of the
company, such as the periodical financial results of the company, intended declaration of dividends (both
interim and final), issue of securities or buy-back of securities. Under the Insider Trading Regulations, no
insider shall communicate or counsel or procure, directly or indirectly, any unpublished price-sensitive
information to any other person who while in possession of such unpublished price-sensitive information shall
not deal in securities.
The Insider Trading Regulations make it compulsory for listed companies and certain other entities associated
with the securities market to establish an internal code of conduct to prevent insider trading deals and also to
regulate disclosure of unpublished price sensitive information within such entities so as to minimise misuse
thereof. To this end, the Insider Trading Regulations provide a model code of conduct. Further, the Insider
Trading Regulations specify a model code of corporate disclosure practices to prevent insider trading, which is
to be implemented by all listed companies and other such entities.
The Insider Trading Regulations require any person who holds more than 5% of the outstanding shares or voting
rights in any listed company to disclose to the company the number of shares or voting rights held by such
person on becoming such holder within two working days of:
(i) the receipt of intimation of allotment of shares; or

(ii) the acquisition of the shares or voting rights, as the case may be.
On a continuing basis, under the Insider Trading Regulations, any person who holds more than 5% of the shares
or of the voting rights in any listed company is required to disclose to the company the number of shares or
voting rights held by him and any change in shareholding or voting rights (even if such change results in the
shareholding falling below 5%) if there has been change in such holdings from the last disclosure made,
provided such change exceeds 2% of the total shareholding or voting rights in the company. Such disclosure is
required to be made within two working days of:
(i) the receipt of intimation of allotment of the shares; or

(ii) the acquisition or the sale of the shares or voting rights.
| 152 |
Depositories
In August 1996, the Indian Parliament enacted the Depositories Act, 1996 which provides a legal framework for
the establishment of depositaries to record ownership details and effect transfers in electronic book-entry form.
SEBI framed the SEBI (Depositories and Participants) Rules and Regulations, 1996 which provide for the
formation of such depositaries and the registration of participants as well as the formation of the rights and
obligations of the depositaries, participants, beneficial owners and issuers. The depositary system has
significantly improved the operation of the Indian securities markets.
Trading of securities in book-entry form commenced in December 1996. In January 1998, SEBI notified of
various companies for compulsory dematerialised trading by certain categories of investors such as foreign
institutional investors ("FIIs") and other institutional investors and also notified compulsory dematerialised
trading in specified scrips for all retail investors. Subsequently, SEBI has significantly increased the number of
scrips in which dematerialised trading is compulsory for all investors. Under the Depositories Act and
guidelines issued by SEBI, the Company shall give the option to subscribers/shareholders to receive the security
certificates and hold securities in dematerialised form with a depositary.
However, even in the case of scrips notified for compulsory dematerialised trading, investors, other than
institutional investors, are permitted to trade in physical shares on transactions outside the stock exchange where
there are no requirements of reporting such transactions to the stock exchange and on transactions on the stock
exchange involving lots of less than 500 securities.
Transfers of shares in book-entry form require both the seller and the purchaser of the equity shares to establish
accounts with depositary participants registered with the depositaries established under the Depositories Act,
1996.
Upon delivery, the shares shall be registered in the name of the relevant depositary on the company's books and
this depositary shall enter the name of the investor in its records as the beneficial owner, thus effecting the
transfer of beneficial ownership. The beneficial owner shall be entitled to all rights and benefits and be subject
to all liabilities in respect of his/her securities held by a depositary. Every person holding equity share capital of
the company and whose name is entered as a beneficial owner in the records of the depository is deemed to be a
member of the concerned company. The Companies Act requires that Indian companies making any initial
public issue of securities for or in excess of Rs.100 million should issue such securities in dematerialised form.
Derivatives
Trading in derivatives is governed by the SCRA, the SCRR and the SEBI Act. The SCRA was amended in
February 2000 and derivative contracts were included within the term "securities," as defined by the SCRA.
Trading in derivatives in India takes place either on separate and independent derivatives exchanges or on a
separate segment of an existing stock exchange. The derivative exchange or derivative segment of a stock
exchange functions as a self regulatory organisation under the supervision of SEBI. Derivatives products have
been introduced in a phased manner in India.
| 153 |
DESCRIPTION OF THE SECURITIES INCLUDING EQUITY SHARES
Set forth below is certain information relating to the share capital of the Company including a brief summary of
some of the provisions of the Memorandum and Articles of Association of the Company and the Companies
Act, 1956 (the "Act") relating to the rights attached to its NCDs, the Warrants and the Equity Shares.
General
The authorised share capital of the Company is Rs.350 million comprising of 35 million Equity Shares of Rs.10
each. The issued and paid up capital of the Company is Rs.167.53 million comprising 1,67,53,466 Equity Shares
of Rs.10 each.
For purposes of this Preliminary Placement Document, shareholder means a shareholder who is registered as a
member in our register of members. The Equity Shares are in registered physical form as well as in non-
physical, or dematerialised, form.
Main Provisions of Memorandum and Articles of Association
The main provisions of Memorandum and Articles of Association of the Company are as under:
Main Objects of the Company
The Main Object of the Company, as per Clause IIIA of the Memorandum of Association is, "to manufacture,
process , buy, sell, fabricate and produce fibre glass roofing and north light channels, rain water channels, as
also FRP articles and equipment bodies and furnishing and decoratives, FRP for building materials/ construction
articles, FRP industrial Products, FRP household and commercial products, FRP hospital products, FRP garden
products, FRP green rouses, FRP products for industrial flooring as well as articles for hotels and restaurants for
both domestic as well as exports.
Description of the NCDs
The present issue, interalia, comprise 2500, NCDs of the face value of Rs.3,00,000 each for cash aggregating to
Rs.750 million on a private placement basis. The NCDs shall be initially secured by a subservient charge to the
first ranking pari passu charge of the existing lenders (later by a first ranking pari passu charge with the Existing
Lenders as stated earlier) pari passu charge over movable and immovable fixed assets of the Company (both
present and future) and shall be redeemed at the last day of 2nd, 3rd and 4th years from the date of allotment.
The claims of the Debenture Holders shall be superior to the claims of the unsecured creditors of the Company
(subject to any obligations preferred by mandatory provisions of the law prevailing from time to time).
Register of Debenture Holders and Register of Beneficial Owners
The Company through the Registrar and Share Transfer Agents namely Link Intime India Private Limited shall
maintain at its registered office (or such other place as permitted by law) a register of Debenture Holders
containing such particulars as required by Section 152 of the Companies Act. In terms of Section 152A of the
Companies Act, the register of Beneficial Owners maintained by a Depository under Section 11 of the
Depositories Act shall be deemed to be a register of Debenture Holders.
Transfers
In case of NCDs held in the dematerialized form, transfers of NCDs may be effected only through the
Depository(ies) through which such NCDs to be transferred are held, in accordance with the provisions of the
Depositories Act, 1996/ rules thereunder as notified by the Depositories from time to time. In case of NCDs held
in the physical form, transfers of NCDs may be effected only by delivery of the NCD certificate issued in
respect of that NCD. Transfer of NCDs may be subject to certain restricted transfer periods. For further details
in relation to transfers of NCDs see the chapter titled "Terms and Conditions of the NCDs" of this Preliminary
Placement Document.
| 154 |
Buyback
The Company may from time to time, subject to applicable laws and necessary approvals, buyback NCDs on
terms and conditions to be decided by the Company.
Description of the Warrants
The Warrants issued in this Issue entitle the Warrant holder to apply for one (1) Equity Share for each Warrant
held at the Warrant Exercise Price at any time during the Warrant Exercise Period. Warrant Issue Price of Rs.30,
shall be paid at the time of allotment. Warrants shall not be sold for a period of one year from the date of
allotment, except on the floor of the Stock Exchanges.
Warrant Issue Price will not be adjusted towards the Warrant Exercise Price, if a Warrant is exercised and will
stand forfeited, if a Warrant lapses.
Register of Warrant holders
The Company shall maintain at its registered office (or such other place as permitted by law) a register of
Warrant holders. The register of Warrant holders maintained by a Depository shall be deemed to be a register of
Warrant holders. For further details see the chapter titled "Terms and Conditions of the Warrants" of this
Transfers
In case of Warrants held in the dematerialized form, transfers of Warrants may be effected only through the
Depository(ies) through which such Warrants to be transferred are held, in accordance with the provisions of the
Depositories Act, 1996 /rules as notified by the Depositories from time to time. In case of Warrants held in the
physical form, transfers of Warrants may be effected only by delivery of the Warrant certificate issued in respect
of that Warrant. Transfer of the Warrants may be subject to certain restricted transfer periods. For further details
in relation to transfers of Warrants see the chapter titled "Terms and Conditions of the Warrants" of this
The Warrants are governed by, and shall be construed in accordance with, the laws of India.
Description of the Equity Shares
Dividends
Under the Act, an Indian company pays dividend upon a recommendation by its board of directors and subject
to approval by a majority of the members, who have the right to decrease but not to increase the amount of the
dividend recommended by the board of directors. However, the board of directors is not obligated to
recommend a dividend. The decision of the board of directors and shareholders of the company may depend on
a number of factors, including but not limited to the company's profits, capital requirements and overall
financial condition. According to the Articles of Association, the profits of the Company, subject to any special
rights relating thereto and subject to the provisions of the Articles as to the reserve fund or other special funds,
shall be divisible among the members in proportion to the amount of capital paid up on the shares held by them
respectively. However, any capital paid upon a share during the period in respect of which a dividend is
declared shall unless the Directors otherwise determine entitle and shall be deemed always to have entitled the
holders of such share only to an apportioned amount of such dividend as from the date of payment. Under the
equity listing agreement listed companies are mandated to declare dividend on per share basis only. The
Directors may from time to time pay to the members such interim dividends as in their judgment the position of
the Company justifies. Under the Companies Act, dividends can only be paid in cash to shareholders listed on
the register of shareholders or those persons whose names are entered as beneficial owners in the record of the
depository on the date specified as the "record date" or "book closure date". The Company shall pay the
dividend to the shareholder entitled within 30 days from the date of declaration of the dividend. No unpaid or
unclaimed dividend shall be forfeited unless the claim thereto becomes barred by law. The Company shall
comply with the provisions of sections 205A of the Act in respect of unpaid or unclaimed dividend. Where the
| 155 |
Company had declared a dividend which has not been paid or claimed by the shareholders entitled to the
payment of such dividend, the Company shall within seven days from the expiry of 30 days from declaration of
such dividend open a special account in any scheduled bank called "the unpaid dividend of Kemrock Industries
and Exports Limited" and transfer to the same the amount that remains unpaid. Any dividend payments
unclaimed by the shareholders for a period of seven years from the date of such transfer shall be transferred by
the Company to the Investor Education and Protection Fund ("IEPF") established by the Central Government.
No claim shall lie against the Company or the IEPF after the said transfer.
Under the Act, dividends may be paid out of profits of a company in the year in which the dividend is declared
or out of the undistributed profits or reserves of the previous fiscal years or out of both in compliance with the
provisions of Companies (Declaration of Dividend out of Reserves) Rules, 1975. Under the Act, a company may
pay a dividend in excess of 10 per cent of paid-up capital in respect of any year out of the profits of that year
only after it has transferred to the reserves of the company a percentage of its profits for that year, ranging
between 2.5 per cent to 10 per cent depending on the rate of dividend proposed to be declared in that year. The
Companies Act further provides that if the profit for a year is insufficient, the dividend for that year may be
declared out of the accumulated profits earned in previous years and transferred to reserves, subject to the
following conditions: (i) the rate of dividend to be declared may not exceed the lesser of the average of the rates
at which dividends were declared in the five years immediately preceding the year, or 10 per cent of paid-up
capital; (ii) the total amount to be drawn from the accumulated profits from previous years may not exceed an
amount equivalent to 10 per cent of paid-up capital and reserves and the amount so drawn is first to be used to
set off the losses incurred in the financial year before any dividends in respect of preference shares or shares;
and (iii) the balance of reserves after withdrawals must not be below 15 per cent of paid-up capital.
Capitalization of Profits
A company may capitalise the whole or part of the amount for the time being standing in credit of Company's
reserve account or to the profit or loss account or available for distribution, upon recommendation of the board
of directors. The Articles of Association of the Company provide that such sums are not to be paid in cash and
are to be applied on behalf of such security holders in full or towards (i) paying up any amounts for the time
being unpaid on any shares held by such members respectively; (ii) paying up in full, unissued shares or
debentures of the Company to be allotted and distributed, credited as fully paid up to and amongst such
members in the proportions aforesaid; or (iii) partly in the way specified in sub clause (i) above and partly in
that specified in sub clause (ii). The Act also permits the issue of bonus shares from a share premium account.
Bonus shares are distributed to shareholders in the proportion of the number of shares owned by them as
recommended by the board of directors.
The shareholders on record on a fixed record date are entitled to receive such bonus shares. Any issue of bonus
shares is subject to guidelines issued by SEBI. The relevant SEBI guidelines prescribe that no company shall,
pending conversion of convertible securities, issue any shares by way of bonus unless similar benefit is extended
to the holders of such convertible securities, through reservation of shares in proportion to such conversion.
Further, as per the Act, for the issuance of bonus shares a company should not have defaulted in the payment of
interest or principal in respect of fixed deposits and interest on existing debentures or principal on redemption of
such debentures. The bonus issue must be made out of free reserves built out of genuine profits or share
premium account collected in cash only. The issuance of bonus shares must be implemented within six months
from the date of approval of the board of directors.
Pre-Emptive Rights and Alteration of Share Capital
The Act gives the shareholders the pre-emptive right to subscribe for new shares in proportion to their respective
existing shareholdings unless the shareholders elect otherwise by a special resolution. The offer must include:
(a) the right, exercisable by the shareholders of record, to renounce the shares offered in favour of any person;
and (b) the number of shares offered and the period of the offer, which may not be less than 30 days from the
date of offer. If the offer is not accepted it is deemed to have been declined. The board of directors is authorised
to distribute any new shares not purchased by the pre-emptive rights holders in the manner that it deems most
beneficial to the company.
| 156 |
The Articles of the Company provides that the Company from time to time, by ordinary resolution:
• consolidate and divide all or any of its share capital into shares of larger amount than its existing
shares;
• convert all or any of its fully paid up shares into stock and reconvert that stock into fully paid up shares
of any denomination;
• sub-divide its shares or any of them into shares of smaller amount than is fixed by the Memorandum
so, however, that in the sub-division the proportion between the amount paid and the amount, if any,
unpaid on each reduced share shall be the same as it was in the case of the share from which the
reduced share is derived; and
• cancel any shares which, at the date of passing of the resolution in that behalf, have not been taken or
agreed to be taken by any person and diminish the amount of its share capital by the amount of shares
so cancelled.
General Meetings of Shareholders
In accordance with section 166 of the Act, a company must hold its annual general meeting each year within 15
months of the previous annual general meeting or within six months after the end of each accounting year,
whichever is earlier, unless extended by the Registrar of Companies at the request of the company for any
special reason.
The Articles of Association of the Company provides that the board of directors may, whenever it thinks fit, call
an extraordinary general meeting. Written notices convening a meeting setting out the date, place, hour and
agenda of the meeting must be given to members at least 21 days prior to the date of the proposed meeting in
accordance with section 171 of the Act. A general meeting may be called after giving shorter notice if consent is
received from all shareholders entitled to vote in case of an Annual General Meeting, or in case of any other
meeting, by members of the Company holding not less than 95 per cent of such part of the paid up share capital
of the Company as gives them a right to vote at the meeting. The accidental omission to give notice of any
meeting to or the non-receipt of any, notice by the member or other person to whom it should be given shall not
invalidate the proceedings at the meetings. The Articles of the Company provide that no business shall be
transacted at any general meeting unless a quorum of members is present throughout the meeting. Five members
present in person shall constitute the quorum.
If the quorum is not present within half an hour of the time appointed for a meeting, the meeting, if convened
upon such requisition as aforesaid, shall be dissolved; but in any other case it shall stand adjourned in
accordance with provisions of sub-sections (3), (4) and (5) of Section 174 of the Companies Act.
Voting Rights
Every member present in person shall have one vote and on poll, the voting rights shall be as laid down in
section 87 of the Companies Act, subject to any rights or restrictions for the time being attached to any class or
classes of shares.
The instrument appointing a proxy is required to be lodged with the company at least 48 hours before the time
of the meeting. A vote given in accordance with the terms of an instrument appointing a proxy shall be valid
notwithstanding the prior death or insanity of the principal, or revocation of the instrument, or transfer of the
share in respect of which the vote is given, provided no intimation in writing of the death, insanity, revocation or
transfer of the share shall have been received by the company at the office before the vote is given. Further no
member shall be entitled to exercise any voting right personally or by proxy at any meeting of the Company in
respect of any shares registered in his name on which any calls or other sums presently payable by him have not
been paid or in regard to which the Company has exercised any right of lien.
Registration of Transfers and Register of Members
The Company is required to maintain a register of members wherein the particulars of the members of the
Company are entered. For the purpose of determining the shareholders, entitled to corporate benefits declared by
the Company, the register may be closed for such period not exceeding 45 days in any one year or 30 days at
| 157 |
any one time at such times, as the Board of Directors may deem expedient in accordance with the provisions of
the Companies Act. Under the listing agreements of the stock exchanges on which the Company's outstanding
Equity Shares are listed, the Company may, upon at least seven days' advance notice to such stock exchanges,
set a record date and/or close the register of shareholders in order to ascertain the identity of shareholders. The
trading of Equity Shares and the delivery of certificates in respect thereof may continue while the register of
shareholders is closed.
Directors
The Articles of the Company provide that the total number of directors of the Company shall not be less than
three and not be more than eleven. The directors shall be appointed by the Company in the general meeting
subject to the provisions of the Act and the Articles of Association. The Directors shall have power to appoint
any person or persons as a Director or Directors, either to fill a causal vacancy or as an addition to the Board but
so that the total number of Directors shall not at any time exceed the maximum number fixed. However, any
Director or Directors so appointed shall hold office only until the next following Annual General Meeting of the
Company and shall then be eligible for re-election. Subject to the provisions of section 313 of the Act the board
of directors shall also have the power to appoint any person to act as an alternate director for a director during
the latter's absence for a period of not less than three months from the state in which the meeting of the directors
is ordinarily held. A director is not required to hold any qualification shares. Pursuant to the Act not less than
two-thirds of the total numbers of directors shall be persons whose period of office is subject to retirement by
rotation and one third of such directors, or if their number is not three or a multiple of three, then the number
nearest to one-third, shall retire from office at every annual general meeting. The directors to retire are those
who have been the longest in the office since their last appointment. The retiring Directors shall be eligible for
re-appointment.
Annual Report and Financial Results
The annual report must be laid before the annual general meeting of the shareholders of a company. This
includes financial information about the company such as the audited financial statements as of the date of
closing of the financial year, directors' report, management's discussion and analysis and a corporate governance
section, and is sent to the shareholders of the company. Under the Act, a company must file the annual report
with the Registrar of Companies within 30 days from the date of the annual general meeting. As required under
the listing agreements with the stock exchanges, copies are required to be simultaneously sent to the stock
exchanges. Every Company must also publish its financial results in at least one English language daily
newspaper circulating the whole or substantially the whole of India and also in a newspaper published in the
language of the region where the registered office of the company is situated. The Company files certain
information on-line, including its Annual Report, financial statements and the shareholding pattern statement, in
accordance with the requirements of the listing agreements and as may be specified by SEBI from time to time.
Transfer of shares
Shares held through depositories are transferred in the form of book entries or in electronic form in accordance
with the regulations laid down by SEBI. These regulations provide the regime for the functioning of the
depositories and the participants and set out the manner in which the records are to be kept and maintained and
the safeguards to be followed in this system. Transfers of beneficial ownership of shares held through a
depository are exempt from stamp duty. The Company has entered into an agreement for such depository
services with the National Securities Depository Limited and the Central Depository Services India Limited.
SEBI requires that company's shares for trading and settlement purposes be in book-entry form for all investors,
except for transactions that are not made on a stock exchange and transactions that are not required to be
reported to the stock exchange. The Company shall keep a book in which every transfer or transmission of
shares will be entered. Pursuant to the listing agreements, in the event a company has not effected the transfer of
shares within one month or where a company has failed to communicate to the transferee any valid objection to
the transfer within the stipulated time period of one month, a company is required to compensate the aggrieved
party for the opportunity loss caused during the period of the delay. The Act provides that the shares or
debentures of a publicly listed company shall be freely transferable. However, the board of directors may,
subject to Section 111A of the Companies Act, at any time in their discretion by giving reasons, decline to
register shares on grounds mentioned under the Act. Notice of such refusal must be sent to the transferee within
one month of the date on which the transfer was lodged with the company. According to the Company's Articles
| 158 |
of Association (the "Articles"), any person who becomes entitled to shares by reason of death, lunacy,
bankruptcy or insolvency of a member shall be entitled to the same dividend and other advantages to which he
would be entitled if he was a registered member. If a company without sufficient cause refuses to register a
transfer of shares within two months from the date on which the instrument of transfer is delivered to the
company, the transferee may appeal to the Company Law Board seeking to register the transfer of shares. The
Company Law Board may, in its discretion, issue an interim order suspending the voting rights attached to the
relevant shares before completing its investigation of the alleged contravention. Under the Companies (Second
Amendment) Act, 2002, the Indian Company Law Board will be replaced with the National Company Law
Tribunal. Further, under the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (the "SICA"),
which is expected to come into force shortly, the SICA is sought to be repealed and the Board of Industrial and
Financial Reconstruction, as constituted under the SICA, is to be replaced with the National Company Law
Tribunal.
Acquisition by the Company of its own Equity Shares
The Articles of the Company authorizes the purchase of its own security by the Company subject to the
compliance of sections 77A, 77AA and section 77B of the Companies Act. Sections 77A, 77AA and 77B of the
Companies Act empower a company to purchase its own shares or other specified securities out of its free
reserves, or the securities premium account or the proceeds of the issue of any shares or other specified
securities (other than from the proceeds of an earlier issue of the same kind of shares or other specified
securities proposed to be bought back) subject to certain conditions, including:
• the buy-back should be authorized by the Articles of Association of the company;
• a special resolution has been passed in the general meeting of the company authorizing the buyback;
• the buy-back in a financial year should be limited to 25 per cent of the total paid-up capital and free
reserves;
• all the shares or other specified securities for buy-back are fully paid-up;
• the debt owed by the company is not more than twice the capital and free reserves after such buyback;
and
• the buy-back is in accordance with the SEBI (Buy-Back of Securities) Regulations, 1998.
The requirement of special resolution mentioned above would not be applicable if the buy-back is for less than
10 per cent of the total paid-up equity capital and free reserves of the company and provided that such buy-back
has been authorized by the board of directors of the company. A company buying back its securities is required
to extinguish and physically destroy the securities so bought back within seven days of the last date of
completion of the buy-back. Further, a company buying back its securities is not permitted to buy back any
securities for a period of one year from the buy-back and to issue securities for six months. Every buy-back
must be completed within a period of one year from the date of passing of the special resolution or resolution of
the board of directors, as the case may be. A company is also prohibited from purchasing its own shares or
specified securities through any subsidiary company, including its own subsidiary companies, or through any
investment company (other than a purchase of shares in accordance with a scheme for the purchase of shares by
trustees of or for shares to be held by or for the benefit of employees of the company) or if the company is
defaulting on the repayment of deposit or interest, redemption of debentures or preference shares or payment of
dividend to a shareholder or repayment of any term loan or interest payable thereon to any financial institution
or bank, or in the event of non-compliance with certain other provisions of the Companies Act.
Secrecy Clause
Subject to the provisions of the Act, no member shall be entitled without the permission of the Directors or
Managing Director, to require discovery of or any information respecting any detail of Company's trading or any
matter which is, or may be in the nature of a trade secret or mystery of trade or which may relate to the conduct
of the business of the Company and which in the opinion of the Directors or Managing Director, will be
inexpedient in the interest of the members of the Company to communicate to the public.
Liquidation Rights
The Articles of the Company provides that if it shall be wound up, and the assets available for distribution
among the members as such are insufficient to repay the whole of the paid up capital, such surplus assets shall
| 159 |
be distributed subject to special preferential rights of the preference or any other shareholder so that as nearly as
may be, the losses shall be borne by the members as nearby as may be in proportion to the capital paid up, or
which ought to have been paid up, at the commencement of the winding up, on the shares held by them
respectively. If in the winding up the assets available for distribution among the members shall be more than
sufficient to repay the whole of the capital paid up at the commencement of the winding up, subject to special
preferential rights of the preference or any other shareholder, the excess shall be distributed amongst the
members in proportion to the capital, at the commencement of the winding up, paid up or which ought to have
been paid up on the shares held by them respectively. This would be without prejudice to the rights of the
holders of the shares issued on special conditions.
| 160 |
TAXATION
The information provided below sets out the possible tax benefits available to the Company and to prospective
investors in a summary manner only and is not a complete analysis or listing of all potential tax consequences
of the subscription, ownership and disposal of securities, under the current tax laws presently in force in India.
Several of these benefits are dependent on the Company or its prospective investors fulfilling the conditions
prescribed under the relevant tax laws. Hence the ability to derive the tax benefits is dependent upon fulfilling
such conditions, which based on business imperatives it faces in the future, it may not choose to fulfill. The
following overview is not exhaustive or comprehensive and is not intended to be a substitute for professional
advice
.
INVESTORS ARE ADVISED TO CONSULT THEIR OWN TAX CONSULTANT WITH RESPECT TO THE TAX
IMPLICATIONS OF AN INVESTMENT IN THE SECURITIES, PARTICULARLY IN VIEW OF THE FACT
THAT CERTAIN RECENTLY ENACTED LEGISLATION MAY NOT HAVE A DIRECT LEGAL PRECEDENT
OR MAY HAVE A DIFFERENT INTERPRETATION ON THE BENEFITS, WHICH AN INVESTOR CAN AVAIL
Under the provision of Section 90(2) of the Income Tax Act, 1961 (the "I.T. Act" or the "Act" ), if the
provisions of the Double Taxation Avoidance Agreement ("DTAA") between India and the country of residence
of the nonresident are more beneficial, then the provisions of the DTTA shall be applicable. The stated benefits
will be available only to the sole / first named holder in case the Securities are held by joint holders.
The following is based on the provisions of Indian tax laws as of the date hereof as amended by the
Finance (No.2) Act, 2009, which are subject to change, possibly on a retrospective basis.
For these purposes, "Non-Resident" means a person who is not a resident in India. For purposes of the I.T. Act,
an individual is considered to be a resident in India during any previous year if he or she is in India in that year
for:
(a) a period or periods amounting to 182 days or more; or
(b) a period or periods amounting to 60 days or more and within the four preceding years he/she has been
in India for a period or periods amounting to 365 days or more; or
(c) in the case of a citizen of India who leaves India as a member of the crew of an Indian ship or for the
purposes of employment outside India, the words "60 days" in paragraph (b) above shall be substituted
by words "182 days"; or
(d) in the case of a citizen of India or a person of Indian origin living abroad who visits India, the words
"60 days" in paragraph (b) above shall be substituted by words "182 days".
A Company is resident in India if it is formed and incorporated in accordance with the Companies Act, 1956
and has its registered office in India or the control and management of its affairs is situated wholly in India. A
firm or other association of persons is resident in India in every year except where during that year the control
and management of its affairs is situated wholly outside India.
A Foreign Company means a company which is not an Indian company, or any other company which, in respect
of its income liable to tax under the I.T. Act, has not made the prescribed arrangements for the declaration and
payment, within India, of the dividends (including dividends on preference shares) payable out of such income.
| 161 |
TAX BENEFITS AVAILABLE TO KEMROCK INDUSTRIES AND EXPORTS LIMITED

("THE COMPANY"), DEBENTURE HOLDERS AND WARRANTHOLDERS.
I. To The Company
1. Special Tax benefits available to the Company under the Income-tax Act, 1961
1.1. In accordance with and subject to the condition specified in Section 80-IA of the Act, the Company
would be entitled for a deduction of an amount equal to hundred per cent of profits or gains derived
from industrial undertaking engaged in generation and/or distribution or transmission of power for any
ten consecutive assessment years out of fifteen years beginning from the year in which the undertaking
has started its operation, which should be before 31st day of March, 2011.
2. Other benefits, available in addition to the above mentioned are as follows:
2.1. Under Section 35D of the Act, the Company is eligible for a deduction of an amount equal to one-fifth
of certain specified expenditure for each of the five successive years, subject to certain limits and
conditions set out in the said Section.
2.2. Under Section 115JAA (1A) of the Act, credit is allowed in respect of any tax paid (MAT) under
Section 115JB of the Act for any assessment year commencing on or after April 1, 2006. Credit eligible
for carry forward is the difference between MAT paid and the tax computed as per the normal
provisions of the Act. Such MAT credit shall be available for set-off upto 7 years succeeding the year
in which the MAT credit becomes allowable.
Long Term Capital Gain
2.3. Under Section 10(38) of the Act, long-term capital gain on sale of equity shares or units of an equity
oriented fund will be exempt provided that the transaction of such sale is chargeable to Securities
Transaction Tax.
2.4. The long-term capital gains accruing otherwise than as mentioned in 2.3 above shall be chargeable to
tax at the rate of 20 % (plus applicable surcharge and education cess) in accordance with and subject to
the provisions of Section 112 of the Act. However, if the tax on long term capital gain resulting on sale
of listed securities or unit or zero coupon bond, calculated at the rate of 20% with indexation benefit
exceeds the tax calculated at the rate of 10% without indexation benefit, then such gains are chargeable
to tax at a concessional rate of 10% (plus applicable surcharge and education cess).
2.5. In accordance with and subject to the condition specified in Section 54EC of the Act, long term capital
gain [other than those exempt U/S 10(38)] shall not be chargeable to tax to the extent such capital gain
is invested in certain notified bonds within six months from the date of transfer. If only part of the
capital gain is so reinvested, the exemption shall be allowed proportionately. However, if the said
bonds are transferred or converted into money within a period of three years from the date of their
acquisitions, the amount of capital gain exempted earlier would become chargeable to tax as long term
capital gain in the year in which the bonds are transferred or converted into money. Investment made
on or after April 1, 2007 in the long term specified asset by an assessee during any financial year
should not exceed Rs.5.00 million.
Short Term Capital gain
2.6. Shares in a company, listed securities or units of UTI or units of mutual fund specified under section 10
(23D) or zero coupon bond will be considered as short term capital assets if they are held for a period
less than twelve months. In case of all other assets if the period of holding is less than thirty six months
they are termed as short term capital assets.
2.7. Under Section 111A of the Act, short-term capital gain on sale of equity shares or units of an equity
oriented fund where the transaction of such sale is chargeable to Securities Transaction Tax, shall be
chargeable to tax at the rate of 15% (plus applicable surcharge and education cess).
| 162 |
2.8. In other cases, where STT is not charged on transfer of short term capital asset being an equity share in
a company, would be taxed at the normal rates of tax in accordance with and subject to the provisions
of the I.T. Act as may be prescribed in each year's Finance Act.
Dividend Income:
2.9. As per Section 10(34) of the Act, any income by way of dividends referred to in Section 115 – O of the
Act, (i.e. dividends declared, distributed or paid on or after 1st April, 2003 by domestic companies)
received on the shares of any company is exempt from tax.
2.10. Under Section 10(35) of the Act, the following income will be exempt in the hands of the Company:
(a) Income received in respect of the units of a Mutual Fund specified under clause (23D) of
Section 10; or
(b) Income received in respect of units from the Administrator of the specified undertaking; or
(c) Income received in respect of units from the specified company.
However, this exemption does not apply to any income arising from transfer of units of the
Administrator of the specified undertaking or of the specified Company or of a mutual fund, as the case
may be.
Dividend Distribution Tax:
2.11. The domestic company is required to pay dividend distribution tax u/s 115-O @ 16.995 % (including
applicable surcharge and education cess and Secondary and higher education cess).
However, the company would be entitled to avail the credit of dividend received by it from its
subsidiaries i.e. domestic company in accordance with and subject to the provisions of section 115-O
(1A) on which tax on distributed profits has been paid by the subsidiary i.e. domestic company. This
credit is available to ultimate parent company is not a subsidiary of any other company.
II. Tax Benefits available to resident Debenture Holders
1. Interest Income
1.1. Interest on non convertible debenture ("NCD") received by resident debenture holders would be subject
to tax at the normal rates of tax in accordance with and subject to the provisions of the I.T.Act as may
be prescribed in each year's Finance Act.
2. Capital Gain
2.1. Under section 2 (29A) of the I.T. Act, read with section 2 (42A) of the I.T. Act, a listed debenture is
treated as a long term capital asset if the same is held for more than 12 months immediately preceding
the date of its transfer.
2.2. Under section 112 of the I.T. Act, capital gains arising on the transfer of long term capital assets being
listed debentures, in the hands of resident debenture holders are subject to tax at the rate of 10% (plus
applicable surcharge and cess) of capital gains calculated without indexation of the cost of acquisition
or 20% (plus applicable surcharge and cess) of the capital gains calculated after indexation of the cost
of acquisition whichever is more beneficial to the assessee. The capital gains shall be computed by
deducting expenditure incurred in connection with such transfer and cost of acquisition of the debenture
from the sale consideration.
2.3. In case of an individual or HUF, being a resident, where the total income as reduced by the long term
capital gains is below the maximum amount not chargeable to tax (i.e. Rs.160,000 in case of all
individuals, to Rs.190,000 in case of women and to Rs.240,000 in case of senior citizens), the long term
| 163 |
capital gains shall be reduced to the extent of and only the balance long term capital gains shall be
subject to the flat rate of taxation in accordance with section 112(1) and the proviso to sub-section (1)
of section 112 of the I.T. Act read with CBDT Circular 721 dated September13,1995.
gain shall not be chargeable to tax to the extent such capital gain is invested in certain notified bonds
within six months from the date of transfer. If only part of the capital gain is so reinvested, the
exemption shall be allowed proportionately. However, if the said bonds are transferred or converted
into money within a period of three years from the date of their acquisitions, the amount of capital gain
exempted earlier would become chargeable to tax as long term capital gain in the year in which the
bonds are transferred or converted into money. Investment made on or after April 1, 2007 in the long
term specified asset by an assessee during any financial year should not exceed Rs.5.00 million.
2.5. In accordance with and subject to the condition specified in section 54F of the I.T. Act, long term
capital gains arising to an individual or Hindu Undivided Family (HUF) on transfer of long term capital
asset shall be exempt from capital gain tax subject to other conditions, if the sale proceeds from such
assets are used for purchase of residential house property within a period of one year before or two
years after the date on which the transfer took place or for construction of residential house property
within a period of three years after the date of transfer.
If only a part of the net consideration is so invested, so much of the capital gain as bears to the whole of
the capital gain, the same proportion as the cost of the new residential house bears to the net
consideration, shall be exempt. If the new residential house is transferred within a period of three years
from the date of purchase or construction, the amount of capital gains on which tax was not charged
earlier, shall be deemed to be income chargeable under the head "Capital Gains" of the year in which
the residential house is transferred.
Short Term Capital Gain
2.6. Under section 2 (42A) of the I.T. Act, a listed debenture is treated as a short term capital asset if the
same is held for less than 12 months immediately preceding the date of its transfer.
2.7. Short-term capital gains on the transfer of listed debenture, where listed securities are held for a period
of not more than 12 months, in the hands of resident debenture holders would be taxed at the normal
rates of tax in accordance with and subject to the provisions of the I.T. Act as may be prescribed in each
year's Finance Act.
3. Business Income
3.1. In case the resident debenture holders are engaged in business of trading in debentures, the income on
transfer of debentures would be taxed as business income or loss in accordance with and subject to the
provisions of the I.T. Act.
4. Withholding tax
4.1. Income tax is deductible at source as per the provisions of section 193 of the I.T. Act on interest on
debentures, payable to resident debenture holders at the rates as may be prescribed in each year's
Finance Act except in the following cases.
(a) On any securities issued by a company in a dematerialized form listed on recognized stock
exchange in India in accordance with the Securities Contracts (Regulation) Act, 1956 and
rules thereunder.
(b) If the conditions of proviso to section 193 of the I.T. Act are fulfilled.
(c) When the Assessing Officer issues a certificate on an application by a debenture holder on
satisfaction that the total income of the debenture holder justifies no/lower deduction of tax at
source as per the provisions of Section 197(1) of the I.T. Act and that Certificate is filed with
the Company.
(d) When the resident debenture holder (not being a company or a firm or a senior citizen)
submits a declaration in the prescribed Form 15G and in case of individual resident debenture
| 164 |
holder who is of the age of sixty five years or more in the prescribed Form 15H verified in the
prescribed manner to the effect that the tax on his estimated total income of the previous year
in which such income is to be included in computing his total income shall be nil as per the
provisions of section 197A (1A) /197A(IC) of the I.T. Act. As per section 197A (1B) of the
I.T. Act, Form 15G cannot be submitted nor considered for exemption from deduction from
tax at source if the aggregate of interest on debenture, credited or paid or likely to be credited
or paid during the previous year in which such income is to be included exceeds the maximum
amount which is not chargeable to tax; as may be prescribed in each year's Finance Act.
4.2. Income tax is not deductible at source on capital gain and business income on transfer of debentures,
payable to resident debenture holders as per the provisions of the I.T. Act.
III. Tax Benefits available to Warrant Holders
A. Resident Warrant Holders
1. Capital Gain
1.1. Under section 2 (29A) of the I.T. Act, read with section 2 (42A) of the I.T. Act, a listed warrant is
listed warrant, in the hands of resident warrant holders are subject to tax at the rate of 10% (plus
applicable surcharge and cess) of capital gains calculated without indexation of the cost of acquisition
or 20% (plus applicable surcharge and cess) of the capital gains calculated after indexation of the cost
of acquisition whichever is more beneficial to the assessee. The capital gains shall be computed by
deducting expenditure incurred in connection with such transfer and cost of acquisition of the warrant
1.3. In case of an individual or HUF, being a resident, where the total income as reduced by the long term
capital gains is below the maximum amount not chargeable to tax (i.e. Rs.160,000 in case of all
individuals, to Rs.190,000 in case of women and to Rs.240,000 in case of senior citizens), the long
term capital gains shall be reduced to the extent of and only the balance long term capital gains shall be
subject to the flat rate of taxation in accordance with section 112(1) and the proviso to sub-section (1)
of Section 112 of the I.T. Act read with CBDT circular 721 dated September 13,1995.
asset shall be exempt from capital gain tax subject to other conditions, if the sale proceeds from such
shares are used for purchase of residential house property within a period of one year before or two
consideration, will be exempt. If the new residential house is transferred within a period of three years
| 165 |
earlier, will be deemed to be income chargeable under the head "Capital Gains" of the year in which the
residential house is transferred.
1.6. Under section 2 (42A) of the I.T. Act, listed warrant is treated as a short term capital asset if the same is
held for less than 12 months immediately preceding the date of its transfer.
1.7. Short-term capital gains on the transfer of listed warrant, where listed warrant are held for a period of
not more than 12 months, in the hands of resident warrant holders would be taxed at the normal rates of
tax in accordance with and subject to the provisions of the I.T. Act as may be prescribed in each year's
Finance Act.
2. Business Income
2.1. In case the resident warrant holders are engaged in business of trading in warrant, the income on
transfer of warrant would be taxed as business income or loss in accordance with and subject to the
provisions of the I.T. Act.
3. Withholding tax
3.1. Income tax is not deductible at source on capital gain and business income on transfer of warrant,
payable to resident warrant holders as per the provisions of the I.T. Act.
B. Non-Resident /Foreign Company Warrant Holders (Other than Foreign Institutional Investors)
1. Capital Gain
1.1. Under section 2 (29A) of the I.T. Act, read with section 2 (42A) of the I.T. Act, a listed warrant is
listed warrant, in the hands of warrant holders are subject to tax at the rate of 10% (plus applicable
surcharge and cess) of capital gains calculated without indexation of the cost of acquisition or 20%
(plus applicable surcharge and cess) of the capital gains calculated after indexation of the cost of
acquisition whichever is more beneficial to the assessee. The capital gains will be computed by
asset will be exempt from capital gain tax subject to other conditions, if the sale proceeds from such
transfer are used for purchase of residential house property within a period of one year before or two
| 166 |
consideration, will be exempt. If the new residential house is transferred within a period of three years
earlier, will be deemed to be income chargeable under the head "Capital Gains" of the year in which the
residential house is transferred.
1.5. Under section 2 (42A) of the I.T. Act, listed warrant is treated as a short term capital asset if the same is
held for less than 12 months immediately preceding the date of its transfer.
1.6. Short-term capital gains on the transfer of listed warrant, where listed warrant are held for a period of
not more than 12 months, in the hands of warrant holders would be taxed at the normal rates of tax in
accordance with and subject to the provisions of the I.T. Act as may be prescribed in each year's
Finance Act.
2. Business Income
2.1. In case the warrant holders are engaged in business of trading in warrants, the income on transfer of
warrants would be taxed as business income or loss in accordance with and subject to the provisions of
the I.T. Act.
3. Withholding tax
3.1. As per the provisions of Section 195 of the IT Act, any, capital gain, business income payable to
warrant holders, may be liable to the provisions of with-holding tax, subject to the provisions of the
relevant tax treaty and the I.T. Act. Accordingly income tax may have to be deducted at source in the
case of warrant holders at the rate under the domestic tax laws or under the tax treaty, whichever is
beneficial to the assessee unless a lower withholding tax certificate is obtained from the tax authorities.
C. Foreign Institutional Investors (FII)
1. Capital Gain
1.1. As per section 2(29A) of the I.T. Act, read with section 2 (42A) of the I.T. Act, listed warrant is treated
as a long term capital asset if the same is held for more than 12 months immediately preceding the date
of its transfer.
listed warrant, in the hands of warrant holders are subject to tax at the rate of 10% (plus applicable
surcharge and cess) of capital gains calculated without indexation of the cost of acquisition or 20%
(plus applicable surcharge and cess) of the capital gains calculated after indexation of the cost of
acquisition whichever is more beneficial to the assessee. The capital gains will be computed by
1.3. As per section 115AD of the Act, on transfer of long term capital assets being listed warrant are liable
to be taxed at the rate of 10% (plus applicable surcharge and education cess). Cost Indexation and
foreign currency fluctuation benefit as per proviso to section 48 of the I.T. Act will not be available in
such a case.
| 167 |
1.5. As per section 2 (42A) of the I.T. Act, listed warrant in a company is treated as a short term capital
asset if the same is held for less than 12 months immediately preceding the date of its transfer.
1.6. As per section 115AD of the I.T. Act, if securities transaction tax is not charged on transfer of short
term capital asset being listed warrant then it would be taxed at the rate of 30% (plus applicable
surcharge and education cess).
2. Business Income
2.1. In case the warrant holders are engaged in business of trading in warrants, the income on transfer of
warrants would be taxed as business income or loss in accordance with and subject to the provisions of
the I.T. Act.
3. Withholding tax
3.1. As per section 196D of the I.T. Act read with section 195 of the IT Act, business income payable to
FII, may be liable to the provisions of with-holding tax, subject to the provisions of the relevant tax
treaty.
Accordingly income tax may have to be deducted at source in the case of a FII warrant holders at the
rate under the domestic tax laws or under the tax treaty, whichever is beneficial to the assessee unless a
lower withholding tax certificate is obtained from the tax authorities.
3.2. As per section 196D of the I.T. Act, income by way of capital gain payable to FII, is not liable to
withholding tax.
IV. Tax Benefits available to Mutual Funds
As per the provisions of Section 10(23D) of the I.T. Act, any income of Mutual Funds registered under
the Securities and Exchange Board of India Act, 1992 or Regulations made thereunder, Mutual Funds
set up by public sector banks or public financial institutions and Mutual Funds authorised by the
Reserve Bank of India would be exempt from income tax, subject to the conditions as the Central
Government may by notification in the Official Gazette specify in this behalf. However, Mutual Funds
will be liable to pay tax on distributed income to unit holders under Section 115R of the I.T. Act.
V. Tax Benefits available to the NCDs/ Warrants holders under the Wealth-Tax Act, 1957
The Securities will not be treated as an asset within the meaning of Section 2(ea) of Wealth Tax Act,
1957. Hence no Wealth Tax will be payable on the market value of Securities held.
VI. Tax Benefits available to the NCDs / Warrants holders under the Gift Tax Act, 1958
Gift of debentures/warrants of the Company made on or after October 1, 1998 are not liable to gift tax.
However as per section 56 of the I.T.Act, where an individual or a Hindu undivided family receives
subject to certain exemption as provided under section 56 of the I.T. Act, , in any previous year, from
any person or persons on or after the 1st day of October, 2009, any property, i.e. debentures, and
warrants —
(i) without consideration, the aggregate fair market value of which exceeds fifty thousand rupees,
the whole of the aggregate fair market value of such property;
| 168 |
(ii) for a consideration which is less than the aggregate fair market value of the property by an
amount exceeding fifty thousand rupees, the aggregate fair market value of such property as
exceeds such consideration then the same is taxable in its hands.
VII. Stamp duty on transfer of NCDs and Warrants
No stamp duty is payable for transfer of NCDs and Warrants in dematerialized form. Transfer of NCDs
in physical form will attract stamp duty at the rate of 0.50% of the value. No stamp duty is payable on
transfer of Warrants in physical form.
| 169 |
LEGAL PROCEEDINGS
The legal proceedings filed against the Company are broadly classified as civil cases, labour disputes, arbitration
proceedings and proceedings in the Debt Recovery Tribunal (collectively, the "Litigations").
The claims against the Company in these Litigations aggregate Rs.2.18 million.
Certain income tax claim has been made against the Company and the Company has filed appeal from the order
of the Commissioner of Income Tax, claims of which aggregates to Rs.5.69 million.
All of the above legal proceedings/claims are pending at different levels of adjudication before various courts,
arbitrators and appellate tribunals.
Based on legal advice regarding the merits of the cases, the Company has not established reserves in its financial
statements to cover the entire amounts of potential liability. Should any new developments arise, such as a
change in Indian law or a ruling against the Company by appellate courts or tribunals, the Company may need to
establish reserves in its financial statements, which could increase its expenses and current liabilities. Further, if
a claim is determined against the Company and it is required to pay all or a portion of the disputed amount, it
could have a material adverse effect on the results or operations. However, it should be noted that some of the
claims are currently not quantifiable in terms of monetary compensation.
| 170 |
INDEPENDENT ACCOUNTANTS
The audited financial statements as of and for the three years ended March 31, 2009, March 31, 2008, March 31,
2007 were prepared in accordance with the Generally Accepted Accounting Principles and the financial results
(limited reviewed) for the period ended June 30, 2010, were prepared in accordance with SRE 2004.
The Auditors of the Company are H.K. Shah & Co., Chartered Accountants having their office situated at
Ashram Road, Ahemdabad, are the Statutory Auditors.
| 171 |
GENERAL INFORMATION
1. The Company was incorporated under the Companies Act, 1956 in the name of The Company was
incorporated under the Companies Act, 1956 in the name of Kemrock Industries and Exports Limited in
the year 1991, under the Certificate of Incorporation number 04-16625 of 1991-92 dated November 18,
1991. The Company was granted Certificate for commencement of business dated November 25, 1991.
The Company is promoted by Mr. Kalpesh Patel and his brother (Late) Mr. Jayesh Patel. Prior to
incorporation of the Company in 1991, the family was engaged in the business of agricultural
chemicals, for about two (2) decades. The Company went public and came out with its Initial Public
Offering in the year 1993. The Company raised Rs.48.9 Million through its IPO. The registered office
of the Company is located at Village: Asoj, Vadodara-Halol Express Way Taluka: Waghodia, District:
Vadodara, Gujarat
2. This Issue was authorised and approved by the Board of Directors on May 7, 2010 and approved by the
shareholders by way of special resolution at the Extraordinary General Meeting held on June 3, 2010.
3. The Company has received the in-principle approval under Clause 24(a) of the Listing Agreements to
list the Securities on the Stock Exchanges. After Allotment of the Securities offered pursuant to this
Issue, the Company will apply for the listing and trading approvals from the Stock Exchanges.
4. Copies of the Memorandum and Articles of Association along with material contracts and agreements
will be available for inspection during usual business hours on any weekday between 10.00 A.M. to
12.00 noon (except Saturdays, Sundays and public holidays as may be notified under the Negotiable
Instrument Act, 1881) at the Company's registered office.
5. The Company has obtained all consents, approvals and authorisations required in connection with this
Issue.
6. There has been no material change in the Company's financial position since June 30, 2010, the date of
the latest financial statements prepared in accordance with Indian GAAP included in this Preliminary
Placement Document, except as disclosed herein.
7. Except as disclosed in this Preliminary Placement Document, there are no litigation or arbitration
proceedings against or affecting the Company or its assets or revenues, nor is the Company aware of
any pending or threatened litigation or arbitration proceedings, which are or might be material in the
context of this Issue of Securities.
8. The Company's statutory auditors are H.K. Shah & Co. Chartered Accountants, who have audited (i)
consolidated financial statements of the Company as of and for the year ended 31 March 2009, 2008
and 2007; and (ii) undertaken a limited review of the standalone financial statements of the Company
for the period ended June 30, 2010.
9. The Company confirms that it is in compliance with the minimum public shareholding requirements as
required under the terms of the listing agreements with the Stock Exchanges.
10. IDBI Trusteeship Services Limited is acting as the Debenture Trustees and have consented in writing to
be include their name in this Preliminary Placement Document in its capacity as Debenture Trustee.
11. Rating: The NCDs proposed to be issued have been rated by CARE and the rating details are as below:
Rating Agency Rating Category Meaning of the Rating

CARE 'BBB+' NCDs Issuers with this rating are considered to
offer moderate safety for timely servicing
of Debt obligations. Such
facilities/instruments carry moderate credit
risk.
| 172 |
12. The Floor Price for the Warrants Exercise price is Rs. 536.20 as certified by H.K. Shah & Co., statutory
auditors of the Company, calculated in accordance with Chapter VIII of the SEBI ICDR Regulations.
Credit Rating
Pursuant to a letter dated July 13, 2010 which was revalidated on March 4, 2011 CARE has assigned a ''BBB+"
(Triple B Plus) rating to the Non-Convertible Debenture Issue of Rs.750 million.'" The rating is not a
recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be
subject to revision or withdrawal or suspension at any time by the assigning rating agency and each should be
evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in
the future. The rating agencies have a right to suspend, withdraw the rating at any time on the basis of new
information and other compelling factors.
Validity of Rating:
The aforesaid rating is valid for a period of six months from the date of the letters revalidating the ratings, i.e.,
March 4, 2011 or in case there is any change in the size or terms of the proposed borrowing.
Credit Rationale:
For the credit rationale, please refer Annexure at the end of the Preliminary Placement Document.
| 173 |
FINANCIAL STATEMENTS
INDEX TO THE FINANCIAL STATEMENTS
Particulars Page No.

Auditors Report on financial statements as at June 30, 2010 175
Auditors Report on financial statements as at March 31, 2009 178
Auditors Report on financial statements as at March 31, 2008 181
Balance Sheet as at June 30, 2010, March 31, 2009 and March 31, 2008 184
Profit and Loss Accounts as at June 30, 2010, March 31, 2009 and March 31, 2008 185
Schedules annexed to and forming part of the accounts 186
Cash Flow Statement as at June 30, 2010, March 31, 2009 and March 31, 2008 201
Un-audited Financial Results for the Period Ended December 31, 2010 203
| 174 |
AUDITORS' REPORT FOR THE YEAR ENDED JUNE 30, 2010
We have audited the attached Balance Sheet of KEMROCK INDUSTRIES AND EXPORTS LIMITED (the
"Company") as at 30th June, 2010 and the Profit & Loss Account and Cash Flow Statement for the 15 months
ended on that date, annexed thereto. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in India. These Standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by the management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our opinion.
As required by the Companies (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's Report)
(Amendment) Order, 2004 (the "Order") issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Companies Act, (the "Act") 1956, we enclose in the Annexure a statement on the matters
specified in paragraph 4 and 5 of the said order.
Further to our comments in the annexure referred to in paragraph 3 above we report as follows:
1. We have obtained all the information and explanations, which to the best of our knowledge and belief
were necessary for the purpose of our audit.
2. In our opinion, proper books of account as required by law have been kept by the Company so far as
appears from our examination of those books.
3. The Balance Sheet and Profit and Loss Account and the Cash Flow Statement dealt with by this report
are in agreement with the books of account.
4. In our opinion, and to the best of our information and according to the explanations given to us, the
Balance Sheet and the Profit and Loss Account and Cash Flow Statement dealt with by this report read
together with the notes thereon comply with Accounting Standards referred to in sub-section (3C) of
section 211 of the Companies Act, 1956, to the extent applicable.
5. On the basis of written representations received from the Directors and taken on record by the Board of
Directors, we report that none of the Directors is disqualified from being appointed as director as on
30th June,2010 in terms of clause (g) of sub-section(1) of section 274 of the Act.
6. In our opinion and to the best of our information and according to the explanations given to us, the said
accounts read together with other notes thereon give the information required by the Companies Act,
1956 in the manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India,
(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 30th June, 2010;
(b) In the case of the Profit and Loss Account, of the profit of the Company for the period ended
on that date and
(c) In the case of Cash Flow Statement, of the cash flows for the period ended on that date.
7. Annexure referred to in Paragraph 3 of Our report of even date.
The company has maintained proper records showing full particulars including quantitative details and
situation of fixed assets.
(a) The fixed assets are physically verified by the management at reasonable intervals. In our
opinion and according to the information and explanations given to us in respect of assets
physically verified during the year, the discrepancies noticed were not material and have been
properly dealt with in the books of account.
(b) There was no substantial disposal of fixed assets during the year.
| 175 |
8. In our opinion and according to the information and explanations given to us, the inventories have been
physically verified by the management at reasonable intervals.
9. In our opinion and according to the information and explanations given to us, the procedure of physical
verification of inventories followed by the management is reasonable and adequate in relation to the
size of the Company and the nature of its business.
10. In our opinion and according to the information and explanations given to us, the company has
maintained proper records of inventory and no material discrepancies were noticed on physical
verification.
11. As informed to us, the Company has neither taken nor given any loan secured or unsecured from/to
parties listed under Section 301 of the Companies Act, 1956.
12. In our opinion and according to the information and explanations given to us, there are adequate
internal control procedures commensurate with the size of the Company and the nature of its business
for the purchase of inventory and fixed assets and with regard to sale of goods.
13. During the course of audit, no major weakness has been noticed in the internal controls.
14. In our opinion and according to the information and explanations given to us, the transactions that
needs to be entered into the register maintained under Section 301 of the Companies Act, 1956 have
been so entered.
15. In our opinion and according to the information and explanations given to us, transactions exceeding
Rs.5 lacs have been made at a price which are reasonable having regard to the prevailing market prices
at the relevant time.
16. The company has not accepted any deposits during the year from the public within the meaning of the
provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and
rules made there under. Therefore the provision of clause (vi) of para 4 of the order are not applicable.
17. In our opinion, the Company has an Internal Audit System commensurate with the size of the Company
and the nature of its business.
18. We have broadly reviewed books of account maintained by the company pursuant to the Rules made by
the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956. We are of the opinion that prima facie the prescribed accounts and records have been
maintained. We have, not, however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
19. According to the information and explanations given to us and the records examined by us, the
company is regular in depositing with appropriate authorities undisputed statutory dues including
provident fund, investor education and protection fund, employees state insurance, income tax, sales
tax, wealth tax, service tax, custom duty, excise-duty, cess and other statutory dues wherever
applicable. According to the information and explanations given to us, no undisputed arrears of
statutory dues were outstanding as at 30th June, 2010 for a period of more than six months from the
date they became payable.
20. According to the information and explanations given to us, the statutory dues which have not been
deposited on account of disputes and the forum where the disputes are pending are as under:
| 176 |
Under Income Tax Act, 1961:

(Rupees in Millions)
Nature of Dues Assessment Year Amount Forum where dispute is pending
Income Tax 2006-07 2.85 Income Tax Appellate Tribunal,
Ahmedabad
Assessment
21. The Company has no accumulated losses as at 30th June, 2010. The Company has not incurred any cash
losses during the financial year covered by our audit and the immediately preceding financial year.
22. Based on the information and explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to the financial institutions or bank. (There are no
debenture holders)
23. Based on the examination of the records and the information and explanations given to us, the
Company has not granted any loans and / or advances on the basis of security by way of pledge of
shares, debentures and other securities.
24. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. The provisions
of clause 4 (xiii) of the order are not applicable to the Company.
25. In our opinion and according to the information and explanations given to us, the Company is not
dealing or trading in shares, securities, debentures and other investments.
26. According to the information and explanations given to us, the Company has not given any guarantee
for loans taken by others from banks or financial institutions.
27. According to the information and explanation given to us the Company has obtained term loans from
banks and they have been applied for the purpose for which they were obtained.
28. According to the information and explanation given to us and based on our examination of the books of
accounts, short term funds raised by the Company have not been used for long term investment.
29. The Company has not made any preferential allotment of shares / warrants to parties and companies
covered in the register maintained under section 301 of the Companies Act, 1956.
30. The Company has not issued any secured debentures.
31. The Company has not raised monies by public issue during the year however the company has made
GDR issue during the period.
32. To the best of our knowledge and belief and according to the information and explanations given to us,
no fraud on or by the Company was noticed or reported during the course of our audit.
For H.K. Shah & Co.,

Chartered Accountants
Firm Reg. No. 109583/W
H.K. Shah
Place: Asoj, Vadodara Partner
Date: August 27, 2010 M. No. 42758
| 177 |
AUDITORS' REPORT FOR THE YEAR ENDED MARCH 31, 2009
"Company") as at March 31, 2009 and the Profit & Loss Account and Cash Flow Statement for the year ended
on that date, annexed thereto. These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based on our audit.
of section 227 of the Companies Act, (the "Act") 1956 and in terms of the information and explanations given to
us on the matters specified in paragraph 4 and 5 of the said order, we state that:
1. The company has maintained proper records showing full particulars including quantitative details and
2. The fixed assets are physically verified by the management at reasonable intervals. In our opinion and
according to the information and explanations given to us in respect of assets physically verified during
the year, the discrepancies noticed were not material and have been properly dealt with in the books of
account.
3. There was no substantial disposal of fixed assets during the year.
4. In our opinion and according to the information and explanations given to us, the inventories have been
5. In our opinion and according to the information and explanations given to us, the procedure of physical
6. In our opinion and according to the information and explanations given to us, the company has
verification.
9. During the course of audit, no major weakness has been noticed in the internal controls.
10. In our opinion and according to the information and explanations given to us, the transactions that
needs to be entered into the register maintained under Section 301 of the Companies Act, 1956 have
been so entered.
11. In our opinion and according to the information and explanations given to us, each of these transactions
have been made at a price which are reasonable having regard to the prevailing market prices at the
relevant time.
| 178 |
rules made there under.
14. We have broadly reviewed books of accounts maintained by the company pursuant to the Rules made
by the Central Government for the maintenance of cost records under section 209(1)(d) of the
Companies Act, 1956. We are of the opinion that prima facie the prescribed accounts and records have
been maintained. We have, not, however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
15. According to the information and explanations given to us and the records examined by us, the
company is regular in depositing with appropriate authorities undisputed statutory dues including
provident fund, investor education and protection fund, employees state insurance, income tax, sales
tax, wealth tax, service tax, custom duty, excise-duty, cess and other statutory dues wherever
applicable. According to the information and explanations given to us, no undisputed arrears of
statutory dues were outstanding as at 31st March, 2009 for a period of more than six months from the
date they became payable.
16. According to the information and explanations given to us, the statutory dues which have not been
deposited on account of disputes and the forum where the disputes are pending are as under:

(Rupees in Million)
Nature of Dues Assessment Amount Forum where dispute is
Year pending
Income Tax Penalty 2003-04 0.61 Commissioner of Income Tax
(Appeals), Vadodara
Income Tax Assessment 2004-05 0.86 -do-
Income Tax Assessment 2005-06 0.06 -do-
Interest u/s. 234B & 234C 2006-07 0.13 Asst. Commissioner of
Income Tax, Circle 1(2),
Vadodara (for rectification)
Income Tax Assessment 2007-08 5.69 Comissioner of Income Tax
(Appeals), Vadodara
17. The Company has no accumulated losses as at 31st March, 2009. The Company has not incurred any
cash losses during the financial year covered by our audit and the immediately preceding financial year.
18. Based on the information and explanations given by the management, we are of the opinion that the
debenture holders)
19. Based on the examination of the records and the information and explanations given to us, the
Company has not granted any loans and / or advances on the basis of security by way of pledge of
shares, debentures and other securities.
20. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. The provisions
of clause (xiii) of the order are not applicable to the Company.
21. In our opinion and according to the information and explanations given to us, the Company is not
dealing or trading in shares, securities, debentures and other investments.
22. According to the information and explanations given to us, the Company has not given any guarantee
for loans taken by others from banks or financial institutions.
| 179 |
23. The Company has obtained term loans from banks and they have been applied for the purpose for
which they were obtained.
24. Based on our examination of the books of accounts, short term funds raised by the Company have not
been used for long term investment.
25. The Company has not made any preferential allotment of shares / warrants to parties and companies
26. The Company has not issued any secured debentures.
27. The Company has not raised monies by public issue during the year.
no fraud on or by the Company was noticed or reported during the course of our audit.
29. Further to our comments above, we report that:
(a) We have obtained all the information and explanations, which to the best of our knowledge
and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so
far as appears from our examination of those books.
(c) The Balance Sheet and Profit and Loss Account and the Cash Flow Statement dealt with by
this report are in agreement with the books of account.
(d) In our opinion, and to the best of our information and according to the explanations given to
us, the Balance Sheet and the Profit and Loss Account and Cash Flow Statement dealt with by
this report read together with the notes thereon comply with Accounting Standards referred to
in sub-section (3C) of section 211 of the Companies Act, 1956, to the extent applicable.
(e) On the basis of written representations received from the Directors and taken on record by the
Board of Directors, we report that none of the Directors is disqualified from being appointed
as director as on 31st March, 2009 in terms of clause (g) of sub-section(1) of section 274 of
the Act.
(f) Subject to the above, in our opinion and to the best of our information and according to the
explanations given to us, the said accounts read together with other notes thereon give the
information required by the Companies Act, 1956 in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India.
(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st
March, 2009;
(ii) In the case of the Profit and Loss Account, of the profit of the Company for the year
ended on that date; and
(iii) In the case of Cash Flow Statement, of the cash flows for the year ended on that date
For H.K.Shah & Co.,

Date: 29.06.09
Place: Asoj, Vadodara H. K. Shah
Partner
M. No. 42758
| 180 |
AUDITORS' REPORT FOR THE YEAR ENDED MARCH 31, 2008
"Company") as at March 31, 2008 and the Profit & Loss Account and Cash Flow Statement for the year ended
on that date, annexed thereto. These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based on our audit.
of section 227 of the Companies Act, (the "Act") 1956 and in terms of the information and explanations given to
us on the matters specified in paragraph 4 and 5 of the said order, we state that:
1. The company has maintained proper records showing full particulars including quantitative details and
The fixed assets are physically verified by the management at reasonable intervals. In our opinion and
according to the information and explanations given to us in respect of assets physically verified during
the year, the discrepancies noticed were not material and have been properly dealt with in the books of
account.
The company has disposed off a meager part of its fixed assets, which do not affect the going concern
status of the company.
2. In our opinion and according to the information and explanation given to us, the inventories have been
In our opinion and according to the information and explanation given to us, the procedure of physical
In our opinion and according to the information and explanation given to us, the company has
verification.
During the course of audit, no major weakness has been noticed in the internal controls.
5. (a) In our opinion and according to the information and explanations given to us, the transaction
that needs to be entered into the register maintained under Section 301 of the Companies Act,
1956 have been so entered.
(b) In our opinion and according to the information and explanations given to us, each of these
transactions have been made at a price which are reasonable having regard to the prevailing
market prices at the relevant time.
| 181 |
rules made there under.
8. The maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 is not prescribed
in case of the Company.
9. (a) According to the information and explanation given to us and the records examined by us, the
company is regular in depositing with appropriate authorities undisputed statutory dues
including provident fund, investor education and protection fund, employees state insurance,
income tax, sales tax, wealth tax, service tax, custom duty, excise-duty, cess and other statutory
dues wherever applicable. According to the information and explanations given to us, no
undisputed arrears of statutory dues were outstanding as at 31st March, 2008 for a period of
more than six month from the date they became payable.
(b) According to the information and explanation given to us, the statutory dues which have not
been deposited on account of disputes and the forum where the dispute is pending are as under:

(Rupees in Million)
Nature of Dues Assessment Amount Forum where dispute is pending
Year
Income Tax Penalty 2003-04 0.61 Commissioner of Income Tax (Appeals), Vadodara
Income Tax 2004-05 0.86 -do-
Assessment
Income Tax 2005-06 0.06 -do-
Assessment
Interest u/s. 234B & 2006-07 0.13 Asst. Commissioner of Income Tax, Circle 1(2),
234C Vadodara (for rectification)
10. The Company has no accumulated losses as at 31st March, 2008. The Company has not incurred any
cash losses during the financial year covered by our audit and the immediately preceding financial year.
11. Based on the information and explanation given by the management, we are of the opinion that the
debenture holders)
12. Based on the examination of the records and the information and explanation given to us, the Company
has not granted any loans and / or advances on the basis of security by way of pledge of shares,
debentures and other securities.
13. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. The provisions
of clause (xiii) of the order are not applicable to the company.
14. Clause (xiv) of the order is not applicable as the company is not dealing or trading in shares, securities,
debentures and other investments.
15. According to the information and explanations given to us, the company has not given any guarantee
for loans taken by others from banks or financial Institutions.
16. The company has obtained term loans from banks and they have been applied for the purpose for which
they were obtained.
| 182 |
17. Based on our examination of the books of accounts, short term funds raised by the company have not
been used for long term investment.
18. The company has made (i) preferential allotment of total 25,80,000 equity shares of Rs.10/- each at a
premium of Rs.440/- per share to M/s. Clarita International Ltd., Mauritius, a foreign body corporate,
and to the promoters of the Company; and (ii) also allotted 18,00,000 warrants (8,22,000 warrants in
Part – A; and 9,78,000 in Part – B) on preferential basis to a promoter, which are convertible in equity
shares of Rs.10/- each at a premium of Rs.440/- per share. However, these company / parties are not
19. Clause (xix) of order regarding creation of securities is not applicable to the company.
20. The Company has not raised monies by public issue during the year.
no fraud on or by the company was noticed or reported during the course of our audit.
Further to our comments above, we report that:
We have obtained all the information and explanations, which to the best of our knowledge and belief were
necessary for the purposes of our audit.
In our opinion, proper books of account as required by law have been kept by the company so far as appears
from our examination of those books.
The Balance Sheet and Profit and Loss Account and the Cash Flow Statement dealt with by this report are in
agreement with the books of account.
In our opinion, and to the best of our information and according to the explanations given to us, the Balance
Sheet and the Profit and Loss Account and Cash Flow Statement dealt with by this report read together with the
notes thereon comply with accounting standards referred to in sub-section (3C) of section 211 of the Companies
Act, 1956, to the extent applicable.
On the basis of written representations received from the Directors and taken on record by the Board of
Directors, we report that none of the Directors is disqualified from being appointed as director as on 31st
March, 2008 in terms of clause (g) of sub-section(1) of section 274 of the Act.
Subject to the above, in our opinion and to the best of our information and according to the explanations given
to us, the said accounts read together with other notes thereon give the information required by the Companies
Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India.
(i) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2008;
(ii) In the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date;
and
(iii) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.
Date: 28.06.08 For H.K.Shah & Co.,

Place: Asoj, Vadodara Chartered Accountants
H.K.Shah
Partner
M. No. 42758
| 183 |
BALANCE SHEET
(Rupees in Million)
2010 2009 2008
SOURCES OF FUNDS
Shareholders' Funds:
Share Capital 1 167.53 110.15 101.30
Equity Share Warrants 61.99 55.13 89.27
Reserves & Surplus 2 5479.30 2462.19 1841.54
Loan Funds
Secured Loans 3 9173.42 6177.91 2643.54
Unsecured Loans 4 2.87 5.89 7.71
Deferred Tax 202.91 147.38 86.36
Total 15088.02 8958.65 4769.72
APPLICATION OF FUNDS
Fixed Assets
Gross Block 5679.26 3279.37 2520.47
Less : Depreciation 751.40 464.79 278.98
Net Block 4927.86 2814.58 2241.49
Capital Work-In-Progress including 3293.14 1553.04 117.46
Advances for Capital Expenses
Sub-Total 8221.00 4367.62 2358.95
Investments 6 910.09 20.09 20.76
Current Assets, Loans & Advances

Current Assets
Inventories 7 2362.73 1965.09 1387.58
Sundry Debtors 8 3156.65 2629.09 951.95
Cash & Bank Balances 9 1751.35 868.74 445.42
Loans & Advances 10 847.77 142.82 209.28
Subtotal 8118.50 5605.74 2994.23
Less: Current Liabilities & Provisions 11 2161.57 1035.77 703.08
Net Current Assets 5956.93 4569.97 2291.15
Miscellaneous Expenditure 12 0.00 0.97 98.86

( To the extent not written off or adjusted)
Total 15088.02 8958.65 4769.72
| 184 |
PROFIT AND LOSS ACCOUNT
(Rupees in Million)
2010 2009 2008
INCOME
Sales & Operation 6293.82 3790.54 2311.45

Less: Excise Duty 215.57 148.48 106.76
Net Sales 6078.25 3642.06 2204.69
Other Income 13 22.64 97.55 29.16
Increase/ (Decrease) in Stocks 14 110.06 554.40 600.74
TOTAL 6210.95 4294.01 2834.59
EXPENDITURE
Raw Materials Consumed 3364.82 2388.12 1554.58

Manufacturing Expenses 15 443.78 292.08 204.24
Provisions & Payments to Employees 16 360.31 216.31 107.56
Administration & General Expenses 17 169.74 74.44 57.94
Selling & Distribution Expenses 18 338.98 303.45 168.26
Financial Expenses 19 540.15 396.54 288.92
Depreciation 288.09 186.14 122.42
TOTAL 5505.87 3857.08 2503.92
Profit before Tax 705.08 436.93 330.67

Less : Provision for Current Tax 119.82 48.68 26.00
Less : Provision for Wealth Tax 0.07 0.01 -
Less : Provision for Fringe Benefit Tax - 2.80 2.25
Less/( Add): Provision for Deferred Tax 55.52 61.03 23.35
Profit after Tax 529.67 324.41 279.07

Add/(Less) : Prior Period Income/ (Expenses) (2.78) (6.20) (29.00)
Profit for the year for appropriation 526.89 318.21 250.07
Less : Provision for Final Dividend 16.75 16.52 10.13

Less : Provision for Tax on Final Dividend 2.78 2.81 1.72
Less : Short Provision for Final Dividend 0.88 -
Less : Short Provision for Tax on Final Dividend 0.15 -
Less: Corporate Dividend Tax on Proposed 1.87
Dividend
Less: Interim Dividend 11.01
Less : Prior year Tax Adjustment - 0.06 -
Profit for the year after appropriation 494.48 297.79 238.22
Profit transferred from previous year 743.54 485.75 293.20

Transfer to General Reserve Account 50.00 40.00 -
Balance Carried to Balance Sheet 1188.02 743.54 531.42
EPS ( Basic) 45.05 29.43 29.96

EPS ( Diluted) 42.67 26.38 26.81
Significant Accounting Policies & Notes on
Accounts 20
| 185 |
SCHEDULES FORMING PART OF BALANCE SHEET AS AT
(Rupees in Million)
Particulars June 30, March 31, March 31,
2010 2009 2008
SCHEDULE 1- SHARE CAPITAL
Authorized Capital
( Equity Shares of Rs.10/- each) 350.00 250.00 250.00
Issued, Subscribed and Paid Up Capital

( Equity Shares of Rs.10/- each ) 167.53 110.15 101.30
Total 167.53 110.15 101.30
SCHEDULE 2 – RESERVES AND SURPLUS
Capital Reserve
Securities premium Opening 1620.15 1348.72
Securities Premium during the period 2491.18 368.77 1348.72
Less: Share Issue Expenses ( Refer Note no. 7 (b) of " Notes
to accounts " for the year 2009-10) (23.67) (97.34) -
Total Securities Premium 4087.66 1620.15 1348.72
Warrants Forfeiture Opening 58.50 7.07
Warrants Forfeiture 55.12 51.43 7.07
Total Warrants Forfeiture 113.62 58.50 7.07
Sub-Total 4201.28 1678.65 1355.79
General Reserve ( Transferred from profit and Loss
Account) 90.00 40.00 -
Balance of Profit & Loss Account 1188.02 743.54 531.42

Less : Deferred Tax Provision - 45.67
Sub-Total 1188.02 743.54 485.75
Total 5479.30 2462.19 1841.54
SCHEDULE 3- SECURED LOANS
Term Loans from :

Term Loans 3932.88 767.14 1063.09
Short Term Loans 505.55 2518.97 504.89
Foreign Currency Term Loan/ECB from Banks 1564.49 846.97 -
Sub- total 6002.92 4133.08 1567.98
Vehicle Loans
Banks 29.84 19.19 17.56
Vehicle Financing Companies - - 0.38
Sub- total 29.84 19.19 17.94
Sub- total 6032.76 4152.27 1585.92
Working Capital from Banks 3140.66 2025.64 1057.62
Total 9173.42 6177.91 2643.54
SCHEDULE 4 – UNSECURED LOANS

External Commercial Borrowing
(Fibergrate Composites Structures, Inc. USA) 2.87 5.89 7.71
| 186 |

2010 2009 2008
Total 2.87 5.89 7.71
SCHEDULE 5- FIXED ASSETS
Land 72.13 41.13 27.52

Building 1600.15 1177.70 773.73
Plant and machinery 3800.53 1925.73 1612.50
Furniture, Office Equipments etc 134.28 84.81 65.05
Vehicles 63.09 42.67 35.53
Quality Control Assets 9.08 7.33 6.14
Total Gross Block 5679.26 3279.37 2520.47
Less: Depreciation 751.40 464.79 278.98
Net Block 4927.86 2814.58 2241.49
CWIP 3293.14 1553.04 117.46
Total 8221.00 4367.62 2358.98
SCHEDULE 6 – INVESTMENT ( AT COST)
Long term Investments
UNQUOTED ( TRADE INVESTMENT)

15975 Equity Shares of Georgia-Pacific Kemrock
International Pvt. Ltd. of Rs.1,000/- each 15.98 15.98 15.98
3 Shares of S.K. Polymers FZCO,UAE of AED 1,00,000/-
each 3.37 3.37 3.37
Top Glass S.p.A.-Italy 6400000 Equity Shares of Euro 1/-
each 889.35 - -
Sub- total 908.70 19.35 19.35
QUOTED
4500 Equity Shares of SNS Textiles Ltd. (Erstwhile Suzlon
Fibers ltd.) of Rs.10/- each, 3/- paid up 0.01 0.01 0.01
Equity Shares of Gujarat State Financial Corporation Ltd. of
Rs.10/- each, Rs.5/- paid up - - 0.02
472 Equity Shares of Punjab National Bank @ Rs.390/- per
share 0.18 0.18 0.18
Sub- total 0.19 0.19 0.21
CURRENT INVESTMENTS
20,000 Units of SBI One India Fund-Dividend Option 0.20 0.20 0.20
1,00,000 units of PNB Long Term Equity Fund Based 3 year
Plan Series II- Growth Option 1.00 1.00 1.00
Less: Provision for diminution in value of Investments - (0.65) -
Sub- total 1.20 0.55 1.20
Total 910.09 20.09 20.76
SCHEDULE 7- INVENTORIES
( As taken, valued and certified by the Management; and at
cost or market value, whichever is lower)
Raw Materials 724.60 455.39 432.38

Stores & Spares 35.83 17.46 17.37
Stock in Process 1507.48 1420.94 893.07
Finished goods 94.82 71.30 44.76
Total 2362.73 1965.09 1387.58
| 187 |

2010 2009 2008
SCHEDULE 8- SUNDRY DEBTORS
(Unsecured, Considered good)
Exceeding six months 653.12 1069.08 66.42

Others 2503.53 1560.01 885.53
Total 3156.65 2629.09 951.95
SCHEDULE 9- CASH & BANK BALANCE
Cash on Hand 12.37 1.52 1.84

Balance with Scheduled Banks:
In Current Accounts 1430.74 683.54 286.39
In Fixed Deposit Accounts ( Under Lien with Bank) 307.47 183.46 157.19
In Dividend Accounts 0.77 0.22 -
Total 1751.35 868.74 445.42
SCHEDULE 10- LOANS & ADVANCES

( Unsecured, Considered good)
Advances recoverable in cash or in kind or for value to be

received 788.05 109.41 171.07
Balances with Customs and Excise 44.73 18.66 12.46
Deposits 14.99 14.75 14.78
Advance Payment of Taxes (Net) - - 10.97
Total 847.77 142.82 209.28
SCHEDULE 11- CURRENT LIABILITIES AND
PROVISIONS
Current Liabilities
Sundry Creditors 1920.54 888.95 590.96
Unclaimed Dividend 0.77 0.22 -
Advance from Customers 6.35 5.99 10.36
Other Liabilities 173.53 112.17 89.91
Provisions
Provision for Gratuity, Leave Encashment and Bonus - -
Provision for Income Tax 40.79 9.09 -
Provision for Wealth Tax 0.06 0.02 -
Proposed Dividend 16.75 16.52 10.13
Corporate Dividend Tax on Proposed Dividend 2.78 2.81 1.72
Total 2161.57 1035.77 703.08
SCHEDULE - 12 MISCELLANEOUS EXPENDITURE
(To the extent not written off or adjusted)
Deferred Revenue Expenditure 0.00 0.97 98.86
Total 0.00 0.97 98.86
| 188 |
SCHEDULES FORMING PART OF PROFIT AND LOSS ACCOUNT AS AT
(Rupees in Million)
PARTICULARS June 30, March 31, March 31,
2010 2009 2008
SCHEDULE - 13 OTHER INCOME
Interest 15.08 5.76 7.19

Foreign Exchange Fluctuation ( Net ) 0.00 71.69 18.94
Insurance Claim Received 0.45 1.17 0.06
Other Income 4.02 0.01 0.61
Dividend from Long Term Trade Investment 0.01 16.46 -
Rental Income 3.08 2.46 2.36
Total 22.64 97.55 29.16
SCHEDULE - 14 INCREASE / (DECREASE) IN

STOCKS
Closing Stock - Finished Goods 94.81 71.29 44.76

-Process Goods 1507.48 1420.94 893.07
Less :
Opening Stock -Finished Goods 71.29 44.76 11.81
-Process Goods 1420.94 893.07 325.28
Total 110.06 554.40 600.74
SCHEDULE - 15 MANUFACTURING EXPENSES
Stores & Spares Consumed 216.93 159.74 107.70

Labour Charges 7.78 7.52 15.19
Loading & Unloading Charges 49.50 28.67 11.44
Excise Duty Paid 17.43 8.28 5.29
Fire & Safety Expenses 0.75 1.46 -
Power & Fuel 114.05 69.89 41.83
Factory Expenses 16.99 7.11 8.22
Repairs to Plant & Machinery 18.52 9.35 3.21
Fencing Installation Expenses - 11.36
Legal and Professional Fees 1.83 0.06 -
Total 443.78 292.08 204.24
SCHEDULE - 16 PROVISION & PAYMENTS TO

EMPLOYEES
Salaries, Wages & Bonus 310.31 182.08 89.61

Director's Remuneration - -
Contribution to Provident Fund & Other Funds 6.28 7.69 2.23
Staff Welfare 43.72 26.54 15.72
Total 360.31 216.31 107.56
SCHEDULE - 17 ADMINISTRATION & GENERAL
EXPENSES
Insurance 40.13 25.76 18.06

Rent, Rates & Taxes 1.83 1.50 0.74
Legal & Professional Charges 13.55 4.82 7.74
Travelling Expenses 26.12 13.05 12.63
| 189 |
PARTICULARS June 30, March 31, March 31,

2010 2009 2008
Vehicle Expenses 14.73 10.40 6.39
General Administration Charges 31.84 10.60 8.99
Foreign Exchage Fluctuation (Net) 21.99 - -
Repairs to Others 9.63 2.05 0.59
Loss on Sale of Assets 1.27 0.31 0.26
Deferred Revenue Expenditure W/Off 0.97 1.23 1.18
Provision for Write Off / Diminution in value of Current 0.00 0.67 -
Investment
Sitting Fees 0.29 0.13 0.06
Donation 7.39 3.92 1.30
Post & Telephone Expenses - - -
Laboratory & testing Expenses - - -
Security Charges - - -
Printing & Stationery - - -
Taxation - - -
Repairs to vehicles - - -
Total 169.74 74.44 57.94
SCHEDULE - 18 SELLING & DISTRIBUTION

EXPENSES
Freight Charges 157.36 164.67 98.40

Royalty 18.06 21.88 14.12
Sales Commission Expenses 30.78 24.66 7.38
Advertisement Expenses 9.25 7.12 9.84
Rebates and Discounts 1.71 7.70 0.02
Sales Tax 80.98 51.83 30.74
Sales Promotion Expenses 38.33 20.54 7.76
Return, Rejection and Claims 2.51 5.05 -
Deferred Revenue Expenditure - - -
Total 338.98 303.45 168.26
SCHEDULE - 19 FINANCIAL EXPENSES
Interest on Fixed Loan 203.34 178.39 137.28

Interest on Working Capital 253.19 175.91 130.23
Interest on Other 3.50 2.09 0.62
Bank Commission and Charges 80.12 40.15 20.79
Total 540.15 396.54 288.92
| 190 |
FOR THE YEAR ENDED JUNE 30, 2010
SCHEDULE 20
A. SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation of Financial Statements
The company follows the accrual method of accounting. The financial statements have been prepared
in accordance with the historical cost convention as modified where required by Accounting Standards
and as per accounting principles generally accepted in India.
Expenditure on R & D, Trademark, development of markets, which are determined to have a useful life
spanning more than one year are amortized over its useful life.
Fixed Assets
Fixed assets are capitalized at cost i.e. direct cost and other expenses including interest and other
finance cost incurred in connection with acquisition of assets apportioned thereto and is net of
MODVAT / CENVAT taken. Assets related to R&D are capitalized as such.
Capital Work in Progress
Capital work in Progress includes advances for pre-production expenses and expenditure on project
under implementation including interest and other expenses to be capitalized.
Depreciation
Depreciation on Fixed assets has been provided on Straight Line Method at the rates prescribed in
Schedule XIV to the Companies Act, 1956 on pro rata basis with reference to the actual date of
Purchase/Installation, on basis of efflux of time.
Impairment
The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of
impairment based on internal / external factors. An impairment loss is recognised wherever the
carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of
the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows
are discounted to their present value at the weighted average cost of capital. After impairment,
depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
Revenue recognition
Revenue is recognised only when it can be reliably measured and it is reasonable to expect ultimate
collection. Sales include Excise duty, Service tax and Sales tax.
Excise Duty
The Excise Duty payable on finished goods is accounted for on the clearance of the goods from factory.
Employee Benefits
• Gratuity benefits are accounted for on the basis of amount determined by actuarial valuation
made by Life Insurance Corporation of India (LIC) and are funded accordingly by the
approved Trust. Any shortfall between liabilities determined on actuarial basis and funds
available is charged to Profit and Loss Account. Contribution made to LIC is charged to Profit
and Loss Account. In respect of certain employees who are not covered under approved
| 191 |
Gratuity Fund, the liability is determined on the basis of actuarial valuation and is charged to
Profit and Loss Account.
• Retirement benefits in the form of provident fund and pension scheme are accounted on
accrual basis and charged to the Profit and Loss Account for the year.
• The monetary value of leave encashment benefit is provided on the basis of actuarial valuation.
Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as
current investments. All other investments are classified as long term investments. Current investments
are carried at lower of cost and fair value. Long term investments are carried at cost. However,
provision for diminution in value is made to recognize a decline other than temporary, if any in the
value of the investments.
Foreign Currency Transactions
• Monetary assets and liabilities related to foreign currency transactions remaining unsettled at
the end of the year are translated at closing rates.
• The difference in translation of monetary assets and liabilities and realised gains and losses on
foreign transactions are recognized in the Profit and Loss Account.
Borrowing Cost
Borrowing costs attributable to the acquisition, construction of assets are capitalized as part of such
assets. All other borrowing costs are recognized as expense in the period for which they are incurred.
Valuation Of Inventories
Inventories relating to Raw Materials, Stores and Spares, Stock in Process and Finished Goods are
valued at lower of Cost or Net Realizable Value and after providing for obsolescence if any.
Income Tax
Income Tax has been computed using the tax effect accounting method, where taxes are accrued in the
same period as the related revenue expenses. Deferred tax assets and liabilities are recognized for the
expected future tax consequences attributable to timing differences between the taxable income and the
accounting income for a period. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which the timing differences are expected to be
recovered or settled. The effect of changes in the tax rates on deferred tax assets and liabilities is
recognized in the statement of income in the period of change. Deferred tax assets are recognized based
on management's judgment as to the sufficiency of future taxable income against which the deferred
tax asset can be realized.
Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a
present obligation as a result of past events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in notes. Contingent assets are neither
recognised nor disclosed in the financial statements.
Contingent liabilities not provided for are disclosed in accounts by way of notes explaining the nature
and quantum of such liabilities.
Prior period adjustments are accounted for in relation to all identified items of income and expenditure
relating to prior period.
| 192 |
Deferred Revenue Expenses identified in accordance with AS –26 are amortized over the period for
which the benefit is estimated to accrue. The management reviews the amortization period on a regular
basis and if expected future benefits from such expenditure are significantly lower from previous
estimates, the amortization period is accordingly changed.
SCHEDULE – 20
B. NOTES TO ACCOUNTS
Figures of previous year have been regrouped / reworked wherever necessary. The company has
extended it's financial year by a period of 3 months beyond 31st March, 2010 to 30th June, 2010.
Accordingly the financial results have been prepared for the period of 15 months from 1st April, 2009
to 30th June, 2010 and therefore are not comparable.
Contingent Liabilities not provided for:

Particulars 15 Months ended As at March
June 30, 2010 31, 2009
Letters of Credit issued by Bank on behalf of the Company 118.92 503.23
Guarantees issued by Bank on behalf of the Company 99.63 5.81
Estimated amounts of Contracts remaining unpaid on Capital Account 79.05 417.23
Disputed Income Tax Demands (not acknowledged) against which
6.22 1.67
proceedings are pending before Income Tax Authorities
Litigations against the Company 2.18 2.18
Payment To Auditors (Net of Service Tax)

Particulars 15 Months ended June 30, 2010 2008-2009
Audit Fees 0.77 0.20
Tax Audit Fees 0.03 0.03
Other Services including Certification work 0.38 0.30
Out of Pocket Expenses 0.05 0.05
Total 1.23 0.58
The company has purchased certain assets on deferred credit from foreign suppliers which is to be paid over a
period of 7 years, where, as per the terms of credit, no interest is payable.
Borrowing Costs directly attributable to creation of assets has been capitalized. The relevant amount is
Rs.499.33/-million (Previous Year Rs.64.64 /- Million)
Managerial Remuneration Paid / Payable

(Rupees in Million)
Salary to Managing Director 15.00 12.00
Salary to Wholetime Director 0.27 Nil
LTC 1.78 Nil
Total 17.05 12.00
Deferred Revenue Expenditure carried over from the previous year is deferred and amortized over the period for
which the benefit is estimated to accrue. During the year the amount charged to Profit and Loss Account is
Rs.0.97/- Million (Previous Year Rs.1.22/- Million)
As per section 78 of the Companies Act, 1956, the Securities Premium Account has been applied in writing off
the expenses in connection with issue of shares to the extent of Rs.23.67/- Million (Previous Year Rs.97.34/-
Million)
| 193 |
Employee Benefits:
The Company adopts Accounting Standard (AS-15) (Revised 2005) "Employee Benefits". The disclosures
required as per the Revised AS-15 are as under:
Defined Contribution Plan:
Contribution to Defined Contribution Plan, recognized as expenses for the year are as under:
(Rupees in Million)
Particulars 15 Months ended June 2008-09
30, 2010
Employer's Contribution to Provident Fund & Pension 5.51 2.84
Scheme
Total 5.51 2.84
Defined Benefit Plan:
The employee's gratuity fund scheme managed by a Trust is a Defined Benefit Plan. The present value of
obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognizes
each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation. The obligation for leave encashment is recognized in the same
manner as gratuity.
The disclosures required as per the Revised AS-15 are as under:
(Rupees in Million)
Particulars 15 Months ended 15 Months ending
June 30, 2010 June 30, 2010
Gratuity Leave encashment
1. Reconciliation of Opening and Closing Balances of
Defined Benefit Obligation
Present Value of Defined Benefit Obligation as at the 6.51 6.43
beginning of the year
Interest Cost 0.50 0.64
Current Service Cost 4.04 2.21
Benefits Paid Nil 0.41
Actuarial (Gain)/Loss (0.06) (2.83)
Present Value of Defined Benefit Obligation as at the end of 9.59 6.03
the year
2. Reconciliation of Opening and Closing Balances of Fair

Value of Plan Assets
Fair Value of Plan Assets at the beginning of the year 6.33 Nil
Expected Return on Plan Assets 0.63 Nil
Employer Contribution 2.90 Nil
Benefits Paid Nil 0.41
Actuarial (Gain) / Loss Nil (2.83)
Fair Value of Plan Assets at the end of the year 9.87 Nil
Actual return on Plan Assets 0.63 Nil
3. Reconciliation of Fair Value of Assets and Obligations

Fair Value of Plan Assets at the end of the year 9.87 Nil
Present Value of Defined Benefit Obligation as at the end of 9.59 6.03
the year
Net Liability / (Asset) Recognised in the Balance Sheet (0.27) 6.03
| 194 |
Particulars 15 Months ended 15 Months ending

June 30, 2010 June 30, 2010
Gratuity Leave encashment
4. Expenses Recognised During the Year

Current Service Cost 4.04 2.21
Interest Cost 0.50 0.64
Expected Return on Plan Assets (0.63) Nil
Net Actuarial (Gain) / Loss (0.06) (2.83)
Expenses Recognised During the Year in Profit & Loss 3.85 0.01
Account
Actuarial Assumptions
Mortality Table (LIC)

Discount Rate (Per Annum) 8.25% 8.25%
Expected Rate of Return on Plan Assets 9.00% 0.00%
Rate of Escalation of Salary (Per Annum) 7.00% 7.00%
(a) Balances are subject to confirmation and in the opinion of management, all known liabilities are
accounted for and there are no contingent liabilities other than those disclosed.
(b) All loan and advances, debtors on the balance sheet are good and recoverable in the opinion of the
management and hence no provision there against is made.
Provision for Income Tax has been made on the basis of Section 115JB of the Income Tax Act, 1961.
(Minimum Alternate Tax)
The tax benefit under Section 10B of the Income Tax Act is available to the company in respect of its EOU
Undertaking. In view of this, the deferred tax liability in respect of timing differences that originate and reverse
during the tax holiday period are ignored and deferred tax liability in respect of timing differences that originate
during tax holiday period but likely to be reversed after the tax holiday period are recognized. The components
of deferred tax liability and assets for the year are as under:
Particulars 15 Months ended As at March
June 30, 2010 31, 2009
A. Deferred Tax Liability:
55.52 61.03
- Related To Fixed Assets
B. Deferred Tax Assets:
- Related to Fixed Assets - -
- Others - -
Provision for Deferred Tax Liability / (Asset) (A-B) Net 55.52 61.03
The Company has amounts due to Micro and Small Enterprises under The Micro Small and Medium Enterprises
Development Act, 2006 (MSMED Act) at the year end.
(Rupees in Million)
Particulars 15 Months ended 2008-09
June 30, 2010
The principal amount and interest due thereon remaining unpaid 1.08 1.55
due to supplier
The amount of interest paid by the company along with the Nil Nil
amounts of the payment made to supplier beyond the appointed
date for the year ended.
The amount of interest due and payable for the period of delay for Nil Nil
making payment (beyond the appointing date during the year)
| 195 |

June 30, 2010
The amount of Interest accrued and remaining unpaid for the year Nil Nil
ended.
The amount of further interest remaining due and payable for the Nil Nil
earlier years
Note:
The above information has been determined to the extent such parties have been identified on the basis of
information available with the Company and has been relied upon by the auditors.
Quantitative Information
Licensed & Installed Capacity, Production, Sales, and Opening & Closing Stocks of Goods
Manufactured/Traded
FRP PRODUCTS
(Quantity in Nos.)
Licensed Capacity Not Applicable Not Applicable
Installed Capacity * *
Production of FRP Products 2,146,229 1,039,943
Quantity Rs. Million Quantity Rs. Million
Opening Stock 26,912 71.29 6,313 44.76
Closing Stock 29,797 94.81 26,912 71.29
Sale of FRP & related Items 2,142,394 5069.55 1,019,344 2299.29
(includes Trading Items)
Captive Consumption 950 - - -
*Cannot be determined as the final products are of various sizes & shapes.
RESIN
(Quantity in Kgs.)
Licensed Capacity Not Applicable Not Applicable
Installed Capacity * *
Production of Resin 22,641,213 20,014,147
Opening Stock 353,873 20.39 258,124 20.39
Closing Stock 529,570 40.47 353,873 28.14
Sale of Resin 13,585,504 1224.27 14,726,014 1491.25
Captive Consumption 8,880,012 - 5,192,384 -
*Cannot be determined as there are various resin being manufactured.
Raw Material Consumption

(Quantity in Kgs.)
No. Description 15 Months ended June 30, 2010 2008-2009
1 Resin ** ** ** **
2 Glass Fiber 28,568,493 591.83 12,801,658 420.75
3 Chemicals *** 1,843.29 *** 1,730.73
4 Others 929.70 236.64
TOTAL 3364.82 2,388.12
** Resin have been manufactured in-house and the raw material consumption cost pertaining to the same is
included in the figures stated for chemicals.
***In absence of common measure for the quantification of quantity of consumption, the same is not furnished.
| 196 |

Value Rs. Value Rs.
%age %age
Million Million
Imported 2,770.79 82.35 1,808.25 75.72
Indigenous 594.03 17.65 579.87 24.28
TOTAL 3364.82 100.00 2388.12 100.00
Stores Consumption
Value Rs.
Value Rs. Million %age %age
Million
Imported 3.48 1.61 - -
Indigenous 213.44 98.39 159.74 100.00
TOTAL 216.92 100.00 159.74 100.00
CIF Value of Imports

(Rupees in Million)
15 Months ended June 2008-2009
Particulars
30, 2010
Raw Materials 2893.28 1,630.30
Machinery / Equipments / Advances 2130.52 895.21
Expenditure in Foreign Currency
(Rupees in Million)
30, 2010
Traveling Expenses 8.24 1.34
Legal & Professional Fee 0.35 0.17
Royalty Expenditure 18.06 20.15
Marketing Expenses 10.97 6.55
Interest Expenses 57.40 8.25
Carriage Outward / Shipping Charges 12.10 3.87
Laboratory Testing 0.09 -
License Fees 0.53 -
Banks Fees 0.12 -
Selling and distribution expenses 8.26 -
Total 116.12 40.33
(a) During the period, Dividend of Rs. 4.92/- Million (Previous year Rs. 4.05/- Million) pertaining to
Financial Year 2008-09 was remitted outside India to 4 non-resident shareholders holding 32,83,208
shares in the Company.
(b) Further, Interim Dividend of Rs. 3.28/-Million (Previous Year Nil) pertaining to Financial Year 2009-
10 was remitted outside India to 4 non-resident shareholders holding 32,83,208 shares in the Company.
Earning in Foreign Exchange

(Rupees in Million)
30, 2010
FOB Value of Exports (as per Shipping Bill) 4168.05 2,309.64
Dividend Income Nil 16.46
| 197 |
Related Party Disclosures
(a) List of related parties:
No. Name of the related party Relationship
1. Mr. Kalpesh M. Patel (CMD) Key Managerial Personnel (KMP)

2. Mrs. Binita K. Patel Relative of Key Management Personnel
3. Mrs. Mrudula M. Patel Relative of Key Management Personnel
4. Master Aditya K. Patel Relative of Key Management Personnel
5. Top Glass SPA, Italy Subsidiary
6. Kemrock Advanced Composites Ltd. Subsidiary
7. Kemrock Advance Reinforcements Ltd. Subsidiary
8. Kemrock Filament Windings Ltd. Subsidiary
9. Kemrock Infratech Ltd. Subsidiary
10. Kemrock Speciality Polymers Ltd. Subsidiary
11. Georgia-Pacific Kemrock International Pvt. Ltd. Joint Venture Company
12. S. K. Polymers FZCO Joint Venture Company
13. Kemrock Agritech Pvt. Ltd. Enterprise over which Key Management
14. Greenspace Enertech Pvt. Ltd. Personnel and relatives of Key Management
Personnel are able to exercise significant
15. Greenspace Infratech Pvt. Ltd.
influence.
(b) Related Party Transactions:

No. Name of related party Nature of Nature of 15 Months 2008-09
Relationship transaction ended June
30, 2010
1 Mr. Kalpesh M. Patel KMP Remuneration 16.78 12.00
2 Top Glass SPA, Italy Subsidiary Sale of Finished 110.96 Nil
goods
Purchase of Raw 6.02 Nil
material
Purchase of Fixed 278.85 Nil
assets
Investment 827.00 Nil
3 Kemrock Advanced Subsidiary Advances 0.13 Nil
Composites Ltd.
4 Kemrock Advance Subsidiary Advances 0.13 Nil
Reinforcements Ltd.
5 Kemrock Filament Winding Subsidiary Advances 0.13 Nil
Ltd.
6 Kemrock Infratech Ltd. Subsidiary Advances 0.13 Nil
7 Kemrock Speciality Polymers Subsidiary Advances 0.13 Nil
Ltd.
8 Georgia-Pacific Kemrock Joint Venture Commission on 29.55 26.31
International Pvt. Ltd. Sales
Sales Nil 1.26
Rent Received 2.48 2.01
9 S. K. Polymers FZCO Joint Venture Sales Nil 288.40
Dividend received Nil 16.46
10 Kemrock Agritech Pvt. Ltd. * Sales 0.77 Nil
* Enterprise over which Key Management Personnel and relatives of Key Management Personnel are able to
exercise significant influence.
| 198 |
Name of company Nature of Relationship Balance as on balance sheet date
Top Glass S.p.A, Italy Subsidiary 259.42 (Dr)
Kemrock Advance Composites Ltd. Subsidiary 0.13 (Dr)
Kemrock Advanced reinforcements Ltd. Subsidiary 0.13 (Dr)
Kemrock Filament Winding Ltd. Subsidiary 0.13 (Dr)
Kemrock Infratech Ltd. Subsidiary 0.13 (Dr)
Kemrock Speciality Polymers Ltd. Subsidiary 0.13 (Dr)
Georgia-Pacific Kemrock International Pvt. Joint Venture 63.18 (Cr)
Ltd
Earnings Per Share
The Institute of Chartered Accountants of India has issued Accounting Standard-20 for working of earning per
share and accordingly the working is given below:

June 30, 2010
Net Profit After Tax (Rs. in Millions) 526.89 318.21
Weighted average paid up equity shares ( Nos. in Million) 11.69 10.81
Basic earnings per share of Rs.10 each (in Rs.) 45.05 29.43
Diluted earnings per share of Rs.10 each ( in Rs.) 42.67 26.38
Segment Reporting
As per AS-17, business segment has been identified as the primary segment and geographic segment has been
identified as the secondary segment as reportable segments of the company.
| 199 |
Primary Segment Information ‐ Business (Rs. In Millions)

S r. P a rt ic ula rs FRP R e s ins S ub - T o t a l E lim ina t io ns T o tal
15
15 m o nt hs 15 m o nt hs m o nt hs 15 m o nt hs 15 m o nt hs
e nde do n e nde do n e nde do n e nde do n e nde do n
No. 3 0 / 0 6 / 10 2008-09 3 0 / 0 6 / 10 2008-09 3 0 / 0 6 / 10 2008-09 3 0 / 0 6 / 10 2008-09 3 0 / 0 6 / 10 2008-09
1 Segment Revenue 4,928.44 2,216.58 1,949.02 1,892.80 6,877.46 4,109.38 799.20 467.31 6,078.26 3,642.07
External Turno ver 4,928.44 2,216.58 1,149.82 1,425.48 6,078.26 3,642.07 - - 6,078.26 3,642.07
Inter Segment Turno ver - - 799.20 467.31 799.20 467.31 799.20 467.31 - -
Gro ss Turno ver 5,069.56 2,299.29 1,224.27 1,491.25 6,293.83 3,790.55 - - 6,293.83 3,790.55
Less: Excise Duty /
Service Tax Reco vered 141.12 82.71 74.45 65.77 215.57 148.48 - - 215.57 148.48
Net Turno ver 4,928.44 2,216.58 1,149.82 1,425.48 6,078.26 362.07 - - 6,078.26 362.07
2 Segment Result befo re 1,145.81 723.68 84.36 104.03 - - - - 1,230.17 827.71
Interest & Taxes
Less : Interest Expense 540.16 396.54
A dd : Interest Inco me 15.08 5.76
P ro fit B efo re Tax 705.09 436.94
Less : Current Tax / Wealth Tax 119.89 48.70
Less : Fringe B enefit Tax - 2.80
Less : Deferred Tax 55.52 61.03
A dd : P rio r P erio d Inco me /
(Expense) 2.78 (6.20)
Net P ro fit after Tax 526.90 318.22

3 Other Info rmatio n
Segment A ssets 12,653.47 7,647.59 1,086.91 1,314.22 13,740.38 8,961.81 - - 13,740.38 8,961.81
Unallo cable Co rpo rate A ssets - - - - - - - - 3,509.22 1,032.63
To tal A ssets 12,653.47 7,647.59 1,086.91 1,314.22 13,740.38 8,961.81 - - 17,249.60 9,994.43
Segment Liabilities - - - - - - - - - -
Unallo cable Liabililties - - - - - - - - 11,540.78 7,366.97
To tal Liability - - - - - - - - 11,540.78 7,366.97
Capital Expenditure 2,400.35 745.75 22.59 14.44 2,422.94 760.19 - - 2,422.94 760.19
Depreciatio n & A mo rtizatio n o f
Expenses 255.88 161.77 32.20 24.37 288.09 186.14 - - 288.09 186.14
No n Cash Expenses o ther than
Depreciatio n - - - - - -
P a rt ic ula rs Do mestic Expo rts Unallo cable To tal

15 M o nths 15 M o nths 15 M o nths 15 M o nths
ended o n ended o n ended o n ended o n
30/06/10 2008-09 30/06/10 2008-09 30/06/10 2008-09 30/06/10 2008-09
Segment Revenue 2,012 1,089 4,282 2,702 - - 6,294 3,791
Segment A ssets - - - - 17,250 9,994 17,250 9,994
Capital Expenditure - - - - 2,423 760 2,423 760
Signatures to Schedules 1 to 20
As per our attached report of even date
For H. K. Shah & Co. Kalpesh Patel Kaushik
Bhatt
Chartered Accountants Chairman & Managing Director Director
Firm Reg. No. 109583/W
H. K. Shah Usha Moraes Dinesh Patel

Partner Chief Financial Officer Company Secretary
Membership No. 42758
Place: Asoj Place: Asoj
Date: August 27, 2010 Date: August 27, 2010
| 200 |
CASH FLOW STATEMENT AS AT

(Rupees in Million)
A.Cash Flow from Operating Activities
Net profit before tax and Extraordinary Items 705.09 436.94 330.67
Add / (Deduct) : Adjustments for
Interest 540.16 396.54 288.91

Depreciation 288.07 186.13 122.42
Preliminary Expenses / Deferred Revenue 0.97 1.22 -
Written off
(Profit)/Loss on sale of assets 1.27 0.31 -
Prior Year adjustments (2.78) (6.19) (28.99)
Provision for Write Off / Diminution in value 0.00 0.66 -
of Current Investment
Income from Investment 0.00 (16.46) -
Operating Profit before working capital 1532.78 999.15 713.01

changes
Add / (Deduct) Adjustments for :
Trade and Other Receivables (527.56) (1677.14) (219.98)

Inventories (397.65) (577.51) (756.8)
Trade and Other Payables 1093.85 316.11 190.36
Loans and Advances and Other Current Assets (704.95) 55.49 (188.98)
Cash Generated from Operations 996.47 (883.90) (262.39)
Direct taxes (paid net of refunds) (90.06) (31.47) (28.25)
Cash flow before extraordinary items 906.41 (915.37) (290.64)
Extras ordinary items - - -
Net cash from operating activities 906.41 (915.37) (290.64)
B. Cash Flow from Investing Activities
Activities - Inflow / (outflow)

Purchase of fixed assets ( including CWIP and (4144.16) (2195.77) (947.39)
advances for CAPEX)
Proceeds from Sale of Fixed assets 1.40 0.65 1.98
Income from Investments - 16.46 (4.36)
(Increase)/Decrease in Value of Investment (889.93)
Net cash generated /(used) in investing (5032.69) (2178.66) (949.77)
activities
C. Cash Flow from Financing activities
Increase/(Decrease) in Long Term Borrowing 1877.46 2564.54 402.94

Increase/(Decrease) in Short Term Borrowings 1115.02 968.02 259.21
Issue of Share Capital 2586.90 394.22 1249.15
Interest Paid (540.16) (396.54) (288.91)
Dividend paid (30.33) (12.89) (11.85)
Net Cash used in Financing Activities 5008.89 3517.35 1610.54
Net Increase/(Decrease) in Cash Equivalents 882.61 423.32 370.13

(A+B+C)
| 201 |
Cash and Cash Equivalents at the beginning of 868.74 445.42 75.29
period
Cash and Cash Equivalents at the end of 1715.35 868.74 445.42
period
| 202 |
UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED 31ST

DECEMBER, 2010
(Rupees in Million)
Audited
Results for
Unaudited Results for the Unaudited Results for the
No. Particulars the
Quarter ended Six months ended
Accounting
year ended
June 30,
December December December December
2010 (15
31, 2010 31, 2009 31, 2010 31, 2009
Months)
1 Gross Sales 2,135.31 1,102.56 3,866.86 2,191.31 6,293.82
Less: Excise Duty/Service Tax 45.56 49.35 84.41 95.56 215.57
(a) Net Sales / Income from
Operations 2,089.75 1,053.21 3,782.45 2,095.75 6,078.265
(b) Other Operating Income - -
Total [1] 2,089.75 1,053.21 3,782.45 2,095.75 6,078.26
2 Expenditure - - - -
(a) (Increase) / Decrease in
stock in trade and work in
progress (111.08) (118.62) (291.10) (233.41) (110.06)
(b) Consumption of Raw
Materials 1,216.42 473.01 2,277.26 904.24 2,798.24
(c) Purchase of traded goods
- 189.66 - 382.42 566.58
(d) Employees cost
100.81 63.73 194.96 137.75 360.31
(e) Depreciation
114.77 56.63 210.03 111.32 288.09
(f) Other Expenditure
335.08 160.11 581.79 342.67 955.27
Total [2]
1,656.00 824.52 2,972.94 1,644.99 4,858.44
Profit from Operations before
3 Other Income, Interest and
Exceptional Items [1 - 2] 433.75 228.69 809.51 450.76 1,219.82
4 Other Income
43.40 7.74 46.93 11.42 22.65
Profit before Interest and
5
Exceptional Items [3 + 4] 477.15 236.43 856.44 462.18 1,242.47
6 Interest
262.34 101.76 449.80 202.51 540.16
Profit after Interest but before
7
Exceptional Items [5 - 6] 214.81 134.67 406.64 259.67 702.31
8 Exceptional items
- - - - -
Profit(+)/Loss(-)from
9 Ordinary Activities before Tax
[7+8] 214.81 134.67 406.64 259.67 702.31
10 Tax Expense
62.62 33.36 116.83 72.78 175.41
Net Profit(+)/Loss(-)from
11 Ordinary Activities after tax
[9-10] 152.19 101.31 289.81 186.89 526.90
12 Extraordinary Items (net of tax - - - -
| 203 |
Audited
Results for
No. Particulars the
Accounting
year ended
June 30,
2010 (15
31, 2010 31, 2009 31, 2010 31, 2009
Months)
expense Rs. Nil) -
Net Profit (+) / Loss (-) for the
13
period [11 - 12] 152.19 101.31 289.81 186.89 526.90
Paid up Equity Share Capital
14
(face value Rs.10/- per Share) 167.54 110.15 167.54 110.15 167.54
Reserves excluding
Revaluation Reserves as per
15
balance sheet of previous
accounting year - - - - 5,479.30
16 Earning Per Share (EPS) - - - - -
(a) Basic and diluted EPS
before Extraordinary items for
the year and for the previous
year (not annualized)
period 8.31 9.07 16.62 16.72 42.67
(b) Basic and diluted EPS after
Extraordinary items for the
year and for the previous year
(not annualized)
period 8.31 9.07 16.62 16.72 42.67
17 Public Shareholding
- No. of Shares
12,243,318 7,176,050 12,243,318 7,176,050 12,391,418
- Percentage of Shareholding
73.08 65.15 73.08 65.15 73.96
Promoters and promoter group
18
Shareholding
(a) Pledged/Encumbered
- Number of shares 2,204,500 1,309,729 2,204,500 1,309,729 1,869,629
group) 48.88 34.12 48.88 34.12 42.86
the Company) 13.16 11.89 13.16 11.89 11.16
(b) Non-encumbered
- Number of shares 2,305,648 2,529,219 2,305,648 2,529,219 2,492,419
group) 51.12 65.88 51.12 65.88 57.14
| 204 |
Audited
Results for
No. Particulars the
Accounting
year ended
June 30,
2010 (15
31, 2010 31, 2009 31, 2010 31, 2009
Months)
the Company) 13.76 22.96 13.76 22.96 14.88
| 205 |
STATEMENT OF ASSETS AND LIABILITIES

(Rupees in Million)
Particulars STANDALONE (UNAUDITED)
Six months ended 31st Corresponding Six
December, 2010 months ended 31st
December, 2009
SHAREHOLDERS' FUND:
(a) Share Capital 167.54 110.15
(b) Reserves and surplus 5,800.57 2,935.22
LOAN FUNDS 10,561.80 8,108.86
Deferred Tax Liability 250.88 179.76
Total 16,780.79 11,333.99
FIXED ASSETS 9,466.04 6,642.24
INVESTMENTS 912.59 20.10
Deferred tax assets - -
CURRENT ASSETS, LOANS AND ADVANCES - -
(a) Inventories 2,551.08 2,509.20
(b) Sundry Debtors 3,622.27 2,868.99
(c) Cash and Bank Balances 420.86 571.36
(d) Loans and Advances 1,195.63 185.32
Less : Current Liabilities and Provisions - -
(a) Current Liabilities 1,353.42 1,463.35
(b) Provisions 34.26 3.94
Net Current assets 6,402.16 4,667.58
MISCELLANEOUS EXPENDITURE (NOT
- 4.07
WRITTEN OFF OR ADJUSTED)
PROFIT AND LOSS ACCOUNT - -
TOTAL 16,780.79 11,333.99
| 206 |
DECLARATION
The Company certifies that all relevant provisions of Chapter VIII read with schedule XVIII of the SEBI
Regulations have been complied with and no statement made in this Preliminary Placement Document is
contrary to the provisions of Chapter VIII and Schedule XVIII of the SEBI Regulations and that all approvals
and permissions required to carry on our business have been obtained, are currently valid and have been
complied with. The Company further certifies that all the statements in this Preliminary Placement Document
are true and correct.
Signed by:
_____________________________
Mr. Kalpesh Patel
Managing Director
Signed by:
______________________________
Mr. Dinesh Patel
Company Secretary and Compliance Officer
Date: [●]
Place: Vadodara
| 207 |
DETAILS OF THE GLOBAL CO-ORDINATOR AND BOOK RUNNING LEAD MANAGER AND
OTHER ADVISORS TO THE ISSUE
Company Secretary
Mr. Dinesh Patel
Kemrock Industries and exports Limited
Village Asoj, Vadodara Halol Express Way
Taluka Waghodia, Vadodara
Gujarat 391510
India
Tel: +912668 666200;
Fax: +91- 2668 666400
Email: dpatel@kemrock.com
Website: www.kemrock.com
Global Co-ordinator and Book Running Lead Manager

2nd Floor, D. C. Silk Mills Compound,
Kondivita Road, Andheri (East)
Mumbai – 400 059
Email : sc.ib@networthdirect.com
Website : www.networthdirect.com
SEBI Regn. No. INM000011013
Contact Person : Mr. Manish Ajmera
Legal Advisors to the Issue

Rajani Associates
204-207, Krishna Chambers
59, New Marine Lines
Mumbai 400020
India
Tel: +91-22-4096 1000
Fax: +91-22-4096 1010
E-mail: sangeeta@rajaniassociates.net
Website: www.rajaniassociates.net
Contact Person: Ms. Sangeeta Lakhi
Statutory Auditors
H.K.Shah&Co.
404, SARAP Building
Opp. Navjivan Press
Ashram Road, Ahmedabad – 380 014
Tel: +91-79 27544995
Fax: +91-79 27683995
Email: hkshahandco@gmail.com
Website: www.hkshahandco.co.in
Contact Person: Mr. Harshesh K. Shah
| 208 |
REGISTERED OFFICE OF THE COMPANY

Village Asoj, Vadodara Halol Express Way
Taluka Waghodia, Vadodara
Gujarat 391510
India
GLOBAL CO-ORDINATOR AND BOOK RUNNING LEAD MANAGER

D. C. Silk Mills Compound
Kondivita Road
Andheri (East)
Mumbai 400059
India
LEGAL ADVISORS TO THE ISSUE
Rajani Associates
204-207, Krishna Chambers
59, New Marine Lines
Mumbai 400020
India
DEBENTURE TRUSTEE
IDBI Trusteeship Services Limited

Asian Building,
17 R. Kamani Marg
Ballard Estate
Mumbai 400001
India
STATUTORY AUDITORS
H.K.Shah & Co.
404, SARAP Building
Opp. Navjivan Press
Ashram Road,
Ahmedabad 380 014
India
| 209 |

Kemrock QIP PPD

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Kemrock QIP PPD

Uploaded by

Copyright:

Available Formats

Dated March 21, 2011

Not for circulation

Kemrock Industries and Exports Limited

THIS ISSUE AND THE DISTRIBUTION OF THIS PRELIMINARY PLACEMENT DOCUMENT IS

information contained in, or available through, such websites.

THIS PRELIMINARY PLACEMENT DOCUMENT HAS BEEN PREPARED BY THE COMPANY

This Preliminary Placement Document is dated March 21, 2011.

GLOBAL COORDINATOR AND BOOK RUNNING LEAD MANAGER

Networth Stock Broking Limited

NOTICE TO INVESTORS ...................................................................................................................................... 1

OFFSHORE DERIVATIVE INSTRUMENTS (P-NOTES)

DISCLAIMER CLAUSE OF THE STOCK EXCHANGES

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

INDUSTRY AND MARKET DATA

ENFORCEMENT OF CIVIL LIABILITIES

DEFINITIONS AND ABBREVIATIONS

AGM Annual General Meeting

Allocated, Allocation The determination of QIBs and number of Securities to be allocated to

Articles/Articles of Association Articles of Association of the Company

AS Accounting Standards issued by the Institute of Chartered Accountants

Bid An indication of QIBs' interest, including all revisions and

BOLT Facility The BSE's Online Trading Facility

BSE Bombay Stock Exchange Limited

CAGR Compounded Annual Growth Rate

CARE Credit Analysis & Research Limited

CBDT Central Board of Direct Taxes

CDSL Central Depository Services (India) Limited

Code Code of Civil Procedure, 1908 of India

CST Central Sales Tax

Debenture Trustee IDBI Trusteeship Services Limited

Depository Participant A depository participant as defined under the Depositories Act

DGFT Director General of Foreign Trade

EBITDA Earnings Before Interest, Tax, Depreciation and Amortization

ECBs External Commercial Borrowings

EGM Extraordinary General Meeting

EPS Earnings Per Share

FDI Foreign Direct Investment

Exchange Act The U.S. Securities Exchange Act of 1934, as amended

FIIA Foreign Investment Implementation Authority

FIPB Foreign Investment Promotion Board, Ministry of Finance, Government

FSMA The Financial Services and Markets Act 2000

GAAP Generally Accepted Accounting Principles

GDP Gross Domestic Product

Global Coordinator and Book Networth Stock Broking Limited

Government (GOI) Government of India

HUF Hindu Undivided Family

IAS International Accounting Standards

ICAI The Institute of Chartered Accountants of India

IFRS International Financial Reporting Standards

India The Republic of India

Indian GAAP Generally Accepted Accounting Principles in India

"Indian Rupees", "Rupees" or "Rs" Currency of India

Insider Trading Regulations SEBI (Prohibition of Insider Trading) Regulations, 1992

IPO Initial Public Offering

ISIN International Securities Identification Number

KMP Key Managerial Personnel

LIBOR London Inter-bank Offered Rate

LuxSE Luxembourg Stock Exchange

MTPA Million Tonnes Per Annum

Memorandum/ Memorandum of The Memorandum of Association of the Company

MNC Multi National Corporation

MOF Ministry of Finance, India